Hungary's inability to reduce its government debt to eurozone levels is likely to delay euro adoption until 2016, DPA QUOTED Hungarian newspapers AS SAYING on Friday. Online news portal index.hu late on Thursday night first published details of what it claimed was the government convergence programme. The European Commission had asked Hungary to submit this new programme by September 1. Prime Minister Ferenc Gyurcsany had already said that there would be no official euro adoption date in the programme - effectively giving up on the previous 2010 date - but most analysts had been predicting between 2012 and 2014 as the most likely dates. All of the focus so far has been on bringing down the nation's huge budget deficit to Maastricht criteria levels, and the new programme foresees bringing the deficit down from the expected figure of 8.6 per cent this year to 3.2 per cent by 2009. Under the Maastricht criteria, the deficit must be 3 per cent two years before the euro can be adopted. The government introduced an austerity package just after being re-elected in April to deal with the budget deficit. However, the real delay looks like being caused by government debt. According to index.hu, the government sees its gross debt actually rising to 72.2 per cent by 2008 and not falling to the Maastricht level of 60 per cent until 2014. This would mean that the euro could not be adopted until 2016.
