On 9 March 2016 I had the chance to take part to the conference dedicated to the Country Report Romania 2016 issued by the European Commission. It is an objective report although not a positive one.
This report assesses Romania’s economy in the light of the European Commission’s 2016 Annual Growth Survey published on 26 November 2015. The survey recommends three priorities for the EU’s economic and social policy 2016: re-launching investment, pursuing structural reforms to modernise Member States’ economies and responsible fiscal policies. Below the main key-points as they are mentioned in the Report.
Briefly the Report has the following main ideas:
- Economic growth has been strong over the last three years, gradually broadening its base.
- The labour market is tightening on the back of robust economic growth.
- Public finances were stable in 2015 but they are set to deteriorate following expenditure increases and cuts in the VAT and other taxes.
- With the financial assistance programme over, market confidence will rest on preserving financial sector stability and implementing sustainable fiscal policy and structural reforms.
- Romania has made limited progress in addressing the 2015 country-specific recommendations.
The main findings of the in-depth review contained in this Report and the related policy challenges are as follows:
- Vulnerabilities related to the external position have been reduced against the background of strong economic growth, and Romania’s economy is becoming more resilient.
- The net international investment position is set to improve further.
- Risks from domestic legal initiatives threatening the stability of the financial sector have increased.
- An expansionary fiscal policy in a strong growth environment is a source of concern.
Other key economic issues analysed in this Report which point to particular challenges for Romania’s economy are the following:
- The effectiveness and efficiency of the public administration are limited and the business environment has hardly improved.
- Labour market conditions have been favourable but structural problems persist.
- The effectiveness of social protection and the health system is limited.
- Rural areas face particular challenges such as severe under-utilisation of human capital and deeply embedded pockets of poverty and social exclusion.
The full Report in English and other relevant information about Romania are available here.
Information about the Bucharest conference and the Romanian version of the Report are here.
A more personal version is coming soon.
To be continued