The governor attended the ESPERA 2013 International Conference where he presented his report “Romania and the euro zone” and the new deadline suggested is 2023 or ten years from now.
This means postponing the official deadline by eight years. The 2015 euro adoption target was set in 2007, when a national consensus was discussed following the model of the seven-year general agreement of 2000 ahead of the country’s EU accession in 2007.
It is not clear now who is responsible for the postponement and the governor did not say who was to blame for the delayed euro zone accession and therefore for the delay in catching up with the West.
Two previously suggested targets by both central bank and governmental officials are 2018 and 2019.
According to the governor, the reasons for his reservations about the euro adoption do not include a potential inability of Romania to meet the criteria, but the reality that the popularity of the euro has declined even among candidate countries. For instance, in Romania it dropped to 50% from more than 65% in 2007, while in the Czech Republic it dropped to less than 25% from almost 50% in 2007.
In other words, besides the Maastricht criteria that have to be met, other conditions have to be fulfilled, as well, for a successful integration.
The advantages of adopting the euro have become less obvious, while costs more so – it is hard to explain to the people, politically speaking, why they should contribute to financial mechanisms that benefit wealthier countries at the moment. This is one of the things hindering a speedier adoption, the governor explained.
Romania meets three of the said criteria: the exchange rate criterion (plus/minus 15% appreciation/depreciation of the leu against the euro), the deficit criterion (less than 3% of GDP) and the public debt criterion (less than 60% of GDP), Isarescu said. The only two criteria left to meet are the inflation and the long-term interest rate criteria.
However, Isarescu says there are important factors to be taken into account if proceeding with the schedule towards euro adoption. One of them is ensuring a sufficiently high level of GDP per capita as shown by the purchasing power standard compared with the EU average. This index now stands at 49% of the EU average compared with 67% in Estonia and 58% in Latvia at the time they joined the euro zone.
Last but not least, Romania also needs to continue structural reforms.
The central bank governor also takes into account the impact of the political factor on the accession date. He says such a date has to be set at the end of a period of political calm and looking at the election cycle calendar, the calmest such period is 2021-2023 (three years in a row without elections).
(English version by Loredana Fratila-Cristescu)