Friday, June 13, 2014

Romania must enhance economic competitiveness before joining Eurozone: central bank governor

BUCHAREST, June 12 (Xinhua) -- Romania could not switch over to the European single currency before securing its competitiveness of national economy, National Bank Governor Mugur Isarescu said Thursday.

Romania is fulfilling most of the nominal convergence criteria for joining the Eurozone, but "we had ahead of us a long and hard way of some years to bridge the real convergence gap," said Isarescu at a Euromoney conference on regional finance and investment for South-Eastern Europe held in Bucharest.

"Romania is currently fulfilling three of the four nominal criteria: a stable fiscal position, long-term interest convergence and stable exchange rates," said the central bank governor.

Yet, there are still many things to be done to bridge the gap separating Romania from the Eurozone member states in terms of economic competitiveness and real convergence criteria, particularly those related to the per capita income, warned the governor.

"A very wide gap in real convergence can complicate business, management decisions in the absence of independent monetary policy," said Isarescu.

"Nominal criteria cannot be supported without competitiveness, financial stability and a solid fiscal balance," stressed Isarescu.

The governor mentioned that EU member states in Central and Eastern Europe are closer than ever before to fulfilling the nominal criteria, but even the most advanced of them in terms of real convergence gave up on an accession schedule after the crisis and adopted a wait-and-see position.

According to a convergence report published early June by the European Commission, Romania is failing to fulfill two of five nominal convergence criteria to switch over to the euro, namely inflation and exchange rates, but it is fulfilling the criteria related to the Government deficit, public debt and long-term interest.

The Romanian government set January 1, 2019 as the target date for switching over to the European single currency, as it was announced early May by Minister Delegate for Budget Liviu Voinea.

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