The Influence of the Global Economic Crisis on Regional Differences in Romania

The issue of regional differences, cohesion policy and ways of financing a rapid-pace economic development are an ever-present issue for Romania. Seven of the eight regions Romania is divided into can be found in the 15 least developed regions within the European Union. However, the regions are not as similar to each another as one may think at first, differences arising in terms of GDP/capita, economic turnover, unemployment rate, absorption degree of regional development funds, percentage of the rural population etc. The European financing, by means of the structural and cohesion funds represents a significant part of the financial resources at the disposal of the local public authorities in their attempt to stimulate economic growth and, hence, to reduce regional disparities. As much as 84% of the global amount to be spent for regional development in Romania in the period 2007-2013 comes from EFRD, while only 14% are amounts from the local public budgets, and 2% come from private sources. The paper aims to perform a comparative analysis at the level of the eight regions in Romania, both before the start of the economic crisis, and at present, focusing on two directions: Firstly, we will attempt to illustrate the dynamic evolution in time of the differences between the regions in strict terms and figures, using economic and social indicators, such as the above-mentioned ones. The second direction focuses on comparing the eight regions in terms of accessing and using the European funds. We intend to discover if European funding of regional development has reduced the inter-regional differences in Romania or, on the contrary, if it has increased the gap between the richer, more industrialized regions, and the poorer ones. Also, the paper will indicate if the global economic crisis has an impact on the pace of accessing EU finances and if regional differences occur in this respect. It is clear that the economic crisis is putting enormous pressure on the public budgets, and, implicitly, on the ability of the public administration to support the co-financing of regional economic development. In this context, we believe it is interesting to investigate if the local public authorities have elaborated alternative solutions, possibly aimed at supporting the private sector development, so that the co-financing to be ensured to a higher extent from private sources and, if so, what are the regional differences in this respect.