Thesis Work Zsolt Szabo 2011

7/30/2019 Thesis Work Zsolt Szabo 2011

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Thesis work

Zsolt Szab

2011


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Corvinus University of Budapest

Faculty of Business Administration

International Study Programs

The consequences of Hungarys accession

to the Economic and Monetary Union

should we join or NOT?

Zsolt Szab

BA in International BusinessInternational Business

2011

Thesis Supervisor: Tams Halm


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I, Zsolt Szab in full knowledge of my liability, hereby declare that all the texts, figures and

tables in this Thesis Work are based solely on my own individual work. Where I have

drawn on the work, ideas and results of others, this has been appropriately acknowledged in

the thesis in the form of citation and references. I declare, furthermore, that the thesis has

not been presented to any other institution before.


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Table of content

1. Introduction ..................................................................................................................... 5

2. Optimum Currency Areas ................................................................................................ 7

2.1. Possible benefits from joining a currency area ........................................................ 8

2.2. Costs of joining a currency area ............................................................................... 9

3. The history of the Economic and Monetary Union ....................................................... 11

3.1. Stage One of the EMU ........................................................................................... 11

3.2. Stage Two of the EMU .......................................................................................... 12

3.3. Stage Three of the EMU ........................................................................................ 13

3.4. The Maastricht convergence criteria ...................................................................... 14

3.5. The EMU as Optimum Currency Area .................................................................. 15

4. Hungary and the Economic and Monetary Union ......................................................... 19

4.1. The Benefits of joining the EMU ........................................................................... 20

4.2. The costs of joining the EMU ................................................................................ 21

4.3. The timing of the accession .................................................................................... 23

4.4. Hungarys EMU maturity ...................................................................................... 26

4.5. The experience of some other EMU members ....................................................... 29

4.6. Should Hungary join or not? .................................................................................. 31

5. Conclusion ..................................................................................................................... 32

6. Appendices .................................................................................................................... 33

Appendix 1Fixed euro conversion rates ........................................................................ 33

Appendix 2Euro banknotes ........................................................................................... 34

7. Bibliography and references .......................................................................................... 36


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1. Introduction

The introduction of the euro as the currency for more than 300 million people was

one of the biggest and most tactile steps in the history of the European Union, and was alsothe most important economic, political and social event in the past decade. The euro first

appeared on 1 January 1999, but in the beginning was used only for accounting purposes

and electronic payment. On 1 January 2002 the first euro banknotes and coins went into

circulation. From February 2002, the euro officially replaced the national currencies of

twelve1

member states of the European Union and became a symbol of the European

integration and the European Union. Today the Euro is the official currency in 17 of 27

member states of the EU.

By joining the European Union in 2004 Hungary has also committed itself to the

common currency, as for the newly joined countries the introduction of the euro will not be

an option, but an obligation as soon as they fulfil the Maastricht criteria. The only

exceptions are the United Kingdom and Denmark, which countries have opt-out rights.

This means that these member states are not obliged to join the euro zone, even if they

fulfil the necessary criteria. Sweden has not negotiated for opt-out, however the country

deliberately fails to fulfil the criteria, because of a 2003 referendum in which voters voted

against the introduction of the euro in Sweden.

The issue of introducing the euro in Hungary has caught my attention for two

reasons. The main reason was that in the past decade, every now and then the timing of the

countrys euro-accession came up to the front, turned up in the news and was a popular

topic for discussions. However in the recent years the possible date of introduction of the

Hungarian euro seemed to be farer in the future than before. The other was to find out what

makes developed countries like Sweden, Denmark of the United Kingdom think that they

are better off sticking to their own currencies, while others say that introduction of the euro

has so much benefits. The aim of this paper is to assess the possible costs and benefits of

giving up the national currency and replacing it with the euro.

1 Countries that introduced euro banknotes and coins on 1 January 2002: Austria, Belgium, Germany, Finland,

France, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal and Spain.


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In the first part of the thesis I will introduce the theory of optimum currency areas,

with a special emphasis on what can be the benefits and drawbacks of joining a single

currency zone. Furthermore I will try to highlight the relationship and interdependence

between a countrys economy, internal qualities and the consequences of joining a

monetary union. After this I will take a look at the history of the European Monetary Union

and examine whether is fulfils the criteria of being an optimum currency area. In the second

half of the thesis I will take a closer look at Hungarys current economic situation and

compare it to the EMU and some selected countries. In these chapters of thesis I will also

give some proposals regarding the timing of the euro accession and argue whether Hungary

should join (if so) the monetary union with a strong or a weak currency.

As one of the hottest economic issues today is the current euro-crisis that emerged

right after the global financial crisis, I believe it is unavoidable to address this issue as well

in a paper, which is closely related to the euro. However, when writing my thesis, I

assumed that the euroas one of the main achievements and symbol of the EU - will stay

as the legal tender of the union and throughout the integration process Hungary and other

new member states of the EU will be able to join the monetary union sooner or later.


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2. Optimum Currency Areas

The theory about optimum currency areas emerged in the 1960s out of the debates

about fixed versus flexible exchange rate systems, throughout the works of Robert

Mundell, Ronald McKinnon and Peter Kenen. By this time the deficiencies of the Bretton

Woods system became clear, the current account deficit of the member countries was rising

constantly. The works of Mundell, McKinnon and Kenen addressed this issue and provided

a solution. Their theoretical analysis can be used to measure how mature and well-prepared

a group of countries is to create an economic and monetary union. Based on their theories

an optimum currency area has the following attributes (Palnkai, 2004):

Flexible and properly functioning factor markets, mobility of factors High degree of internal homogeneityno threat of asymmetric shocks Possibility of appropriate budget transfers

According to Mundell (1961) the most important feature of the optimum currency

area is the free movement of production factors (capital and labour), which implies that the

adjustment of prices and wages take place without significant losses or shocks. Also, it

must be possible to handle economic disruptions with appropriate budget transfers, which

means the necessity of good and adequate fiscal policy. Mundell also highlighted, that theintroduction of a fixed exchange rate system can be beneficial for those regions, which are

highly integrated through the movements of goods and factors. Since in a fixed exchange

rate system or in a monetary union the room for individual monetary policy is very limited,

it is necessary that the business cycles are the same in the member countries.

