President Klaus Iohannis said on Thursday that policies based on consumption and budget deficits, in use before the pandemic and the economic crisis, have moved Romania away from strategic country goals, such as joining the Eurozone, and are now making the fight inflation more difficult.
"As a country, we aim to make far-reaching reforms and investments that generate added value, prosperity and sustainable development over time. Let us remember that, in the years before the pandemic, Romania had a strong pro-cyclical course, with politics based on consumption and budget deficits. The pandemic and the economic crisis have caught us unprepared in terms of public finances, with the largest deficit in the Union in 2019, which has led to the rapid growth of public debt. Such policies pushed us away from strategic country goals, such as joining the Eurozone, and now making the adjustments needed for an effective fight against inflation even more difficult," the President said at the Financial Education Forum.
He stressed that changing the development model requires that investment become a zero priority. In this regard, he stated that budget allocations of almost 7% of GDP for investment should be maintained.
"The deepening of current account deficits, the loss of competitiveness amid the energy price crisis, the drastic intensification of inflation in recent months, to name just a few developments, require responsible policies and reforms that offer resilience to the economy and modernize Romania. (...) In 2022, the budget allocations of almost 7% of GDP for investment indicate a firm direction, which must be concretized and maintained," said the President.
According to him, the quality of economic policies, laws and the act of governing must be based on a healthy economic education.
"For an active and responsible civic participation, including in relation to the political offers of economic solutions, it is very important that our citizens are well educated and correctly informed from a financial point of view. Banking and financial bodies, in daily contact with their customers, with the citizens, can get involved and they get more involved," he said.
He noted that universities have been and continue to be "pioneers" in playing a key role in shaping skills for new generations.
Klaus Iohannis participates in the first edition of the Financial Education Forum, organized by the Financial Supervisory Authority, the Bucharest Academy of Economic Studies and the Romanian Association of Banks. The event takes place under the High Patronage of the President of Romania.
AGERPRES