Central bank governor Isarescu: National Bank has balanced approach to euro adoption

The National Bank of Romania (BNR) has a balanced approach to the adoption of the euro, BNR governor Mugur Isarescu said on Tuesday, mentioning that this requires a high real convergence, as well as keeping the pace after Romania joins the eurozone. "On the one hand, we are fully aware of the need for a high real convergence rate of at least 70-75 percent of the eurozone average in terms of per capita GDP at purchasing power parity. Otherwise, we will be insufficiently prepared and as a result, in the event of asymmetric shocks, we won't be able to synchronize our business with other economies in the euro area. On the other hand, a high convergence does not mean that we are so ambitious as to target a convergence of 90 percent of the eurozone average, or a level equal to Germany's as per some approaches in Hungary or Poland. We consider ourselves to be more realistic, with a per capita GDP which we consider to be just as important as nominal convergence. And, equally important, no matter how high the targets are, it is essential to keep the pace of this process," Mugur Isarescu told the conference 'Convergence towards euro enlargement' organized by the National Bank of Romania in cooperation with the European League for Economic Cooperation Romania (ELEC). The BNR governor also said that the switch to the euro is not a panacea and that the pace of the process must be maintained in the long run. "For the switch to the euro to be successful, one must be a marathon runner rather than a sprinter. As a Latin country, I'd say the Latin adage 'festina lente' perfectly fits our approach. Slowly making haste on the way to convergence means to achieve a pace that is sustainable in the medium- and long-term. In addition, we should be aware that the convergence process is continuous and will unfold even after we join the eurozone. There is a lesson we must learn from the failed experiences of other states that considered that joining the eurozone is the end of the line," Isarescu cautioned. AGERPRES (RO - author: George Banciulea, editor: Andreea Marinescu; EN - author: Simona Klodnischi, editor: Simona Iacob)