ANALYSIS OF THE SUSTAINABILITY OF FISCAL POLICY IN ROMANIA

Abstract

The relationship between government revenue and expenditure has always been of interest to economists. As of 2020, Romania, unlike other EU Member States, is subject to the Excessive Deficit Procedure, with a deficit of -9.79 percentage points. Based on the recommendations of the Council of the European Union, in June 2021, to readjust the excessive deficit situation by 2024 at the latest, setting the ESA deficit targets at 8.0% of GDP for 2021, 6.2% of GDP for 2022, 4.4% of GDP for 2023 and 2.9% of GDP for 2024, the paper has as its general objective the analysis of fiscal sustainability in Romania, as a member state of the European Union. The adjustment of Romania's medium-term budget deficit is essential to reduce macroeconomic imbalances and, at the same time, to create the fiscal space needed to implement investments financed by European funds available to Romania.

Keywords

• fiscal sustainability
• general consolidated budget
• budget deficit