Romania could join the eurozone by 2035 and is able to exit the excessive deficit procedure by 2030, Finance Minister Alexandru Nazare said during his participation in the international business and technology forum Impact SEE in Bucharest. He gave a presentation on the topic “Economy of Ambition: Turning Potential into Prosperity“.
The Minister of Finance spoke about the country's current economic and financial model, focusing on several key areas and future prospects - fiscal discipline and consolidation, transition to an investment-led economy, maximum absorption of European funds and attraction of private capital.
“Our investments in August this year are 25-26 billion more than last year, while at the same time we managed to reduce the budget deficit. This means that we did not compromise investments because of the deficit, that is, we made a qualitative adjustment, not just an accounting one“, emphasized Alexandru Nazare.
In his words, all this speaks of the new economic direction that Romania must take in order to develop and become increasingly significant in the region.
“Looking at the budget execution, we have a 25 percent increase in VAT, we have over seven percent growth in social security contributions, we have 2.5 billion more in profit tax and all this helped us to show this summer to the rating agencies that the adjustment is not just a plan – it is real, it is serious, it is reliable and it has materialized“, said the minister.
He recalled that in February the authorities adopted a recovery plan containing a series of support schemes. One of them provides for support for industry.
„We have a new approach because we plan to finance precisely those industries that Romania suffers from in terms of the trade balance. We will have 150 million euros, which will be redirected precisely to those production investments that Romania needs. And Romania suffers a lot in the pharmaceutical sector, in the petrochemical sector, in the food processing sector, so from October 15, projects can be submitted to the Ministry of Finance. The selection will be made a month later“, announced Nazare.
As another support scheme, he mentioned „TeHab Romania“.
„This is a scheme that, for the first time, unites research and development and production in the same program. We have planned another 150 million euros along this line, and the acceptance of project documents will start in November,“ added Alexandru Nazare.
He stressed that Romania should also think about a credible budget for 2027.
“Why do we need such a budget? Because we need to be able to show that we have a credible path for 2027 and that the reduction of the deficit and the maintenance of the trajectory that we adopted are also materializing. This is necessary to prove to the rating agencies and the European Commission that Romania remains a predictable and serious partner, and also to show that our level of ambition in terms of credit rating has changed. We no longer want to be on the last step, to remain just one step above the non-investment grade (junk) with a negative outlook“, explained Nazare.
In the end, he said that new resources, public-private partnerships, foreign capital and stable financial markets are needed.
“These are resources that are absolutely necessary for the type of growth that we project for the future of Romania“, the minister concluded.