From the Leu to the Euro

An overview of the main challenges facing Romania's Euro adoption.

Corina Cristea, 11.09.2026, 14:00

As a member of the European Union since 2007, Romania committed to adopting the single currency once it meets the necessary conditions, with no automatic deadline for replacing the Leu. These conditions, known as the Maastricht convergence criteria, aim to show that an economy is stable enough for the country to give up its national currency and independent monetary policy.

We are talking about four main economic criteria. The first is price stability. Average inflation over 12 months cannot exceed that of the three best-performing EU member states by more than 1.5 percentage points. The second is fiscal discipline. The budget deficit must generally remain below 3% of GDP, and public debt should not exceed 60% of GDP, barring exceptions provided by European rules. The third is exchange rate stability. The national currency must participate in the ERM II mechanism for at least two years without severe tensions or central rate devaluations against the Euro, proving the Leu is stable relative to the Euro. The fourth criterion is long-term interest rate convergence. Long-term government bond yields cannot be more than 2 percentage points higher than the average of the three best-performing states in price stability. In addition to all this, national legislation, including the statute of the National Bank of Romania, must align with European treaties.

A current snapshot of the situation shows that although Euro adoption remains a national goal, Romania currently fails to meet any of these conditions. This comes despite the country being surprisingly close to nominal criteria a decade ago, when it had very low inflation, a deficit of just 0.7% of GDP, a public debt of 38.4%, and long-term interest rates of 3.6%. However, it lacked ERM II participation and faced legislative hurdles.

Adrian Codirlaşu, from CFA Romania, the organization representing investment and financial analysis professionals, explains:

“About 10 years ago, in 2016–2017, we met the criteria and could have requested accession. Granted, we wouldn’t have entered immediately, but we might not have ended up in our current situation. Right now, we face an unsustainable public debt growing at an accelerated pace. Looking at the cost of this public debt, we rank fourth in Europe for interest payments as a percentage of GDP. A way out of this situation, perhaps the only one, would be entering the Eurozone. That makes it imperative to take steps toward joining, particularly regarding fiscal policy. Our massive deficits are the core issue driving this unsustainable debt and generating high inflation that impacts citizens directly. We currently have by far the highest inflation in Europe, even if it dropped slightly in July”.

Experts point to stagflation in Romania, characterized by economic stagnation and high inflation, which continues to suppress consumer spending. Within a year, the National Bank revised its inflation forecast upward twice: from 3.9% to 5.5%, and then to 6.1% for late 2026, expecting a return to the target range only by the fourth quarter of 2027.

For now, although data reveals Romania is more integrated economically in Europe and much more prosperous, an inflation rate of 8.4%, a deficit of 7.9%, interest rates at 6.7%, and the continued lack of ERM II participation make Euro adoption unrealistic right now. Officials maintain that Romania must continue its efforts, with President Nicușor Dan advancing the idea of a political agreement among parties to support this path.

The solution to Romania’s problems is fiscal. Our current situation stems directly from fiscal policy, says Adrian Codirlașu, who also offers an estimate on when Romania might adopt the single currency:

“In 2025, we planned to bring the deficit below 3% within seven years. Until then, entry is impossible. Other events will likely happen, bringing new excuses to keep the deficit high, so I don’t see this happening in less than 10 years. For a target to be credible, politicians cannot just announce a desire to join, we must take concrete steps. Crucially, we should approach the European Commission and the European Central Bank to establish a joint plan. Only then will that roadmap carry weight”.

Analysts say the Euro could bring Romania lower transaction costs, eliminate exchange rate risk, foster deeper financial integration and benefit citizens and businesses alike. However, they add that the single currency is not a magic fix for economic issues. It works best when an economy is strong enough to operate without its own exchange rate or independent monetary policy.

Currently, the Central Bank can adjust interest rates and intervene to address local economic challenges. Once the Euro is adopted, monetary policy decisions fall entirely to the European Central Bank. For now, Romania is not ready to give up the Leu without losing its ability to protect its economy. (VP)