Hungary’s Euro Ambition Is a Long-term Bet Requiring Discipline, Credibility and Integration

Péter Magyar and the Tisza Party achieved an outright majority in general elections held on Sunday, 12 April. They ran on a platform including the adoption of the euro.

1. How realistic is this promise?

The promise of joining the euro is politically powerful but economically conditional: adopting the euro is not a switch one can flip following an election win—it is a multi-year process bound by very-strict convergence criteria. Hungary could credibly set a path toward membership, but presenting it as a near-term deliverable risks overselling what is, in reality, a disciplined and externally monitored transformation. The experience across central and eastern Europe displays that even highly motivated governments cannot shortcut the process without risking market backlash or EU pushback.

At the same time, the signal from Tisza does matter. Committing to euro adoption can act as a policy anchor, shaping investor expectations and enforcing greater fiscal and monetary discipline. In that sense, the promise is less about any fixed date and more about a general direction of travel—but voters should be clear that this is a strategic horizon, and not an immediate policy outcome.

2. What obstacles does Hungary need to overcome to achieve this?

The obstacles are both technical and political: Hungary would need to sustain moderate inflation, stabilise its currency, cut fiscal deficits and government debt, demonstrate long-term central bank independence, and convince markets to trim financing rates—all under the scrutiny of EU institutions. These are not marginal adjustments; they require sustained policy consistency over many years, often in the face of domestic political pressure and external economic shocks.

As I referenced for Handelsblatt, perhaps even more challenging is rebuilding trust with European partners. Euro adoption is as much about credibility, relationships and alignment as it is about meeting any numerical threshold. Hungary would need to demonstrate that its economic governance is predictable, its institutions are robust, and its relationship with the EU is constructive—because, ultimately, membership is a political decision that is informed by economic and institutional readiness.

3. When, at the earliest, could Hungary adopt the euro, especially given the experiences of Croatia and, in particular, Bulgaria?

If Hungary moved decisively, the absolute earliest and most-optimistic time frame would likely be the mid-2030s. Before adopting the euro, countries must spend at the minimum two years in the Exchange Rate Mechanism II waiting room, and in practice, preparation for entry into that system alone can take many years. This makes any rapid transition highly unlikely, even under an ambitious reform agenda. The road is, moreover, perilous and would need to survive multiple political cycles, during which government changes such as any return of Viktor Orbán and Fidesz could easily thwart the entire process.

Recent examples underline this point. Croatia’s relatively smooth entry was the result of years of alignment and policy discipline but nevertheless required nearly a decade following its entry to the EU, while Bulgaria’s repeated delays despite cross-party support for euro adoption highlight how inflation dynamics and institutional concerns can slow the process by many years.

Hungary would likely face meaningful constraints, especially given the lingering euroscepticism within a share of the populace (Figure 1), meaning that any credible timeline must build in buffers for setbacks rather than assume any linear path. This is even though the euro area may act to speed up any such acceptance of Hungary during any final stages—as it did for Bulgaria—if the EU has a geopolitical incentive to deepen integration and pull Hungary further away from the Russosphere.

Figure 1. Should Hungary abolish the forint and adopt the euro?

Hungarian public, % of poll responses

4. Would Hungary’s economy benefit from adopting the euro?

Hungary’s economy would benefit from adopting the euro—but there are caveats: euro adoption would likely curtail transaction costs, meaningfully trim currency risks (Figure 2), provide a strong lender of last resort, and anchor Hungary more firmly within the EU core, which could boost investment and deepen financial integration. Entering Banking Union with the euro as other nations have done may furthermore support financial stability. For an open, trade-oriented economy, such benefits can be substantial, particularly as concerns attracting long-term capital and reducing borrowing costs.

Figure 2. Euro vs Hungarian forint daily exchange rate

Nevertheless, the trade-off is real. Joining the euro removes independent monetary policy, which means Hungary would lose its capacity to adjust its exchange rate as a response to shocks. That places a greater burden on fiscal policy, wage flexibility, and overall economic resilience. In other words, the euro can amplify stability—but only if the domestic policy framework is strong enough to compensate for the loss of monetary autonomy.

5. Is the euro area ready for new members?

The euro area is open but cautious: following the euro area debt crisis, it has become far more selective concerning new members. There is political appetite for enlargement, especially in central and eastern Europe, but this is paired with a stricter interpretation of the rules and a greater emphasis on institutional quality. The bar has not formally changed, but in practice it is higher.

At the same time, the euro area has a strategic interest in expanding its footprint and reinforcing economic cohesion within the EU. That creates the opportunity for nations such as Hungary—provided they can demonstrate a sustained commitment to reform. The message from Brussels has been clear: the door is open, but only for those who have demonstrated they are ready to walk through it.

Dennis Y. Shen is a macroeconomist and the former Chair of the Macroeconomic Council of the European credit rating agency. He is a lecturer in finance at the International School of Management (Germany) and serves as a Member of the Supervisory Board of Visioneers gGmbH. He is a regulator contributor for the London School of Economics.