News & Analysis

Hungarian central bank governor calls for eurozone exit mechanism

EU member states part of the bloc’s common currency zone should be allowed to leave in coming decades, while those countries that remain in the eurozone, should build a “more sustainable global currency” in the future, György Matolcsy, the governor of the National Bank of Hungary (NBH) has said.

In an editorial published by the Financial Times, Mr Matolcsy argues that two decades after the euro was launched, “most of the necessary pillars of a successful global currency”, which include a common state, a budget covering at least 15-20 per cent of the eurozone’s total GDP, a eurozone finance minister and a corresponding finance ministry “are still missing”.

“The time has come to seek a way out of the euro trap,” the Hungarian central bank governor stressed, adding that the common currency was not the right way to fasten Europe’s integration since none of the necessary preconditions were met.

According to him, most eurozone member countries were in a better situation before they adopted the common currency. Citing a recent study from the Centre for European Policy, he said that euro had created both winners and losers, with Germany being the biggest winner.

“The common currency was not needed for European success stories before 1999 and the majority of eurozone member states did not benefit from it later,” he continued, noting that most eurozone states were badly hit by the 2008 financial crisis, resulting in the piling up of “huge government debts.”