Reasons for and against the Early Adoption of the Euro in Romania

 In the context of the current turmoil in the European Union and the euro area and taking into account the discussions on the remaining or the exit of Greece from the euro area, in our country there is a trend that supports the early (faster) euro adoption. Given that Romania can not opt out of joining the euro area, as is the case of the United Kingdom and Denmark, the problem which remains to be solved is when and how our country will enter in the euro area. Therefore, this article aims to analyze the indicators of the scoreboard for the surveillance of macroeconomic imbalances for our country, at the same time offering a number of reasons for and against a faster adoption of the euro in Romania. The paper argues its observations based on international and national documents and Eurostat database. The study may have a series of implications for the politicians, public policy administrators, academics and researchers, bringing its contribution to the euro adoption debates

The Reflection of the Current Crisis on the Economic Growth in the European Union New Member States

The paper presents an analysis of the economic growth evolution in the European Unionnew member states, being part of a more comprehensive research regarding the euro adoptionchallenges, taking as benchmark Slovakia and Slovenia, countries that already entered the euro zone.The research underlines the fact that, starting with the mid-September 2008, the macroeconomiclandscape of the analyzed countries changed radically, registering a decrease of the economicactivities determined both by a diminished export activity and by a reduced internal demand, witheffects on the firms’ profitability and on the deterioration of the labour market situation. The resultsshow that the severity of the financial global crisis effects was different in the analyzed countries, as aresponse to various “paths” of economic development, with less or more important vulnerabilities,with differences in the extent to which the economies are based on external demand and on creditactivity induced from abroad. The countries that are suffering the deepest recessions are those thatregistered not only a decline of exports, but also a collapse of the internal demand, as a result ofstopping the credit activities that were a support for the internal demand

AUTOMATIC SOCIAL STABILIZERS WHAT THEY ARE AND HOW THEY FUNCTION

At the global level and especially in Europe, current economic and financial crisis has had a major impact on the economy, on the output and especially on the employment and incomes. As it is known in economy, as a natural process, some elements (e.g. progressive tax system) can help to counter or to mitigate the adverse evolution of the business cycle and the output fluctuation. Normally, in the recession, the collection of taxes decreases in order to support the private income and the aggregate demand and the unemployment compensation is increased. The fast response of the automatic stabilizers is mostly due to the fact that do not require any modification of the laws and any state discretionary action in order to obtain the necessary results, being usually unnoticed by the general public. Considering that social policy can provide important tools to counter the cyclical development of the economy, this article analyses the social security benefits in report to the GDP evolution, in Europe and in Romania and proposes some solutions for the improvement of the stabilization effect of those instruments

POSSIBLE DIRECTIONS OF EUROPEAN UNION ECONOMIC GOVERNANCE DURING THE PRESENT PERIOD

Although it is an insufficiently defined concept, the economic governance seems to play an extremely important role both for the future of the European continent, and for all the countries of the world. The current economic and financial crisis revealed numerous difficulties of the current governance system at the local, national, regional and global level, accelerating the decision-making process to find the best solutions correcting the weaknesses and problems that appeared. Recently, the major problem of the economic governance at the European Union level materialized in the crisis of the sovereign debts, which paradoxically, manifested preponderantly in the peripheral countries of the euro zone, and less outside it. Thus, in this article we will try to show some alternatives or directions of the European economic governance outlining the best way to be taken by the countries candidate to the euro zone, particularly by Romania.crisis, public policies, economic governance, deficits and public debt, euro area

The Reflection of the Current Crisis on the Economic Growth in the European Union New Member States

The paper presents an analysis of the economic growth evolution in the European Union new member states, being part of a more comprehensive research regarding the euro adoption challenges, taking as benchmark Slovakia and Slovenia, countries that already entered the euro zone. The research underlines the fact that, starting with the mid-September 2008, the macroeconomic landscape of the analyzed countries changed radically, registering a decrease of the economic activities determined both by a diminished export activity and by a reduced internal demand, with effects on the firms’ profitability and on the deterioration of the labour market situation. The results show that the severity of the financial global crisis effects was different in the analyzed countries, as a response to various “paths” of economic development, with less or more important vulnerabilities, with differences in the extent to which the economies are based on external demand and on credit activity induced from abroad. The countries that are suffering the deepest recessions are those that registered not only a decline of exports, but also a collapse of the internal demand, as a result of stopping the credit activities that were a support for the internal demand.economic growth; global financial crisis; external demand; consumption

MEASURES TO RECALIBRATE THE MACROECONOMIC POLICIES IN THE NEW EU MEMBER STATES THAT ARE TO ADOPT THE SINGLE CURRENCY

As of September 2008, the vulnerabilities accumulated during the previous periods overlapped the devastating effects of the crisis in the new member states (NMS) of the European Union, deteriorating the main macro-indicators and increasing the economic instability, which generated a profound process of adjustment. Under the conditions of the economic crisis, the accomplishment of the criteria of nominal convergence, necessary in order to adopt the euro, is a real challenge for all the new member states; this materialized primarily in the increase of the exchange rate volatility and of the fiscal-budgetary deficits. During this period of great incertitude and national, regional and international disturbances which spread throughout the world states touched by the economic globalization process, the NMS need a balanced mix of macroeconomic policies adapted to the new conditions that will allow them to preserve their stability. Thus, the monetary policy should have a supportive role for the domestic economies of the NMS, while the fiscal policy should be a key macroeconomic instrument which to compensate the limited capacity of the monetary policy under the conditions of the economic recession, being an important short-term support for the economy.global economic and financial crisis, nominal convergence, public debt, monetary policy, foreign deficit