Romania’s economy – as seen by the government and the opposition

The Prime Ministers Hour, Romania's new parliamentary practice, saw heated exchanges between the Prime Minister and the Opposition

Ştefan Stoica, 03.06.2015, 13:07

Following the
implementation of two measures with a strong economic and social impact, the
cut in the VAT rate for food products and doubling the amount of child
benefits, prime minister Victor Ponta on Tuesday presented Parliament with the
situation of the economy as part of a new practice called the Prime Minister’s
hour, based on Britain’s Questions to the Prime Minister.

Victor Ponta
told MPs that three years after recession, Romania now has the highest economic
growth rate in the European Union. The GDP grew by 4.2% in the first quarter of
the year and the country’s foreign debt has almost entirely been paid back. The
fact that the economy is performing so well is no accident, said Ponta:

This growth is
not based on circumstantial factors, but on domestic consumption, exports, the
growth of the industrial sector and services, and most importantly this year,
also a growth in the building sector, which we should continue to encourage.
2015 began with a significant growth in the amount of direct foreign
investment. We paid back almost the entire loan contracted and spent by our
colleagues from the Liberal Democratic Party in the opposition. We have met
each of the deficit targets established together with our international
partners.

The prime
minister thanked Parliament for the support given to his cabinet to implement
two important measures for Romania’s economy: the cut in VAT rates for food
products and non-alcoholic drinks to reach 9% and doubling the amount of child
benefits. He called for further support to pass the new Fiscal Code bill, the
Transport Master Plan and the new public procurement bill. Unimpressed with
the figures presented by the prime minister, the Liberal opposition said the
number of businesses that have been declared insolvent in recent years has
increased dramatically, while family incomes have dropped. Liberal MP Ludovic
Orban:

During your
term as prime minister, more than 370,000 businesses have closed and almost
80,000 have begun insolvency procedures. Over 450 businesses have gone bust.
How can we support the development of domestic capital when public investment
has been systematically reduced?

The Liberals
also quoted a European Commission report that denounces, among others, the
unpredictability of Romania’s fiscal measures and the adoption of an
unsustainable investment strategy. The conclusion of the opposition was that
the government has no credibility left and the little progress seen by the
economy came in spite of the Social Democratic rule and not because of it.