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January 28, 2023

Daniel Daianu: Fight against waste of public money must be merciless

The absorption of EU funds could be a powerful modernization instrument if it brings a significant supplement of resources, of at least 4 pc GDP annually, if it boosts infrastructure development, favours the modernization of public administration, while diminishing waste and the embezzlement of public money, says economist and former finance minister Daniel Daianu, according to Realitatea.net.

“A much higher absorption of European funds would lead to a public spending of 37-38 per cent of GDP, amid small budget deficits, if the collection of taxes and dues – which stands now at 28-29 per cent of GDP, would match the level of 33-34 pc in the other new EU member states. We must entice domestic savings. One lesson from this crisis is that native investment should rely more on local resources,” Daniel Daianu told cursdeguvernare.ro. According to Daianu, the thesis that Romanians are too poor to save, as local economists maintain, is false

“The public policy in Romania has not encouraged domestic saving; the measures taken, including the flat tax rate, have increased consumption more than anything else. Taxation needs to get changed, including through deductions, in order to boost savings,” Daianu said, in whose view drawing foreign investments from non-EU area makes sense. “Royalty taxes from exploitation of natural resources could be increased substantially. The state should stop alienating natural resources, but draw foreign participants into exploiting them instead. What happened with Petrom was a great mistake. The management of state companies in the energy sector should be reformed quite drastically and all those who make a mockery of public resources, punished; privatisation could be employed, under certain conditions,” Daniel Daianu said, according to whom the fight against the waste of public money must be merciless.

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