THE ADOPTION OF EURO IN CASE OF ROMANIA: THE MAIN (COUNTER) ARGUMENTS

Cristian Paun

Review of Social and Economic Issues, 2016, vol. 1, issue 3, 76-94

Abstract: In accordance with Treaties and assumed obligations, Romania should adopt Euro when it is “ready”. As EU-member, there is no possibility to avoid the adoption of Euro, only to postpone on an indefinite time this decision. The decision about the introduction of Euro remains a political one. Romania revised for many times the schedule on this specific matter. Euro, as Romanian Leu, is a fiat currency with legal money characteristics, serving for the same redistributive purpose. Euro Area has the same imperfections as local monetary arrangement. The paper will be focused on the fulfilment of pre-requisites (nominal and real convergence), the existing gap between Romania and Eurozone and the main arguments for adoption and against the adoption of single currency. The central idea of the paper is concentrated around the argument that it is irrelevant to discuss about the advantage of a specific tool for public policy that is the currency, taking into consideration that this tool (the fiat currency) is used to arbitrarily redistribution of resources among economic operators. Without a proper theory of money, all theories defining monetary integration (optimal currency area - OCA theory, convergence theories, Balassa-Samuelson effect) are submitted to be wrong and unrealistic. Therefore, under fiat-money conditions, the adoption of a single currency or not is impossible to be properly analysed and defined.

Keywords: Euro; nominal convergence; real convergence; optimal currency area; integration. (search for similar items in EconPapers)
Date: 2016
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