Quantitative vs. Qualitative in the Romanian Fiscal Adjustment

Abstract

As it encountered a fiscal event (budget liquidity crisis) in 2009, Romania should have proceeded to one of the most ambitious fiscal correction in the last 30 years in EU. Nevertheless, the absence of vision regarding the increase in quality of the fiscal adjustment is obvious. The fiscal correction made until now has rather been a quantitative one, falling within certain strictly numerical targets. In this paper, we present a series of signals arguing for the necessity to increase the fiscal quality. Moreover, we propose a few immunization mechanisms of the Romanian economy against the contagion of the current uncertainty in the Euro area or against the future crises.

Keywords

• fiscal adjustment
• contagion
• immunization mechanisms