EC: Romania unprepared to switch to euro

The European Commission (EC) on Wednesday recommended Estonia to join the euro area as of January 1, 2011, and announced that eight states seeking eurozone accession, Romania included, are unprepared for the move.

The nine EU countries covered by the 2010 Convergence Report are Bulgaria, the Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Romania and Sweden. ‘None of the other eight countries assessed in the report was found to meet all the conditions for euro adoption,’ notes the European executive body in the report presented on Wednesday, which finds that the inflation rate and the budget deficits were too high in the eight aforementioned states.

The Convergence Report presented on Wednesday by the EC assesses the progress made to convergence by the states with ‘ derogation’ from euro area membership. The assessment takes place against the background of the global financial crisis, which has affected the prospects for nominal convergence. The document notes that the nine Member States with a so-called ‘derogation’ have made uneven progress on the road to the single currency, and eight of them – Romania included – do not yet meet all the conditions for euro adoption.

At the press conference organized on Wednesday at the EC seat, EU Commissioner for Economic and Monetary Affairs Olli Rehn said that the assessment and proposal by the EU executive body is also ‘a strong signal about the euro area and to the EU more broadly, underpinning the role of the euro as medium-term policy anchor and confirms that sustained policy efforts and a long-standing record of stability-oriented policies generate concrete results.’

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