Hungary outlines potential timeline for euro adoption

eurozone accession Hungarian forint ERM II monetary policy European Commission infringement

Zoltán Kurali, Deputy Governor of the Hungarian National Bank, has outlined a potential timeline for Hungary to adopt the euro. Under one scenario, the country could join the Exchange Rate Mechanism II (ERM II) by 2029, with a final decision to adopt the common currency potentially occurring in 2031. A more conservative timeline suggests meeting criteria by 2030 for an adoption in 2032.

The government aims to reduce the budget deficit to 3% of GDP by 2030. To support this transition, the central bank recently lowered its inflation target from 3% to 2.5% for 2028. Following these remarks, the Hungarian forint saw a 0.6% increase against the euro.

Separately, the European Commission has initiated infringement proceedings against Hungary. The Commission alleges that the tax-exempt status of certain domestic government bonds may violate EU law by providing an advantage to domestic investors over those from other EU member states, potentially restricting the free movement of capital.