Romania dreams to be in champions league of the European economy

Slowing down engines of the main European economies could grant Romanians a respite to recover the huge gap of development that separates them from these, on the condition to turn out from the European Union.If we give credit to the calculations of PM Calin Popescu Tariceanu, in the next six years, Romania will be counted among the first seven European economies, or among the first ten if we listen to the Minister of Economy and Finance, Varujan Vosganian. The politicians optimism is motivated by the fulminate rhythm of the economical increase, comparative with the slower development of the European Union’s economy champions, to which is added the wage increase of the active population and retired persons in so frequent stages that would blush of envy till the best paid European employees.

Which are our competitors

“The main criteria which define a country as being an economical power are the population and the gross domestic product”, dr. Constantin Ciutacu, director of the Institute of World Economy, explains the general confusion“. The economical increase itself it doesn’t say a thing, it matters where you start from, with what costs and what structure of the GDP“, he adds. Indeed, the first economical powers of Europe, classified depending of the gross domestic product, have rhythms of economical increase much under the one of Romania. Germany, the first economical power of the European Union, with a GDP of 3.322.147 million USD, and the third power at world level, had recorded an economical increase of 1,7% in the period in which Romania has reported a fulminate 9,3% (second quarter of 2008).Great Britain, the second in the top to which we aspire to get, has a GDP of 2.772.570 million USD and an increase rhythm of 1,4%. Poland, the former country from the socialist block, with a structure similar to the one of Romania, is the new economical power of the European Union, with a GDP of 420.284 million USD and an economical increase of 6,1%. Norway, ranked on the last position in the European champions top and ranked 43 at world level, has a GDP of 391.498 million USD and an increase rhythm of 3,3%. Although it isn’t a member state of the European Union, Norway is included in all the classifications of the continental European powers. As much it would tend to zero the economical increase of these powers, fact less probable, the hope of reducing the development gap is in vain. At least for the fact that the greatest part of the commercial and investment flux towards and from Romania (70%) depend of the countries whose economical slowdown we believe that would advantage us: Germany, Italy, France. A decrease of demands, industrial orders and the appetite of the investors from these countries for the investments in Romania would mean fewer resources for the increase of the local GDP. The only conjuncture in which the Romanian economy would make a separate opinion of the one of the European Union, prospering when this is in decline, it could be the one in which it would have China’s productivity and markets.

Opinions about Romania as European economical power over 10 years

Leonard Orban, European commissioner

“Possible just in certain conditions”

The objective is very ambitious, it can be touched just in the conditions in which there would be taken measures on domestic plan, and on foreign plan the evolution of economy would be favorable. On domestic plan a sustained development rhythm. On foreign plan, at the moment the situation it isn’t positive; it takes place the decline of economy of some great European powers. I consider that Romania should pay special attention to:

• Full joining in the mechanisms of economical and budgetary coordination of the European Union. The integration is a long term process, and Romania is only at the beginning.

• Consolidation of the public finances,vast structural reforms and a prudent budgetary policy.

Juan Jose Fernandez – Ansola, regional representative of the International Monetary Fund

“It’s necessary a favorable conjuncture”

Taking into account just the evolution till now of the gross domestic product it isn’t a guarantee for that the economical growth to continue in the same rhythm. I would have to see the government’s calculations in order to be able to pronounce myself about the realism of the Romanian objective, of being counted among the first 10 European economical powers in 2020. The discussion is a little more complex, it is also necessary a favorable conjuncture.

Dr. Reiner Klingholz, analyst, The Institute for Population and Development from Berlin:

“Romania could be mostly in top 20 European economies”

It’s true, Romania has a dynamic development rhythm, but it started late and from a low level. Plus that it doesn’t compete by itself for the statute of economical power. Countries such as Poland and Slovakia are more advanced, and have also sustained economical increases. Romania will get closer to the level of the developed countries, but I don’t expect to reach among the first 10 economies. A good result would mean to situate among the first 20 European economies till 2020.

Dr. Constantin Ciutacu, director of the Institute of National Economy

“It matters the structure of GDP“

Noticing the economical increase till now and supposing that this will maintain also during the next decade, it can be stated that Romania could be in 2020 among the first 10 European economical powers. So, it is necessary to correspond to some conditions:

• If in 2015 we don’t reach to at least 70% of the average income level per inhabitant at the EU27 level, we’ll continue to have big demographic problems. The main challenge for Romania’s development in the next 10 years it is represented by the capacity of retaining in the country the active population.

• It also matters the structure of the gross domestic product. In a developed economy,60-70% of the active labour force works in services and less then 5% in agriculture.

• Economical power means population and development. For the moment, Romania corresponds with the population criteria. However, we are witnessing to a fast decline of the birth rate and we don’t know which it would be the number and the structure of the population over 10-15 years.

• If the European Union surpasses over the delicate moment in which finds itself at the moment, we’ll be able to maintain our rhythm of economical increase. Otherwise, I don’t think it is possible.