Hungary

December 2005 | Risk Summary

Uncertainty over Hungary’s eurozone entry, and the shadow of its chronic budget deficit, is eroding the country’s credibility with the European Commission and neighbouring states. With market predictions for euro adoption running as late as 2014, the ruling Socialists maintain their 2010 pledge, and opposition Fidesz have proposed an optimistic 2009 agenda. At an EU Finance Ministers meeting, Slovakia expressed concern about the damaging knock-on effects of Hungary’s budget deficit, and Commissioner Almunia threatened EU funding withdrawals if the situation was not addressed. With an export economy tied to its European partners, Hungary is poorly situated to flout prevailing European

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