THE NOMINAL CONVERGENCE CRITERIA AND ROMANIA'S COMPATIBILITY WITH THE EURO AREA

Abstract

The developments in recent years in Romania regarding price stability, sound public finances, exchange rate stability and the convergence of long-term interest rates have significantly influenced the process of switching to the euro. The convergence criteria to be met by each state wishing to switch to the euro ensure that that state is prepared to adopt the euro and that its accession to the euro area will not cause economic risks for either the Member State or the euro area. ensemble. According to the latest Official Report of the European Union in 2020, Romania does not meet the criteria for joining the euro area. In the current economic situation, strongly influenced by the pandemic, it is obvious that for Romania, the concomitant fulfillment of the Maastricht criteria is more and more difficult to fulfill. The commitments made by the Romanian state to the European Commission, together with the approval of the National Recovery and Resilience Plan, do not guarantee Romania's economic success. In this paper, through an empirical research, we performed an adequate analysis on the EU requirements that Romania must meet in order to meet the commitments made and to achieve the criteria of nominal and real convergence in order to be part of the euro area.