Position And Future Of Hungary In Europe

Position and future of Hungary in Europe

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Table of contents

Foreword 2

3

4

A. Hungary’s dangerous dependence on Eurozone banks 4

B. Hungary Reaffirms not to Enter Eurozone 4

6

8

10

15

16

References 16

Foreword

First of all, I decided to approach this topic because Hungary is my country of origin. Therefore, I am interested full in this country. In Hungary, I have the feeling to be at my home. In any other country I traveled I felt like a stranger or even a refugee. The spirit of this country is so familiar, that this feeling of comfort makes me calm, merry and smiling. That is why I like this country!

Whenever I am in Hungary, I discover the evolution and the impact of their entry into Europe. Most people I know have a lot of financial difficulties following the price increases. While their wages remains almost identical. Retired persons have been rappelled so that they continue to work.

I love Budapest, and I think everyone will agree with me that it is one of the most beautiful cities in the world. The Danube runs through the two parts of the city (Pest and Buda). In addition to being a cultural city, it is also a city of wellness thanks to its thermal springs. In fact, Hungary benefits from loans granted by the European banks in order to renovate buildings and improve public transit.

The Republic of Hungary joined the European Union on 1 May 2004 and in December 2007 Hungary became part of the Schengen zone.

The Hungarian language is one of the few languages spoken in the European Union that is not of Indo-European origin. My dad has not taught me the language and unfortunately it is much too hard to learn. The best way would have been to leave immersion to learn it but I prefer to do my internship abroad to be able to speak English. Indeed, I don’t speak English though it is very important. So it's time that I learn.

It was an important political goal of Hungary to become a membership of the European Union.

“Having moved away from the Communist system, Hungary made a strong effort to distance itself from Eastern Europe and to become more integrated with the West. In particular, it made efforts to identify itself as central European country rather than as part of the Communist sphere of influence.”

In the social sphere, Hungary wanted to promote the integration of the Roma. This way, their standard of living could be improved by the use of more efficient EU funds. However, we will see later that this goal has not been met.

One of the highlights of the Hungarian presidency was the energy summit. A primary goal was to ensure that EU countries' electricity and gas networks are interconnected in order to reduce the EU's dependence on non-EU countries, especially for its gas supply.

On 1 January 2011, Hungary became head of the Council of the European Union.

A. Hungary’s dangerous dependence on Eurozone banks

I will first define what the Eurozone is. The Eurozone is a monetary union. And this monetary union is two or more countries with a single currency, or different currencies having a fixed mutual exchange rate monitored and controlled by one central bank.

“The financial crisis in Hungary is a warning of why the Eurozone’s debt crisis is the world's debt crisis”.

Hungary is not a member of the Eurozone. However, the financial difficulties have been seriously reinforced by the feebleness of the Eurozone’s banks and the fears of Eurozone investors. The huge point is that as an economy, Hungary is very dependent on credit from abroad, especially credit provided by Eurozone banks. According to the latest figures from the Bank for International Settlements, European banks have provided $120bn of credit to Hungary's public sector and private sector.

If further, austerity is imposed in Hungary that could make it tougher for Hungarians to repay their debts. And this austerity could weaken Eurozone banks even more, and simply reinforce the vicious cycle of financial disintegration in the currency union.

B. Hungary Reaffirms not to Enter Eurozone

After the meeting with Angela Merkel, Prime Minister Viktor Orbán explained that the euro must offer a perspective again. So, he does not reject the euro categorically.

The Hungarian currency is the forint:

Orbán explained that Hungary has learned from the mistakes of southern European countries. South European countries have joined the Eurozone much too early. Indeed, they were not ready for it.

Initially, all European Union member States had to be part of the Eurozone. When they have signed the accession treaty, the Eurozone was completely different. Therefore, the membership was not automatic.

For the members of Eurozone, I don’t think that the euro has had any effect on the feelings of being European.

There are many advantages of the euro adoption by the countries in the Eurozone, despite that disadvantages also exist.

The most well-known are the following: obliteration of the existing exchange rate fluctuations between a number of currencies and reduction of transaction costs. The single European currency also stimulates trade activities and free movement of capital, goods and people but these effects should be subject to a profound academic research. Indeed, I gave only the most obvious advantages.

I think that the single euro exchange

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