In contrast to Mundell, McKinnons argument places more emphasis in on the

openness of the economies, but he also admitted the importance of free movement of

capital and labour. In his argument he approached the issue from a whole other point of

view than Mundell. According to McKinnon (1963), exchange rate fluctuations have

specifically negative effect on both competitive sectors, because they constantly need to

adjust to the changing exchange rates, and to non-competitive sectors, through the

reallocation of resources. McKinnon also stated that a fixed exchange rate system is

indispensible for the optimal operation of factor movements.


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Kenen (1969) pointed out, that the most important feature is the high level

homogeneity of the countries creating a currency union. The high level homogeneity

minimizes the possibility of emerging asymmetric shocks2, which is crucial for the optimal

operation of such unions. This homogeneity means that there is a significant similarity in

the countries economic structure and characteristics.

As Palnkai (2003) states, whenever a country joins a monetary union, it loses its

power to change the exchange rate of its currency. With the elimination of exchange rate

interventions the economic stability and competitiveness depends on the flexibility of

prices and wages.

What can be noted as a common idea of all of the arguments above is the necessity

of high level integration and similarity of the countries. This similarity does not only mean

economic, but cultural similarity as well. All in all, an optimum currency area can only be

formed by member states that act and function like being one big country.

2.1. Possible benefits from joining a currency area

Both fixed and flexible exchange rate systems have positive and negative effects onthe economy. Flexible exchange rates can prevent the development of economic shocks,

although it makes prices more unpredictable. Fixed exchange rate systems or currency

areas tend to be more predictable, making a more stable ground for decisions involving

international transactions. The benefits stemming from being a part of a monetary union

occur as monetary efficiency gains at a microeconomic level in the joining country. This

means that the country can achieve a lower level of inflation and a better price stability,

simply because of the disappearing exchange rate risk (FX risk). Furthermore the

eliminated FX risk also reduces the risk-premium required by foreign investors, leading to

lower interest rates and cheaper financing costs. The necessity of hedging the FX risk also

ceases. At the same time a higher risk countrylike Hungarycan get a better country risk

2 Asymmetric shock: Shocks that affect only some of the member countries in a monetary union, or shocks

that are contrary to each other in the different member states.


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rating. The financing benefits and the better integration to the international goods market

can let the country to sustainably run a higher current account deficit matched by an

increased capital account. (Palcz, 2004)

As a consequence of the above the countrys ability to attract capital is likely toincrease. The level of monetary efficiency gains are determined by the joining countrys

integration to the monetary union, while the integration depends on the extent of the

countrys trade with the union, the possibility of free movement of production factors and

structural similarities.

2.2. Costs of joining a currency area

While the benefits of giving up the national currency can be detected at microeconomic

levels, the costs occur at macroeconomic level as economic stability losses. Similarly to the

benefits, the extent of these costs is highly correlated with the level of integration to the monetary

union. The higher the level of integration, the lower the costs and stability losses will be when a

country decides to join a currency area.

The losses stem from giving up monetary autonomy, which results that the country

sacrifices one major tool that can reduce the effects of asymmetric shocks, stabilize output and

employment. Furthermore the country will not be able to devaluate its currency anymore. In this

respect the integration of the country and the fluctuation of business cycles are crucial, since the

common monetary policy will have to work in all member states of the currency zone.

Krugman (2003) illustrates this situation on a real simple example in his book, which I am

about to describe in short. Lets imagine that the external demand for products of country A falls.

If country A is not part of a monetary union and has flexible exchange rates , its currency can

simply depreciate to the equilibrium, where demand for its products returns to the original level.

However, if country A was memberof a monetary union or a fixed exchange rate system and was

the only member to face a drop in demand for its goods, the common currency would not depreciate

(or at least not as needed for country A). Consequently as demand for the products drop the

employment rate will drop as well, and can only be restored to the original level by decreasing

prices and wages of workers. If country A is highly integrated to the monetary union, even a

small decrease in prices will generate extra demand within the union for its goods fairly quickly,


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GG

LL

Degree of integration between the joining

country and the exchange rate area.

Themonetaryefficiencygain(GG)

and

economicstabilityloss(LL)forthe

joiningcountry.

The GG and LL curves

Source: Krugman (2003)

Figure 1 which would restore

employment rate to the

original level. This quick

reaction for price

differences will come from

the fact, that the country

can easily trade its goods

with member states of the

currency area and

consumers in the other

countries can easily

compare prices, because of

the common currency.

Another possible or

alternative solution would be, that the workers of country A simply move abroad to find work,

which in the end also would restore employment rate.

Figure 1 shows the relation between the degree of integration and monetary efficiency

gains and economic stability losses. It can be seen on the diagram that as the degree of integration

raises so does the gains from joining the currency area, while at the same time economic stability

losses decrease. At the point where GG and LL curves intersect each other, the gains and losses of

giving up the own currency will cancel each other out. From this level of integrity the country is

better off joining the monetary union. At an integrity level lower than at the point of intersection

costs exceed benefits, implying that it is best to keep the own currency.

Another type of cost, which a country has to face when joining a monetary union, is the loss

of seigniorage income that comes from issuing their own money and minting coins. In the

Economic and Monetary Union each member states have their own euro (the backsides of notes and

coins differ from country to country), and also receive a part of the seigniorage from the European

Central Bank based on the contribution to the registered capital of the ECB. The contribution is

calculated the countrys population and GDP compared the EUs population and GDP. In the case

of Hungary the seigniorage it would receive after its contribution is less, than the seigniorage

income today. (Csajbk Csermely, 2002)


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3. The history of the Economic and Monetary Union

The traces of the creation of the Economic Monetary Union go back to the 1960s,

namely the 1968 Barre plan, and a 1969 initiative by the European Commission for the

better coordination of economic policy making and monetary cooperation. The

consequence of this was the Werner plan, a three-stage program which would result in

locked European exchange rates and the integration of national central banks into a

common European system of banks. The two major reasons behind these moves have

remained motives for the adoption of the euro, and are the following: enhancing Europes

role in the international economy and the monetary system and to turn the European Union

into a genuinely unified market. However the project suffered setbacks in 1971, after the

dollars convertibility to gold was suspended by the US government.

The debate was re-launched at the Hannover Summit in June 1988 and the objective

of the progressive realization of the Economic and Monetary Union (EMU) was confirmed

by the European Council. The Council then mandated a committee to study and propose

stages leading to the union. As a result the committee led by Jacques Delors, president of

the European Commission, proposed that the economic and monetary union can be

established through three evolutionary stages. (Delors-plan)

3.1. Stage One of the EMU

Based on the Delors report the first stage of the implementation process of the EMU

started on 1 July 1990. As the main principle of this chapter all restrictions on capital

movements between member states were abolished on that date. Further tasks of the first

stage included increasing co-operation between central banks, free use of the EuropeanCurrency Unit (ECU, the predecessor of the Euro) and the improvement of economic

governance.


