The euro is a trap and countries must be allowed to walk away from it, warns Hungarian central bank Governor

Budapest: The Governor of the Hungarian central bank, Gyorgy Matolcsy warned, ‘The European countries need to recognise that the single currency is a trap for practically all its members — for different reasons — not a gold mine. EU states, both in and outside the Eurozone, should admit that the euro has been a strategic error. At the same time, the members of the Eurozone must be allowed to leave the currency zone with an alternative for it.’

Currently, the European Union (EU) is tremendously uneasy due to the Brexit crisis, and the pressures on the economy are rising, given the US-China trade war and many other issues. A recession-like state currently exists in the leading European economies such as Germany, France, Italy and Spain and the International Monetary Fund (IMF) had already warned of a fall in the EU’s economic growth rate. At the same time, the leading political parties in many EU member states were observed to hold resentment against the euro still. On the sidelines of the developments, the Hungarian central bank Governor’s stand against the euro assumes much significance.

Even though Hungary is an essential member of the EU, the country has had frequent disputes with the block on immigrants and various other issues.

The euro is one of the main points of disagreement while the block’s interference in the country’s internal affairs was the leading reason for displeasure. Given the background, the stance taken by the chief of the Hungarian central bank against the euro becomes significant.

The Hungarian central bank Governor, Gyorgy Matolcsy targeted the euro and criticised it saying, ‘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. The time has come to wake up from this harmful and fruitless dream.’

Even Europe faced a significant economic crisis after the 2008 financial crisis that hit the United States. The economies of many European countries were in a near-bankruptcy state, having piled up massive government debts. The EU had bailed out many of the European economies and in return, had imposed deeply unfair conditions on them. The terms had sparked severe discontent amongst the European people regarding the bailout.

It has ascribed to the displeasure against the euro and the opposition to the currency over the last few years was only observed to be growing in most of the European countries.

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