Hungary’s new government pushes for euro by 2030

Hungary’s premier-in-waiting, Peter Magyar, is keen to secure a return to the European Union mainstream and is moving quickly to mend fences. 

Part of that mission is a plan to have the country ready to join the euro by the end of the decade.

Some, including the governor of the central bank, suggest that timeframe could be overly ambitious, given that outgoing Prime Minister Viktor Orban will hand over a sluggish economy and a fiscal mess. 

But if euro accession is approached in the right way, Hungary could see significant benefits.

Back to the European Union mainstream

Meeting the requirements of euro adoption will be a daunting task for the incoming government.

Magyar’s Tisza party has little room to maneuver within its spending and reform plans, especially amid the ongoing crisis in the Middle East, says Sili Tian from the Economist Intelligence Unit. 

“We do not expect euro adoption within the next decade,” Tian told DW.

However, Tisza is highly motivated. Returning Hungary to the EU mainstream from the “illiberal” periphery to which Orban banished it was a key plank in the party’s election campaign. Joining the eurozone would drive that new message home.

But speed is of the essence and Magyar is urging Brussels to unfreeze €17 billion ($19.8 billion) in funding that was blocked due to Orban’s democratic backsliding and rule-of-law issues; €10 billion of the amount must be accessed before it expires in August.

Tightening belts across Hungary

Around 75% of Hungarians are in favor of adopting the single European currency, according to a 2025 survey. Nearly as many, however, said they understand the country is not ready to make the leap. 

“A 2030 entry date may seem ambitious, but it’s not impossible,” Julia Kiraly, former deputy governor of the central bank and a professor at the Hungarian Academy of Sciences, told DW.

“The main challenge is that the Maastricht criteria be met,” said Kiraly.

These criteria mark the EU’s required levels of inflation, debt, budget deficit, interest rates and currency stability that a country must meet before it can adopt the euro. Hungary currently fails badly on those fiscal demands.

The deep cuts to government spending needed to tame the deficit will pose the biggest test. Tian suggests this will be “impossible” to achieve by 2030.

“Mr. Magyar has already committed to continuing many of Mr. Orban’s fiscally profligate policies while accelerating defense spending to meet NATO targets,” he added.

Pros and cons of joining the eurozone

Yet even just trying to get into the eurozone should offer Hungary a range of potential benefits. 

Once the government announces an official bid to join, it should bring increased stability for its currency, the forint, and lower inflation and interest rates.

Borrowing costs should also drop, both for the government and across the economy, as European Central Bank supervision helps to stabilize the financial sector.

Looking forward, eurozone membership would remove exchange rate risk and transaction costs — something that is key for Hungary’s export-heavy economy.

The biggest trade-off would be Hungary’s loss of autonomy over monetary policy and the ability to absorb shocks. But the country would then have access to eurozone liquidity and bailout facilities should it face trouble. 

Eurozone partners are likely to be wary

Hungary’s weak economy and fiscal position, not to mention 16 years of institutional deterioration, will likely make eurozone members wary of Hungary joining the group.

They have not forgotten the Greek debt crisis, which proved highly contagious and expensive and could complicate Hungary’s progress as it seeks the necessary agreement from the rest of the members.

They’re also likely to see a risk that Hungary could reverse course and back out of the euro bid following the next elections scheduled for 2030, or return to an illiberal course and become disruptive while inside the single‑currency area.

“Hungary is likely to be regarded skeptically,” suggested analysts at London-based Capital Economics in a recent analysis note. The country “will need to convince eurozone partners that euro entry is a shared goal across the political spectrum.”

A natural path for Hungary?

However, EU officials see the move as positive for the bloc. 

European Commission President Ursula von der Leyen praised Hungary for its “return to the European path” — a route that European Central Bank president Christine Lagarde declared leads naturally to the euro.

“Within central and eastern Europe, Hungary’s euro adoption would signal renewed convergence and strengthened political cohesion,” Tian noted.

When Hungary joined the EU in May 2004, alongside nine other countries, it committed to adopting the single currency. But it’s one of three from that group yet to make the move, alongside Czechia and Poland.

Given that the Visegrad Group economies all rely heavily on exports into the eurozone, it’s surprising that only Slovakia has joined so far. Now Hungary hopes to tap into the kind of benefits that turned its northern neighbor into the “Tatra Tiger.”

“For major trading partners such as Germany, the elimination of exchange-rate risk and reduced transaction costs will support further trade and investment flows, particularly in dominant automotive and electronics sectors,” Tian pointed out.

Hungary’s decision to aim for the euro is unlikely to influence Czechia or Poland, however. 

Popular opposition to the single currency, stirred by fears of inflation and loss of autonomy, stifles serious conversation on the topic in Prague and Warsaw. That said, until mid-April, the euro was also off the menu in Budapest.

“It can’t be ruled out that, sooner or later, all EU member states may join the eurozone in pursuit of greater competitiveness vis-à-vis the United States,” said Kiraly.

Edited by: Tim Rooks