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In March 1990 the Committee of Governors of the central banks was given new

responsibilities of organizing consultations for promoting the coordination of monetary

policies of the different member states to achieve the necessary price stability.

Additionally, to be able to realize stages two and three, some legal preparationswere also started at an early stage, for example the revision of the Treaty of Rome in order

to establish the required institutional framework. This was done on the Intergovernmental

Conference on EMU in 1991. Other preparatory steps included the identification of key

issues, the elaboration of a work program by 1993, the establishment of working groups

and the definition of mandates of sub-committees accordingly.

3.2. Stage Two of the EMU

The start of the second chapter of the EMU was marked by the establishment of the

European Monetary Institute (EMI) on 1 January 1994. With this step the Committee of

Governors of central banks ceased to exist. This new, transitory institution has also shown

how the monetary integration process within the Community progressed. The main tasks of

the EMI was to further strengthen central bank cooperation and monetary policy

coordination and to make preparations required by the establishment of the European

System of Central Banks (ESCB) which would be the key in the creation of the single

monetary policy and single currency in the third stage of the EMU. The EMI had no

competence for carrying out foreign exchange intervention and the conduct of monetary

policy also remained the preserve of national authorities. Actually, the EMI could be seen

as a forum for consultation and exchange of views on policy issues. This forum has also

specified the regulatory, organizational and logistical framework of the ESCB.

In December 1995 the European Council agreed that the name of the new currency

unit to be introduced in Stage Three would be euro and confirmed that the third stage

would start on 1 January 1999. Based on the detailed proposals of the EMI a chronological

sequence of events for the conversion to the euro was pre-announced.


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Simultaneously, the EMI carried out a preparatory work on the future of monetary

and exchange rate relationships between the euro zone and other EU member states. The

report presented in 1996 formed the basis for the new exchange rate mechanism system

(ERM II), adopted in June 1997.

On 2 May 1998 the Council of the European Union decided that 11 MS had fulfilled

the necessary conditions and can participate in the third stage of the EMU. This also meant

that they would adopt the single currency on 1 January 1999. Also in May the ministers of

finance of the 11 member states alongside with the heads of national central banks, the

European Commission and the EMI agreed that the current bilateral central rates of the

currencies would serve as the irrevocable conversion rates for the euro. On 25 May 1998

the President, Vice-President and four other members of the Executive Board of the

European Central Bank (ECB) was appointed. This took effect from 1 June, which date

also marks the establishment of the ECB. As the EMI has completed its task in good time it

went into liquidation in accordance with Article 123 of the Treaty establishing the

European Community. The rest of 1998 was used to final testing of newly built systems

and procedures.

3.3. Stage Three of the EMU

On 1 January 1999 the third and final stage of the EMU started with irrevocably

fixing the exchange rates of the currencies of 11 member states to the euro and with the

conduct of a single monetary policy under the responsibility of the European Central Bank.

The initial participating countries were Austria, Belgium, Finland, France, Germany,

Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. Around this time, the euro

functioned only in accounts. The actual physical usage of euro notes and coins began on 1

January 2002.

The number of countries which adopted the euro as a legal tender has been

increasing ever since. In 2001 Greece was next to adopt the euro, followed by Slovenia in


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2007. In 2008 both Cyprus and Malta joined the euro zone. Slovakia and Estonia became

members in 2009 and 2011 respectively.

3.4. The Maastricht convergence criteria

The Treaty on European Union (or as better known, the Maastricht Treaty), entered

into force on 1 November 1993, defines 5 convergence criteria regarding price and

exchange rate stability and sustainable financing of the country, which must be fulfilled by

every candidate before the accession to the European and Monetary Union. The reason

behind the criteria is to ensure that the EMU as a group of countries fulfils the requirements

of being an optimum currency area as much as possible. The Maastricht convergence

criteria are the following:

The rate of inflation cannot exceed by more than 1.5% the averageinflation rate of the three countries with the best price stability. Also, this

low rate of inflation needs to be sustainable.

Annual budget deficit cannot exceed 3% of GDP Gross national debt level should not exceed 60% of GDP, however a

country with a higher debt level may still adopt the euro provided its

debt level is falling steadily

The national currency must have stayed within a certain pre-set band,and the currency cannot be devaluated against any of the member states

within a 2 year period. This means

The average long-term nominal interest rate must not be by more than 2percentage points above than the average of the three member states with

the lowest inflation over the previous year.

However, it is not enough to reach the above criteria before the adoption of the

euro; they are to be kept afterwards as well, except for the inflation, which is not regulated

within the EMU. The monitoring of the member states, whether they maintain to keep


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themselves to the criteria or not, and possible sanctions for the latter case are regulated by

the Stability and Growth Pact (SGP), adopted in 1997. (Palcz, 2004)

The SGP ensures, that member states continue to observe the Maastricht

convergence criteria even after they have adopted the euro. This guarantees that membercountries remain committed to strict fiscal policies and dont endanger the stability neither

of the common currency nor of their own economy.

It can be seen that during the creation of the Maastricht convergence criteria the

member states had to intention to include criterion, which are relatively easy to measure

and compare. Many critics of the Maastricht criteria highlight that it takes into

consideration only quantifiable data, while it does not account for the real economy and

structure, although these are equally important factors for a currency area. In the cases of

the newer member states, the EU takes into consideration real economic factors as well.

3.5. The EMU as Optimum Currency Area

The opinions of experts differ concerning the extent to which the European

Monetary Union can be considered as an optimum currency area and in the recent crisis the

voice of those who say that the introduction of the common currency was a mistake

emerged. What is common, that the number of experts, who say that the monetary union is

an optimum currency are is very limited.

As Pter Rna in a recent (01.07.2011) interview to ATV highlighted the common

currency is not a tool to, but a fruit of integration, and according to him the necessary level

of integration within the Economic and Monetary Union is missing. Rna admits that there

is a competitive core within the EMU (Germany, France, Austria, Finland, Netherlands and

Luxemburg), but the rest of the countries are on the periphery. The countries on the

periphery lose their competitiveness and suffer, because the euro is overvalued for them,

while in case of the competitive countries, the euro is undervalued. Consequently for the

less developed countries in the current situation the euro in itself hinders the integration to

the developed countries. Also, a great difference in the structure of the economies can be


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discovered. In the interview Mr. Rna used Greece as an example, which relies heavily on

tourism; while other countries like for example Germany rely on their automobile industry.

