Page 33 - BNE_magazine_02_2020

bne February 2020 Central Europe I 33
Visegrad leaders stand united at Prague summit
Tamas Szilagyi in Budapest
Visegrad 4 (V4) leaders confirmed their agreement on the issue of migration at the summit in Prague on January 16. The meeting between the prime ministers of the Czech Republic, Slovakia, Poland and Hungary covered important foreign policy issues such
as EU enlargement and the common budget and energy issues.
Austrian chancellor Sebastian Kurz also took part in the talks. His invitation suggests that Kurz is trying to be
a bridge-builder between CEE states and older EU members.
The prime ministers of the four Visegrad countries agree that quotas for the redistribution of migrants are not the solution. Poland, the Czech Republic and Hungary refused to take any
migrants, for which the Commission took them to the bloc’s top court, the Court of Justice of the European Union (CJEU).
Hungarian PM Viktor Orban said the summit’s major achievement was to identify areas of cooperation that include migration, security, border protection, competitiveness, climate protection, and EU enlargement. The areas of "non-cooperation" have also been defined, one of which is nuclear energy, he added.
Differences between Austria and V4 countries remain in energy issues. Austria is opposed to nuclear power and refuses to channel EU money towards coal-dependent regions. The Czech Republic, Slovakia, and Hungary, on
the other hand, want to increase the use of nuclear in their energy mix.
As an investor and trading partner, Austria is a natural partner for Hungary and the V4, Orban said
He called on his Czech counterpart
to invite Western Balkan countries seeking EU membership to a conference on Europe’s future, since this would concern those countries as well.
Answering a question, Orban said the V4 stood united against any diversion of cohesion funding to finance new climate protection goals. "If we want more Europe, we need more money, but not at the expense of old programmes," he said.
Hungarian forint slips to all-time low
against the euro
Tamas Szilagyi in Budapest
The forint weakened to 337.57 to the euro in early trading on January 23 to reach a new historical low. Previously, the Hungarian currency hit a historic low in November at 337.2 versus the euro. The forint softened to 304.23 from 303.31 against the dollar.
The Hungarian forint is amongst the worst-performing currencies this year behind the Chilean peso, the Brazilian real and the South African rand. Against the dollar it weakened by 3% and nearly 2% against the euro this year.
Analysts opine that the forint's depreciation will continue this year thanks to the central bank’s (MNB's) dovish policies.
Last year the Hungarian currency traded within the 325-335 range. David Nemeth, a senior analyst at K&H Bank, estimates
that it will fluctuate between HUF340- 345 to the euro. Brokerage Equilor also expects an exchange rate of HUF330- 340 to the euro.
Hungary has extremely low-interest rates compared to surrounding countries. The weakening is the result of a conscious strategy by the central bank. The MNB is trying to shield the economy from the impact the global economic slowdown by stimulating exports through a weaker currency,
investment specialist Viktor Zsiday said.
At the last Fx swap tender the MNB accepted none of the bids in all four maturities for the first time.
The drop in the swap stock was interpreted by markets as a sign of policy tightening with the MNB decreasing liquidity pumped into the banking system. The central bank will hold its next rate-setting meeting on January 28.
“The Hungarian forint is amongst the worst- performing currencies this year behind the Chilean peso, the Brazilian real and the South African rand.”
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