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de Marin Pana , 26.10.2020

Romania had in the second quarter of 2020 the fourth-lowest increase in public debt relative to GDP among the EU Member States compared to the previous quarter but was at the EU average if the reporting is compared to the same quarter of the previous year, according to data published by Eurostat.

The explanation lies in the fact that we were clear European champions by the budget deficit in the quarters before the pandemic, after which, despite the good management of public finances in crisis, the result could only be improved at the level of the EU average decline in a crisis situation.

During which we had to borrow, like all other European states. Not only for the situation occurred but also for the obligations previously committed when we did not know that the crisis would come. Which, on the one hand, makes the result on Q2 even more remarkable, but on the other hand it draws our attention not to force additional social spending.


  • Budget balance seasonally adjusted (%GDP)
  •             Q4 2019          Q4 2019          Q1 2020          Q2 2020
  • Romania
  • EU


Simplified, as usual, we managed the good periods more poorly and we showed a higher performance only when we came to the end of our rope. For reference, in Q3 2020, Hungary had the lowest result behind us (-3.4% of GDP compared to -5.9% for Romania), Poland had -0.9% of GDP, the Czech Republic -0.3% of GDP and Bulgaria recorded a surplus of 0.8% relative to GDP.

Concerned before the crisis with adopting the single European currency, Bulgaria even managed to increase the budget surplus to + 3.1% in Q4 2020, which helped it to fall in Q1 2020 to only -0.7% and in Q2 to stop at -5.7%. Because they performed well BEFORE THE CRISIS, although they had slightly weaker results than us DURING THE CRISIS, their deficit remained somewhere at the half compared to ours (-5.7% compared to -11.1%).

All in all, we remained (still) on the sixth place in the ranking of the lowest public debt in the EU with 41.1% of GDP, a slightly higher value than the Czech Republic or Sweden but below Hungary or Poland, all countries from outside the Eurozone. The big problem is to not continue to grow because interest rates at which we can borrow do not benefit us at all (even if they fell below 3.5%).

It should be noted that between the second quarter of 2019 and the second quarter of 2020, Romania registered the largest increase in public debt expressed in the national currency (interest and fees are paid from taxes and duties collected in RON), respectively 28% (from about 338 billion to 432 billion), above the Czech Republic (+ 25%), Poland (19%) or Hungary (9%).

The advance of public debt Q2 2020 to Q1 2020 was the fourth smallest in the EU. With only 3.6 percentage points (also helped by the fact that we started from a GDP growth of 2.4% in Q1), we positioned ourselves much better than the EU average (8.4 percentage points) and only above the countries that performed well, Bulgaria (+1.2 pp), Sweden (+1.3 pp) and Luxembourg (+1.6 pp).

The evolution compared to Q2 2019 in seasonally adjusted terms looks less good, where we went to the middle of the ranking with 7.2 percentage points, but remained below the EU average (+8.1 pp), between Poland (7.1 pp) and the Czech Republic (7.3 pp).

Beware, however, they have entered the minus range exclusively in the pandemic crisis (both with -7.2 pp in Q2 2020).

All in all, the data published now and certified by Eurostat does not look too bad, but we should be careful to not “lie on our oars.”

Granting social benefits increased by law on the basis of the economic growth that has turned into a sharp decline for objective reasons would lead to the rapid accumulation of unsustainable debts, which risks unbalancing the economy just when we much need to mitigate the effects of the pandemic and recover from the crisis.

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