After Bulgaria, Romania Delays Euro Adoption

"A delay of one or two years is less significant than the need to accede to the euro zone well prepared," Romanian Central Bank governor Mugur Isarescu said. Photo by BGNES

EurActiv.com

Romanian Central Bank governor Mugur Isarescu suggested his country would delay its 2015 target for adopting the euro, saying "more preparation" was needed, the Romanian press wrote yesterday (15 April).

"A delay of one or two years is less significant than the need to accede to the euro zone well prepared," Isarescu said.

Last week, Bulgaria's centre-right government abandoned plans to join ERM II, the euro zone's waiting room, after the country recorded a larger-than-expected deficit in 2009 (EurActiv 12/04/10).

The Romanian National Bank will continue to mention 2015 as a target date, Isarescu said, because the ambitious objective would act as a catalyst role in preparing for the single currency.

Isarescu said the Romanian economy was stalled due to high inflation. According to official statistics, inflation in Romania will reach about 3.5% by the end of the year.

A relatively poor Balkan state of 22 million people, Romania has experienced a sharp economic reversal in the last year as a result of the global financial crisis and poor economic policies. 

"For 15 years, I haven't been going to restaurants," Isarescu is quoted as saying. The central bank governor explained his personal austerity by saying that each time he went to a restaurant, people would come to his table to ask him what the exchange rate for Romanian currency would be.

Lucian Croitoru, an advisor to the government, was quoted by AFP as saying that Romania's planned 2012 entry into ERM II, seen as the euro zone waiting room, would now be a difficult goal.

He said the difficulties were stemming from the population's reluctance to accept austerity measures designed to keep the budget deficit below 3% of GDP.

In 2009, Romania had a deficit of 7.2%. Since then it has committed to reforming its pension and public sector wage systems in a bid to bring this figure down to 5.9% during 2010.

During the global recession, Romania has been transformed from the European Union's fastest-growing economy and an attractive destination for foreign investors to a problem zone in dire need of aid. 

In March 2009, the country secured a 20-billion euro bailout package. Of that sum, the International Monetary Fund will provide 12.9 billion, the European Commission five billion and the World Bank 1.5 billion. About one billion will be raised by other financial institutions.

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