User:Georgia Cretu/Romania and the euro

= Romania and the euro = Romania’s actual national currency is leu. However, being bind by its EU accession agreement, Romania has to replace the leu with the euro, as soon as Romania will fulfil all of the four nominal euro convergence criteria as states in the Treaty of Functioning the European Union in article 140. At the moment, the only currency on the market is leu, euro is not yet used in shops. The Romanian leu is not part of the European Exchange Rate Mechanism (ERM II), although the Romanian authorities are working to prepare the changeover to the euro. In order to achieve the change of the currency, Romania is required to undergo at least two years of sustainable stability within the limits of the convergence criteria. The current Romanian Government in addition established a self-imposed criterion to reach a certain level of real convergence, as a steering anchor to decide the appropriate target year for ERM II membership and euro adoption. As of March 2018, the scheduled date for euro adoption in Romania is 2024, according to the National Plan to Changeover to the Euro.

Contents

 * 1History
 * 1.1First changes in the Romanian currency
 * 1.2The delays in adhering to the ERM II
 * 2Current perspectives
 * 2.1Monetary and exchange rate policies
 * 2.2Preparing the changeover to the euro
 * 2.3The Committee for Preparing the Changeover to the Euro
 * 3Public opinion
 * 4See also
 * 5Notes
 * 6References

First changes in the Romanian currency
The first step required in the preparation of the changeover of the leu into euro took place at the same time with the depreciation of the national currency. Thus, in 2005 the new Romanian leu was printed with the same physical dimensions as the euro, in order to fit the ATMs system.

One year later, the Romanian Government announced that the new plan to join the ERM II (a prerequisite for euro adoption) will take place only after 2012. Although, important impediments  such as price instability and high interest rates, were at stake. The president of the European Central Bank said in June 2007, that "Romania has a lot of homework to do ... over a number of years" before joining ERM II. The Romanian government announced in December 2009, that they officially planned to join the eurozone by 1 January 2015.

In 2011, the Romanian government announced it would strive to comply with the first four convergence criteria by 2013, but the economy will need further reforms to successfully change to euro.

The delays in adhering to the ERM II
The governor of the National Bank of Romania confirmed in 2012, that Romania would not meet its previous target of joining the Euro Zone in 2015. He addressed the benefits for Romania to not be a part of the Euro Area during the European debt-crisis, but that the country in the years ahead would strive to comply with all the convergence criteria. Concerns about its workforce productivity were also been cited for the delay.

In 2013, Romania submitted their annual Convergence Programme to the European Commission, which for the first time did not specify a target date for euro adoption. Then Prime Minister Victor Ponta stated that "Eurozone entry remains a fundamental objective for Romania but we can't enter poorly prepared", and that 2020 was a more realistic target.

At the same time, the National Bank of Romania submitted draft amendments for the Romanian Constitution to the European Central Bank (ECB) for review. The amendments would make the NBR's statue an organic law to ensure "institutional and functional stability", and would allow for the "transfer of NBR tasks to the ECB and the introduction of the euro as legal tender" using organic law.

In 2014, Romania's Convergence Report set a target date of 1 January 2019 for euro adoption. According to the Erste Group Bank, Romania will not be able to meet this ambitious target by 2019, not in regards of complying with the four nominal convergence criteria values, but in regards of reaching some appropriate levels of real convergence (i.e. raising the GDP per capita from 50% to a level above 60% of the EU average) ahead of the euro adoption.

The Romanian Central Bank governor, Mugur Isărescu, admitted the target was challenging, but obtainable if the political parties passed a legal roadmap for the required reforms to be implemented. This roadmap should lead to Romania entering into the ERM II only on 1 January 2017 - so that the euro could be adopted after two years of ERM II membership on 1 January 2019.

However, in 2015, Isărescu  argued once again for a delay in the changeover to euro. Ahead of ERM II entry Romania needs to conduct monetary adjustments in form of finalizing the process of bringing minimum reserve requirement ratios in line with Eurozone levels (a process envisaged to last between 1 and ​1 1⁄2 years) and to complete major economic policy adjustments:


 * removing the sources of repressed inflation (i.e. completion of the energy market deregulation);
 * removing sources of quasi-fiscal deficits (by restructuring loss-making state-owned enterprises);
 * removing other sources of future budgetary pressures (i.e. the unavoidable expenditures to modernise road infrastructure).

Romania's Prime Minister Victor Ponta said in June 2015 that he was open to the idea of holding a referendum on euro adoption. However, the decisive trio, the President, BNR Governor, and Finance Minister did not considered this option.

The Romanian target for "real convergence" ahead of euro adoption, is for its GDP per capita (in purchasing power standards) to be above 60% of the same average figure for the entire European Union, and according to the latest outlook, this relative figure was now forecast to reach 65% in 2018 and 71% in 2020, after having risen at the same pace from 29% in 2002 to 54% in 2014.

Finally, the Romanian government also expressed its commitment to join all pillars of the Banking Union, as soon as possible. However, in September 2015 Romania's central bank governor Mugur Isarescu said that the 2019 target was no longer realistic. The new target date was initially the year 2022, as Teodor Meleșcanu, the foreign minister of Romania declared on 28 August 2017 that, as they "meet all formal requirements", Romania "could join the currency union even tomorrow". However, he thought Romania "will adopt the euro in five years, in 2022". In March 2018, members of the Socialist Party voted at an extraordinary congress to back a 2024 target date to adopt the euro currency.