romania ’ s real convergence before 2007. afterwards, actual membership in the eu “ convergence club ” has fuelled the catching - up process. the obvious next stage is joining the euro area. a successful adoption of the single currency, however, requires optimal timing. this, as i pointed out before, is mainly conditional upon achieving a high - enough level of real convergence, alongside compliance with the nominal convergence criteria. unlike the eu, the euro area is not a “ convergence club ”, as its current members did not necessarily increase their convergence level after adopting the euro. while the optimal level of real convergence for a successful euro area entry is still a hotly debated issue, the consistency and sustainability of real convergence are, in my opinion, at least as important as its level. and in order to remain on track, economic convergence – both real and nominal – must advance in step with the economy ’ s fundamentals lest progress be jeopardised by abrupt setbacks. at the end of the day, forcing convergence is as harmful as postponing it. looking at nominal convergence, between july 2015 and november 2017 romania had been 1 / 3 bis central bankers'speeches fulfilling all maastricht convergence criteria ( yet without being part of the exchange rate mechanism ). the fact that currently the reference values for the long - term interest rate and inflation are no longer being met is a warning that efforts should be made to achieve nominal convergence in a lasting, rather than coincidental or transitory manner. this is possible only when the two types of convergence reinforce each other. on the way towards sustainable and smooth convergence, a first guiding principle is to avoid divergence. not only across countries ; reducing development gaps within countries is also essential to mitigate the trade - offs challenging the policies confronted with asymmetric shocks. in romania, for instance, one can find areas that are comparable, in terms of development and living standards, to western economies, but also regions that trail well behind. moreover, in 2016, the wealthiest region in romania was almost four times richer than the poorest one ( measured by the regional gdp per capita as a percentage of the euro area average ). the second guiding principle towards sustainable and smooth convergence is to keep going. by this, i mean that progress, once made, should not be undone. we now need to maintain the economy on an upward trend, while being extremely careful to preserve the macroeconomic equilibria restored through a painful adjustment after the crisis. the

only way ahead is by means of a coherent macroeconomic policy mix and resolute structural reforms aimed to boost the economy ’ s growth potential, while making it more resilient. this approach should never leave room for pro - cyclical policies. as we have clarified that the consistency and the sustainability of real convergence are extremely important, now it is time to discuss how monetary policy can support these two dimensions of the convergence process. it is beyond any doubt that countercyclical monetary policy favours smooth convergence. this has always been one of the guiding principles for calibrating the stance of nbr ’ s monetary policy, as well as for developing and employing our policy tools. an example of the latter are the unorthodox prudential measures taken before the global crisis to mitigate the impact of extremely volatile capital flows ; with these in mind, the imf mentioned the nbr as being among “ the pioneers ” of what was later referred to as “ macroprudential instruments ”. besides acting in a countercyclical manner, in order to preserve the consistency and the sustainability of real convergence, monetary policy should also be flexible while avoiding extremes. on one hand, it should by no means ignore the threat of inflation for the sake of fast and easily gained ( and therefore illusory ) prosperity. on the other hand, it should avoid becoming, in mervyn king ’ s words, an “ inflation nutter ”. with this philosophy, back in 2005, the national bank of romania decided to adopt a “ light ” version of inflation targeting, as monetary targeting had to be abandoned mainly due to the broken relationship between monetary aggregates and inflation. light inflation targeting was deemed more suitable than any other monetary policy regimes for sustainably achieving price stability, while limiting the cost of excessive volatility in output and employment. a peg was not a feasible option, since exchange rate flexibility was seen as an asset for an economy as big and rigid as romania was at the time, especially given the widening external imbalance and the upcoming stages of capital flows liberalisation. we focused our monetary policy strategy on the medium - term achievement of the inflation objective rather than on hitting the target as fast as possible at any costs. this strategy has been supported by a managed floating exchange rate, which proved to be a highly effective alternative to free floating in cushioning the economy from the impact of sizeable capital flows. as a matter of fact, after the crisis, forex interventions re -