How prepared is Romania for the transition to the euro?

The recent statement by the Governor of the National Bank of Romania, Mugur Isărescu, according to which adopting the Euro could become the country’s new “national project,” marks a significant shift in Bucharest’s economic discourse.

Corina Cristea, 08.05.2026, 14:00

The recent statement by the Governor of the National Bank of Romania, Mugur Isărescu, according to which adopting the Euro could become the country’s new “national project,” marks a significant shift in Bucharest’s economic discourse. Speaking at a conference on the subject, the central bank governor indicated that this could happen after the completion of the current national project, namely accession to the Organization for Economic Cooperation and Development (OECD), which brings together the world’s most developed economies, a process now in its final phase, following the stabilization of the economy and the reduction of the significant fiscal deficit. The idea of joining the euro zone is by no means a new one, but it has been abandoned several times in the years following Romania’s entry into the European Union, for various reasons and in different contexts. The National Bank of Romania (BNR) has been engaged in intensive preparations in this area, which continued even after Romania began to drift away from meeting the macroeconomic criteria required for the eurozone, says Eugen Rădulescu, advisor to the BNR governor.

“Back in 2015, we were very close to meeting the nominal convergence criteria set forth in the Maastricht Treaty, including reducing the budget deficit, and we didn’t yet have a very high level of public debt. However, one thing that is rarely mentioned is that Romania’s economy was far less developed. In 2015, Romania’s GDP was around 175 billion dollars; right now, it’s around 400 billion dollars. We’re talking about a different economy, one that’s much more developed and much more efficient. The big problem we face is that, at least in part, this development has come at the cost of an increasingly pronounced imbalance in public finances. And right now, we are in a situation in which we no longer meet any of the Maastricht criteria for joining the eurozone. And the most difficult criterion to meet, in my opinion, will be reducing the public deficit to a level that should not exceed 3% each year and returning public debt to the 60% ceiling, which we are just exceeding this year.”

For several years now, Romania has exceeded the 3% threshold, and it is currently making serious efforts to reduce the fiscal deficit to 6.2% this year, down from the more than 9% it had risen to. Experts explain that this reduction is not merely a formal requirement, but an essential condition for economic stability. What does a large deficit mean? It reflects structural imbalances, ranging from high public spending, particularly on wages and pensions, to poor tax collection or dependence on borrowing. Another essential criterion for joining the euro zone is price stability. The National Bank of Romania (BNR) has generally managed to keep inflation under control in the long term, although recent periods have been marked by significant increases, and Romania currently has the highest inflation rate in the European Union. Another aspect, by no means negligible, is that joining the eurozone entails relinquishing its own monetary policy. In other words, once Romania adopts the Euro, it would no longer be able to adjust interest rates or the exchange rate according to domestic needs, and this is sustainable only in an economy that is sufficiently stable and flexible. Beyond the technical criteria, real convergence is also part of the equation for joining the eurozone. Professor Daniel Dăianu, Chairman of the Fiscal Council explains:

“We need, however, economic and even social structures that are more in line with how the European Union works, especially the eurozone. But joining the eurozone now also has greater geopolitical significance than it did 20 years ago. And it is worth being in the eurozone. But it cannot be achieved in a few years, because we need to have a budget deficits that is around 3% of GDP and it is essential to stabilise the public debt at some point, for it not to exceed, let’s say 67-68% of GDP. Public debt in Romania will continue to grow. Let’s stabilize it and even lower it, let’s bring it down closer to the 60% of GDP benchmark.”

Despite the challenges, the benefits of adopting the euro can be considerable, ranging from the elimination of currency risk, meaning that companies, investors and ordinary citizens would no longer be exposed to the leu-euro fluctuations, to lower interest rates, translated into cheaper access to financing for the state and the private sector. From higher foreign investment, given that ​​a more stable and predictable environment attracts capital, to deeper economic integration, Romania would become part of the European economic core.

For the time being, however, the reality shows that, although Romania has made significant progress in recent decades, the gaps separating it from developed economies remain significant in terms of productivity, wage levels, infrastructure and the quality of institutions. Adopting the euro in an insufficiently convergent economy can generate tensions, as has happened in other southern European countries. Experts are warning that rushing the process can have consequences related to the loss of economic flexibility, difficulties in managing crises, possible price hikes for the population and pressure on competitiveness.

So, is Romania ready? Not yet, but the direction is clear, and the statement of the National Bank governor should not be seen as an immediate objective, but rather points to the benchmarks of a healthy economy, and which Romania should aim to achieve.