The European Central Bank (ECB) released a report on euro convergence on Wednesday (23rd of May). They states that Hungary needs “stability-oriented economic policies” and “wide-ranging structural reforms”.The European Central Bank reviews the progress of those members states which have not adopted the euro yet. EBC stated that “Hungary would benefit from structural reforms aimed at promoting private sector-led growth, such as by improving the governance of institutions and by cutting red tape and tax burden where excessive”.
The European Central Bank also stated that Hungary had met the Maastricht criterion for the budget deficit last year, in 2017, but the country had exceeded the threshold for state debt.
Euro convergence criteria limits CPI to 1.5 percentage points over the average rate of the three EU member states with the lowest inflation and long-term interest rates to 2 percentage points over the average ten-year government bond yields in those three states. The criteria set the thresholds for the general government deficit and state debt as a percentage of GDP at 3 percent and 60 percent, respectively.
In the report it is also noted that “Hungarian law does not comply with all the requirements for central bank independence, the prohibition of monetary financing, the requirements for the single spelling of the euro and legal integration into the Eurosystem”.
Source: www.mti. hu / www.dailynewshungary.com