Isarescu: Romania needs law to enforce 2019 Euro-adoption target

Newsroom 19/08/2014 | 08:51

Romania’s 2019 euro-adoption target should be enclosed in a law adopted by the parliament so that the necessary reforms to join the euro area would not be affected by political changes, central bank governor Mugur Isarescu said Monday.

“I am a staunch supporter for these two projects: adopting the Euro and adhering to the Banking union. The problem isn’t if but when they will be accomplished. (…) At this moment, Romania is eligible for all the criteria established at Maastricht for adopting the Euro, including inflation. (…) The target to adopt the euro in 2019 remains a verbal one. We think it would be appropriate to become a strategy adopted by all political parties like in 2000 when joining the EU was a commitment. You are starting on a path, the election cycle should not deter, regardless what happens. Until 2019 we have a few elections, in 2016 there are parliament elections. I can’t say now that after the presidential elections the verbal agreement between Victoria and Cotroceni will materialize. The best thing to do is to have a law in the Parliament with discussions about what adopting the euro means, as a strategy and the parties should commit to it”, according to the governor of the central bank.

The bank official underlined that if this law is adopted by January of February next year, we can maintain January 1, 2019, as a target so that on January 1, 2017, Romania will enter ERM II – the exchange rate mechanism, with a “flexible exchange rate, which means it won’t be stable, there will be certain fluctuations”.

Isarescu mentioned that it is welcomed to have a fixed date for entering the Euro Zone, but setting it in 2019 should be supported by preparing the Economy for that moment.

“Establishing a national political consensus is a chance we can’t waste. A feasible objective can be an anchor, a catalyst for all the necessary structural reforms. (…) Let’s not forget we have a long road ahead of us and we need a very detailed calendar of all the steps we have to take and we need to make considerable efforts to recover our gaps. The five year period till the target for Euro Adoption is a reasonable interval”, the governor believes.

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