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“The Euro Trap” – National Bank Head Matolcsy Campaigns for National Currency

Csongor Szij 2021.06.29.

The head of the Hungarian National Bank, György Matolcsy, has recently published an article in pro-government daily Magyar Nemzet. The essay, titled “The Euro Trap”, concerns itself with the history of the EURO currency and its effect on the countries which have joined the EuroZone. He also expresses his concerns about the dangers of a future “left-liberal” government changing the national currency to the Euro.

Matolcsy starts by talking about the history of the EU’s currency. He says “The European single currency was a response, especially in France, to the collapse of the bipolar world order, the new hegemonic role of the United States and German unification”.

20 Years of the Euro: Are Netherlands and Germany the Only Winners?
20 Years of the Euro: Are Netherlands and Germany the Only Winners?

20 years after the euro’s introduction, its effect is still a much disputed subject. The Freiburg research center (CEP) has used a synthetic control method to analyze which countries have gained the most from the introduction of the currency and which ones have lost out. The study shows it was Germany which gained by far the most […]Continue reading

“While the Euro might seem a huge success at first, most members of the eurozone, who are among the best in the world in terms of development and living standards, rose to the top when they still had a national currency”.  He cites a study from the Center for European Policy Research in Freiburg and says that even though it seems that Baltic countries have won with the introduction of the euro, they have also “suffered historical social losses”.

Today, the V4 group – especially the three countries using national currencies – can be the engine of growth for the EU because they have retained more room for maneuver in independent economic and monetary policy”

Finally, the Head of the National Bank expresses his concerns that in the future, despite “the known facts,” an opposition government would join Hungary to the EuroZone.” A country can only leave the eurozone by leaving the EU, a decision which no reasonable person would make,” Matolcsy writes. Therefore, he concludes that “this is how, together with the euro, Hungary’s fallback would be finalized.”

Featured photo illustration by Zsolt Szigetváry/MTI