Lagarde gave the example of Latvia, which made significant reforms in a very short period, but lost 10% of its population due to immigration. It is preferable to consolidate, have a sustainable growth, have solid structural reforms in place before joining the euro zone than hurrying the accession process only to find yourself vulnerable and possibly unable to face external shocks, Lagarde told journalists Tuesday in Bucharest.
She quickly pointed out that she has no reasons to worry that Latvia miss any of the steps, or that it failed to meet all criteria to join the single currency area.
When a country joins the euro zone it loses the monetary policy mechanism, which can be used to stabilize the economy, Lagarde said.
Lagarde ends Tuesday a two-day visit to Romania, and an IMF mission is scheduled to arrive in Bucharest Wednesday to discuss terms of a new agreement.
Romania and the IMF have signed a two-year EUR3.6 billion loan agreement in 2011, following the completion of a larger EUR13 billion deal secured in 2009. The agreement was supplemented by a EUR1.4 billion loan from the EU and another EUR1 billion from the World Bank. The country has not drawn any funds under the second program.