Currently, Romania does not meet the conditions for the adoption of the euro, but 10-12 years ago they met these conditions, but the Romanian politicians did not want our country to be admitted to the euro area, said BNR Governor Mugur Isarecu.
Romania could adopt the euro 10-12 years ago. Photo archive
“He gave up the horizon when he gave up a fiscal-budgetary target. Then that was a political decision, We have met the conditions (of accession, no) by 2013, 2014, 2015.
It was also a political decision. President Basescu had even established this target. It was considered politics that we have too small public debt and that we can use this advantage and most of the parties and governments that have not kept in this fiscal target. I lived this, so I can speak freely.
There was not a single party, the debate must be reassured, because they all went on this line, more or less“, Isarescu replied, asked if, from a technical point of view, we could be prepared to print Euro until the end of the year and if there is any time horizon at which Romania will adopt the euro.
According to him, in 2018 the NBR did not want to collaborate.
“In 2018, if I remember, the last meeting was at the Romanian Academy, regarding the adoption of the euro. And we gave up all the committees, we had about three committees, including a technical one, related to the cash part: how to bring the cash in the country, how to distribute the cash, so we were advanced. Now, if fiscal correction means five or seven years, it means that over five or seven we are discussing“, Isarescu said, in the press colence on the quarterly report on inflation.
BNR trains for European currency
The financial-bank analysts in Romania expect our country to adhere to the euro area in 2035, that is over 11 years, according to the results of a CFA Romania poll.
However, 10 days ago, Cristian Popa, chairman of the Numismatics Commission of the National Bank of Romania and a member of the Board of Directors, recently said that Romania will have, by the end of this year, of the entire technological equipment necessary for the printing of Euro banknotes.
Romania does not meet any criterion for accession to the euro area
The convergence criteria for the euro area, also known as the Maastricht criteria, are economic standards that the European Union Member States must meet to adopt the euro. These criteria concern the economic and financial stability of the future members of the euro area and include:
1. Price stability:
The inflation rate should not exceed more than 1.5 percentage points the average of the best three Member States with the most stable inflation.
2. Public Finance Health:
The budget deficit should not exceed 3% of the gross domestic product (GDP), and the public debt should not exceed 60% of GDP.
3. Stability of the exchange rate:
The national currency must participate in the European mechanism of exchange rates (ERM II) for at least two years without major voltages, with limited fluctuations to the euro.
4. Long -term interest rates:
The average long -term interest rate should not exceed by more than 2 percentage points the interest rate from the three best price stability states.
5. Legal convergence:
The national legislation must be compatible with the Treaty of Maastricht and the status of the European system of central banks (SEBC) and the ECB, including the principles of central banks.
These criteria are meant to ensure a stable and coherent economic and monetary integration in the euro area.
Romania has the largest budget deficit in the EU
In addition, Romania does not currently participate in the mechanism of the exchange rate II (ERM II), an essential condition for the adoption of the euro. Also, the national legislation remains incompatible with the requirements regarding the independence of the central bank and the full integration of the National Bank in Eurosystem, according to the convergence report of the European Commission of June 2024.
From a budget point of view, Romania registered in 2024 the highest deficit in the European Union, of 9.3% of GDP, according to ESA methodology, far exceeding the ceiling imposed by the Maastricht criteria. This level reflects the skids in the fiscal policy and the poor structural adjustment capacity. And, it is estimated that it will remain well above the reference threshold of 3 % (about 8.6 % in 2025). The gross public debt increases rapidly, from 54.8 % of GDP in 2024 to about 63 % in 2026.
Bulgaria took us before
Since June, Bulgaria has received a green wave from the European Commission for accession to the euro area, last month establishing the Leva/euro exchange rate, after January 1, 2026, when Bulgaria will become the 21st state of the euro.
Bulgaria will join the single currency at the beginning of next year, at a rate of one euro for 1.95583 Leva. Now Bulgaria has less than six months to prepare the technical transition.
Bulgaria has endeavored to maintain the Leva related to the euro since joining the EU in 2007, but after such a long expectation, many Bulgarians have lost their initial enthusiasm, and 50% are now skeptical of the euro, according to a Eurobarometer survey in May. Some Bulgarians are afraid that passing to Euro will lead to increase in prices.
The adoption of the euro by Bulgaria comes three years after the last extension of 2023, when Croatia became the 20th member state of the euro.
Following the accession of Bulgaria, only six EU member countries remain outside the single currency area: Sweden, Poland, Czech Republic, Hungary, Romania and Denmark. None of them has immediate plans for the adoption of the euro, either for political reasons, or because they do not meet the required economic criteria.
Bulgaria is currently on the last hundred meters in the process of accession to the euro area. The biggest challenge was inflation, which decreased significantly – from 4.7% in 2023 to 2.6% in 2024.
In order to be accepted, Bulgaria had to maintain an average annual inflation that would not exceed more than 1.5 percentage points the average of the three most stable European economies – in 2024: Ireland (1%), Italy (1.4%) and Luxembourg (1.6%).
