EC’s Dombrovskis in Bucharest: Romania, trustworthy partner, supporting appeal of European project. President Iohannis meets EC Vice-President Dombrovskis, affirms Romania’s support for EMU strengthening

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Romania is a trustworthy partner on whom the appeal of the European project depends, however, it must ensure more efficient and equitable tax and social transfer systems, Valdis Dombrovskis, Vice-President of the European Commission in charge with the Euro and Social Dialogue, stated on Friday in Bucharest.

“We must make sure that the tax system and the transfer system are efficient and equitable. In respect to Romania’s case, the inequality rate is among the highest in Europe, even after the social transfers occur because, as has already been highlighted, the revenues of the 20 percent of Romanian people who earn the most are eight times higher than those of the 20 percent who earn the less and this has to do with the tax scheme. Our advice is to curb labour tax, especially the less paid labour and to carry out a transfer so that consumption, property and other sectors are taxed more,” said the EC’s official.

He added that an educational system better connected to the labour market requirements and specialised support need to be instituted, especially in the case of disadvantaged groups.

“Recommendations for this country are largely due to efforts at the Union’s level to support people more and to use opportunities through their entire active life, especially for those who cannot cope on their own. We will have to adapt these dimensions as well, because the labour market is shifting, we can no longer rely on the paradigm in which people receive education and training while they are young and use these skills throughout their entire life, but we need to adapt them all through life in the digital technological age and in compliance with the new developments, progress that we witness. Romania must therefore pursue this domain, so that people with skills can compete in the open market. In the European agenda for skills, we provide opportunity for governments and people to perform this change. Educational systems needed to be better connected to the requirements of the labour market and specialised support is needed for certain groups, especially the disadvantaged ones,” the Vice-President of the EC affirmed.

As regards the youth, Valdis Dombrovskis specified that what is needed is not only the human resource and its launch, but also political resolution and the full use of the EU available funds and support.

Valdis Dombrovskis also spoke about the necessity of ensuring a better targeted social support towards groups that need it the most, making sure that the social protection system remains durable without undermining social performances, for which “immediate action and long-term strategies are required at the Union level and at national level.”

 

“In past few years, Romania has deviated from medium-term budgetary objectives”

 

Romania has diverged from medium-term budgetary targets over the past few years and is now the only European Union member state in a diversion procedure, said on Friday Valdis Dombrovskis, Vice-President of the European Commission, in charge of the euro and social dialogue, financial stability, financial services and the union of capital markets.

In 2014-2015 the structural deficit was forecast at 1pct of GDP but over the last two years, Romania has deviated substantially from this objective and is now the only EU member state in a deviation procedure under the stability and growth pact. I will meet later with the minister of finance and I will discuss the budgetary developments in Romania in more detail. I can already say that we have formulated clear recommendations confirmed by the Council regarding the additional deviation procedure to ensure that a fiscal adjustment takes place and the short-term goal is reached again, Valdis Dombrovskis told a conference on “Social Inclusion – Challenges and Opportunities.”

He said that Romania is recording one of the largest economic growths in the EU, but there is a rapid increase in the structural deficit, and these trends are not reconcilable, so the budget deficit has to decrease.

As far as taxing changes are concerned, I want to say that we agree that there is a need to ensure fiscal predictability, but I stress that direct tax systems are still the responsibility of the member states because they are those who make the decisions, mentioned Valdis Dombrovskis.

The Ministry of Finance (MFP) states that the difference between the balances mentioned in the Eurostat communiqué and the data posted monthly on the MFP website comes both from the calculation methodology, the European System of Accounts and also from the impact generated according to the methodology of calculating seasonally adjusted quarterly deficits.

 

President Iohannis meets EC Vice-President Dombrovskis, affirms Romania’s support for EMU strengthening

 

President Klaus Iohannis welcomed on Friday at the Cotroceni presidential palace European Commission Vice-President Valdis Dombrovskis responsible for the Euro and Social dialogue; the two officials discussed subjects related in particular to the future of the Economic and Monetary Union (EMU), and Romania’s joining the eurozone, informs a release of the Presidential Administration.

“President Klaus Iohannis expressed Romania’s support for further strengthening the Economic and Monetary Union,” the cited source said.

The head of the state also said that the future of the eurozone is of particular importance to Romania, given its strategic goal to adopt the euro as soon as possible. President Klaus Iohannis underscored that the preparation for joining the eurozone is an important anchor of stability and predictability in the sphere of public policies.

The President of Romania voiced support for an inclusive approach of the EMU strengthening, while observing in the process the interests of the non-euro member states.

Klaus Iohannis welcomed the European Commission’s intention to launch a convergence instrument to provide pre-accession technical assistance to member states that wish to adopt the euro.

In his turn, the European Commission Vice-President informed about the Commission’s intention to roll out this December a package of proposals on strengthening the Economic and Monetary Union, which will also include the creation of a financial assistance instrument for member states wishing to adopt the euro.

During talks, the need was also highlighted for the Romanian authorities to ensure a sustainable economic roadmap that would favor the preparation of the country’s joining the eurozone.