Bruegel analysts Zsolt Darvas and Gene Frieda argue that Hungary should pass a real-economy test before adopting the euro. In a new study, they say meeting the Maastricht criteria is not enough on its own.
The proposed test asks whether Hungary can function sustainably without its own interest rate policy and exchange rate. The authors set out five domestic suitability tests to be applied alongside the formal convergence rules.
Institutional and fiscal questions
The first test is institutional readiness. It covers the independence of the Magyar Nemzeti Bank, alignment of the central bank law with the ESCB, negative central bank equity, fiscal transparency and the role of the Fiscal Council.
Hungary’s budget deficit is expected to reach 7.3 percent of GDP in 2026, while government debt stands at 75 percent. The IMF forecasts debt rising to 88 percent by 2031 absent major change.
Competitiveness and productivity
The study points to a sharp real appreciation. The real effective exchange rate based on consumer prices rose 8.8 percent over the year to July 2026, while the unit labour cost measure rose 18 percent year on year in the second quarter.
Labour productivity growth has also slowed. It averaged 3.6 percent a year in 2001-2008, 1.1 percent in 2011-2019 and 0.4 percent in 2022-2025.
By our market data, as of 04:40 GMT, EUR/USD was at $1.1229. CFTC figures for the week to 13 October show speculators net short the euro at 137,573 contracts, up 38,241 from a week earlier.
Political backdrop
The government elected in April 2026 supports euro adoption and aims to meet the Maastricht criteria around 2030. The European Commission and the Magyar government agreed in May on releasing frozen EU funds.
Related: MNB outlines preparation steps for Hungary's euro adoption · Hungary prepares inflation target cut for euro path
Source: Bruegel | Data: Swissquote · CFTC
