 Finance experts have recently said that the lack of EU funds and other alternative financial resources may cause difficulties over the next two years, as Romania’s foreign debt peak will stand at about 13 billion Euros. Most of the sum, that is 7.6 billion Euros will have to be paid back to the IMF by the National Bank of Romania. The president of the Fiscal Council Ionut Dumitru has warned that without a better absorption of EU funds and reforms that should attract foreign investments, the foreign currency reserves of the National Bank of Romania might drop dramatically.
He said that although the Bank was able to deliver its payments, new sources of financing and new EU funds had to be made available. Should Romania fail to do so, the country risks sinking into recession again.
Ionut Dumitru: “Stepping up the absorption of European funds is key in the current economic context. If we fail to do that, it will become impossible to finance the budget deficit and our economy will go into recession against the backdrop of pressure on the depreciation of Romanian Leu”.
Another problem that needs solving, Ionut Dumitru argues, is curbing tax evasion, a phenomenon that deprives the state budget of big incomes.
Ionut Dumitru: “Taxation is a big issue. You just can’t call yourself a European country with an income of 32.5%, when the EU average stands at 44%. The reason behind this is that tax evasion is extremely high in Romania. If we look at various estimates, we can see Romania’s shadow economy accounts for 30% of its GDP, our country ranking second in Europe after Bulgaria”.
A new law in the field of public procurement aimed at detecting conflicts of interest in EU-funded projects may be passed over the next weeks, Romanian Minister of European Affairs Leonard Orban has said. Issues in the two fields have determined the European Commission to pre-suspend its payments for several operational programmes in Romania. Orban believes those laws may be quickly enacted provided they are supported with political will. Certain financial corrections should also be applied, Leonard Orban also said.
Leonard Orban: “According to preliminary estimates, for the Sectoral Operational Programme Human Resources Development the financial correction stands at some 180 million Euros, while in the case of programmes coordinated by the General Directorate for Regional Policy, corrections amount to some 600 million Euros.”
Leonard Orban believes part of those sums may be obtained from the very sectors where problems have been identified, therefore they must be covered with taxpayer money. Minister Orban insisted the money wouldn’t be lost, but that Romania needed to submit new refund applications to the European Commission for new projects worth nearly 1 billion Euros.
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2025-04-03
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