This and similar types of structural differences weaken the euro zone, and lead to instability

as this is a source for asymmetric shocks to emerge. In the 2008 financial crisis the income

from tourism in Greece dropped significantly. This appeared as an asymmetric shock

compared to the core countries, which did not perceive such an impact on their economies.

The loss of income played a significant role in the indebtedness of Greece, which now

affects the whole euro zone and the European economy. Asymmetric financial shock,

symmetric economic shock(Barry Eichengreen, 2009) In case of Germany as we know the

situation of the automobile industry became worse than before as during the financial crisis

the demand for their high quality vehicles decreased. Thanks to Germanys fiscal stability

the government could support internal demand by the Wreck Premium program.(Anonymus, 2009)

As a solution Mr. Rna suggests that integration of members of the EMU needs to

deepen through common taxation, fiscal policy and a higher level resignation of

sovereignty. Years before this argument Gspr and Vrhegyi (1999) also stated that the

EMU lacks some of the most crucial tools and level of integration to handle shocks, like

high level of labour mobility and central budget transfers.

Both Palnkai (2004) and Krugman (2003) admit that according to traditional

economic theories the EU and the EMU cannot be considered as an optimum currency area,

mainly because of the limited mobility of labour, although migration among EU countries

is technically feasible, hence there are no country borders. The immobility of labour is

rather a result of language barriers and cultural differences among the member states, which

makes it difficult for individual countries to adjust to economic shocks. In addition,

movement of labour within the EU is also set back by unfavourable regulations and

housing policies in some countries. (Palnkai 2004)

The inefficiency of the housing market, the lack of clarity in the cross-border recognition of

professional qualifications and the limited portability of pension rights are all barriers to

geographical labour mobility in the EU. (Heinz-Warmedinger, 2006)


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Compared to this, in the United States currency union this is just the opposite, as the

language and is the same in all states, cultural differences are not that significant and labour

force seems to react much more flexibly and rapidly to regional changes. The Americans

not only have the possibility to move, but also willing to move, creating equilibrium at

regional labour markets. (Bks, 1998)

Regarding the mobility of the other production factor, capital the EU can be

considered as perfectly mobile, since in the early 1990s member countries abolished all

restrictions on capital flows. The development of the IT sector has also contributed to more

efficient operation of capital markets.

If we go back to the criteria checklist of optimum currency areas in the second

chapter of this thesis, we can easily assess the properties of the EMU accordingly and

conclude whether it can be considered as an OCA or not. The following table helps in this

comparison.

Table 1

OCA Checklist and the EMU

Flexibility of factor markets Capital market: Yes

Labour market: No3

High degree of internal homogeneity No

Budget transfers No

About the flexibility of factor markets the previous give a comprehensive picture,

but I believe the degree of internal homogeneity and the issue of budget transfers need

some more clarification.

The degree of internal homogeneity can be described in many ways. And perhaps

this is the area where most experts and analysts have different opinions. Krugman (2003)

stated that the euro zone countries are similar in their manufacturing structure, which is

evidenced by the large volume of intra-industry trade. However he also admitted that there

3 Technically feasible, but language, cultural and other barriers are significant.


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are important differences as well. For example northern countries are better endowed with

skilled and educated labour, while products that use low-skilled labour are likely to come

from southern Europe. It is also true that northern countries are more abundant in capital as

well. The newer members of the EU, who are waiting for the adoption of the euro, are also

more likely to have a development level of the southern countries. In this case their

accession to the euro zone can further increase differences within the monetary union.

The last point in the checklist is budget or fiscal transfers. This basically means

shifting a part of the fortune of better performing countries to those, which are performing

worse and have higher than optimal budget deficits. The no bail-out clause4 of the

Maastricht Treaty limits the possibility of such transfers to a very low amount. However as

we have seen in the current bail-out packages for Greece, there are some possibilities,

although they take long negotiations. Also as the example of Greece shows, the access to a

bail-out package does not the problems of the real economy, only delays bankruptcy.

As a the result of the above we can conclude that, despite the fact the accession

Economic and Monetary Union is only possible through the compliance with the

Maastricht criteria, the EMU does not fulfil the requirements of optimum currency areas.

However as the process of joining the monetary union was considered irreversible from the

beginning there is no elaborated way a country can return to its original currency and own

monetary policy making. Also, a step like this would have unpredictable effects on the euro

and financial markets and thus would not likely to be supported by any of the member

states. For this reason chances are that the euro zone will stay together, but it needs to

improve to be able to operate optimally as it was planned in the beginning.

4Article 104 b/1 of the Maastricht Treaty: The Community shall not be liable for or assume the commitmentsof central governments, regional, local or other public authorities, other bodies governed by public law, or

public undertakings of any Member State, without prejudice to mutual financial guarantees for the joint

execution of a specific project. A Member State shall not be liable for or assume the commitments of central

governments, regional, local or other public authorities, other bodies governed by public law or public

undertakings of another Member State, without prejudice to mutual financial guarantees for the joint

execution of a specific project.


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4. Hungary and the Economic and Monetary Union

In the second chapter of the thesis I assessed the costs and benefits of joining an

optimal currency area. Whether we consider the EMU an OCA or not, the costs and

possible benefits of the accession will be similarto those of an optimum currency area, only

their extent will be different. Since the adoption of the euro will be compulsory for Hungary after it

fulfils the Maastricht convergence criteria, it is good to know what we can expect from giving up

our national currency, the forint and plan with economic policy accordingly. Alternatively, if policy

makers conclude that it is best to keep our own currency it is still possible deliberately not to fulfil

the criteriaas Sweden does.

It also has to be noted, that in itself the fact that the EMU does not fulfil all requirements of

optimum currency areas does not mean that Hungary cannot benefit from joining the euro zone. If

the similarities and the degree of integration reach a certain level it is beneficial for us to adopt the

euro. However it has to be added, that not only the nominal extent of gains and losses count. The

extremes of business cycles are also important; it is better and safer to have a slower but sustainable

economic growth, then having rapid expansion with overheated economy and dramatic collapse.

The level of integration and the applicability of the common monetary policy are crucial in this

respect.

