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Jeffrey Franks: Romania can postpone adopting Euro, if not economically prepared

Romania adopting the European single currency in 2015 is a highly ambitious target that can be postponed if the economy fails to reform effectively, considering the current situations faced by the member states which adopted the euro without the back-up of a solid economy, chief of the IMF delegation in Romania Jeffrey Franks told a debate broadcast at Romanian TV channel ProTV.

'Romania joining the euro area in 2015 is possible, however, it is a very challenging target and it should not take this step before being prepared. We can see what happens to the countries that had not been prepared and yet joined the eurozone. Romania must have a flexible, efficiently reformed economy before joining the European single currency. However, setting this target is good so as to keep pressure on making the necessary reforms. If they are not concluded, joining the eurozone can be postponed. We will see,' Jeffrey Franks said.

The IMF delegation head added that Romania must observe the commitments it had pledged to the European Union about entering the euro area.

Romania's economic growth to come from investments and consumption

Romania's economic growth will derive from the money invested in the local economy and from consumption, IMF delegation head Jeffrey Franks said during a talk-show broadcast on Romanian TV channel ProTV.

'I thought initially that a growth in economy will come from exports because they have been the engine by now. It is obvious we cannot rely on them anymore. The growth should stem from local economy, namely investments and consumption. Romania should attract investors and make use of the European funds. Drawing European money is vital. Romania has drawn less than 10 percent of all the money available. The time has come to do it now. It represents cumulated investments worth two billion euros. This might be my priority,' Franks said.

The IMF official added that the citizens will consume more if they perceive economy is on the rise.

'Consumption will go up if citizens feel secure. They will buy more if they see things evolving, economy growing,' Jeffrey Franks said.

He mentioned that the economic growth forecast for 2012 was downgraded from 3.5 to 2 percent, warning that the risks will still be there in case the economic state of Europe gets worse.

Sursa: http://www.actmedia.eu

Tags: romania economy growth european euro franks jeffrey prepared

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