BNR’s Isarescu: The net EU fund inflows amounted to EUR 30.4 billion between 2007 and 2017

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From 2007 to 2017, Romania benefited from European funds from the EU budget amounting to EUR 45.7 billion, representing an annual average of 2.8 percent of the GDP. If we take into account Romania’s contribution to the budget of the European Union, the net EU fund inflows amounted to EUR 30.4 billion, namely an annual average of 1.8 percent of the GDP, the Governor of the National Bank of Romania, Mugur Isarescu, stated on Monday.

“Between 2007 and 2017, Romania benefited from European funds from the EU budget amounting to EUR 45.7 billion, representing an annual average of 2.8 percent of the GDP. Of this amount, EUR 37.1 billion were funds received from the UE budget corresponding to the 2007-2013 multiannual financial framework, while the remaining EUR 8.6 billion were received under the 2014-2020 multiannual financial framework. If we take into account Romania’s contribution to the budget of the European Union, the net amount of the EU fund inflows was EUR 30.4 billion, namely an annual average of 1.8 percent of the GDP. We could say that we should be relatively satisfied with this figures. For Romania, EU funds represent not only these figures, but also the opportunity to modernize the economy and the country, to create the needed infrastructure in order to have a sustainable development” Mugur Isarescu also said at the conference called “Fondurile europene, absorbtia, şi impulsul necesar. Cum conectam Romania în anul centenar” (“EU Funds, the absorption and the needed impulse. How do we connect Romania in the centenary year” – e.n.), according to Agerpres.

He said that he is sure that the EU fund absorption should be systematically considered for the great development projects, prioritized so that they will support the sustainable economic growth. The infrastructure investments have not only an economic role, but also a social, political and even a national one, by reducing the disparities between regions.

Between 2007 and 2016, the structural and investment funds represented an average of approx. 27 percent of the total investments made by the public administration.

Mugur Isarescu mentioned that, according to the estimations made by the International Monetary Fund, the cumulative effect of attracting EU structural and investment funds on the growth of the GDP for the period 2007-2016 was between 1.2 and 1.6 percent of the GDP. A 95% absorption rate of these funds in the current multiannual framework would lead to a growth rate of the potential GDP in 2022 higher by approx. 1.7 percent, therefore we would reach a potential GDP of approx. 5% per year.

“As a daily observer of the situation on the foreign exchange markets, I can also tell you that when the inflows of European money are delayed or they are performed only partially, this reflects even daily in the balance of the exchange market” Isarescu stated.

The BNR Governor pointed out that it’s natural for us to wish to have a faster growth, but we must wish to have a sustainable and healthy growth, which doesn’t cause risks and imbalances to accumulate, requiring future corrections when imbalances accumulate, instead of having the strength to correct them slowly and along the way.

“In order to achieve a sustainable and fast, but also a healthy development, we must be rather oriented to a qualitative growth, not only to a quantitative one. This growth should determine also a convergence of the production structures, of the endowment with infrastructures, we shouldn’t think only at the income increase for the next period. This goal involves an increased endowment with production factors, and refer here primarily to the capital factor, along with the labor force, as well as to the efficiency of using them, namely the productivity” Isarescu stated.

According to him, if we force economic growth beyond what the economy can bring, a short-term increase in incomes will result, but the accumulation of imbalances and tensions will also be caused.