In 2002, a study conducted by the Hungarian National Bank concluded that the monetary

policy of the Economic and Monetary Union is applicable to the Hungarian economy at least as

much as it is for the less developed members of the euro zone. As we see, today the less developed

countries, especially Greece faces huge crisis, which shows that their euro accession was too early,

and the strong common currency ruined their competitiveness within only a few years, or led to

unsustainable growth, which than made the economy collapse. This can be warning sign for

Hungary, showing the importance of level of integration at the point of accession and the timing of

the euro adoption.

The same study has also shown quantified data to interpret the aggregate effect of

Hungarys euro accession. The studys English title is Adopting the euro in Hungary: expected

costs, benefits and timing, and was edited by Attila Csajbk and gnes Csermely. This study

serves as the basis for the next paragraphs of my thesis.


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4.1. The Benefits of joining the EMU

When we assess the benefits and costs of membership in the monetary union, first it

needs to be clarified what is the alternative to the accession, what do economic prospects

look like in case of keeping the own currency. In the above mentioned study the editors

related the costs and benefits to an alternative path of joining the European Union at a

relatively early stage (this was fulfilled in 2004), but keeping the own currency, monetary

and exchange rate policy. The study also assumed that despite the country refrained from

the accession to the monetary union, the continued convergence of inflation rate and

incomes towards the euro area.

The benefits of joining the EMU can be classified into three main categories, which

I have already indicated in the second part. These are the following:

reduction of transaction costs expansion of external trade reduction of real interest rates

The use of the national currency can be considered as an administrative burden,

which ties up part of the physical and human resources. These losses appear at a household

and firm level as well, since the cost of conversion of forint to euro (and vice versa) takes

form in commissions, bank fees and bid-ask spreads. According to estimates based on the

volume of trade of the forint on the foreign exchange market and the corresponding fees,

the reduction of transaction costs means a single (one time) 0.18-0.3 percentage point

increase in the level Hungarys gross domestic product.

Maintaining the national currency can have a negative effect on the volume ofexternal trade as well. The common currency makes prices more transparent and

comparable. Also, the risk of exchange rate fluctuation disappears. This motivates trade,

which in turn leads to further exchange of technology and know-how. Based on this

argument the adoption of the euro will lead to a 0.55-0.76 percentage pointincrease in the

rate of GDP growth in the long run.


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The risk of exchange rate fluctuation is also included in the risk premium of

Hungarian securities (bonds for example). This extra interest compensates external

invertors for uncertainties regarding future exchange rates. The common currency will

remove this extra interest from nominal rates, which in turn causes real interest rates to be

lower. This not only makes financing cheaper, but the threat of devaluation caused by the

current account deficit will also be ceased for euro zone investors. This removes a major

restraint on investment growth, and accelerates the convergence of incomes to EU levels.

Analysts suggest that this change will raise the rate of GDP growth by 0.08-0.13percentage

point. According to the study the euro will have a positive effect on the financial

integration as well. As the exchange risk ceases domestic households will have the

possibility to broaden their investment portfolios with foreign assets from the euro zone.

The better diversification can reduce risks and the exposure to asymmetric shocks, leading

to more efficient portfolios. This can also increase the GDP growth rate on the long run by

an estimated 0.6-0.9 percentage point.

A further benefit of giving up the own currency is that by using the euro a small and

open economy, which is classified in the emerging market investment category can reduce

the likelihood of financial infections and speculative attacks against its currency. The use of

the own currency would lead to a greater fluctuation of capital flows, which can be harmful

for the business cycle as well.

4.2. The costs of joining the EMU

The quantifiable cost of giving up the own currency is the loss of income from

issuing the money. Of course Hungary will also receive a share of the seigniorage income

of the euro zone, but due to the rules of distribution of this income, the money received willbe less than the seigniorage earned if Hungary kept the forint. The share of the seigniorage

income is base on the countrys contribution to the capital of the European Central Bank.

The money that a country has to pay into the capital base of the ECB is calculated using a

key which reflects the respective countrys share in the total population and gross domestic


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product of the EU. The lower seigniorage income causes a 0.17-0.23 percentage pointloss

to the annual GDP level.

Another type of cost will stem from abandoning the monetary autonomy, this cost,

however, is not really quantifiable and will be determined by the fluctuation of economiccycles after the accession to the euro zone. The fluctuations will be determined by the

extent of asymmetric shocks to which Hungary will be exposed. These shocks are rapid

changes in the economic environment that have a different affect on Hungary and the euro

zone. There are two ways of adjustment to these changes, namely the operation of

automatic stabilizers and active fiscal measures. In Hungary the role of automatic

stabilisers is minor, which is not exceptional within the less developed member states of the

euro zone. It should be noted that the EU prefers aggregate demand adjustment via

automatic stabilizers in contrast to fiscal measures. Since it cannot be measured or

quantified there is a big uncertainty behind the cost of stability loss, which needs to be

reckoned with.

Table 2

Effect of the short-term factors on

the level of GDP as percentage point of GDP

Reduction in transaction costs 0.180.30

Change in seigniorage revenue (-0.17)(-0.23)

Net effect 0.010.07

Source: Csajbk- Csermely (2002)


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Table 3

Effect of long-term factors on

GDP growth as percentage points

Reduction in real interest rates 0.080.13

Expansion of external trade 0.550.76

Net effect 0.630.89

Source: Csajbk- Csermely (2002)

The cost-benefit comparison of joining the EMU can be summarized in the

following way. Although in the short run quantifiably benefits and costs cancel each other

out, on the longer term benefits arising are can significantly exceed the costs entailed. With

the common monetary policy the country loses a major device for keeping asymmetric

shocks at bay, but at the same time a potential source of asymmetric shocks disappears by

giving up the national currency (e.g.: financial infection and speculative attacks). (Csajbk

Csermely, 2002)

4.3. The timing of the accession

As the cost benefit analysis showed that benefits will significantly exceed costs

when Hungary joins the euro zone, the answer for the timing of the accession seems to be

obvious: the sooner the better. However it is not that simple.

