| HOW FAR IS THE EURO? 14/05/2010 |
| (2010-05-14) |
| Last updated: 2010-05-17 11:39 EET |
The Romanian authorities have announced that 2015 would be the official target for adopting the European single currency. But the 2010 Convergence report from the European Commission shows that the law governing the Central Bank is not compatible with the EU Functioning Treaty and the European Central Bank System.
Incompatibilities occur in terms of the integration of the National Bank of Romania within the European central bank system upon adopting the Euro, as well as the institution's independence. Inflation in Romania stood above the EU reference value, calculated over 12 months, since the country's EU accession in January 2007. The average price hike was 5% during the 12 month-interval ending in March.
This is a lot more than the EU 1% reference value. And it will probably remain at this high level over the coming months, the report says. Prices in Romania are expected to go up by 4.3% on average this year, and by 3% in 2011. The European Commission's report also recalls the low level of prices in Romania as against the Eurozone, that is 58%.
Romania does not meet any criterion regarding the budget position and is currently undergoing an excessive deficit procedure, with 2012 as a deadline, aimed at bringing the negative public expense balance below the limit of 3% of the GDP. In order to join the Euro, the currency of a state must be included in the exchange rate mechanism. The leu is traded on the open market, and financial unrest that started in the second half of 2007 had it depreciate significantly, a slump aggravated by the country's domestic macroeconomic lack of balance.
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2025-04-03
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