Isarescu, BNR: An agreement with the IMF would give more credibility to Romania’s economic policy. 2019, no longer a target to adopt EUR

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A new agreement with the IMF would give more credibility to Romania’s economic policy, but shouldn’t be focused on the balance of payments, but on the unresolved problems, namely structural reforms, said on Wednesday the BNR governor, Mugur Isarescu.

“An agreement with the IMF would give more credibility to Romania’s economic policy. I think it would help us in terms of advantageous financing from the international markets, and would probably stimulate the reform processes and the cohesion policy mix,” Isarescu said on Wednesday during the briefing after the meeting of the BNR Board on monetary policy issues.

He said that all these issues must be politically decided, especially in the context of parliamentary elections next year and having in view the agreement will be carried forward by the next government.

Isarescu emphasized, however, that the IMF will take a decision on a new agreement by ‘weighing’ the manner in which the former agreement has ended.

Another issue discussed by Isarescu was the one of the European currency. The target set for Romania to adopt the European single currency, namely the year 2019 is no longer feasible, and the National Bank of Romania will ask the Government and the Presidency that, before announcing a new date for joining the Eurozone, to set up a road map to be accepted through national consensus, Mugur Isarescu said.

“The 2019 target is not feasible anymore, not only because time has passed, but because we should have joined the ERM (Exchange Rate Mechanism) II on January 1, 2016, or June 1, 2016 at the latest. The preparation for this antechamber is complicated,” the BNR governor explained.

In his opinion, this is not possible anymore, not even technically, and even if Romania would join the ERM II by the next year’s half, there is another problem.

“The two-year period a country should stay in this antechamber of the euro is the minimum. So, no one guarantees that we join the Eurozone in 2019 and I don’t believe this is the moment to push it,” added Isarescu.

In this context, the BNR head warned that a road map is essential before announcing a new target.

“We’ll propose the Government and the Presidency that, before any decision on a certain date is made, we should draw a road map to be discussed politically, to be appropriated by the Opposition, too, by all parties because next year we are looking to an elections’ year. The road map should be accepted in a national consensus, for the Romanian society understands it is not about a mere change of banknotes,” the BNR governor specified.

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