Stolojan: Many don’t want Romania to join the euro zone

Romanian authorities have committed to join the euro zone on January 1, 2015. The adoption date is deemed as unrealistic by certain analysts, as the country is still far from meeting Maastricht criterion for the public finances.

And the key obstacle to euro adoption is the budget deficit, as the terms require the governments to cap budget gaps at 3% of Gross Domestic Product. But Romania’s deficit is projected at almost 6% of GDP this year alone.

Theodor Stolojan (photo), first-vice president PDL, said there are serious doubts whether Romania’s target to join the euro area in 2015 will be reached, also given the fact that the European Union is considering applying a set of new criteria for the euro adoption, and the Romanians’ and authorities’ lack of determination.

“Although I reaffirm my position in favor of the euro adoption, I don’t see how Romania could still achieve its 2015 goal anymore, unfortunately. The severity of EC and BCE’s assessments over the country’s ability to meet the euro zone entry criteria on a medium and long term will be much higher”, said Theodor Stolojan.

The first VP of the Liberal Democratic Party stressed that there are still many people in Romania against the currency switch. The economist Theodor Stolojan said the country will join the 16-nation euro area only when Romanians and local institutions will actually want to.

We need political will, if we want to stick to the 2015 goal

On the other hand, Lucian Croitoru (photo), monetary policy adviser to the governor of National Bank of Romania, said Romania still has chances to meet its euro adoption target, but that it takes will to make it happen.

“If we look at the history of our country, Romania has the ability to mobilize if it has a target. Adopting the euro is a major goal that takes political will to achieve it. If the government fails to make the necessary reforms in the public sector, the risk of falling short of the target is greater”, said Lucian Croitoru.

Croitoru described the 2015 target as achievable but stressed that authorities shouldn’t overlook the other conditions that we have already met, debt ratio in particular. In order to join the euro area, the debt-to-GDP ratio shouldn’t exceed 60%.

“One can easily switch to a 60% debt ratio from 30% even within 12 months. I do support the 2015 target, and even if it is a goal difficult to achieve, if there is a strong political will, it will be possible”, Croitoru pointed out.

Romania’s public debt rose at an alarming pace, according to Theodor Stolojan, from less than 15% to around 30%.