President Klaus Iohannis said on Thursday that a decade and a half after joining the European Union, Romania is still far behind in terms of financial inclusion and financial intermediation, and Romanians are “far behind” the European average in terms of online shopping population.
“A decade and a half after joining the EU, Romania is still far behind in terms of financial inclusion and financial intermediation. Since European accession, we have enjoyed remarkable economic growth, starting from a GDP of around 100 billion in 2006, and going up to almost 270 billion euros this year, despite the two severe crises that occurred during this period. The finance and banking sector, with a key role in mobilising resources for funding, also developed significantly. In the last 15 years, non-government credit has almost quadrupled, and the value of the stock market is now three times higher, but Romania continues to have the lowest rate of financial intermediation in the EU. There are nearly 20 million bank cards issued, and the e-commerce sector has exceeded 6 billion euros, but we are still well below the European average in terms of online shopping population,” said Iohannis.
Iohannis attended on Thursday the first edition of the Financial Education Forum, organised by the Financial Supervisory Authority, the Bucharest Academy of Economic Studies and the Romanian Association of Banks under the High Patronage of the President of Romania.
Consumption-based policies, budget deficits push Romania away from goals such as joining Euro
President Klaus Iohannis also said on Thursday that policies based on consumption and budget deficits, in use before the pandemic and the economic crisis, have moved Romania away from strategic country goals, such as joining the Eurozone, and are now making the fight inflation more difficult.
“As a country, we aim to make far-reaching reforms and investments that generate added value, prosperity and sustainable development over time. Let us remember that, in the years before the pandemic, Romania had a strong pro-cyclical course, with politics based on consumption and budget deficits. The pandemic and the economic crisis have caught us unprepared in terms of public finances, with the largest deficit in the Union in 2019, which has led to the rapid growth of public debt. Such policies pushed us away from strategic country goals, such as joining the Eurozone, and now making the adjustments needed for an effective fight against inflation even more difficult,” the President said at the Financial Education Forum.
He stressed that changing the development model requires that investment become a zero priority. In this regard, he stated that budget allocations of almost 7% of GDP for investment should be maintained.
“The deepening of current account deficits, the loss of competitiveness amid the energy price crisis, the drastic intensification of inflation in recent months, to name just a few developments, require responsible policies and reforms that offer resilience to the economy and modernize Romania. (…) In 2022, the budget allocations of almost 7% of GDP for investment indicate a firm direction, which must be concretized and maintained,” said the President.
According to him, the quality of economic policies, laws and the act of governing must be based on a healthy economic education.
“For an active and responsible civic participation, including in relation to the political offers of economic solutions, it is very important that our citizens are well educated and correctly informed from a financial point of view. Banking and financial bodies, in daily contact with their customers, with the citizens, can get involved and they get more involved,” he said.
He noted that universities have been and continue to be “pioneers” in playing a key role in shaping skills for new generations.
Compiled from Agerpres