Romania sticks to 2015 euro adoption target.

By bne IntelliNews May 2, 2011
Romania will stick to the target timeframe for joining the single currency area in January 2015, PM Emil Boc confirmed adding that the target is included in the updated Convergence Plan, approved by the government. A newly established special body, headed by the PM as chairman and the central bank governor as his deputy, will monitor the adoption process. The decision to maintain the euro adoption calendar was taken by the government upon consultations with the ruling coalition, central bank governor Mugur Isarescu and President Traian Basescu. Earlier last week, there were rumours about postponing the euro adoption target. However, Basescu made a statement in support of the rather tight adoption target. IntelliNews comment : The toughest challenge in the euro adoption process is the fiscal consolidation and the confirmed 2015 deadline provides a positive message regarding the governments commitment. However, bringing the general budget deficit from a cash-based 6.5% of GDP to 3% of GDP next year under ESA95, while also eliminating the government spending arrears, requires tremendous efforts for expenditures prioritisation and tax collection improvement. Eurostat has recently questioned the quality of Romanias budget deficit data suggests that the actual 2010 deficit might turn out to exceed 6.5% of GDP. The government has already accepted that it stood at 6.8-6.9% of GDP under ESA95, if including the losses of two large state owned companies, but Eurostat invoked more discrepancies, which might mean a wider deficit.

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