EC: “Corruption continues to be a major problem for the business environment in Romania”

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The European Commission has voiceS its concern again on the negative impact that the law amendments and political pressures have had against the judiciary system in Romania in the past three years, according to the EC’S “2020 European Semester: Assessment of progress on structural reforms, prevention and correction of macroeconomic imbalances“.

The report also raises concerns over the corruption in all sectors, including in economy.

“In the absence of lasting reform efforts, growing fiscal and current account deficits are putting
the sustainability of Romania’s economic growth at risk”.
“Corruption continues to be a major problem for the business environment in Romania.
While the government currently supports actions to prevent and sanction corruption, Romania is facing important challenges to restore progress in the fight against corruption following damages done in the past years through legislative amendments and continued  pressure on judicial institutions.”
The European Executive says that “strong domestic demand, stimulated by tax cuts and large wage increases, has been the economy’s growth engine in recent years”.
This consumption-led growth model has pushed the country’s current account and public finances into rising deficits. In addition, adverse demographic developments have led to significant labour and skill shortages, limiting the country’s growth potential. Despite an average growth of around 5% in the past three years, inequality is increasing and poverty remains high, while regional disparities are deepening. Without a correction of the fiscal and external deficits and a firm commitment to implement structural reforms, Romania’s convergence towards EU living standards is likely to suffer important set-backs.”\
The EC officials argued that Romania has made limited progress in addressing the 2019 country-specific recommendations, for instance in terms of efforts to strengthen tax compliance and collection, of improving the quality and inclusiveness of education, and social dialogue, of developing a minimum wage setting mechanism based on objective criteria, of improving access and cost-efficiency of healthcare and of focusing investments on key policy areas and strengthening project prioritisation and  preparation in public investment.

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