Under pressure from the economic crisis, the Hungarian and Latvian governments collapsed this year among widespread public discontent, shows a Reuters study. The Czechs succumbed to a no-confidence vote last month based mainly on domestic infighting, although the opposition there, too, pinned it to economic turmoil.
The poll’s change in consensus forecast in the three states’ potential euro dates underscored how deeply political risk has become entwined with the economic crisis and investor sentiment. The wider global slowdown has pushed down export orders across the industry-heavy region by as much as a third in the worst cases, while joblessness is rising and governments are slashing budgets as a contraction in growth hits tax revenues. The survey showed Estonia was still forecast to enter the euro zone in 2013. Romania and Bulgaria were not seen coming on board until 2015, unchanged from last time.
The stability of those forecasts comes despite the severest recession raging in many parts of the euro area since the Second World War. That does not appear to have damaged ambitions. Many outside the 16-nation bloc have tried to speed up efforts to adopt the euro as a potential shield against the crisis. Meanwhile, the outlook for Turkey’s EU membership looked a touch more positive, with analysts predicting it could happen in 2019, a year earlier than the previous poll. The poll of 31 analysts also forecast that the Czech Republic, Hungary and Latvia, whose governments have all collapsed this year, would not join the single currency until 2014. That was a year later than the last poll’s predictions as public finances and currencies across the ex-communist region continued to take a battering. On Monday, Poland’s centre-right government stuck with the 2012 target date but conceded it now looks untenable after months of turbulence for the zloty and a jump in its budget deficit to way past the euro zone’s 3 percent ceiling. But analysts stuck with a forecast made in a poll in January for Poland to enter the euro currency antechamber in 2010 and full entry to be granted in 2013.Along with other criteria, countries aspiring to enter the euro zone must also maintain a government deficit below 3 percent of GDP.