Romanian Govt.’s new economic paradigm prioritizes production hubs and local capital

The new Romanian Government backed by the Liberal Party (PNL), Social Democratic Party (PSD) and ethnic Hungarians’ party UDMR aims to change the economic paradigm, Ziarul Financiar daily concluded based on the Ruling Strategy published by the emerging ruling coalition.

ZF identified two key directions of the new paradigm: the special focus on the production/manufacturing sector (secondary sector of the economy) and the boost envisaged for the Romanian capital [as opposed to foreign direct investments].

The profile of the new paradigm carries more elements of economic nationalism (typical for the Social Democrats and even radical USR party) than neoliberalism (advocated by the new Liberal leader Florin Citu), judging from the elements outlined by ZF daily.

However, some provisions on the list have the imprint of the Liberal Party, such as the increase of the contributions to the mandatory private pension system (Pillar II) from 3.75% of the gross wage to 4.75%.

Those reading the 271-page Ruling Strategy compiled in no more than a couple of days by PSD and PNL should expect a mix of diverging, possibly conflicting, targets and policies. But the document may anyway undergo serious amendments in July 2023 on the occasion of the peaceful handover of the prime minister seat by the Liberals to the Social Democrats.

On the list of priorities are the development of industrial hubs, improving the efficiency of state spending, promoting digital technology, more investments, and developing infrastructure.

The Strategy also guarantees the implementation of the reforms attached to the Recovery and Resilience Plan (PNRR), in particular improving institutional capacity, corporate governance, achieving European transport decarbonization targets, digitizing and increasing safety in the transport sector.

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