THE ANNUAL FORECAST AND ANALYSIS REPORT – ROMANIA 2017

The 2017 SAR Annual Policy Analysis and Forecasting Report asks the big question: do EU funds lead Romania to “Europeanization”? Or to put it differently, do they contribute to our overall development or not? There are risks involved: it was barely the beginning of the absorption period as over 10% of corruption sentences were related to the management of EU funds, and the extent of their bureaucratic burden was becoming legendary. Still, if their curse is clear, is there any blessing at all? We looked for it in the education sector, health sector, infrastructure, and all over the policy areas benefiting from such financing, amassing in the process an unprecedented collection of data. Our findings, presented here, can be freely judged.

The 5 sections of the Report touch on issues such as:
-The problems posed by the budget deficit and potential solutions for the Government
-A quantitative and qualitative analysis of European funds
-European funds allocation in Romanian higher education
-The risks of the SDP governing program, with particular emphasis on healthcare
-Investment prioritization in the General Transportation Master Plan

The Executive Summary can be read here (English).
The full Report can be accessed here (Romanian).

1. The current government budget will be within its 3% deficit limit agreed in the Stability and Growth Pact. Our experts, however, are more pessimistic, as they expect a deficit of 3.4%. GDP will grow by 4.4%, and our experts expect inflation to start growing in 2017, reaching 1.6% (in tune with European Commission forecasts), with a positive trend expected in the following years.

2. The second section of this SAR Report compares the process of EU funds absorption across the EU member states both quantitatively and qualitatively. The assessment of the current situation in the Romanian case study, as well as the comparative perspective on the neighboring countries which proves our negative outlier position leads us to three common-sense public policy recommendations: total transparency, intermediary assessments of result indicators and professionalization of human resources involved.

3. The third section in this SAR Report looks at the allocation and deployment of European funding in Romanian academic institutions. A straightforward explanation in this regard is that there is a severe and worrisome lack of coordination between the objectives and public policies assumed at the national level on one hand, and the performance indicators or overall objectives of such programs in Romania on the other hand.

4. For the fourth section, SAR expert Sorin Paveliu, MD has carefully read the Social Democrats’ health program, and identified the potential risks regarding the assumed objectives. The current program does not identify a sustainable mechanism for the projected salary increases of medical personnel, nor does it offer a solution for the unintended consequences of populist measures, such as the blanket measure of price reduction
for subscription drugs.

5. The final section of this SAR Report challenges the manner in which Romania’s General Transport Master Plan (MPGT) has planned and prioritized the infrastructure investments (e.g. road transport, railways sector, naval sector, aviation sector and multimodal centers). The recommendation here is to revisit the planned objectives and reconsider an earlier version of the Master Plan which was more conservative.

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