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Explore the role of economic integration in Romania's development within the EU, analyzing prerequisites for success and proposing a country project to achieve the status of a developed economy.
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Romanian economy within the EU – A conceptual analysis Florin Bonciu, Ph.D. Bucharest June 14, 2016
Contents • The wider context of analysis; • Economic integration: prerequisites of success • Comparing theory with reality: Central European countries and Romania; • The need for a Romanian country project - Achieving the status of developed economy • Conclusions
The wider context of analysis • EU and the world economy. Where it stands, where it goes ? • EU and Europeans. Recent perceptions. • What about the future ? • The need to talk more about people than about numbers, directives or scenarios …
In 40 years (1980 – 2020) the EU’s share of world GDP declined from 30 % to 15 % despite several enlargements
EU – what about the future ? • We propose to shift the focus from: Unity in diversity to Diversity in Unity • European Union is characterized by diversity. • This diversity should become a strength instead of being a weakness.
Economic integration: prerequisites of success • 1) A similar level of development; • 2) A political will in favor of integration based on a large support from the citizens. • In 2007 Romania had definitely the second (with over 80 % popular support) but (at about 30 % of the EU average GDP/habitant) lacked entirely the first.
The limits of the cohesion policy • The cohesion policy has been designed to address exceptions and not entire countries. • The cohesion policy is supposed to be implemented by the authorities of the member states. • When there is no similar level of development a vicious circle appears.
Correlation between levels of development and efficiency and effectiveness of national authorities • Developed countries = more efficient and effective authorities; • Less developed countries = less efficient and effective authorities. • In an objective way, less efficient and effective authorities can not act as those from developed countries and can not raise the less developed countries by themselves. – See next slide.
Baron Munchausen pulls himself out of a mire by his own hair (illustration by Oskar Herrfurth).
OECD – a proxy of the development level • Central European countries became OECD members BEFORE their accession to EU: • Czech Republic – 1995 • Hungary - 1996 • Poland - 1996 • Slovak Republic – 2000. • After accession: • Estonia - 2010 • Slovenia – 2010 • Lithuania invited in 2015 • Latvia invited 11 May 2016
The need for a Romanian country project • In our opinion, Romania can be better off within the EU by adopting as a country project the Achieving of the status of developed economy • based entirely on tangible indicators (infrastructure, housing, education, environment, health care, etc.) • Best practices are widely available in the EU.
Conclusions • In order to achieve sustainable growth and participate as a full member of the European Union Romania should become first a developed state; • Particularly given the current geopolitical context EU and US should assist Romania in becoming a market economy, capitalist developed state; • Remember East – West Berlin or North – South Korea; or the reunification of Germany …. • New approaches and mechanisms are needed but they are fully within reach.
