Isarescu: Structural reforms needed for euro adoption are oftentimes politically, socially painful

Romania is fulfilling most of the nominal convergence criteria for a switchover to the European single currency, but it still has a long and hard way before getting the necessary competitiveness to join the Eurozone, given that structural reforms are oftentimes politically and socially painful, Governor of the National Bank of Romania (BNR) Mugur Isarescu told a Euromoney conference on regional finance and investment for South-Eastern Europe held in Bucharest on Thursday.

'I am firmly convinced that we had ahead of us a long and hard way of some years to bridge the real convergence gap, to continue structural reforms, which, oftentimes are politically and socially painful, and also to secure competitiveness of Romania's national economy,' said Isarescu.

He underscored that the adoption of the euro is not unconditional, and that is why Romania has to make sure that nominal convergence criteria are sustainably got. 'We know very well that a very wide gap in real convergence can complicate business, management decisions in the absence of independent monetary policy. Moreover, it is important for us to prove the efficiency of the institutions and prevent imbalances,' said Isarescu.

He mentioned that fact that Romania has recently got political consensus over a switchover to the euro in 2019. 'Such an objective, although still very ambitious, could act as a catalyst for consistent political actions. Romania is currently fulfilling three of the four nominal criteria: a stable fiscal position, long-term interest convergence and stable exchange rates, although technically Romania is no inside the Exchange Rate Mechanism II. Moreover, fulfilling the price stability criterion is a matter of months only,' said Isarescu.

And yet...