Discussions on a deadline for Romania's joining the eurozone could start in five years' time if the below 3% deficit reduction programme works, governor of the National Bank of Romania (BNR) Mugur Isarescu, said on Wednesday.
"When we manage to bring the government deficit to 3% and you see that it is not an easy job, we start talking about a deadline. Until then, inflation will be marginally higher, we have no way to bring it down. It's the country's deficit. It's not the deficit of X or Y. It was made by various governments, but it's the country's deficit, right? I personally do not like at all the joy of some who talk about the fact that we will hit the walls because of this deficit and because of the situation of the country. The deficit must be financed. If the deficit is not financed, pensions are no longer paid, wages in the public sector are no longer paid and so on. We must also be serious about the problem of deficit and debt. Who has incurred the debt? Again a question arises. The governments have, the governments paid for it. The governments acted on behalf of the country....and now, to answer you directly, probably if the programme that means bringing the deficit below 3% in the next 2-3 years works, we will probably discuss in five years' time entering the eurozone," said Isarescu, when asked when we could see Romania's transition to the euro.
Also, the BNR governor said that in order to bring the public debt below 60%, Romania would have to have a deficit of less than 3% of GDP for several years.
"We, the National Bank, until 2018, in this building, want to make it clear that we have heard that someone from the banking system would have opposed Romania entering the eurozone. It's not true. So, until 2018 we had meetings of a committee to transition to the euro. In 2017, we also had the programme where the cash transport cars that would bring euro cash would stop, stop in Oradea, Cluj, Sibiu and so on, where to deposit the banknotes. And the last meeting I did, because I had this capacity, at the Romanian Academy, with Prime Minister Viorica Dancila. We went to the Romanian Academy with all the political parties in 2018 and talked about entering the Eurozone. Indeed, the pandemic appeared, the war appeared. So, in this institution you can have every guarantee that we support the entry into the eurozone in all reasonable and true ways," Isarescu said.
Isarescu on Wednesday held a news conference to release BNR's latest quarterly report on inflation.
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