1999 | OriginalPaper | Chapter
Exchange Rate Policy, Fiscal Austerity and Integration Prospects: The Hungarian Case
Authors : Jens HöLscher, Johannes Stephan
Published in: EU Enlargement and its Macroeconomic Effects in Eastern Europe
Publisher: Palgrave Macmillan UK
Included in: Professional Book Archive
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Hungary prides itself on being one of the ‘hottest’ candidates for EU membership in the next round of EU enlargement. It bases this on the fact that, amongst all post-socialist economies, the Visegrád-four have proceeded comparatively further in systemic transformation and economic development than other post-socialist economies. Moreover, in 1992/93, Hungary, together with Poland and the then CSFR, had signed ‘Europa Agreements’, which can be interpreted as a preliminary step to accession agreements. In fact, Hungary is the country which started as the earliest with systemic reforms in some form of a ‘third way’. This can be highlighted not least by the introduction of a two-tier banking system already in 1987, which envisaged, but failed to achieve at this early stage, the hardening of Hungary’s ‘soft budget constraint’ (Kornai, 1986).