Romania to enter eurozone in 2015 - Fitch
21 April 2009
Fitch ratings agency expects Romania and Bulgaria to enter the euroland in 2015 rather than in 2014 and 2012, respectively, mainly due to 'the financial challenges faced by countries with large external financing requirements, fixed exchange rates and high levels of euro-denominated debt on their balance sheets,’ said Edward Parker head of Emerging Europe Sovereigns at Fitch.
Furthermore, Parker noted that 'Fitch's ratings in eastern Europe do not factor in any expectation that the European Union (EU) authorities will allow fast-track euro adoption in response to the current economic and financial pressures facing many countries in the region,' adding that 'the EU is unlikely to loosen the Maastricht requirements on the latest EU member-states.'
Fitch added that the policy of the European Central Bank, European Commission and European Union is that a country can adopt the euro, only if it has met the Maastricht convergence criteria covering price stability, long-term interest rates, budget deficits, government debt and exchange rate stability within the Exchange Rate Mechanism (ERM II).
In order for a country to enter the euroland, budget deficit should meet Maastricht criteria and stay below 3%. The country's annual inflation should be no more than 1.5 percentage points higher than the average level of the three lowest inflation member states of the EU.
However, Fitch believes that Bulgaria and Romania would benefit from entering the eurozone, as the threat of a currency crisis would be reduced and the credit ratings of both countries would be raised automatically. ‘If there were an unexpected relaxation of EU policy that opened the way for early euro adoption, then Fitch would expect to respond by taking some positive rating actions on the countries concerned,’ said Parker.
Meanwhile, he pointed out that unilateral euroisation would be far less advantageous as it would not bring access to ECB liquidity or influence on ECB decision-making, and would lead to a loss of "goodwill" with key EU policy makers.
Fitch expects Estonia, Lithuania and Poland to enter the eurozone in 2013, while the Czech Republic and Hungary in 2014.
<<< back to Romanian news >>>
International Property News
Latest World News