Romania fails euro adoption criteria as concluded by the European Commission. Romania is the only Member State subject to an excessive deficit procedure.
The European Commission concluded on June 1 the 2022 Convergence Report, which assesses the progress that Bulgaria, Czechia, Croatia, Hungary, Poland, Romania and Sweden have made towards joining the euro area.
In other words, European Commission decided the followings:
- Only Croatia and Sweden meet the criterion of price stability;
- Except for Romania, which is subject to an excessive deficit procedure, all Member States meet the criterion on public finances.
- Bulgaria and Croatia are the two EU members who meet the exchange rate criterion.
- Bulgaria, Croatia, the Czech Republic, and Sweden meet the long-term interest rate criterion.
According to the EC’s Convergence Report, Romania’s general government balance is expected to fall back to -7.5% in 2022 after improving last year, before improving to 6.3% in 2023.
As energy-related subsidies are phased out, the commission estimates a negative 1.1pp contribution to the fiscal stance in 2023 from the nationally financed primary current expenditure. Romania does not intend to join the Eurozone before 2029.
The euro adoption calendar is typically revised annually and is included in the Government’s Convergence Report to the European Commission.
Would Romania be prepared to enter Eurozone in 2029? More likely than any other country, Romania has to take specific steps to adopt Euro as the national currency. An essential step towards the Eurozone would be financial stability, which Romania is not doing well at all, however, by 2029, Romania may hope for a euro future and take the initiative towards change.