Hungary could join the eurozone by its 2010 target date only if radical shift in the economic policy as well as tighter fiscal spending is implemented, said National Bank of Hungary governor Zsigmond Jarai in interview on the public radio.
He stressed that the economic reforms must be launched no later than after the 2006 general elections. Jarai said that at present the central bank reserves (some EUR 13bn) provide some stability to the HUF, but pointed that any fast reduction in the base rate would significantly weaken the forint.
The governor did not miss to attack the Socialist-led government about its tax reform intention saying that "there is nothing more dangerous than to speak about tax cuts without curbing central expenditures".