If Romania were to switch to the euro now, it would be seriously affected by asymmetric shocks, and this is why it chose the middle path in its efforts to adopt the European single currency, considering that a real convergence of 70 - 75 percent - compared to the current 61 percent - is critical for this step, governor of the National Bank of Romania (BNR) Mugur Isarescu on Friday told the Bucharest Security Conference, an event organised by the National University of Political Studies and Public Administration.
"We now have 61 percent real convergence. At this level asymmetric shocks would severely affect us and we would be unable to synchronize the business cycles with the other eurozone economies," said Isarescu at the 4th edition of the Bucharest Security Conference.
Regarding the Maastricht criteria, he said that from 2015 to November 2017 Romania has met all the convergence requirements, but didn't participate in the exchange mechanisms. The fact that now the long-term interest rates and the inflation are no longer in line with the established targets shows that we should aim for a sustainable, not an accidental or temporary nominal convergence, said Romania's top banker.
He went on to remark that although Romania has a different approach, as it considers the switch to the euro to be quite complex, this doesn't mean that it doesn't intend to adopt the euro as soon as possible.
"This means that there has to be a serious, thorough preparation for us to be able to face the inherent challenges," said Isarescu, citing the Latin adage "Festina lente/Make haste slowly" as the wisest approach to adopting the single currency.
Speaking about risks, Isarescu said that the fiscal and the current account deficit can greatly erode the national economy, therefore it would be better for adjustments to be made gradually, rather than having the market perform them.
Prime Minister Viorica Dancila said in late January that the government is committed to the goal of Romania's switching to the euro in 2024.