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BUCHAREST (Romania), November 17 (SeeNews) - Romania could join the Eurozone 13 years from now - if the country sustains the average growth rate of the last 15 years, according to a new study conducted by the European Institute of Romania.
„If Romania would keep the growth pace from the 2000-2015 period, then it could reach the average of the Eurozone in 27 years, while 75% of the Eurozone average could be reached by our country in 13 years," says the study "Romania joining the Eurozone: under what conditions?" published on Wednesday.
The European Institute of Romania (EIR) is a public institution whose mission is to provide expertise in the field of European affairs to the public administration, the business community, the social partners and the civil society.
The study suggests that in order to enter the Eurozone in a sustainable way, Romania should target a GDP per capita in purchasing power parity of at least 75% of the European Union average in 2007, when the country joined the EU.
This would boost Romania's chances to meet the euro convergence criteria of price stability, government budget deficit below 3% of GDP, and normal fluctuation in exchange rates and long-term interest-rate levels to qualify for adopting the euro.
Currently, Romania is below 60% of European Union average in terms of GDP per capita.
If Romania adopts euro with a big gap in GDP per capita compared to EU average, there is a risk of considerably higher inflation than in the euro area, which would lead to lower real interest rates than in the rest of the Eurozone, according to the study.
"It is is not clear whether macroprudential measures would be effective enough to combat the adverse capital movements', according to the authors of the study.
The study was coordinated by Romania's central bank (BNR) board member Daniel Daianu. Its three other co-authors are Alpha Bank's chief economist Ella Kalai, the head of European integration division at BNR, Gabriela Mihailovici, and Aura Socol, adviser to the financial supervision authority.
Romania's annual economic growth decelerated to 4.4% in the third quarter of 2016 from 6.0% the quarter before, a flash estimate from the country's statistics board, INS, showed on Tuesday. In the first nine months of the year, the country's gross domestic product (GDP) grew by an annual 4.9%.
In July, the European Central Bank (ECB) said that Bulgaria, Croatia and Romania are among the seven countries that do not meet all the criteria for Eurozone entry.
"The seven countries under review (Bulgaria, Croatia, Romania, Czech Republic, Hungary, Poland, Sweden) comply with most of the quantitative economic criteria, but none of them fulfils all of the obligations laid down in the Treaty, including the legal convergence criteria," the ECB said in its last convergence report.
(1 euro = 4.5195 lei)