Lawyers give their views on one of the country’s most hotly debated topics
Joining the eurozone has been a strategic target for Romania since joining the EU in 2007, as part of the country’s commitment to deeper integration with Europe, and developing a strong market economy and a solid business environment. While this continues to be a target, the timing of Romania joining must be calibrated by two factors: when the country can be considered fully ready and how the present challenges in the eurozone are resolved.
From an economic point of view, Romania meets three out of five Maastricht euro convergence criteria and there are strong signals that it could meet all of them by the end of 2014. However, the downturn has shaken economies around the world, challenging even the most solid institutions – the euro included.
A study by Clifford Chance from June 2013 shows that the risk of euro fragmentation, or the exit of one or more nations from the euro, is making it difficult for investment decisions to be made. Four of the five countries identified as most attractive for investment are outside the eurozone.
Romania still has important challenges to overcome, as structural reforms on several fronts are behind schedule. Moreover, 2014 and 2015 are election years and the agenda is sure to take a more socially focused turn.
Joining the eurozone will bring economic and political benefits and it is important for Romania to maintain this point of reference. I am confident that it will take the step once the time is right.
Daniel Badea is managing partner of Clifford Chance Badea
According to the government Romania is still committed to adopting the euro in 2015 and joining the exchange rate mechanism. But critics say Romania will be ready to join the eurozone only after having restructured and consolidated the competitiveness of its economy. Most likely, this will be after 2020.
What has happened to Greece, Portugal, Ireland and Spain had raised a lot of questions about the benefit of joining the eurozone. Also, the mere fact of speeding up the eurozone joining process – as is the intention of our politicians – is likely to be painful for the Romanian economy, with higher unemployment and reduced labour market flexibility being likely consequences.
To Romania, joining the eurozone should mean securing sustainable development within an economic and monetary union. But at present, there are too many uncertainties in the aftermath of the economic crisis to judge the full extent of any adverse effects on the Romanian economy.
Gabriel Zbârcea is managing partner of Ţuca Zbârcea & Asociaţii