Delays in switching to euro could endanger convergence measures, central bank head warns

Postponing the accession to the Eurozone could result in a "dangerous relaxation" for the measures taken within Romania’s convergence process towards the economic level of the EU developed states, Central Bank of Romania (BNR) governor Mugur Isarescu said.

Romania wants to join the Eurozone in 2014 and should access the Exchange Rate Mechanism (ERM2) two years earlier. Romania must comply with some nominal convergence criteria which require a maximum 3 percent of the GDP budget deficit.

It must also keep the public debt under 60 percent of the GDP. Another essential criterion is that the average annual inflation stays below a maximum 1.5 percentage points of the average inflation of EU’s top three economies.

Other criteria include the interest rate for the long-term state securities and the exchange rate, meaning the leu should enter a fluctuation path of plus/minus 15 percent against the euro.

NewsIn