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EU executive: Romania failing to fulfil conditions for adopting euro
Romania does not meet the conditions for the adoption of the euro currency, is the conclusion of the European Commission, following the assessment of legal compatibility and the fulfillment of the convergence criteria and taking into account additional relevant factors for economic convergence and integration, according to a press release published on Wednesday by the Executive community.
The conclusion is presented in the 2024 Convergence Report, which assesses the progress made by Bulgaria, the Czech Republic, Hungary, Poland, Romania and Sweden towards joining the euro zone. These are the six member states outside the euro area that have legally committed to adopting the euro currency.
The EC report indicates, in particular, that the Romanian legislation is not fully compatible with the compliance obligation provided for in Article 131 of the Treaty on the Functioning of the European Union (TFEU). Thus, Romania does not meet the criterion of price stability, the one concerning public finances, it does not meet the criterion of the exchange rate and the criterion of convergence of long-term interest rates. The European Commission’s report shows that joining the euro zone is an open process, which is based on certain rules.
The document is based on the convergence criteria, sometimes referred to as the “Maastricht criteria”, which are provided for in Article 140(1) of the TFEU. Among these convergence criteria are the stability of prices, the soundness of public finances, the stability of the exchange rate and the convergence of long-term interest rates.
The conclusion of the report is that the member states it targets show heterogeneous results in terms of nominal convergence. Currently, none of these states meets all the criteria for joining the euro zone.
Bulgaria is the only country that fulfills all the criteria, except one, and whose national legislation can be considered compatible with the norms of the economic and monetary union.
According to the report’s conclusions, Sweden meets the price stability criterion.
Bulgaria and Sweden meet the public finances criterion, and based on the Commission’s report of 19 June, drawn up pursuant to Article 126(3), the Czech Republic is expected to meet this criterion as well.
Bulgaria, the Czech Republic and Sweden also meet the long-term interest rate criterion, and Bulgaria meets the exchange rate criterion.
“As regards the independence of the BNR, the prohibition of monetary financing and the BNR’s integration into the ESCB at the time of euro adoption, the legislation in Romania, in particular the BNR Law, is not fully compatible with the requirements of Article 131 TFEU. The Romanian authorities should remedy the above-mentioned incompatibilities and imperfections,” according to the Convergence Report. (https://economy-finance.ec.europa.eu/document/download/a3bb3063-6478-44a5-a270-933e49fb304b_en?filename=ip294_en_1.pdf)