“The most serious national project is the PNRR. If we stick to the PNRR, with all its flaws, we will make a lot of progress. That is, infrastructure, education, energy… Rural projects made by Romanians, no matter how good they are (and some are really good), were always not taken seriously by the Romanian public for various reasons. All the projects that gained popularity in Romania came from abroad. Unfortunately, that’s what happened!”, – says the chief economist of the National Bank Valentyn Lazeya in a conversation with HotNews.

Is it still worth switching to the euro?

Valentin Lazeya:8 years ago I was doing very well in the sense that I met all the Maastricht criteria? Of course, we came after a period of fiscal adjustments and wage adjustments, after the liberalization of the labor market, also carried out at the insistence of the IMF.

In 2010-2012, the economy worked and was balanced, but the population was dissatisfied. why Because he could not live in debt, he could not live in deficit….

And then there was such a request from the public, which the politicians immediately went to meet, to open the wallet to increase the deficits, so now it is in vain that we want to discuss, because by 2027 we will not reach the criterion of a budget deficit at the level of 3% of GDP, as required by Maastricht agreement. If it was wanted, it could be!

We have a derogation that allows us to delay the transition to the euro. But someday we will have to switch to a single currency

No, no one is calling you with a gun to your temple. Sweden, for example, has been in the European Union longer than us, also with a margin. And they did not enter the Eurozone. There are countries that can, that can enter, like Sweden, like the Czech Republic, but they don’t want to…

However, the Czechs have a different situation.

Maybe not the best approximation, but the Swedes anyway or the Danes are comparative situations. (Editor’s note: According to the provisions of the Maastricht Treaty, countries joining the European Union must adopt a single currency when all convergence criteria are met. The exceptions to this rule are Denmark and the United Kingdom, which have agreed on an “opt-out clause”. opt out), allowing them to stay out of the euro zone.Meanwhile, Brexit has “solved” the problem for the UK.

Do you hope that we will one day enter the Eurozone?

Is the Eurozone following the rules? Right? How many people in Romania, I ask you rhetorically, are ready to follow the rules? And with that I answered your question.

Well, the Greeks didn’t want either…

That’s good, that’s great that you gave that example. The Greeks were the same as the Romanians, people who don’t respect the rules, people who live in debt, etc. That is until they looked into the abyss and saw the bottom of the abyss!

Yes, they tried all possible tricks to have the euro: and imbalances, i.e. loosening the budget… Until they were told in the EU: you have a choice, either stay in the eurozone and tighten your belts (and we, the EU, help you in this process), or leave the euro zone and live as you want, but without outside help. And then the ordinary Greek, the one who does not want to follow the rules, etc., looked into the abyss and said that it would be better if the EU helped me.

The Economist magazine announced Greece as the country of 2023. Why? Because under the government of Misotachis, the Greeks realized that at some point they would have to work to keep up with Western Europe? And now they work more than the Germans, than the French and other Europeans.

We entered a difficult election year. What are the biggest challenges we will face in 2024, and especially if the score, the score, is handed down in 2025?

I do not want to enter into such a discussion precisely because it is an election year and absolutely everything I say can be interpreted as criticism of the government. So no, I don’t want to get into that debate. All I can say is what is already known, which is that we have two very large deficits – the budget deficit and the external deficit – and that sooner or later, probably sooner, we will have to correct both. And what about external…

I could see that it was slowly, slowly getting fixed….

Yes, but it is still a very high 7%…European norms stipulate that the deficit should not exceed 4% of GDP. If you reach 7%, you are still far from European norms.

Why don’t we have a country project? What should be a serious and believable dacha project?

The most serious state project, I have already said about it, is the PNRR. If we stick to the PNRR with its imperfections, we will make a lot of progress. I mean infrastructure, education, everything written there in the PNRR, energy… Always the projects of the country made by Romanians, no matter how good they were (and some were really good), were not taken seriously by the Romanian public, with various reasons. All the projects that gained popularity in Romania came from abroad. Unfortunately, that’s what happened. This is a country of people who do not trust their own projects and mobilize only when external institutions provide trust.

Do you think the euro will overcome the psychological threshold of 5 lei this year?

This psychological threshold is rather an invention of journalists. What is the level of 5 lei/euro more important than 4.85 or 5.22? This is such a thing, a journalistic fad. This makes sense when it is easier to divide by 5 or multiply by 5 depending on whether you are buying or selling. Another moment or another meaning. They do not have these 5 lei/euro.

Now, when it comes to the background of the issue, we have two divergent movements, and we don’t know which one will win. On the one hand, there is a movement towards the depreciation of the lei, caused by the fact that we have more imports than exports. But this devaluation trend is offset by the fact that a huge amount of foreign capital is coming in, either in the form of money from the PNRR, or in the form of foreign direct investment, or in the form of multi-year programs of the European Union. Union.

All these capital inflows lead, on the contrary, to an increase in the exchange rate. And then, between these two different trends, the National Bank tries to play a balance so as not to allow itself to be either too devalued or too highly valued.

The question that makes sense is what will happen when these outward flows diminish in a few years, or when the PNRR ends and the appreciation trend is no longer strong enough to balance the other trend. And that is why we have to reduce the external deficit as much as possible in the next 2-3-4 years, that is, bring our exports closer to the level of imports. This is a fundamental question, not when the euro will be 5 lei or 5.01 lei

• Read also The Moral History of Monetary and Fiscal Policy – a discussion with Valentin Lazea about democracy, religion, consumerism and the economy