Romania already has a "country project" represented by its accession to the Organisation for Economic Co-operation and Development (OECD), now in the final stage, and the next strategic objective will be the adoption of the euro, after rebalancing the economy and reducing the major fiscal deficit, Governor of the National Bank of Romania (BNR) Mugur Isarescu said on Thursday.
"We do have a country project. Even though I keep hearing that we do not. In fact, we do have a country project, the one we are currently working on, which is dominated by Romania's accession to the OECD. If that is not a country project, then what is? There are some 30-40 milestones, and at some point someone will have to write about what this project has meant for Romania in recent years through the fulfilment of those milestones. We still have a few left to complete, but this country project is nearing completion and we will move on to another one that has already been announced, one we have been expecting for some time and which we must prepare thoroughly, especially for the younger generation. Namely the adoption of the euro. That will also be a country project, but of course, as has been said, until then we must complete the OECD process, rebalance the economy and move out of what I would not call a nightmare, but certainly a difficulty, an impasse, namely the major fiscal deficit. It is hard to correct such issues, especially when society has aspirations for a better standard of living," Mugur Isarescu said at the conference on "Risks and opportunities in the Romanian financial system."
He underscored that meeting the nominal criteria for adopting the euro must be done in a sustainable manner.
"And you see, the euro will not be adopted only in the Bucharest area, as I was asked yesterday by a foreign delegation. Some 10-15 years ago I said: 'Bucharest could join the euro area tomorrow, if we could somehow cut it out and separate it, but the country is larger'. Those living 100 kilometres from Bucharest or further away, where poverty still exists and where the rigour of adopting the euro must be understood, will also want, or will have to, join. They also want to live well, do they not? And they represent part of the electorate. That is why we have all these discussions. They want paved roads and sewerage systems. All of this costs money. So it is not that we, or anyone in the banking sector, do not understand, but the nominal criteria are those required for joining the euro area. However, they must be met in a sustainable way, that is the key word. We met them in 2015, and by 2016 we had already moved away from them due to other policies and social pressures, hadn't we? Now we face the same issue in meeting the nominal criteria. There are pressures from the real economy and from the poorer parts of the country, which exert pressure through democratic means. Disputes between political parties reflect this. But the project has already been announced by the President of Romania and must be properly prepared," Mugur Isarescu said.
According to the governor of the National Bank of Romania, the future of Romania's financial system largely depends on the ability to invest, starting today, in education, performance and strong partnerships.
The conference on "Risks and opportunities in the Romanian financial system" was organised by the National Bank of Romania and the Bucharest University of Economic Studies.
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