Isarescu: Romania currently meets none of criteria for adopting euro,BNR is ready to resume the process

The National Bank of Romania is ready to resume preparations for adopting the euro; however, Romania currently meets none of the necessary criteria, and the switch to the euro is a complex political and social process, BNR Governor Mugur Isarescu stated on Thursday."It is a very good discussion (regarding the switch to the euro - Ed. note). The National Bank has provided support in the past as well, including through a dedicated secretariat for the euro adoption process. Until around 2018, meetings of the Euro Adoption Committee were held right here, in this room. I have mentioned this a few times before. Back then?during the 2011-2012 discussions?we even got down to the details: where cash-transport vehicles would enter the country, which branches had large vaults, and where to position?or rather, store?the cash reserves," Isarescu said.He pointed out that the process was interrupted in 2018 and recalled that Romania met the criteria in 2014, but the external context was unfavorable due to the Greek crisis and the Eurozone crisis."That was a time when there was even talk of the zone's breakup, of the disappearance of the eurozone. (...) So, there was no discussion back then about a new country joining the eurozone," stated the BNR Governor.On the domestic front, Isarescu noted that after the criteria were met in 2014, a period of tax cuts and increased spending followed?leading once again to a large deficit?before the pandemic and the war subsequently intervened.However, the BNR Governor emphasized that the transition to the euro is not merely a currency exchange."The switch to the euro is not a simple currency exchange?swapping the leu for another currency. No, it is a complex political process. It involves both political and social components and permeates the entire fabric of society. Moreover, we cannot do it alone. We play an important role, certainly, but the Government and Parliament are the ones who will decide. We can contribute to properly formulating the path forward," explained Mugur Isarescu.He stated that Romania has no alternative to adopting the euro, as it committed to this objective through the EU accession treaty."We have no other alternative. The accession treaty we signed stipulates that we will adopt the euro once the necessary conditions are met?once we fulfill the requirements. We do not have the status that England or Denmark had, allowing us to retain our national currency. Therefore, the decision has already been made," Isarescu stated.He added that Romania is ready to begin the process when society is ready, but currently, none of the criteria are met."We are prepared to do it when society is ready. Now, you are asking me whether the country is ready. We do not meet a single criterion at the moment. The priority is to implement this fiscal correction, to hold the course, and to maintain it, because the experience of 2014 shows us that if we do not sustain it, we cannot even enter the exchange rate mechanism," he said.Isarescu explained that, after meeting the performance criteria, Romania must remain in the exchange rate mechanism for at least two years and maintain the stability of its indicators.He emphasized the need for internal discipline and the willingness to take responsibility for decisions, noting that Romania must demonstrate its ability to maintain its macroeconomic indicators.He also said that he cannot yet specify a timeframe for the switch to the euro.