Possible Risks of a too Early Adoption of Euro in Romania (original) (raw)
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2010
The global financial crisis created new challenges for the states that have joined the European Union in 2004 and 2007, but that are not yet members of the Euro zone; the maintenance of the convergence indicators below the reference values is a real challenge for the new EU member states. This study aims to evaluate the macroeconomic policies which these countries implemented in their endeavour to adopt the Euro. It starts from the analysis of the stage of meeting the nominal criteria of convergence and it subsequently identifies some characteristics of the macroeconomic policies, stressing on the importance of reformulating and recalibrating these macroeconomic policies so that they can cope with the current challenges.
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Studies in Business and Economics, 2018
Since 2007, Romania has been under the under the glance of experts in the European Union, but also under the strict monitoring of the NBR and also under the pressure of citizens and investors' expectations about the moment of euro adoption. My research concerns have also been channeled to this point of maximum interest, impact and timeliness, which is why I have proposed through this paper to highlight a synthetic situation regarding the fulfillment of the convergence criteria from the moment of accession to the European Union, to the present. The objective of this paper is to reflect, in dynamics and correlation, the degree of fulfillment of the nominal and real convergence criteria, the sustainability of the levels achieved for certain indicators, so necessary for joining the single currency, without shocks. Romania is a country subject to frequent fluctuations at all levels: economic, political, legislative, also reflected in the fluctuations in meeting the convergence criter...
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International conference KNOWLEDGE-BASED ORGANIZATION, 2019
The repeated postponement of the deadlines set for Romania’s accession to the Eurozone as well as the challenges facing the nominal convergence criteria raised many questions among the European community regarding the competitiveness of the Romanian economy in relation to the economies of the European countries adopting the single currency. The present paper aims to present the current state of nominal convergence our country manages to achieve and to import compliance with these criteria by exemplifying the concept of optimal monetary areas. The adoption of the single currency must be achieved in the context of sustainable convergence that guarantees the minimization of costs caused by the renunciation of national monetary policy. To achieve this goal, the present paper presents the optimal context that Romania’s shift to the single currency should take into account in order to maximize its benefits from the beginning of this irreversible process.
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Analele Universităţii "Eftimie Murgu" Reşiţa: Fascicola I, Inginerie, 2008
All the European Union (EU) member states engaged to adopt, sooner or later, the euro. In order to do so, they must accomplish the convergence criteria concerning the inflation rate, the exchange rate, the interest rate, the public deficit and the public debt. The paper analyses the situation of Romania, based on the convergence criteria. Romania accomplishes only the criteria referring to public finances, while inflation still seems to be the worst problem.
Analysis for the Degree of Euroization in Romania
2012
Euroization is defined as the adoption of the Euro currency by the authorities from a country outside the Euro area, as a legal currency and as an official currency, and this means that the country chooses to give up its national currency and that the national bank gives up using the monetary policy as an instrument of the economic policy. The objective of this study is to adjust the extent of meanings of the Euroization concept for Romania and to explain it under the terms of the optimum currency areas theory. Thus, an economy characterized by a high Euroization will be more ready to give up its national currency in the future, as that economy has passed the test of using the currency it wants to adopt. This study makes an analysis for the causes of Euroization, based on the economic literature and we have examined the forms of occurrence of Euroization in the Romanian economy, insisting upon the aspects related to the preferences of the economic agents for crediting and saving in ...
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The main objective of this research is to estimate the time needed for Romania to achieve real sustainable economic convergence with the euro area. In this regard, we will try to determine when the absolute level of GDP/capita in Romania will equalize the absolute level of GDP/capita in the euro area. This equalization occurs when the growth rate of GDP/capita (expressed in PPP) of Romania is higher than the growth rate of the same indicator in the euro area. To achieve this objective, there are used simple relationships of growing of the GDP/capita both for Romania and the euro area. The estimated results shows that the GDP/capita (expressed in PPP) in Romania will be able to equalize with GDP/capita in the euro approximately in the year 2030. This uniformity will occur only if the average growth rate of the Romanian economy will remain constant, ie at the same level as the average growth rate for GDP/capita in the analyzed period. If Romania will register higher growth rates, the ...
The opportunity for the euro’s introduction in Romania and Hungary
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The opportunity for the euro's introduction in Romania and Hungary After 2004, more than half of the 13 countries that joined the EU, 7 have already joined the eurozone, too, while 6 countries, including Romania and Hungary, the subject of our research have not yet to join. Moreover, apart from some press releases it does not even seen when Prage, Warsaw, Zagreb and Sofia beside Budapest and Bucharest enter the ERM-II system, which is considered the euro hall. Therefore, in our paper, we examine the trade and economic indicators for the two chosen countries that are not included in the Maastricht Convergence Criteria, at the same time we do not think it is possible to set aside them if we want to use the European single currency in the future in a sustainable way. We prepesent our work as a thought-provoking, and we would like to contribute with our analysis to the possible biggest domestic macroeconomic changes in the next decade. In our view, only the smallest challenge is the introduction of the euro from the perspective of the real economy. Greater efforts will be made by sustainable economic development in the euro area.
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The Romanian Economic Journal, 2008
Romania is one of the least developed countries of the EU, with a level of GDP/capita three times lower than the EU average (1:2,9 GDP/head and 1:6,8 GDP/person employed), with a relatively low contribution of services to the PIB achievement, having an excessive labor force in agriculture, a reduced potential of the educational and research infrastructure and the lowest convergence level compared to the EU. According to the Convergence Programme, published at the beginning of 2007, Romania will not accede to the EMU-2 sooner than 2012, which means that 2014 becomes for Romania the most appropriate period for the adoption of euro (The Romanian Government, Convergence Programme, 2007). According to the Government, this period appears to be necessary for the continuation of the structural reform process, necessary for the economy to support euro.
Risk Factors in Euro Adoption by Romania
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The costs and benefits of adopting a unique currency have been studied and outlined by the optimum currency areas theory. This theory of Mundell has suffered modifications, a series of economists identifying and introducing a series of subsequent or additional criteria in the analysis. Starting from the costs indicated by the optimum currency areas theory and its further developments, I have identified a series of factors that I believe to represent future risks for the Romanian economy within the process of adopting the unique euro currency.
Convergence and Shocks in the Road to EU: Empirical Investigations for Bulgaria and Romania
SSRN Electronic Journal, 2000
Despite their progress Bulgaria and Romania significantly differ from the EU economies. In this article, on the basis of the theoretical and empirical achievements of the theory of optimal and (endogenous) currency areas we study to what extent the two South European economies are able to adopt the common economic (and above all monetary) policy of the EU, and to what extent the convergence to the EU stimulates the economic development of these countries. Despite the similarities, the two countries now differ fundamentally in their choice of a monetary regime-while Romania uses inflation targeting and a flexible exchange rate, Bulgaria has adopted a currency board regime. For this purpose we analyze: (i) the degree of nominal, real and financial convergence and synchronization of the economic cycle with that of the European Union (using unconditional β convergence approach). Income and price levels, inflation rate, interest rate, monetary aggregates, credit, productivity etc. are among the studied variables; (ii) the resistance to different external and internal shocks (using VAR model) as well as (iii) the mechanisms for balancing and absorption of these shocks. To give a better comparative picture we compose the panel including Hungary and Czech Republic.