Thursday, June 11, 2009

Romania sticks to 2014 euro goal in convergence plan

BUCHAREST, June 10 (Reuters) - Romania's centre-left government has kept its 2014 deadline for joining the euro zone in a convergence report, which was revised after the European Union state secured 20 billion euros in foreign aid. 

The report, which was sent to Brussels, was revised to include budget conditions attached to the aid package, led by the International Monetary Fund, as well as revised macroeconomic indicators and prescribed reforms.

Under its agreement with foreign lenders, Romania plans to implement vast public sector reforms but was allowed to keep a budget deficit target of 5.1 percent of gross domestic product this year, barely smaller than in 2008 and far above EU limits.

It cut spending by roughly 1 percent of GDP. The report sees the consolidated budget deficit at just under 1 percent of gross domestic product in 2012.

The Maastricht Treaty's targets on deficits, exchange rates, and inflation are the main headaches for the bloc's eastern European members seeking to join the euro as they strive to converge with western European economies.

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