Isarescu: If we are not capable of constructing a highway, how easy would be to accede to euro area?

Isarescu said yesterday, in front of over 600 students of the Department of Economic Studies and Business Management within Babes Bolyai University, that people across the world talked about the vulnerability of euro area more often.

“When you accede to a club, you must observe the rules of the club beforehand. We are talking about the expansion of the euro area, whereas worldwide, people are talking about the deterioration of the euro area, in the midst of rising pressures emerging on a constant base”, said the governor of National Bank of Romania.

Isarescu referred to Milton Friedman, who offered low odds of stability to euro area, adding that there is not even a common tax in the EU member states, because the states didn’t agree upon.

“There is no unitary tax, a one only. And when the proposal to introduce a European tax was made, you probably remember the reaction. The countries had relinquished the symbol of sovereignty, their national currency, but they will never relinquish a tax so easily “, said the governor of BNR, reminding that the absence of a unitary tax policy is weak point.

Mugur Isarescu said that Romania’s accession to euro area would be a positive thing, pointing out that the state must observe certain economic regulation.

“It would be a positive thing to accede to this group, but before talking about this safety group, we must know whether we meet the requirements or not: low budget deficit and low inflation. When it comes to practice, however, it’s more difficult. In other words, a monetary structure is as difficult or probably more difficult - tax-structure-based monetary policy – than highway engineering. If we are not capable of finishing a highway, how easy would be for us to accede to euro area? Facts is what we need rather than words”, Mugur Isarescu said.

The governor of National Bank of Romania pointed out that there were no advantages arising from the accession to euro area, such as the rise of price for foodstuff, which determined many countries, such as Italy or Greece to consider the exit from the group.

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