Hungary applied for membership in the EU on March 31, 1994. The accession negotiations started exactly four years later. Although, fulfillment of the convergence criteria itself is not a topic of the accession negotiations, the Copenhagen Criteria include the ability to take on the obligations of membership, that is, implicitly also the ability to participate in the EMU. The successful stabilization program, which was introduced in March 1995, consisted of a new exchange rate arrangement, a ‘crawling band’, combined with a consolidation program for the relief of the state budget and nominal wage restraint. The success of consolidation of the state finance is already visible, but the inflation rate and hence the domestic interest rate are still clearly above the EU average. This fact means a great challenge to Hungary’s monetary policy, central to which has been the exchange rate policy before the crawling band was given up for an exchange rate target zone following the pattern of the ERM2.