–But It Deserves Praise And Hungary Should Seek To Join Eurozone
ALPBACH, Austria (MNI) – The euro faces challenges, but on the
whole it deserves praise and Hungary should give high priority to
adopting it, Hungarian central bank Governor Andras Simor said Friday.
“Of course there are some serious challenges on the road ahead.
However, today I would rather praise the common currency and not bury
it,” he said at a conference here. “The common currency has a future”
even if “it is true that enormous tasks still lie ahead.”
“Our view of the euro has not changed, or if it has it only has
been reinforced by the crisis,” he continued. “Adoption of the euro
should be high on the list of priorities” for Hungary.
Although Hungary should “do our best to fulfill the entrance
criteria, we should not forget the lesson from Greece,” Simor urged.
In particular, “joining ERM II is best for us when the Hungarian
economy is surely on a stable path. Thus it is best to join when
convergence is assured on a stable basis.”
Monetary union has disadvantages as well as advantages, Simor said.
The disappearance of the exchange rate risk resulting from euro adoption
“may induce investors to underestimate the remaining” risks, which
include “the development of bubbles in countries with weak
fundamentals,” since independent monetary policy does not address this
directly.
–Frankfurt bureau tel.: +49-69-720142. Email: dbarwick@marketnews.com
[TOPICS: M$X$$$,M$$EC$]
