Hungarians want euro, the government does not: spontaneous euroisation happens

The Hungarian forint is one of the most vulnerable national currencies in the world, which is very sensitive to the changes in the global and regional economy. Though the Hungarian central bank could baulk a spontaneous euroisation last year-end, the majority of Hungarians would like to introduce the euro to replace the weakening forint. But is that possible, and would it be beneficial for the people?

According to portfolio.hu, the government has not been communicating about the euro introduction even though Hungary has been an EU member for 20 years, and even Romania wants to adopt the euro by 2026. Croatia introduced it this year, while Slovakia and Slovenia (and the Hungarian communities living there) have been using the common European currency for years. As a result, hundreds of thousands of Hungarians receive their salaries and pay their bills in euros in the neighbouring countries. More than 1 million will soon join them from Romania in 2026. But Hungarians living in the motherland seems to remain using the forint.

The forint has been introduced in 1946, and contrary to other nations, Hungarians love it. That is probably because the new currency was based on the people’s work. There was no help from abroad because the Communist block refused to accept the USA’s Marshall Aid.

Spontaneous euroisation in multiple segments of the Hungarian economy

Portfolio argues that the Hungarian government and economic policymakers try to belittle the advantages of introducing the euro. Meanwhile, a spontaneous euroisation is already happening in the Hungarian economy. Business owners and companies calculate in euros. Furthermore, many households put their savings in the EU’s common currency.

The Hungarian people are “europositive”. In 2022, based on a survey carried out by the Eurobarometer, 69 percent of the respondents supported the introduction of the euro. That rate is 77 percent in Romania. Meanwhile, Bulgarians, Czechs, and Swedes are much more sceptical. The figure is below 50 percent in those countries.

Hungarians believe that, provided they used the euro, the inflation would not be EU champion in Hungary. Thanks to the protective measures of the central bank last October-December, the euro introduction due to the historic forint-weakening of 2022 was postponed. But many think they need a less vulnerable currency.

Furthermore, it seems the central bank will loosen the strict monetary policy it has been following since last October. And that may trigger a new wave of forint weakening. The Hungarian government sticks to the idea that Hungary should not use the euro until it reaches at least 90 percent of the EU’s development level. However, that may never happen, portfolio.hu argues.

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