What Romania exported and imported in 2017. Some observations

According to INS data, last year, the automotive industry was the driver of Romanian exports, with about EUR 9.6 billion, of a total of EUR… Mai mult

Real salary goes “down to Earth”. Health and education are still Cinderella

The average gross salary earning announced by the INS for February 2018 was 4,128 lei, 0.4% lower than in the previous month. Paradoxically, the net… Mai mult

EU tax harmonization plan may have negative effects on Romania. Bucharest – totally unprepared

European authorities are taking increasingly decisive steps towards tax harmonization of the 27 systems remained in the EU, but the new measures may have negative… Mai mult

Beware of who bears the burden: Atypical arrangement of wage cost increase in Romania in 2017

Romania ranked first in the EU in 2017 by the labour cost increase, according to data published by Eurostat. With an increase of +15% in… Mai mult

A ruthless table: Number of Romanians who obtain citizenships in other EU countries is growing more than those who run away from dictatorships

The number of Romanians who obtain citizenships in other EU countries keeps growing. Only in 2016, 29,700 people swore to another member state, compared to… Mai mult

With what? Romania – for 10 years, last in EU by budget revenues and first to reduce them! Specific problems

de Marin Pana , 18.12.2017

Romania undertook, between 2006 and 2016, the most bizarre policy on public funds of all European countries, according to an analysis released by Eurostat. Starting from the last position in terms of the share of budget revenues in GDP, our country struggled hard last year to reduce them even further.

Only the massive relocation of some multinationals in little Ireland made us lose, under very special statistical circumstances, the position of a European red flashlight to which we would have been fully entitled to due to the utterly irresponsible strategy of permanent tax ease. A strategy based on which we shall ensure not the convergence but the divergence in relation to civilized Europe.

From a minus 10% of GDP in budget revenues from taxes and social contributions compared to the European average just before the EU accession, Romania has reached a disastrous -14% last year, after decreasing the revenue collection by three percentage points in the context of the increase in the overall average by one percentage point (see table).


  • Evolution of the share in budget revenues from taxes and social contributions in some EU countries (% GDP, 2006-2016)
  • Country


On this divergent trend in relation to the practice in the Western states that we want to catch up, the ratio of the money available to the Romanian state for health, education, administration, public order, social protection, etc. and the EU average (considering, of course, the proportion of GDP level) fell from 74% to only 65%.

It may seem a little to some people, but within ten years, the increase in the budget revenues needed for us to start on an equal footing with our counterparts that manage public funds has grown from + 35% (correct is the increase needed in taxes) to a fulminant + 54% in 2016. Make the ratio of 100% to 74% and then to 65% and see what result we obtain.

An important mention. Contrary to the established political clichés, the state, basically, does not takes or gives money, but redistributes it. From productive activity or consumption to the areas of which it is in charge (mentioned above) or from one to the other. If you wish, move some of the decision of money use from your personal pocket to the benefit of all.

A state that redistributes a little is inherently a weak state (not in terms of repression but the possibility to provide social services). Lacking the ability to perform at the level of Western societies to which we theoretically aspire, and do not quite agree when it comes to accurately translating them into practice. As we would translate from English, we should put the money where we put the words.

Specific issues: Possible and feasible solutions in European practice

Beyond the eternal and traditional lamentations about our situation, where we cannot do so much with so little, neither public policies without money, let’s look at others and see what we can do. We chose three countries: Spain (because it is Latin, somewhat similar and the only one besides Romania that is below the European average of revenue collection in all areas), Poland (because it comes from the eastern block and is closest to us in terms of the economy size, structure and level of development) and Germany (chosen as a benchmark for its optimized economic and social performance).


  • EU average
  • Tax on production
  • – of which VAT
  • Tax on income and wealth
  • households
  • – companies
  • Social contributions


If we are to compare the percentages to the European usage, we immediately see the source of problems in public budget financing. Even if we do not agree, we shall have to increase sometime, as soon as possible, taxes on households and social contributions. The dose of them could be of a Polish inspiration and commensurate with the level of the increase in living standards.

The Bulgarian alternative to this Spanish-Polish-German action would be to maintain the taxes mentioned at relatively low values and strongly push the tax on production and VAT (measuring, at the south of the Danube, 114% and 131%, respectively, of the EU average).