The too rapid fulfilment of the nominal convergence criteria can lead to losses in

the real economy. The most problematic factors in this sense are the inflation and the

budget deficit. A too fast disinflationary and fiscal convergence can sacrifice too much of

the real growth of the economy. However it also has to be noted, that in the period between

the EU accession and the adoption of the euro a country can face a speculative inflow of

capital, if investors are on the opinion of an early euro accession. If investor confidence

falls for some reason, the speculative capital can be withdrawn from the country, causing a


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rapid devaluation of the currency. The fluctuation of capital flows can cause extreme

volatility in the valuation of a nations currency. Since Hungarys is in this stage of the

integration, this also has to be taken into account in the convergence programme. A

credible programme can reduce fluctuations and stabilize the exchange rates, as

international experiences show that exchange rates tend to converge to the expected rate of

conversion as the date of entry approaches. (Csajbk Csermely, 2002)

As it can be seen on Figure 2 there were quite lot fluctuations in the EUR/HUF

exchange rate in the past years. Extremes of the volatility were reached during years of the

financial crisis in 2008 and 2009. In this period, due to the instability of the markets the

exchange rate shoot up from the all-time low (strong forint) 230 to the all time high (weak

forint) 310. This is a 35% change in only a few months. If we do not consider this period,

some volatility still remains, however it can be noted, that the exchange rate fluctuated

around 270 (+- 10%).

Figure 2

The EUR/HUF exchange rate

between 2004 and 2011

source: yahoo.finance.com


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The governments commitment to an early accession to the euro zone is one of the

most important factors that make a disinflationary programme credible. The more

inflationary expectations start to sink after the announcement of the disinflationary path, the

easier it becomes to reduce inflation to the required level. Also it will take less time, which

means that the economy needs to suffer much lower losses. Hungary submitted its first

convergence programme in the spring of 2004, and since 2007 submits an updated

programme, which includes aims and completed measures.

As some experts say, Hungarys development level is too far be low the average of

the euro zone countries to join the EMU in the near future. According to Pter Rna the

Hungarian real economy is at about a level of 60% compared to the monetary union, while

the accession to the euro zone would be a mistake under 85-90%. According these

estimates and the current economic situation an accession before 2020 seems to be

unrealistic, if Hungarian governments are willing to wait until the economies development

reaches a certain level. (Frjes Judit, 2010) And it is worth waiting to an adequate level of

integration, because as we see in the previous chapter the net effect of the accession will

depend mainly on the long-term benefits and costs. As long-term costs/stability losses are

hardly quantifiable Hungary needs to make sure in advance, that its economy is ready for

the adoption of the euro by good policy making and by preventing a too early accession.

In the recent financial crisis many experts and analysts said that Hungary needs to

join the euro zone, because the introduction of the euro can solve the problems, but the

words of Jrgen Stark should always ring in our minds, when hearing about the straight

away accession to the monetary union: In short, unilateral euroisation is not a panacea. Its

benefits are uncertain, whereas the costs are real, and the risks serious. In particular, it should be

stressed that euroisation is not a quick-fix for structural problems or external pressures.

Admittedly, euroisation would provide some shelter against adverse winds coming from the

outside. (Jrgen Stark, 13 February 2008, Reykjavik)


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4.4. Hungarys EMU maturity

In 2002, the Hungarian National Banks comprehensive analysis (Csajbk

Csermely, 2002) concluded that Hungarys accession to the Economic and Monetary Union

has significant net benefits, which implies it is worth to join the monetary union as soon as

possible. After Hungarys 2004 accession to the European Union, the government proposed

more possible dates for the introduction of the euro, which all turned out to be infeasible. In

the last few years, Hungarys euro accession seemed to be drifting away. Also, since 2006

the Hungarian National Banks Analysis of the Convergence Process has more and more

emphasis on the necessary conditions for the successful adoption of the euro. One of the

most important factors is fiscal consolidation; Hungary not only has to fulfil the formal

requirements for inflation and debt level of the Maastricht criteria, but also needs to create a

reasonable room for fiscal manoeuvring before the euro accession. (Hungarian National

Bank, 2010)

When assessing Hungarys maturity preparedness for joining the euro zone it seems

to be logical to start with comparing Hungarys performance to the Maastricht criteria.

Since the reference levels of the inflation and long-term interest rate are changing from year

to year it is necessary to highlight that the prevailing economic situation of the EU,

especially its members with the lowest inflation rates are determinant when assessing how

well Hungary is approaching the criteria. In the recent years of economic slowdown for

example the three members of the euro zone with the lowest inflation experienced

reduction in prices (negative inflation or deflation), which according to most of the

economists is far more dangerous than a moderate level inflation, because it can slow the

economy down even further. Also, at this point another weakness of the Maastricht criteria

can be discovered, namely that when it considers inflation as the measure of price stability,

it does not take into account that inflation can be negative as well, or turning this aroundconsiders negative inflation more desirable then zero inflation (perfect price stability).

The reference values for the Maastricht criteria are published by the European

Central Bank every two years. The last report was published in May, 2010. According this

convergence report the three countries are Portugal (-0.8%), Estonia (-0.7%) and Belgium


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(-0.1%). The average inflation of these three is -0.5%, which means that the reference level

for inflation since May, 2010 is 1.0% (-0.5% + 1.5%). The reference value for long-term

interest rates (after similar calculation) is 6.0%. (European Central Bank, 2010)

Table 4

The Maastricht criteria and Hungary

Criteria Reference Level (2010) Hungary

Inflation rate 1.0% 3.6% *

Long-term interest rate 6.0% 7.6% *

Budget deficit to GDP 3.0% 3.2% **

Debt level to GDP 60.0% 76.1%*

Exchange rate stability ERM II No

source: European Central Bank, Hungarian National Bank, Ministry of National Economy

* - September, 2011

** - 2010

As it can be seen in Table 4 today Hungary fails to match any of the Maastricht

convergence criteria. Although Hungary is not a member of the ERM II (which will be

compulsory sooner or later), until February, 2008 the Hungarian National Bank let the

forint to fluctuate against the euro only within a certain fluctuation band. This was a

unilateral shadowing of ERM II (Allam, 2009). The centre of this band was at 282.36, with

the lower extreme of 240.01 and a higher extreme of 324.71. The EUR/HUF exchange rate

has stayed mostly within these rates even after February 26, 2008, when the Hungarian

National Bank revoked the fluctuation band.

As I have mentioned earlier the economic slowdown in some of the member states,

which resulted in deflation has effected that the reference value for inflation is 1.0%. As the

Hungarian National Bank states on its website (www.mnb.hu), that the medium term

inflation rate in Hungary is 3.0%, it can be concluded, that is not the goal of policy makers

to chase the Maastricht criteria at any cost. Additionally it is more likely that as the

economies recover prices will increase in those countries, which experienced deflation in

the recent years. This means that the reference value will increase to a more healthy value


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as well. The average inflation target of the European Central Bank is below but close to

2%. (Jrgen Stark, 13 February 2008, Reykjavik)

The criteria for long-term interest rates, budget deficit to GDP and debt to GDP

have a common point. Strict fiscal policy can make these figures improve. Lowergovernment spending directly improves the budget deficit and debt level. Although on the

other hand it needs to be done properly. Suddenly cut government spending can have

negative effect on the GDP. If GDP fall, these figures get worse, even if the nominal

amount of deficit or debt does not change. While fiscal policy indirectly, monetary policy

directly has effect on long-term interest rates. To improve this figure, Hungary needs to

gain credibility in investors eyes, so that they are more willing to finance the country even

at lower interest levels.

