Economists: Romania will probably join euro after 2020

Friday, April 10, 2015 Share

The adoption of euro will take place after 2020, as the politically assumed deadline was a formal one and the authorities do not have a well defined agenda and strategy. Economists say Romania should enter the Exchange rate mechanism in 2016.

“The year 2019 was a very ambitious target but it was just a target launched without a clear agenda. In order to make 2019 feasible, we should have had an agenda of structural reforms to be implemented, which should have led us to a real, healthy convergence, sustainable on a long term and we could maintain macroeconomic balances at the same time,”said Ionut Dumitru, the president of the Fiscal Council and chief economist at Raiffeisen Bank at the debate “Euro zone, where to?”organized by BNR.

Economic growth is not lasting and will be corrected at a certain point said Dumitru and gave as example increases of 7-8% before the crisis, followed by the need to adjust imbalances created.

He pointed out that 2019 was a very ambitious deadline and in the happiest scenario, in which economic policies are coherent and there is an agenda of structural reforms the adoption of euro might take place after 2020.

His opinion about the deadline of joining the euro zone is also backed by financial analyst Florin Citu, who points to the fact that Romania should decide whether there will be real convergence before accession , with the advantage of a very independent monetary policy, or within the euro zone when the advantage is lost.

“Romania should understand that real convergence must be made. We have to decide whether we do it outside the euro zone with a very independent monetary policy or within the euro zone when there is not an independent monetary policy,” Citu said.

He added later on that Romania might adopt euro after 2020.

In his turn, the chief economist of BCR, Radu Craciun says that with the access to the euro zone Romania will be forced to converge with it and will benefit from it as it did by joining EU.

“A hasty monetary integration, as the creation of the euro zone proved to be, without competitiveness leads to a deadlock. From our point of view I think we should be attentive what we wish for, because it might come true”, Craciun mentioned.

Dumitru considers that Romania has only one possibility, that of observing rules, which must be well analysed and all factors involved in Romania must understand what these rules mean for the country and economy.

He pointed out that Romania can participating in making rules at European level by means of its participants in European forums.