The fact that the second option does not seem to be for a long run, beyond our national appetite for VAT evasion, is explained by Germany’s positioning, not at all a Bulgarian one, which applied a strategy of reduced taxes on production (with the VAT collected positioned at the EU average) and boosted social contributions above the European average.

As well as the disguise of Poland, in terms of fiscal policy, as a kind of smaller Germany, by keeping the proportions between the level of development and the taxation share compared to the European average. A model to which our Latin cousins from Spain also get close, except for our unwillingness to have taxes applied at the personal level, which can be explained (interesting note: not as much at the household level but on the social contributions side).

Mergeți în homepage ›

Publicat la data de 18.12.2017

Lăsați un comentariu


Industrial production, up 7% in first two months of 2018, compared to the same period of last year

Industrial production (gross series) was up 7% in the first two months of 2018 compared to the same period in 2017, following the growth in… Mai mult

Deloitte study: Romania vs. EU - Tax rules applied to losses from selling bad loans

Deloitte Romania, at the request of the Romanian Banking Association, conducted a study for analysing the tax treatment of the sale of receivables and the… Mai mult

Transgaz, favourite to take over Greek natural gas transport operator

The US and the EU support Transgaz-Reganosa (Spain) offer to take over the Greek natural gas transport operator DESFA, for geopolitical reasons, the Greek media… Mai mult

Workforce (i)mobility: Unemployed young Romanians are not willing to move to another locality for a job

Romania has one of the highest percentages of young unemployed people who would not leave their hometown to find a job (either in the country… Mai mult

Unions: State will pay detainees between EUR 370 -550 million

Total compensation that the state will pay to detainees who have been imprisoned in improper conditions will be between EUR 370 million (in the case… Mai mult

Schweighofer sells forest domains owned in Romania and only keeps processing activities

Schweighofer Group, one of the European leaders in wood processing, announced on Monday "a strategy change": it sells its subsidiary Cascade Empire S.R.L. (Cascade Empire)… Mai mult

Dancila government has established "Commission for Preparing Changeover to Euro". Another committee has been already doing the same thing for a year and a half

On Wednesday, the Government adopted an Ordinance aimed at establishing a commission for preparing the timetable for Romania's accession to the single European currency. Prime… Mai mult

Mangalia Shipyard: Agreement between Ministry of Economy and Damen. Dutch buy Daewoo shares, give state 2%

The state has reached an agreement with Damen Shipyards Group after blocking for several months the takeover by Dutch company of Daewoo's shares at Mangalia… Mai mult

CCR judges are no longer willing to participate in MCV assessments

The President of the Constitutional Court (CCR) has communicated to the European Commission (EC) delegation the fact that "the Court plenary expressed its wish not… Mai mult

Five priorities of the Coalition for the Development of Romania presented to Dancila government

Representatives of the Coalition for the Development of Romania (CDR), an initiative of the Romanian business community coordinated since the beginning of this year by… Mai mult

Romania to host regional centre for endowment of Black Hawk helicopters for Central Europe

Romaero and American company Sikorsky, part of the Lockheed Martin group, have signed an industrial partnership agreement that will lead to the establishment of a… Mai mult

State-owned companies forced to participate in public tenders

The Government approved on Thursday a memorandum that includes a series of measures targeting publicly owned or controlled companies. Basically, the document forces the state-owned… Mai mult

Country Report - European Semester: Romania risks a tough economy landing at change of cycle, because of growth model

"In the absence of structural reforms and fiscal consolidation, Romania's strong economic growth risks creating the conditions of a tough landing," in case of a… Mai mult

Governance and Congress: Prime Minister Dancila appointed PSD Vaslui and Neamt leaders’ sons as state secretaries

Prime Minister Viorica Dancila, who is aspiring to the position of PSD executive president, promoted the sons of PSD Vaslui and Neamt presidents to government… Mai mult

Monopoly on natural gas market in Romania: Interests supported by deputy Iulian Iancu push Romania to an open conflict with European Commission

The European Commission will sue Romania at the European Court of Justice if the Parliament in Bucharest adopts the amendments to the Emergency Ordinance 64/2016… Mai mult