(Bloomberg) — Hungary has drifted closer to a scenario of potentially leaving the European Union, a former central bank governor said.
Andras Simor, who helped steer Hungary through the financial crisis when it required an International Monetary Fund-led bailout, said an exit from the bloc is not the most likely scenario, but “it is a possible one.”
“Its probability, if it was 10% last year, by now has risen to 20% to 30%,” he told ATV television late on Sunday.
Hungary’s budget deficit has widened to a record after Prime Minister Viktor Orban engaged in a spending spree before last year’s elections, which he won.
The country also has the EU’s highest inflation and key interest rate at a time when more than $30 billion of EU aid remain blocked. Those funds have been withheld by the bloc over government backsliding on democratic commitments and alleged graft.
“I’m afraid that Hungary’s government will maneuver the country into a situation where an exit from the European Union becomes a real alternative,” said Simor, who is a fierce critic of Orban.
Still, he said he doesn’t expect “Hungary’s economy to implode. I rather expect a slow slide.”
Source : BNN Bloomberg