By joining to the euro zone and giving up monetary autonomy Hungarys economic

structure will be more or less fixed. The threat of asymmetric shocks is caused by the

different sensitivity of countries to changes in the economic environment in different

industries. This different sensitivity stems from the structural differences among countries.

Since after the accession the only tool in individual economic policy making will be fiscal

measurements, Hungary should get to a high level of real convergence before the

introduction of the euro. In the narrow sense this means that wages catch up to EU levels

and the economic structure becomes similar to the EU. In the latter case it can be said, that

convergence is appropriate (although the level of development is low), but the adjustment

of wages is expected to be a very slow process.

The optimal operation of the EMU needs perfectly flexible markets, which can

stabilize changes in the economic environment. On the goods market this means price-

flexibility, while on the labour market a supply of labour force that adjusts to the

production conditions. The barriers to a flexible labour market are the high rate of long-

term unemployment, the inelastic education and low mobility. In the new member

countries, like Hungary, the mobility of labour is significantly lower than in the developed

countries. Until differences among regional unemployment rates dont reduce (indicating

low labour mobility within the same country), it is unrealistic to expect reduction between

different member states.


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4.5. The experience of some other EMU members

In the previous parts of the thesis I assessed the possible consequences of Hungarys

euro zone accession from mainly a theoretical point of view. However before deciding

about, whether it is beneficial for us to join the EMU, it is good to take a look at the

experiences of some member states, which introduced to euro at an economic development

and integration level that is similar to Hungarys current situation. Perhaps, the most

obvious choice for this would be Slovakia, but they only joined the EMU a few years ago,

right before the financial crisis. The short timeframe and the exceptional world economic

situation could have a biasing effect on the conclusion about Slovakias euro experience.

However there are still some other states from South-Europe that can be used for this kind

of analysis.

According to Horvth and Szalai (2001) the way of integration of Greece, Ireland or

Spain can be a good starting point for Hungary, but they also highlighted that Hungary has

a different economic structure and environment than the previously mentioned countries.

The reason for still using their example is that the development level of these countries

was similar to Hungarys current situation. The authors concluded, that for the earliest

possible accession to the EMU the joining countrys government and national bank has to

co-operate advisedly, since both fiscal and monetary policy making is the most effective in

this way. In Greece, Spain, Portugal and Ireland this seemed to be working, as all countries

could reduce their inflation from high levels to acceptable values. In case of Greece this

meant to a reduction of price increase from almost 20% in 1991 by around 3% in 1999.

After the accession the EMU inflation rates were rising in these countries as a result

of the common monetary policy. This is the result of the previous wrong approach to

decrease inflation within a relatively short time. This wrong approach could be that instead

of strengthening confidence of investors and companies, they implemented restrictions

through contractionary fiscal policy, which led to a decrease in inflation through the

decrease in demand. After the introduction of the euro, the higher level inflation returned to

these countries.


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While inflation and budget deficit can be reduced by one time measurements and

restrictions on spending, the progress of integration and the way towards the

implementation of the euro needs to be sustainable. Long-term interest rates indicate how

confident investors are, that the fiscal and monetary policies of a country lead to a

sustainable development path. The level of public debt is another key factor which

determines investor opinion and thus the interest rate. A high debt level increases the risk

of non-payment, which risk will appear in interest rates. In the beginning of the integration

process the risk premium of Spanish and Portuguese bonds was much higher than the

similar maturity date German bonds. After the 1995 ERM crisis this difference rapidly

decreased as the schedule for the creation of the Economic and Monetary Union was

finalized, and the fulfilment of the Maastricht criteria became the priority of Southern

countries as well. (Horvth Szalai, 2001).

Regarding budget deficit and debt level, the example of these countries show,

monetary discipline and strict fiscal policy making made it relatively easy to meet target

levels, or at least show a trend of approaching target at a high pace. After the EMU

accession, however it turned out that the Greek and Portuguese approach was somewhat

wrong. In these two countries budget deficit was decreased to a large extent by increasing

state incomes, while Spain implemented cut backs on the expenditures side. The latter

turned out to be the sustainable solution. (Horvth Szalai, 2001)

One of the major questions regarding the accession to the monetary union is the

exchange rate at which the countries original currency will be converted to the euro. In this

respect, the goal of previously joined countries was to prevent their currency to be

overvalued compared to the euro. This is a reasonable idea, because the overvalued

currency would worsen the countries competitiveness, lead to unemployment and

recession. Also it would set back integration to the western countries. As a preventive

measure Greece devaluated the drachmas by 10% before the accession. The exchange rates

of both the Portuguese escudos and the Spanish pesetas were nominally at around the final

conversion rate for 4-5 years before the accession and the volatility of fluctuations has

decreased continuously. (Horvth Szalai, 2001) For the future my only advice for

Hungary regarding exchange rate policy is to prevent joining with and overvalued currency,


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as it would easily ruin the countrys competitiveness in the euro zone. (For individual

conversion rates of countries see Appendix 1.)

4.6. Should Hungary join or not?

As it could be seen in this chapter the gains of joining a properly functioning euro

zone would exceed costs on the long term. However, this picture of the ideal world is not

reality. Reality is, that the neither the European Union nor the Economic and Monetary

Union can be considered as optimum currency areas in their current form, which implies

that member countries risk the possibility of emerging asymmetric shocks that cannot be

handled easily. From this point of view, in my opinion it is best to stay out of the monetary

zone, and observe its development, even if it takes some tricks as for example in the case of

Sweden, which country stays out by deliberately not fulfilling the Maastricht criteria.

However Hungary is not yet at a point of development to ask itself the question whether it

should join the monetary union or not. The fact is that today Hungary is far from being able

to join the euro zone and the government and policy makers should concentrate on

developing a plan not to fulfil the nominal criteria of accession, but to get the real economy

behind the numbers start to converge to those of the more developed countries of Europe.

