Romanian finance minister Adrian Câciu was questioned at length by MEPs on budgetary consolidation and his country’s membership of the euro area during his hearing at the European Parliament’s Committee on Economic and Monetary Affairs (ECON) on Monday 7 November. However, he pointed to his country’s good economic performance despite the crises.
In his opening remarks, Mr Câciu spoke of his country’s positive economic record: “Romania is the only country in the EU where GDP has not declined with the crisis, despite a restrictive budget”. He pointed out that the country is experiencing “unexpected” economic growth of 5.7%, which he explained as being due to exports. He also reported positive development in employment, influenced by rising inflation. Finally, the level of debt in August 2022 had reached 48.4% of Romania’s GDP.
His compatriot Dragoș Pîslaru (Renew Europe) disputed this assessment. Romania is subject to an excessive deficit procedure, he said. He pointed to the creation of 17,000 new civil servant posts, which is the highest number in Europe.
Mr Câciu argued that fiscal consolidation starts with the establishment of specific budgetary mechanisms.
“On the basis of the recovery and resilience plans, we have put in place tools to meet the objectives”, he replied. He argued that these mechanisms had led to a 2.5% increase in GDP, by turning away from budgetary derogations and organising better tax collection.
“It is difficult to restart a process like this after three decades of budgetary derogations, it leads to discontent”, the minister continued. He conceded that the government needed to “do more on the tax system”, as recommended by the World Bank.
Although the number of jobs has increased, he explained that his government is “trying to limit the number of jobs and make them more efficient”. The aim of fiscal consolidation is to reduce permanent expenditure. “We need to curb spending to reach a sustainable level”, he said.
Like Mr Pîslaru, Margarida Marques (S&D, Portuguese) asked what medium-term measures were in place to adopt the euro.
While Bucharest’s ambition is indeed to join the euro area, the minister said the crises had made the situation more difficult. Romania was therefore unable to meet the nominal debt or inflation criteria.
For Mr Câciu, the priority is to reduce the national deficit. “We are fully committed to this, I believe we will achieve it”, he said. (Original version in French by Anne Damiani)