Romania meets none of the convergence criteria – price stability, sound public finances, exchange rate stability and convergence in long-term interest rates – required for euro adoption.
The country is currently under the excessive deficit procedure and will have to regain macroeconomic balance before setting a euro-adoption calendar.
“One problem in meeting the long-term interest rate criterion in particular is the sovereign rating. Romania’s rating is on the lowest investment grade,” said Adrian Codirlasu, vice-president of CFA Romania.
Another criterion is that public debt must not exceed 60% of GDP but the current crisis will raise the country’s debt considerably. Romania’s budget deficit is very high and will be difficult to bring down, he added, estimating the country would likely return to a deficit of 3% or less in three or four years.
Romania’s latest euro-adoption target was set for 2024-2026 back in December 2018.