Euro adoption in Romania: facts and perceptions

• Author: Enache, I. - Brodský, Z.
• Position: PhD. Candidate, Dept. of Marketing, Tourism and International Relations, Transilvania University of Brasov - University of Pardubice, Czech Republic
• Pages: 37-40

Bulletin of the Transilvania University of Braşov • Vol. 6 (55) •No. 1 - 2013

Series V: Economic Sciences

EURO ADOPTION IN ROMANIA:

FACTS AND PERCEPTIONS

I.-C. ENACHE

1 Z. BRODSKÝ2

Abstract: The aim of this paper is to link the nomina l convergence criteria

with Romanian citizens perceptions about euro adoption. Based on

convergence r eports and Eur o-barometer da ta, the 2010 and 2012 years are

ana lysed. It is shown tha t even if the nominal convergence achievements are

improving, the per ceptions regar ding the eur o adoption a re deterior ating. A

better communication stra tegy is advised.

Key words: euro adoptio n, euro area , Romania.

1 PhD. Candidate, Dept. of Marketing, Tourism and International Relations, Transilvania University of

Braşov.

2 University of Pardubice, Czech Republic.

1. Introduction

The Euro adoption is one of the last and

most challenging tasks that Romania has to

address in order to complete its European

integration. By signing the Treaty of

Accession in 2005, Romania and Bulgaria

had agreed to join the Economic and

Monetary Union (EMU) and to comply

with its requirements. To fulfill these

requirements the monetary integration

must be achieved. Therefore the matter is

not if Romania will join the Eurozone, but

when this will happen.

The scientific literature points out a

multitude of facets of the Euro adoption.

The moment needs to be carefully planned

in order to take advantage of the business

cycle correlations [6]. It is also important

to consider how monetary and fiscal

measures can bridge the gap between the

non-euro area Members States, with not so

strong economies, and euro area Member

States. In this matter it seems that inflation

targeting with floating rates is the best

option [2].

The final objective of the non-euro area

Member States is to achieve convergence

with euro area Member States. When it

comes to convergence criteria there are

two perspectives: the real convergence and

the nominal convergence.

The real convergence refers to countries

gap reduction in terms of macroeconomic

indicators like GDP per capita, income per

capita, productivity, etc. This gap

reduction process will not end when the

euro is adopted [1]. Real convergence can

be further analysed as -convergence or  -

convergence [11]. For example, studies

using unconditional -convergence models

showed an annual average rate of

convergence of 5.97% among EU27 [10].

The nominal convergence implies

compliance with the four Maastricht

criteria. Nominal and real convergence are

not always correlated. Nominal

convergence can be achieved by damaging

the real convergence [8]. The reform of

Euro area entry criteria needs to be

considered [3].