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The Official Implementation of the Euro by Romania (Thesis Sample)


This was my bacHelor’s tHesis. The tHeme was aBout romania’s accession to the euro aRea. The purpose of this thesis is about learning more aBout the importance of a single curRency in the European union and analyzinG the beNefits and challanges of this curRency fOr romania’s eConomy and future as a member state of tge EurOpean union.


The official implementation of the euro by Romania is a strategy with not only economic but also political and social-cultural ramifications. The euro's adoption is part of a longer-term historical process between sovereign European governments that began in the 1940s and 1950s. Romania has been a part of this long process since the 1990s, joining the European Union on January 1, 2007. Transitioning from a centralized to a market economy, such as during the pre-and post-accession periods, has resulted in significant changes in Romania's economic structure. Even though these changes have historically occurred at a quick speed, there are considerable concerns regarding the number of numeric aspects of EU membership. Romania has a high level of economic integration with the European Union economy as a result of these events. The majority of EU countries are already participating in this deeper level of monetary integration, with 19 out of 27 countries accounting for 73.4 percent of the EU's GDP. Despite the numerous efforts made in recent years, political integration remains an unresolved issue in the system as a whole. Our country agreed to the euro adoption commitment by signing the Accession Treaty on April 25, 2005. The Treaty, on the other hand, establishes no explicit deadline for Romania to comply. Nevertheless, the Treaty does not specify a definite date by which Romania would be required to meet the legal requirements for adopting the single currency. Thus, in theory, there is some room for flexibility in determining this date. Romania, like the other EU Member States, has the option of delaying or accelerating its entry into the monetary union based on its interests. Of course, the date of entry is determined not only by Romania's political vision but also by the European authorities' willingness and availability. In this context, the topic of this thesis is Romania's accession to the European Monetary Union. The reason for selecting this theme is because it is of general interest. In choosing the theme I was also motivated by its contemporary relevance and importance for our country and its future in the European Union as well as its potential effects on local society. The Maastricht Treaty and its annexes stipulate that the euro must meet certain nominal criteria before it may be adopted. Even if many analyses have been developed in this regard in recent years,  my research could not ignore such analysis. This analysis was carried out over a longer period,  displaying the state of satisfaction with these criteria at various points in recent years. The goal was to track the progress of this plan. The most recent difficulties to the euro's adoption are primarily the process of continued convergence and its long-term sustainability. I have also researched the official strategy and timetable for joining the Eurozone and I have created a critical assessment and personal opinion on this problem. In this paper, I have as well talked about the impact of the Covid-19 pandemic on meeting the conditions and deadline for adopting the Euro.
The euro remains one of the most important symbols of national sovereignty. Linked to this is the historical novelty of the euro, which shows that this is the first time an independent group of states has replaced their national currencies with a common currency while transferring the sovereignty of monetary policy to a new institution, the European Central Bank.[]
1 The road towards EMU and the single currency - main steps, conditionalities, and challenges
The euro is the most visible symbol of European integration: about 341 million people use it daily, making it the world's second most extensively used currency. Its benefits are evident to everyone who travels overseas or shops online in other EU nations. The euro (EUR) is the official currency of 19 of the EU's 27 member states. They make up the Eurozone.[]
The European Economic Community began to seriously address the idea of deepening the integration process by forming a monetary union in the late 1960s. Creating a single currency made Europe's economy more efficient, especially in competition with the US. The objective is to create an area in Europe with more excellent exchange rate stability against the US dollar.[]
The Barre Report, drafted by the six-member states of the European Economic Community, laid the groundwork for a common European currency as early as 1969. (EEC). Later that year, at The Hague, a meeting of chiefs of state and government was held to prepare for establishing an economic and monetary union. The fall of the Bretton Woods System in 1971, following President Nixon's unilateral decision to declare the dollar non-gold-backed, and the 1972 oil crisis slowed the process. Meanwhile, the EEC expanded to accommodate new members, many of whom were hesitant to abandon their national currencies. The EU attempted to give financial unity a new push at the 1972 Paris summit by introducing the snake in the tunnel,' a system for the regulated fluctuation of currencies with small margins of change against the dollar. The snake was destabilized by the oil crisis, dollar weakness, and differing economic policies, and it lost the majority of its members in less than two years. They were subsequently consolidated into the 'Deutschmark zone,' which included Germany, the Benelux, and Denmark.[]
Efforts to create an area of monetary stability were relaunched at the 1978 Brussels summit with the establishment of the European Monetary System (EMS), based on fixed but adjustable exchange rates. At the 1978 Brussels summit, efforts to create a zone of monetary stability were resumed by introducing the European Monetary System (EMS), which is based on set but flexible exchange rates. Except for the United Kingdom, all Member States' currencies were included in the exchange rate mechanism (ERM I) (before the Brexit). Exchange rates were computed as a weighted average of the participating currencies against the European currency unit, or ECU (formerly known as the European unit of account). Based on central rates stated in ECU, a bilateral exchange rate grid was created, with currency swings accounting for 2.25 percent of bilateral rates during a two-year period (except for the Italian lira, for which the acceptable margin was 6 percent).[]
The EMS achieved great success in lowering exchange rate unpredictability over ten years: the system's flexibility and political commitment to achieve economic convergence resulted in currency stability 1979, the Council of Europe, on the initiative of German Chancellor Helmut Schmidt and French President Giscard d'Estaing, decided to create the European Monetary System to limit exchange rate fluctuations of European currencies.[]
With the adoption of the Single Market Programme in 1985, it became clear that the internal market's full potential would not be realized as long as the relatively high costs of currency conversion transactions and the uncertainties associated with exchange rate fluctuations, no matter how minor, persisted. Many economists also criticized the so-called "impossible trinity" of unrestricted capital movement, exchange rate stability, and independent monetary policies, which they saw as irreconcilable in the long run.[]
The European Currency Unit (ECU) was designed as a standard reference for exchange rates. The value of the ECU was set against the US dollar. Under the leadership of Jacques Delors, then-President of the Commission, the Hanover European Council established a commission to explore EMU in 1988. Under the leadership of Jacques Delors, then-President of the Commission, the Hanover European Council established a commission to examine EMU in 1988. The commission's report (the Delors report), released in 1989, recommended that EMU be implemented in three stages. The report emphasized the importance of more robust economic policy coordination, developing financial regulations limiting national budget deficits, and establishing a new independent institution to oversee the Union's monetary policy: the European Central Bank (ECB).[] []
The Madrid European Council voted in 1989, based on the Delors Report, to commence the first stage of EMU: full liberalization of capital movements by July 1, 1990. The European Council organized an intergovernmental conference in Strasbourg in December 1989 to determine what Treaty amendments were required to create EMU. The Treaty of the European Union was formally adopted by the Heads of State or Government at the Maastricht European Council in December 1991 and entered into force on November 1, 1993.[]
An April 1989 study described the monetary union as complete deregulation of capital flows, full integration of financial markets, irreversible convertibility of currencies, irrevocable fixed conversion parities, and the possibility of replacing national currencies with a unified currency. According to the research, this may be accomplished in three stages...

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