Even if it takes time, this is the sustainable way of improvement, and at the end, the

sustainable way is the only way to go. Furthermore this is not only the condition of joining

the Economic and Monetary Union but the own interest of the country for the future.

To answer the question given in the title of the thesis I have to say, that in my

opinion Hungary should NOT join the Economic and Monetary Union even if it was

(nominally) ready for the accession. The reason behind my argument as it turned out from

the previous pages, is that both sides, the EMU and Hungary fail to meet the necessaryrequirements for a flourishing future with a common currency; the EMU does not have the

properties an optimum currency area needs to have, thus cannot operate optimally, while

Hungary not only fails to meet the convergence criteria, but also lacks the necessary real

economic development level, which could serve as a good ground for using the common

currency.


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5. Conclusion

At the end of my thesis work I shall assess and conclude the findings of the

previous pages. The main aim of the thesis was to assess the costs and benefits of

Hungarys accession to the Economic and Monetary union and to conclude whether

Hungary should join the euro zone or not in a form which is easily understandable for the

reader.

In the first part of the thesis I introduced the main theories about optimum currency

areas and assessed the possible benefits and certain costs of joining a monetary union.

Then, after taking a view on its history, I examined the Economic and Monetary Union and

reached the conclusion, that it cannot be considered as an optimum currency area for

different reasons. The main reason that I highlighted was that the necessary homogeneity of

member countries is missing, furthermore some of the mechanisms that can prevent the

economy from the consequences from asymmetric shocks does not work properly as well

(e.g.: labour mobility). However I also admitted that some competitive core countries of the

EMU can be considered as countries forming an optimum currency area, but this is not

enough to say that the monetary union as a whole was a good decision to be made.

In the second half of the thesis I compared Hungary to the Economic and MonetaryUnion, examined whether the country fulfils the Maastricht criteria and gave some

information about what kind of experiences similar countries had before and after joining

the monetary union in the past. I also assessed the numerical costs and benefits of joining

the EMU. As a conclusion to these I admitted that an adequately timed accessions benefits

can exceed its costs. However, based on theoretical material and the experiences of Greece,

Portugal and Spain I suggested that Hungary should wait with the adoption of the euro until

it gets closer to the economic development level of the core countries, to minimize risks of

the accession. Since currently Hungary does not fulfil the Maastricht criteria, and Europes

economy faces hard times the possible time for Hungarys accession to the monetary union

seems to be in the distant future. Even optimistic estimates say that the chances are minimal

for an accession before 2020, but as the euro itself is not a cure for diseases the timing of

the accession does not need to be compelling.


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6. Appendices

Appendix 1 Fixed euro conversion rates

Country and Currency Conversion Rate

Belgium, Belgian francs (BEF) 40.3399

Germany, Deutsche mark (DEM) 1.95583

Estonia, Estonian kroon (EEK) 15.6466

Ireland, Irish pound (IEP) 0.787564

Greece, Greek drachmas (GRD) 340.750

Spain, Spanish pesetas (ESP) 166.386

Cyprus, Cyprus pound (CYP) 0.585274

France, French francs (FRF) 6.55957

Italy, Italian lire (ITL) 1936.27

Luxembourg, Luxembourg francs (LUF) 40.3399

Malta, Maltese lira (MTL) 0.4293

Netherlands, Dutch guilders (NLG) 2.20371

Austria, Austrian schilling (ATS) 13.7603

Portugal, Portuguese escudos (PTE) 200.482

Slovenia, Slovenian tolars (SIT) 239.640

Slovakia, Slovak koruna (SKK) 30.1260

Finland, Finnish markkas (FIM) 5.94573

source: European Central Bank


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Appendix 2 Euro banknotes


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source: European Central Bank


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7. Bibliography and references

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Repercussions of the Financial Crisis, University of Pittsburgh, Archive ofEuropean Integration

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accessed 30 October, 2011

Anonymus (2009)Hatalmas profitot rt el a nmet autipar llami segtsggel, hvg.hu,

http://hvg.hu/cegauto/20091231_nemet_autoipar


Bks, Gbor (1998) Optimlis valutavezetek, gazdasgi integrltsg s hasonlatossg:

az Eurpai Uni pldja.Kzgazdasgi Szemle, Vol. XLV., July-August 1998, pp.

709-739.

Csajbk, Attila Csermely, gnes (2002)Az eur hazai bevezetsnek vrhat hasznai,

kltsgei sidztse., Budapest, Magyar Nemzeti Bank

Eichengreen, Barry (2009) Was the euro a mistake?

http://www.voxeu.org/index.php?q=node/2815


European Central Bank (2010) Convergence Report May 2010, Frankfurt am Main,

European Central Bank

Frjes, Judit (2010)Rna Pter: Mire bevezetnnk az eurt, mr nem lesz

http://hvg.hu/velemeny/20100517_rona_adocsokkentes_euro_gazdasag


Gspr, PlVrhegyi, va (1999)Az eur bevezetsnek hatsai az EMU s

Magyarorszg gazdasgra,Kzgazdasgi Szemle, Vol. XLVI., June 1999, pp

548-563.
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Heinz, F. F.Ward-Warmedinger, M. (2006) Cross-border labour mobility within an

enlarged EU, Frankfurt am Main, European Central Bank

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konvergencijnak tapasztalatai,Kzgazdasgi Szemle, Vol. XLVIII., July-August2001, pp. 640-658.

Hungarian National Bank (2010) Analysis of the convergence process from the point of

view of the financial crisis, Budapest, Magyar Nemzeti Bank

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Mundell and A. Swoboda (eds)Monetary problems of International Economy,

Chicago, University of Chicago Press

Krugman, P. R.Obstfeld, M. (2003)International Economics., Boston, Pearson

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McKinnon, R. (1963) Optimum currency areas, American Economic Review, Vol 53.,

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Palcz, va (2004)Az eur magyarorszgi bevezetshez vezet, trsadalmi s gazdasgi

szempontbl optimlis t jellemzirl, annak temezsrl, klns tekintettel a

nvekeds, az egyensly, a bevezetshez szksges konvergencia kvetelmnyek s

az llami szerepvllals mrtknek lehetsges alakulsrl, Budapest,

Pnzgyminisztrium


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Rna, Pter (2011) Interview on ATVs programme, Egyenes beszd.

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Stark, Jrgen (2008) The adoption of the euro: principles, procedures and criteria, speechat the Icelandic Chamber of Commerce, Reykjavik, 13 February 2008,

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