Romania’s new Government, led by former finance minister Florin Citu, promises under the Ruling Program to bring the budget deficit down to under 3% of GDP by 2024 and keep the public debt to GDP ratio under 60% while not charging new taxes or hiking the current ones, according to Romania-Insider.com.
Romania added 9% of GDP to its public debt this year and will likely throw another 7%-of-GDP burden on the public budget in 2021. The ruling strategy explains only in broad terms its plan to bring down these imbalances: transparency, flexibility, efficiency, participative budgeting, multi-annual budgeting, and green budgeting. These are the ingredients that should keep the public debt from rising above 60% of GDP. Avoiding the excessive deficit procedure is not mentioned in the Ruling Program, although it is a higher and more pressing target.
The Governing Program’s Public Finance chapter lacks clarity in some places and goes beyond its scope in others. The “fiscal consolidation” (reducing the budget deficit, not to be confused with a broad process of putting the public finance on strong foundations) is mentioned alongside increasing the budget transparency and public spending efficiency as a facilitator for economic growth. In principle, these two must be balanced. Separately, the chapter touches upon the competition area (regarding small farmers) and the euro adoption – without mentioning a specific calendar, though.
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