Salaries in companies with domestic capital increase faster but remain half the level in foreign companies. Why

Salaries in domestic companies continue to grow as staff shortage widens, but remain half the level registered in foreign firms, according to an analysis by… Mai mult

BNR meeting minutes: Six comments on local economic development

Although gross fixed capital formation had a surprising positive contribution to the economic growth in the first part of the year, members of the National… Mai mult

Public deficit, out of European practice: How others stand

Romania recorded the largest public deficit among the EU states in 2018, according to data published by Eurostat, except for Cyprus (-4.8% of GDP last… Mai mult

IMF report – Conclusions show that Romania has become a new and atypical growth model: through imbalances. Which will soon get to be paid

Romania’s macroeconomic imbalances have increased in the past year, and economic and fiscal policies have to change so that the population’s incomes and prospects of… Mai mult

Discharging imbalances on RON exchange rate could start even this year. Analysts’ scenarios and BNR’s uncertainty

Analysts’ scenarios on the evolution of the exchange rate are rather prudent for the coming months, but severe for the beginning of the next year… Mai mult


How does Romania stand with taxation compared to other EU countries – and where it is with related revenues?

de Marin Pana , 31.3.2019

Authorities have borrowed EUR 3 billion from foreign markets yesterday to finance the current year’s deficit. Much: both for one day and in general. A thing that should make us think about how revenues are made in our society.

Of course, we first look at taxation and we make that by comparison in terms of what other people are heading to and where we are going.

Data published by Eurostat show that Romania was in the period 2014-2017 precisely contrary to developments in countries from the same region and EU member.

Unlike the situation in Bulgaria, Hungary, Poland, the Czech Republic or Slovakia, the share represented by tax revenues and social contributions in the budget has decreased and the percentage increase in the amounts available to the state from these sources (about 90% of total public revenues) had the lowest increase, despite the fact that we had the highest economic growth and recovered the most from the gap with the West.

Moreover, the increase in wages from the public sector and pensions was the highest in the region, which led to a budget deficit placed at the 3% threshold set as a Maastricht criterion for joining the Eurozone, for recession situations and not a steady economic growth with values well above the European average.


  • Evolution of budget revenues from tax and social contributions in Romania (2014-2017)
  • Year
  • Share of GDP


Even our EU accession wave colleague Bulgaria, placed at only 49% of the EU average in terms of GDP per capita at the standard purchasing power parity (compared to our 63%) has considerably increased the state’s ability to supports its obligations. Our neighbours’ revenues based on the taxation applied have been increasing by more than 25% (value in euro) in just four years.


  • Evolution of budget revenues from tax and social contributions in some EU states (2014-2017)
  • Year
  • Bulgaria    Share of GDP
  • Revenues (million euros)
  • Hungary  Share of GDP
  • Revenues (million euros)
  • Poland           Share of GDP
  • Revenues (million euros)
  • Czech Republic        Share of GDP
  • Revenues (million euros)
  • Slovakia           Share of GDP
  • Revenues (million euros)


It is thus enough to look at the values recorded in all of these countries and the general trend in the EU (where the increase was slightly more stabilized, from 39.8% of GDP in 2014 to 40.2% of GDP in 2017, based on the fact that a level of 41.2% has been maintained within the Eurozone, which is the centre of gravity of the Union).

After 20 years: we and others

Incidentally, as a coincidence that should give us food for thought, we are in terms of the revenue share of GDP almost exactly where we are in terms of GDP/capita adjusted to the purchasing power, that is to say about 62%. Perhaps, in view of adopting the euro, we should broaden the convergence criteria we are observing.

For example, based on a similarity with the social purpose and budget sustainability, what you would say to consider the increase in the share of taxes and social contributions to at least 70%, 75% or a desirable 80% of the Eurozone average not only in terms of GDP per capita but also of budget revenues.

Translated into figures, there would be a minimum of almost 29% of GDP, that is no more than Poland or Bulgaria already have, a reference of 31% to Slovakia five years ago (interestingly, we would also have five years to go according to the already announced intention of adopting the euro) or 33%, where the Czech Republic already was in 2014 and where Slovakia reached in 2017.

Money neither from taxes nor EU funds

If we look at the statistical series published by Eurostat since 1995, we can see that similar values of the share of tax revenues and social contributions (and the lowest ones registered during the observation period based on European criteria) are found at an interval of 20 years, between 1996-1997 and 2016 -2017.


