ROMANIA’S PATH TO THE EUROZONE
ELEC ConferenceOctober 26, 2012
Bucharest, Romania
Romania’s population remains one of the most confident in the merits of adopting the Euro.
According to the April 2012 Eurobarometer, 54 percent of Romanians consider that Euro adoption would have a positive effect for them, compared with 45 percent of Latvians, 44 percent of Hungarians (the three countries where Euro enjoys a majority), 37 percent of Bulgarians, and of Poles, 36 percent of Lithuanians and 21 percent of Czechs.
Valentin Lazea
The new Government resulting from the Parliamentary elections of December 9 will have to confirm or to revise the proposed adoption date, of 2015.
However, maintaining the current timetable is extremely difficult, since it supposes: entering the ERM2 starting January 2013 a minimum stay within the ERM2, of only two years acceptance by the Commission and by the ECB of the adoption
taking place not at the beginning of 2015, but during that year.
The nominal convergence criteria should not constitute an unsolvable problem. Romania already fulfills 3 of the 5 Maastricht criteria and 7 of the 10 Scoreboard criteria.
The real problem consists of the real convergence criteria.
% of GDP3 year
average% of GDP
3 years% change
5 years% change
3 years% change
1 year% change
% of GDP % of GDP% of GDP
3 yearaverage
-4%/+6%of GDP
-35%of GDP
±5% (EA)±11% (non-EA)
-6%+9% (EA)
+12% (non-EA)+6%
160%of GDP
+15%of GDP
60%of GDP
10%
2010 -11.2 -95.4 10.4 14.9 33.9 -11.1 170.1 -0.1 16.3 7.5
2011 -3.4 -85.6 17.2 20.3 146.0 -6.7 16.3 9.4
2010 -2.8 -48.2 12.7 10.2 5.7 -2.6 77.2 1.7 37.8 6.1
2011 -3.0 -49.3 8.4 3.3 40.8 6.9
2010 -2.2 -112.8 -0.5 1.4 6.4 -6.7 154.0 -21.6 81.8 9.7
2011 0.6 -105.8 -2.8 3.7 167.3 6.4 81.4 10.7
2010 -5.2 -65.4 -0.5 20.1 11.3 -6.1 74.0 3.6 54.8 8.3
2011 -4.6 -63.5 12.8 4.3 80.3 7.1 56.4 9.2
2010 -6.7 -63.8 -10.4 21.2 36.5 -14.5 76.4 1.7 30.5 6.6
2011 -4.3 -62.5 22.8 12.9 71.8 1.8 33.3 7.2
*) last update: 22 October 2012
Source: Eurostat
Poland
Romania
Macroeconomic Imbalance Procedure Scoreboard*
Current account balance
Net international investment
position
Real effective exchange
rate (based on HICP)
Exporter market share of goods and
services
Nominal unit labour cost
index
House price index
Private debt
Unemploy-ment rate
Bulgaria
CzechRepublic
Hungary
Private credit flow
Public sector debt
Inflation rate (HICP) 3.1
(percent, annual average) (September 2012)
Long-term interest rates 6.9(percent per annum) (September 2012)
Exchange rate (vs. euro)(maximum percentage change***)
General government deficit**** 5.5(percent of GDP) (2011)
Government debt**** 33.4(percent of GDP) (2011)
Source: Eurostat, National Institute of Statistics, National Bank of Romania, Ministry of Public Finance
Maastricht Criteria(Nominal Convergence Indicators)
+0.1pp
Nominal Convergence Indicators Maastricht Criteria
<1.5 pp above 1.5%* (average of the three best performing Member States)
RomaniaDifference from the criteria
<2 pp above 1.7%** (average of the three best performing Member States in terms of
price stability)
± 15 percent
+2.5pp
+3.2pp
+4.7 / -8.3
below 3 percent
****) according to ESA95 methodology
**) reference level, October 2011 - September 2012 (Sweden).
***) Maximum percentage deviations of the bilateral exchange rate against the euro from its September 2010 average level in October 2010 to September 2012 based on daily data at business frequency. An upward/downward deviation implies that the currency was stronger/weaker than the average exchange rate in September 2010.
*) reference level, October 2011 - September 2012 (Sweden, Ireland, Greece).
below 60 percent
0
20
40
60
80
100
Bu
lga
ria
Cze
ch
Re
pu
blic
Est
on
ia
Cyp
rus
La
tvia
Lith
ua
nia
Hu
ng
ary
Ma
lta
Po
lan
d
Ro
ma
nia
Slo
ven
ia
Slo
vaki
a
percent
2000 2011
Share of imports from EU in total imports
0
20
40
60
80
100
Bu
lga
ria
Cze
ch
Re
pu
blic
Est
on
ia
Cyp
rus
La
tvia
Lith
ua
nia
Hu
ng
ary
Ma
lta
Po
lan
d
Ro
ma
nia
Slo
ven
ia
Slo
vaki
a
percent
2000 2011
Source: Eurostat, NIS
Share of exports to EU in total exports
Gross value added
0
10
20
30
40
50
60
70
80
90
100
20
00
20
11
20
00
20
11
20
00
20
11
20
00
20
11
20
00
20
11
20
00
20
11
20
00
20
11
20
00
20
11
20
00
20
11
20
00
20
11
20
00
20
11
20
00
20
11
Bulgaria CzechRepublic
Estonia Cyprus Latvia Lithuania Hungary Malta Poland Romania Slovenia Slovakia
Source: Eurostat, NIS
agriculture industry construction services
share of GVA, percent
GDP/capita (PPS)
0
10
20
30
40
50
60
70
80
90
100B
ulg
aria
Cze
ch
Re
pu
blic
Est
on
ia
Cyp
rus
La
tvia
Lith
ua
nia
Hu
ng
ary
Ma
lta
Po
lan
d
Ro
ma
nia
Slo
ven
ia
Slo
vaki
a
share in EU27, percent
2000 2011
Source: Eurostat
Options for the new Government:
a) maintaining the current accession date
b) proposing a new accession date
c) leaving the question of accession date open-ended.
Reasons for option c): in the short term and in the medium term, there is little
willingness from the Eurozone to accept new members real convergence criteria require time to be fulfilled the disciplinary role of the Euro has been, to a large extent,
taken over by new instruments at the Commission’s disposal (European Semester, Six Pack etc.).
Thank you!