Ten Years of the Euro – Inspirations for the Czech Republic György Szapáry Central European University,Budapest Conference hosted by Mr. Miroslav Kalousek, Minister of Finance of the Czech Republic, November 25, 2008

Nominal exchange rates against the euro 2 January – 14 November, 2008

Three-month interbank offered interest rates 2 January – 14 November, 2008

Current Account and CDS in new EU member states

Current Account and CDS in EU neighboring countries

Current Account and CDS in old EU member states

7 Domestic credit (% of GDP)

8 Fast convergence in comparative price level as well (EA12=100)

9 Current account balance / GDP in the NMS

10 Fast convergence in GDP per capita at PPS (EA12=100)

Performance under the Maastricht criteria

Factors influencing the performance under the Maastricht criteria in the years ahead Inflation: the recession will reduce the inflationary pressures, but this can be offset by depreciations of the exchange rate. Interest rate: the reduced capital inflows may make it difficult to satisfy the 10-year interest rate criterion. Budget deficit: little room for counter-cyclical expansionary fiscal policy, so meeting the deficit criterion should not represent a big problem, unless bank bailouts occur. Government debt: Hungary’s debt is going to increase because of slow growth and borrowing under the IMF- EU-IBRD credit line.