VI - Euro Plus Pact

On March 11, 2011 the Heads of State or Government of the Eurozone endorsed the Pact for the Euro. At the 24/25 March 2011 European Council, the same Heads of State or Government agreed on the Euro Plus Pact and were joined – hence the ‘Plus’ – by six others: Bulgaria, Denmark, Latvia, Lithuania, Poland, Romania (leaving only the UK, Czech Republic, Sweden and Hungary out).
The objective of the pact is to foster competitiveness, foster employment, contribute to the sustainability of public finances and reinforce financial stability. In the Euro-Plus-Pact the Heads of State or Government have entered into commitments on a number of policy areas, in which member states are competent.    

What political/legal difficulties did Romania encounter in the negotiation of the Euro-Plus-Pact, in particular in relation to the implications of the Pact for (budgetary) sovereignty, constitutional law, socio-economic fundamental rights, and the budgetary process.

Romania was represented at the 24/25 March 2011 European Council by the President of Romania, Traian Băsescu (Former member of the PDL party). Although not part of the Eurozone, Romania joined the Euro-Plus-Pact. The reason behind this approach was, as reported by the media, the desire of not being excluded from the European process.[1]

Immediately after the March European Council summit, President Băsescu defended his choice in front of the Romanian public. The President declared that the Pact was a catalyst towards a complex national “roadmap”: “1. for sustainable economic growth, Romania has to become competitive again, which is why structural reforms must be pursued 2. Romania needs to continue the European convergence process to take advantage of the full benefits of the Single Market, and this process must be completed with the Euro adoption in 2015”. [2]

As mentioned above, the progress towards the adoption of Euro is a national priority. Romania is bound under the accession treaty to adopt the Euro, however no pre-established date is foreseen.[3] The ratification of the Euro-Plus-Pact was presented as an intermediate step towards accession to the Monetary Union. It was reported, that in order to limit the budget deficit and public debt sustainability, Romania would have to prepare the ground for institutional structural reforms. In this respect, the Euro-Plus Pact was presented as a useful complement to a rapid accession to ERM-II (European Exchange Rate Mechanism), also called the “euro waiting room”.[4]

First, the Government proposed 2015 as a timeline for adopting the Euro currency in the Convergence Programme 2012-2015,[5] although during the financial crisis the National Bank of Romania expressed some concerns about this time-table.[6] The current target for adopting the Euro currency as announced by the Ministry of Public Finance in the 2014-2017 Convergence Programme is January 1st, 2019.[7]

In terms of macroeconomic commitments, Romania has already implemented a good part of the reforms committed to under the Euro Plus Pact at the request of the IMF. No banking restructuring, nationalisation or sales of banks’ assets was reported. In this sense, the President declared after the European Council summit that the crisis-legislation has been already adopted in 2010 by Romania – as part of troika conditionality – which lines up the country perfectly with the objectives of Euro-Plus-Pact.[8] The Head of State has also declared that the decision to join the Euro-Plus-Pact was taken after Romania had the guarantee that the tax rates will remain a national decision: “[i]f [tax rates discretion] had been in question, Romania would not have joined (the Pact),” he commented.[9]

Therefore, it seems that signing the Pact was an easy political decision. As it was expressed even by President Băsescu: “[t]he exchange of best practice, combating fraud and tax evasion which are expressly mentioned in the decisions of the Council – we have no reason not to be a part of this Euro Plus Pact”.[10]

No ex ante comprehensive impact assessment was conducted, no debates on advantages and disadvantages were presented, no long-term implication studies were analysed before joining the Euro-Plus-Pact.

What other information is relevant with regard to Romania and the Euro-Plus-Pact?

The measures envisaged by Romania under the Euro-Plus Pact have been adopted by the Government through a memorandum, on the 29th of April 2011 and fully integrated in the National Reform Programme 2011-2013.[11]

According to the implementation report of the Euro-Plus-Pact of March 15, 2012, the institutions in charge of Euro-Plus-Pact monitoring are the Ministry of European Affairs and the Ministry of Public Finances.[12] Each of the Ministries puts in place internal arrangements to accommodate their respective monitoring tasks of the National reform Programme and Convergence Programme. The monitoring is based on a concrete action plan with specific short and medium term targets to be achieved within a precise time-line. [13]

An ex post study undertaken by the European Institute of Romania – a public institution whose mission is to provide expertise in the field of European Affairs – provides a comprehensive analysis of the advantages and disadvantages of Romanian accession to the Euro-Plus-Pact.[14] According to the study, on the positive side, the economic policies undertaken under the Euro-Plus-Pact are able to foster the country’s convergence and facilitate the structural consolidation and labour market reforms undertaken by Romania.[15] However, on the other side of the medal, the study stressed that an independent monetary and fiscal policy would have proved a better medium-term choice for the country: “[f]or Romania it would be beneficial if it could maintain some degree of independence over fiscal policy. Deeper fiscal integration at the EU level would necessarily involve a higher coordination of fiscal policies across the EU which would lead to fiscal harmonisation. If Romania were to adjust fully to this, it would adversely affect its competitiveness. Tax policy, especially the existing low levels of income and profit tax, provides a competitive advantage compared to other EU countries.”[16]

[1] Corneliu Harea, Europuls Collaborator, available at Europuls:


[3] Protocol concerning the conditions and arrangements for admission of the Republic of Bulgaria and Romania to the European Union, Official Journal of EU L 157 of 21 June 2005.

[4] Corneliu Harea, Europuls Collaborator, available at Europuls

[5] “The commitment to adopt the euro in 2015 is maintained and it represents an important anchor for ensuring the consistency in time of the macroeconomic policy mix and of the structural reforms, as well as for fostering the adjustments needed to increase the resilience and flexibility of the Romanian economy.” Convergence Programme 2012-2015, p. 4.

[6] The Government did not include a specific moment as objective for joining Euro-zone in the 2013-2016 Convergence Programme. It only states that “[T]he commitment to adopt the euro is maintained for a date when will be attained the objective regarding the fulfilment of the real and nominal convergence criteria.” Convergence Programme 2013-2016, p. 4.

[7] Ministry of Public Finance, Convergence Programme 2014-2017, available at:

[8] The Presidency of Romania, Declaration of the President, March 25, 2012, available at:



[11] Government of Romania, National Reform Programme 2011-2013, 55p, available at:

[12] Ministry of Foreign Affairs of Romania, Report on the implementation of Euro-Plus-Pact, March 15, 2012, available at:

[13] Due to limited space, we refer to the Euro-Plus Pact Implementation Report issued by the Government of Romania – Ministry of European Affairs on March 15th 2012, which is annexed to the present Report.

[14] European Institute of Romania – Euro Plus Pact Adoption: Implications for Romanian Fiscal Policy, 2012, p. 146, available at: Further information about the European Institute of Romania available at:

[15] Ibidem.

[16] Ibidem, p. 206.