Romania’s target to join the euro zone by 2019 is not feasible anymore, said Bogdan Olteanu, Romania’s National Bank deputy governor. The country hasn’t had any clear roadmap to achieve this target, he added.

The current talks about a legislation that leads to slippages in the budgetary outcomes lead the country even further away from achieving this objective, Olteanu said, cited by local Agerpres. He referred to the VAT rate cut and other fiscal relaxation measures from the new Fiscal Code. The VAT rate will go down from 24% to 20% starting next year and to 19% starting 2017. These measures will generate a higher budget deficit than the level Romania agreed with the IMF, European Commission, and World Bank, which is 1.2% of the GDP.

Romania needs to understand that its future lies in the euro zone, Olteanu said. Staying outside the euro zone doesn’t exempt the country from implementing structural reforms. These need to be even tougher.

editor@romania-insider.com