October 12, 2017 / 2:38 PM / 2 years ago

Hungary rejects euro fin min plan, no rushed entry - PM aide

BUDAPEST (Reuters) - Hungary opposes plans for deeper integration in the euro zone and will not rush to join the currency bloc before it is ready, a senior aide to Prime Minister Viktor Orban said on Thursday.

FILE PHOTO - Hungary's Prime Minister Viktor Orban attends a news conference with his Vietnamese counterpart Nguyen Xuan Phuc (not pictured) at the Government Office in Hanoi, Vietnam September 25, 2017. REUTERS/Kham

Szabolcs Takacs, state secretary for EU Affairs in Orban’s Office, also told Reuters that dividing the European Union into a core and periphery — or countries within the euro zone and those outside — would go against the interests of the bloc.

Five eastern ex-communist member states — Slovakia, Slovenia, Estonia, Latvia and Lithuania — have already adopted the euro. However, Poland, Hungary, the Czech Republic, Romania, Bulgaria and Croatia have so far retained their national currencies.

However, a drive in the EU for closer integration has prompted a renewed debate about euro accession in eastern Europe in the past weeks.

“The perception should be avoided that the good member states are those who are in the euro zone - regardless of what price they paid for it ... and those outside are bad member states,” Takacs said in a telephone interview.

Takacs said Hungary would not support the concept of the euro zone having its own budget and own finance minister — an idea laid out by French President Emmanuel Macron last month.

Takacs said the euro zone should work along transparent rules where countries inside fully keep to the rules of the club, adding that a strong euro zone was in Hungary’s interest.

Hungary, which has followed a go-it-alone mix of economic policies since Orban rose to power in 2010, has been running a deficit below the EU’s 3 percent ceiling and its economy is expected to grow around 4 percent this year. Growth in eastern Europe has outpaced euro zone economies.

Takacs said these member states, whose economies are in an upswing now, should be allowed to develop further for a few more years before adopting the euro.

“When there are results which provide sufficient guarantee that they can absorb a potential bigger shock ... then and only then should they join the euro zone.”

“I don’t know how many years this will take, it will also depend on how the situation of the euro zone shapes up.”

He declined to say when Hungary could join.

While Prague and Bratislava have sometimes struck a more moderate tone, Warsaw and Budapest have had conflicts with the bloc’s executive Commission in Brussels over what the bloc increasingly sees as their flouting of democratic rules.

European Commission head Jean-Claude Juncker has invited the leaders of four eastern European countries to a dinner for Oct. 18 in an effort to ease tensions between them and western states.

Juncker has also stressed the “paramount importance” of EU unity.

Takacs welcomed Juncker’s comments that a division between western and eastern member states should be healed.

“This is a very positive thing,” he said.

Reporting by Krisztina Than; Editing by Toby Chopra

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