  • Share of tax revenues and social contributions in Romania after 20 years
  • Year
  • Share of GDP


There is, though, a major difference between the two pairs of values. The first one was on an increasing trend against the backdrop of the crisis started in 1997 that affected the economic result, while the second one reflects a percentage decline, in the context of robust GDP growth.

The question is why we have not maintained the revenue share of GDP to co-finance public investment based in European non-reimbursable funds.

If we had been to remain at 2015 level (28% of GDP, namely 2.2 percentage points in addition compared to 2017), with the same expenditure from public budgets, we would have maintained the deficit of 0.8 percentage points attained then (a big achievement from the perspective of financial stability commitments) or we would have used the extra deficit for infrastructure works.

All in all, we can neither reinvent the wheel nor the hot water.

The same as we cannot be able to change the elementary arithmetic of the budget. That is why we cannot go forward to new progress and civilization heights of the multilaterally developed capitalist society with macroeconomic parameters registered two decades ago.

Mergeți în homepage ›

Publicat la data de 31.3.2019

Lăsați un comentariu


Laura Codruta Kovesi remains alone in the race for European Chief Prosecutor

French Prosecutor Jean-Francois Bohnert will be appointed as head of the European Financial Prosecutor's Office, a position for which he was heard on Thursday, 11… Mai mult

Romania - EU country with highest risk of dying in a road accident, Bulgaria is quickly decreasing number of victims since it built motorways

Romania recorded the highest road deaths in the EU also last year, with 96 deaths per one million inhabitants in 2018, almost double the EU… Mai mult

Latest developments in progress at Health Ministry: Differentiated wages based on performance, competitions organised at a regional level not by hospitals

Sorina Pintea announced on Thursday further new changes that will be brought to the functioning of the health care system, including new rules for employment… Mai mult

ANAF changes selection procedure for liquidators. Main changes

The new order on approval and selection procedures for insolvency practitioners is an important step to a very good direction, industry experts say. ANAF is… Mai mult

Romania loses competition for a seat at UN Security Council. MAE Excuse: Campaign started too late

Romania lost to Estonia in the final vote to get the non-permanent member position within the UN Security Council for the period 2020-2021. On Friday,… Mai mult

Business internationalization / eMAG makes a step to entry five new international markets and targets a business of EUR 2 billion

eMAG hopes to get the opinion of the Hungarian Competition Council over the next two months for the acquisition of Extreme Digital, the market leader… Mai mult

"At a distance from books": 85,000 teachers (one third of educational staff) are graduates of distance learning

Approximately 85,000 teachers are graduates of distance learning (ID) programs, Education Minister Ecaterina Andronescu said at a meeting with school inspectors from Caras-Severin County. The… Mai mult

Mugur Isarescu: We should make a film for Viasat History about treasure in Moscow

A book should be written or a movie should be made and sent to Viasat History about a treasure evacuated to Moscow, as it is… Mai mult

Rhythm of commercial vehicle registration increases 3 times faster in Romania than EU average

Today, the European Automobile Manufacturers Association (ACEA) announced the status of commercial vehicle registrations in EU member states + EFTA in April and cumulated after… Mai mult

4.2%, from 3%: BNR has increased inflation forecast for 2019

The National Bank increased the inflation forecast for 2019 by 1.2 percentage points, from 3% to 4.2%. Also, the forecast for 2020 goes up by… Mai mult

Emergency procedure at European Court of Justice for Romania’s question: Are MCV recommendations mandatory?

The Court of Justice of the European Union (CJEU) has decided that Bihor Court’s request to be discussed under the emergency procedure, which is a… Mai mult

Government decides to increase external borrowing ceiling by EUR 4bn. It has consumed program resources for two years

The Government's agenda for Wednesday also includes the draft decision to increase the foreign loans ceiling for 2019 and 2020 by EUR 4 billion, up… Mai mult

Preparations for Summit in Sibiu - European Commission’s recommendations for EU's strategic agenda

On Tuesday, the European Commission presented a series of policy recommendations on how Europe can shape its future within an increasingly uncertain and multipolar world.… Mai mult

Meeting between Prime Minister Viorica Dancila and Chinese Prime Minister Li Keqiang: talks on a possible involvement of Chinese companies in PPP projects in Romania

On Friday, Prime Minister Viorica Dancila had a meeting with Chinese Prime Minister Li Keqiang, during which she stated her interest in involving Chinese companies… Mai mult