Members of the National Commission for the development of the national plan to adopt the euro currency met on Tuesday at the Victoria Palace, and discussed the documents that will be used as the foundation for Romania’s adoption of the European single currency, according to a press release.
The national plan to adopt the euro and its related foundation report are the result of consultations with parliamentary political parties, the governor of the National Bank of Romania, the leaders of the Romanian Academy, presidential advisors, as well as representatives of unions, business owners and associative structures, the government’s press release said.
“In the context of the discussions related to the foundation report, the majority of Commission members approved the realist target of Romania adopting the euro between 2024 and 2026. This document analyses in detail the way the eurozone works, how this can influence Romania’s accession and the Romanian economy’s readiness to implement this objective,” the government wrote.
When will Romania adopt the euro?
The study presents three scenarios which show the time it would take for Romania to reach a critical mass of real and structural convergence of 70, 75 and 80 percent respectively, based on two average yearly growth rates: a 4 percent growth rate, based on the average of real GDP growth from the 2000-2017 period, as well as a more optimistic rate of 5 percent, based on the premise that Romania could improve the contribution of its production to potential growth and that it would implement structural reforms encouraging economic growth.
In the case of a target of 70 percent of the EZ19 (the eurozone currently includes 19 out of the 28 EU countries), Romania can reach this level in six years, if it has a 4 percent average yearly growth rate, or in four years if the growth rate reaches 5 percent per year.
In the scenario where Romania aims for a 75 percent convergence rate (the most highly recommended path according to the report), it can be achieved in a nine-year period based on a 4 percent yearly economic growth or in six years if the yearly growth reaches an average of 5 percent.
Besides reaching these indicators, the Commission members also highlighted two other aspects that are crucial for Romania’s readiness to achieve real convergence in order for the euro adoption to be beneficial for society.
“First of all, it is vital to increase competitiveness and ensure a sustainable economic growth, based on high technology, value-added and innovative products. Equally, it is important for Romania to prepare its entry into the European exchange rates mechanism – ERM II, which is a preliminary step to entering the eurozone,” the government representatives noted.
Following these meetings and the completion of the documents, the parliamentary political parties will be asked to make a political declaration to commit to the national plan to adopt the euro.