Isarescu said the mistrust in the country’s ability to absorb EU funds is equally shared by the public opinion, which is “extremely dangerous on questioning Romania’s entire development strategy,” as the economic boost affects consumption.
According to the central bank governor, the European Union’s accession was thought with Romania contributing in cash to its budget, in exchange of EU funds.
“This should have been a priority after 2007. (…) Governments say this is a priority issue but in fact figures show something else. We have come to believe the country cannot absorb community funds. This stance is unacceptable. I wanted to stressed this out, as it was our chance,” Isarescu added.
Beyond the fact the European funds represent “cheap money,” the central bank’s official pointed out that Romania does not have enough internal saving to compensate for foreign private capital flows.
As long as Romania keeps boosting savings, it affects the consumption. “And consequently, all this idea on supporting consumption… well, how could we boost it as long as everybody is saving. (…)Solving this major problem, essential for Romania’s long-term economic growth, was related to EU’s funds absorption,” Isarescu said.