The problems Hungary faced with its widening budget deficit hindered the country's acceptance of the euro, Bloomberg reported. Bulgaria and Romania could be expected to join the euro zone first, Kai Stukenbrock, Standard and Poor's associate director said.

Stukenbrock said during  an international business forum in London that Romania and Bulgaria had better fiscal policies.

According to Standard and Poor's evaluation, Hungary's public finances were in a 'desolate state' and the economy was in urgent need of reforms.

Forecasts presented at the forum predicted that Slovakia would be able to introduce the euro in 2009, the Czech Republic in 2011 and Poland in 2012.

Because of Hungary's constantly widening budget deficit, the country could enter the euro zone as late as 2014.Despite government efforts the deficit was likely to exceed the target levels for 2006 and 2007, Bloomberg reported.

Specific measures Hungary took to deal with the problem included tax increases and reduction of state administration, Bloomberg said. Despite efforts, the deficit remained 11 per cent of the GDP.