Should the Forint give way to the Euro in Hungary?

Theoretically, Hungary might have fulfilled all the criteria that are necessary to change the country’s currency to Euro, but the government won’t even consider the common currency now. Vilaggazdasag listed the requirements for Euro qualification. 

One of the criteria of introducing the Euro in a member country is to reduce the government budget deficit and keep it under 3%, which Hungary accomplished, and its debt is decreasing since 2012. Another criterion is that inflation should not exceed the three best performing countries’ rate with more than 1.5 percentage points which was probably fulfilled by keeping inflation under 0. The best performing country’s inflation (it was Latvia), was around -0.5%.

The level of long term interests cannot pass the three best performing countries with 2 percentage points in inflation, but because Spain is part of the best three (and their interest level reaches 2%) the reference level is higher as well, therefore the 3.5% long term rate that Hungary has might qualify it for the Euro.