11:04 PMAdoption of the euro by Romania - the horizon of 2024-2026
By Edwig Ban
The members of the Commission to substantiate the National Plan for the adoption of the euro agreed on Tuesday with an "overwhelming majority" as a "realistic objective" for the adoption of the euro by Romania, the "horizon of 2024-2026" at a meeting held at Victoria Palace in the presence of Prime Minister Viorica Dăncilă.
According to a government communiqué, at the meeting were discussed the final drafts of the documents that will form the basis for the preparation of the changeover to the European single currency.
"The report on the basis of the National Plan for the Adoption of the Euro and the National Plan for the Adoption of the Euro is the result of consultations with representatives of parliamentary political parties, the Governor of the National Bank of Romania, Mugur Isarescu, the Romanian Academy leadership, and representatives of trade unions, employers' associations and associative structures, "the statement said.
The quoted source states that the head of the Executive appreciated the work of the commission and thanked its members for their seriousness and involvement.
"Your work and your thorough grounding prove once again how important it is for Romania to be well prepared for the adoption of the euro. I also hope we can rely on your expertise in other major projects for Romania, "said the prime minister, quoted in the press release.
At the same time, in the context of discussions on the substantiation report, "the overwhelming majority of Commission members have approved as a realistic goal for the adoption of the euro by Romania the time horizon 2024-2026".
"This paper analyzes in detail how the euro area works, how can Romania's entry into the eurozone influence and the degree of preparation of the Romanian economy for the implementation of this objective. The study presents three scenarios showing the time period Romania could reach to a critical mass of real and structural convergence of 70%, 75% and 80% respectively, depending on two annual average growth rates: a 4% growth rate, starting from the average real GDP growth rates in 2000 -2017 and a more optimistic rate of 5% based on the assumption that Romania will improve the contribution of production factors to potential growth and will implement structural reforms conducive to economic growth, "according to the press release.
Also, according to the assessments made by the commission, "in the case of a set target of 70% of the ZE19 average, Romania may reach this level in 6 years if it has an average growth rate of 4% per year or 4 years with a rate increase of 5% ".
"In the scenario where Romania intends to reach 75% of the average ZE19 (the most appropriate level for Romania's economy, as the Report shows), it can be achieved within a period of 9 years (if the average growth rate is maintained 4% a year) or in 6 years in the context of an average growth rate of 5% a year, "the statement added.
In the same context, the members of the Preparatory Commission for Romania's accession to the euro have stressed that besides achieving these indicators, two aspects are important for thorough preparation and achievement of real convergence, so that the accession to the euro will bring benefits for the society.
"First of all, it is vital to increase competitiveness and ensure sustainable economic growth, based on high technology products with high added value and innovation. Equally, it is important to prepare Romania's entry into the European Exchange Rate Mechanism - ERM II , a step ahead of joining the euro area, "the press release said.
According to the Executive, the National Commission had the mandate to prepare a report presenting the current situation in terms of convergence and substantiation criteria of the National Plan for the adoption of the euro and the draft National Plan for the adoption of the euro.
"As a result of the permanent consultations in this format and of the finalized documents, a political declaration for assuming the National Plan for the adoption of the euro will be proposed to the parliamentary parties", the communiqué says.
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