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Sustainability of public co-financing of investment projects with EU financial assistance in Romania

Author

Listed:
  • Anca DACHIN

    (Bucharest University of Economic Studies, Romania)

  • Monica Gabriela GHERMAN

    (Bucharest University of Economic Studies, Romania)

Abstract

The public sector capacity of the EU Member States to access the European funds depends highly on the sustainability of their government budgets. According to the European Commission assessment, Romania is not facing a risk of fiscal stress in the short run. However the effects of the economic crisis and the vision with a predominantly social character regarding the public expenditures have contributed to the limitation of resources allocated for economic development. The low level of absorption of the European funds in Romania means implicit losses for the national economy, but a higher level could have been a cause for excessive budget deficit. In order to reduce the pressure on the state budget the government aims at being committed mainly in investment projects with EU financial assistance. This reflects the substitution of the state own financial resources with foreign funds, therefore the additionality effect initially wanted by the EU decreases. The paper evaluates the public investment effort in Romania under the Fiscal Pact limit on deficit and the conditionalities negotiated with IMF, as well as its effects on the economy and budget deficit.

Suggested Citation

  • Anca DACHIN & Monica Gabriela GHERMAN, 2014. "Sustainability of public co-financing of investment projects with EU financial assistance in Romania," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(592)), pages 45-56, March.
    • Handle: RePEc:agr:journl:v:xxi:y:2014:i:3(592):p:45-56
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    Cited by:

    1. Anca DACHIN & Georgiana MORARU, 2016. "Long-term effects of the investments dynamics in Romania in the post-accession period – a regional approach," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(1(606), S), pages 129-140, Spring.

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