Common Market & Euro zone

With half billion inhabitants, the EU constitutes the world's largest economic bloc. Although the common market has made significant progress starting with 1992, we cannot talk about a fully integrated European economy. The internal market started with:

• eliminating restriction related to the circulation of goods and persons (the Schengen Agreement was created as a separate institutional tool);
• common recognition of standards and authorizations (a product authorized in one country could be  sold in the entire Union)
• the equality of all European companies regarding access to public procurement;
• competition policies (anti-trust regulations; state aid, merger control)

Following these initial steps, the deregulating and liberalization at EU level continued for tele communications, financial services, transportation, energy, environment policies, anti -discrimination policies, each of them with specific sectorial policies.

The market for services lagged behind and a liberalization attempt supported by the Commission – the so called the Bolkestein Directive – generated a heated debate, with both Parliament and the Council acting to limit liberalization in the final version of the bill.

As the economic space came to gradually work according to common rules, a common currency seemed to be the expected follow-up, and the Delors Report proposed in 1989 the creation of the Economic and Monetary Union (EMU).

Complicated political negotiations have generated a new set of institutions, with the European Central Bank (ECB) being the first and the most prominent. ECB was designed as an independent monetary institution based on the Bundesbank model. The Maastricht criteria reflect the neoliberal consensus of their era and the orthodox preferences of the Bundesbank: controlled inflation, reduced deficits and stable currency.

Romania adopted most of the common market directives well before becoming an EU member state. Yet, given its precarious bargaining position during negotiations, the Romanian government had few opportunities to obtain delays or opt-outs in transposing the acquis.
 
The EU legislation introduced in Romania strict regulations that the economy was not used to. Pace pessimistic voices on Romania’s capability to adjust to the new order, the adoption and implementation of the relevant EU regulations was carried out faster than expected and the massive economic growth that lasted between 2001 and 2008 reduced the shock and ensured the needed flexibility.

Concerning the common currency, the official government goal is to adopt Euro in 2014. In this regard, Romania accomplished the goal of a limited budget deficit until 2008, but the lack of moderation in public spending, together with the financial crisis caused a rapid raise in the deficit above 5% in 2008, tagging Romania as a country with potential problems of macroeconomic stability.