Romania to postpone euro adoption target until 2029

Romania to postpone euro adoption target until 2029
By Iulian Ernst in Bucharest December 16, 2021

The next report on Romania's euro adoption will set 2029 as the target date, said first deputy governor of the National Bank of Romania (BNR) Florin Georgescu.

The estimate takes into account the current situation of the main macro indicators in the country, which require substantial corrections and time to achieve them.

"The lack of political will of the decision-makers in the governments that ruled after Romania joined the EU in 2007, is demonstrated by the fact that Romania has changed so far, based on reports prepared by state institutions and experts the target year for the adoption of the euro," explained Georgescu.

The euro adoption calendar is revised typically on an annual basis and is included in the Convergence Report submitted by the government to the European Commission. Initially, Romania set 2014 as the target for euro adoption, but the deadline was repeatedly revised to 2019, 2024 and now 2029.

Romania had a window of opportunity between 2015 and 2017 when it could have applied for the entry into the eurozone’s preparatory mechanism ERM II given that at that time it met all the nominal convergence criteria set by the Maastricht Treaty (on price stability, the sustainability of public finances and the indebtedness, the stability of the exchange rate and the level of long-term interest rates). At this moment, however, Romania no longer meets all these criteria.

Romania’s repeated delays to its euro adoption process is in contrast to fellow Southeast European EU member Croatia. Despite having only joined the EU in 2013, Croatia is now progressing rapidly towards euro adoption, and the government currently hopes it will join the Eurozone at the beginning of 2023.

Bulgaria is also aiming for euro adoption, though little progress has been made this year, which has been marked by months of political uncertainty amid the repeated failure to form a new government.

“[A]fter Croatia and Bulgaria, it is likely to remain quiet on the euro enlargement front for a very long time. From the perspective of the remaining current potential euro candidates – Czechia, Hungary, Poland and Romania – economic arguments, albeit from different angles, for accession are not convincing at present,” wrote Raiffeisen economists in a comment for bne IntelliNews earlier the year.