Why Does Hungary Not Use the Euro? The Reasons and Context Behind Staying Out

Although Hungary committed to becoming an integral part of the Economic and Monetary Union, twenty years after accession the country has still not adopted the euro. A majority of Hungarian society has supported the euro, and until 2010 there was a political consensus among leading domestic parties regarding its importance. However, this political commitment waned after 2010. The sovereigntist strategy pursued by the Orbán government appears incompatible with euro adoption, despite macroeconomic indicators in the 2010s moving considerably closer to the required convergence criteria. In the 2020s, neither the requisite political will nor the appropriate policy conditions exist for introducing the euro. The experiences of Eastern member states—whether joining or remaining outside the euro area—suggest that economic trajectories are not solely determined by euro area membership. For instance, while Czechia has achieved significant progress without adopting the euro, as evidenced by the appreciation of the Czech koruna, Hungary’s economic performance has been more limited, with the forint undergoing significant depreciation. This analysis implies that even under the given circumstances, the governmental performance of the Hungarian political elite has been suboptimal, and alternative policy choices might have produced more favorable outcomes over the past two decades, independent of euro adoption.