Romania fulfills 1 out of the 4 criteria necessary for adopting the euro, the European Commission Representation in Romania explained in a Facebook post. The message came as PM Viorica Dăncilă announced the country’s plan for the adoption of the euro by 2024.
Romania fulfilled the criterion relating to public finances, as outlined in the 2018 Convergence Report reviewing the member states’ progress towards euro adoption. The criterion looks at government deficit as percentage of GDP, which should not exceed 3%. It also looks at government debt as percentage of GDP, which should not exceed 60%.
Still, Romania does not fulfill the price stability, exchange rate and long-term interest rate criteria and legislation in Romania is not fully compatible with the Treaty on the Functioning of the European Union (TFEU), the 2018 Convergence Report found.
Member states adopting the euro are required to have achieved a high level of sustainable economic convergence, examined by reference to the convergence criteria. These criteria, sometimes referred to as the ‘Maastricht criteria', are set out in the TFEU.
According to the convergence criteria, the inflation rate cannot be more than 1.5 percentage points above the rate of the three best performing member states. The country should also participate in the exchange rate mechanism (ERM II), for at least two years without devaluing against the euro. At the same time, the long-term interest rate should not exceed 2 percentage points above the rate of the three best performing member states in terms of price stability over one year before the examination.
Seven of the 12 Member States that joined the EU in 2004 or 2007 have already adopted the euro. Slovenia did so in 2007, Cyprus and Malta in 2008, Slovakia in 2009, Estonia in 2011, Latvia in 2014 and Lithuania in 2015.