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Reflections on the Essay 'Thoughts on the Dilemma of When to Introduce the Euro in Hungary' by Peter Gottfried

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  • Elemer Tertak

    (K&H Bank)

Abstract

The Our Vision section in the September 2021 issue of the Financial and Economic Review included an essay by Peter Gottfried, member of the Monetary Council of the Magyar Nemzeti Bank (the Central Bank of Hungary, MNB), entitled 'Thoughts on the dilemma of when to introduce the euro in Hungary'. This article is a response and supplement to that essay's arguments and conclusions. In accordance with Article 140(1) of the Treaty on the Functioning of the European Union, the European Commission (EC) and the European Central Bank (ECB) shall report to the Council on fulfilling the conditions of introducing the euro, at least once every two years. However, Péter Gottfried's essay is deliberately not about this; instead, it makes important points about when and under what conditions the obligations regarding euro introduction should be fulfilled if Hungary already meets the conditions. It is high time to consider this, in particular for two reasons: on the one hand, Croatia, which joined the EU later than Hungary, and possibly even Bulgaria, may join the euro area soon, reducing the number of countries staying outside to five. On the other hand, Sweden became an EU member nine years before Hungary: it has the same obligation to introduce the euro and fulfils practically all of the criteria for joining the currency club, but still does not plan to introduce the euro in the foreseeable future. The analysis is also timely because we now have a perspective of two decades, and it could and should be assessed to what extent the euro has met expectations, and how the exit of the United Kingdom, as the internal 'opposition' to deepening the Economic and Monetary Union (EMU), is shaping the future of the EMU.

Suggested Citation

  • Elemer Tertak, 2021. "Reflections on the Essay 'Thoughts on the Dilemma of When to Introduce the Euro in Hungary' by Peter Gottfried," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 20(4), pages 130-143..
    • Handle: RePEc:mnb:finrev:v:20:y:2021:i:4:p:130-143.
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    References listed on IDEAS

    as
    1. Nazim Belhocine & Ernesto Crivelli & Ms. Nan Geng & Tiberiu Scutaru & Mr. Johannes Wiegand & Zaijin Zhan, 2016. "Taking Stock of Monetary and Exchange Rate Regimes in Emerging Europe," IMF Departmental Papers / Policy Papers 2016/012, International Monetary Fund.
    2. Zsolt Darvas & György Szapáry, 2008. "Euro Area Enlargement and Euro Adoption Strategies," European Economy - Economic Papers 2008 - 2015 304, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
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    More about this item

    Keywords

    EU; euro area; EMU; euro; European integration;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • F45 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Macroeconomic Issues of Monetary Unions
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
    • N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-
    • N44 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: 1913-
    • N90 - Economic History - - Regional and Urban History - - - General, International, or Comparative
    • N94 - Economic History - - Regional and Urban History - - - Europe: 1913-
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • P43 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Finance; Public Finance

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