Thank you for the opportunity to join you today to discuss the economic and budgetary situation in Romania, as well as Europe's current challenges and policy priorities.
Let me start by briefly outlining how we see the situation in Romania.
Overall, Romania has taken a remarkable journey since it entered the European Union in 2007.
It has converged substantially in terms of GDP per capita compared with the EU average, doubling it since entering the EU.
It is now close to the EU's average, which indicates strong convergence with other Member States.
The stock of foreign direct investment has tripled since 2007, from €42 billion to around €120 billion in 2023, due to the increased investor confidence linked with joining the EU.
Integration into the Single Market has resulted in Romania's exports more than tripling between 2006 and 2024.
Also wages and social benefits have almost tripled in the past 10 years, and purchasing power has nearly doubled.
It is therefore not difficult to conclude that the people of Romania have strongly benefited from joining the European Union.
Romanians themselves feel the benefits and continue to see EU membership as a source of progress and opportunity: almost 80% of Romanians believe that accession has brought advantages for the country.
But along with this progress, several challenges have emerged over time.
Over the last couple of years, Romania has developed an increasingly worrying twin deficit on its current and public accounts.
The European Commission has signalled the risks related to these developments early on, with the opening of an Excessive Deficit Procedure in 2020, and the identification of macroeconomic imbalances since 2022.
In June of this year, the Commission concluded that Romania had not taken sufficient action to bring its budget deficit under control and back below 3% of GDP.
In fact, the deficit last year reached 9.3% of GDP, a level that is clearly unsustainable and by far the highest in the entire European Union.
Interest payments on Romania's debt have increased from 1.4% of GDP in 2020 to 3.1% of GDP in 2025.
This also reflects the very difficult funding conditions earlier this year.
To put this in perspective: this is close to the budget for education.
It was therefore crucial that bold measures be undertaken to correct this situation and reduce Romania's vulnerabilities.
A prosperous society and a sustainable economy cannot be built on an unsustainable fiscal foundation.
The scale and nature of the measures taken are fully necessary and appropriate to bring Romania back on a sustainable track.
We already see the first positive results:
The external accounts have started to rebalance.
After reaching 8.2% of GDP in 2024, the current account deficit is expected to decline to below 8% of GDP this year and below 7% of GDP in 2026.
The government deficit is set to decrease from 9.3% last year to 8.4% this year and around 6% next year.
These efforts have been recognised, helping Romania maintain its investment-grade credit rating.
But we are not there yet.
It is vital to ensure Romania retains access to international capital markets and ensuring Romania can finance its policy priorities at an acceptable cost, in the interest of the Romanian people.
Therefore, it is important to stay the course.
And it is clear: the price of inaction today would have been to impose an even greater burden on Romania's people tomorrow, especially the most vulnerable.
Staying the course towards a stabilised and resilient economy will require comprehensive political support.
Your work is therefore key for Romania's prospects.
The good news is that the Romanian economy seems to be absorbing the fiscal consolidation packages relatively well.
Although economic activity has slowed, most indicators suggest that the economy continues to expand.
We will be updating our economic forecast next month.
The focus should now be on sustaining these improvements, continuing to ensure fiscal sustainability and policy continuity and bring the deficit below 3% of GDP by 2030 as planned.
This requires a strong political commitment from your side.
Honourable Chair, Honourable Members,
As part of the European Union, Romania is not on its own as it navigates this challenging period.
The Recovery and Resilience Facility remains key to unlock important funds to boost sustainable growth.
Recently, Romania has revised its recovery and resilience plan.
This paves the way for its successful implementation by the August 2026 deadline.
It foresees significant funding opportunities to future-proofing Romania's economy.
Beyond the RRF, Romania can count on substantial EU financial support from cohesion funds, the SAFE instrument for defence, and the EU's next long-term budget.
To make the most out of these opportunities, it will be crucial for Romania to put in place coherent, stable and transparent mechanisms to facilitate the effective absorption of these funds to benefit Romania's citizens and business.
Today's geopolitical challenges have further underscored the value of a strong Romania within a strong European Union.
Here, I would like to briefly refer to two European policy priorities that are key to boost our global strength and resilience: improving our competitiveness and increasing our defence capabilities.
Our "Competitiveness Compass", built around addressing the issues identified in the Draghi Report, is guiding our work to deliver a more competitive Europe.
On defence, as Russia continues its war of aggression against Ukraine, we need to keep supporting Ukraine, financially and militarily. And we need to undertake real and significant measures to take greater responsibility for our own security.
This includes, in particular, measures designed specifically for the EU's Eastern Member States.
We must be clear about and prepared for Russia's expansionist ambitions, which extend beyond Ukraine.
Its hybrid warfare already affects Romania and Moldova, which are on the front line in confronting Russian disinformation, acts of sabotage and cyberattacks, be it in the Black or Baltic Sea.
We are in this fight together.
I hope this provides a useful context for our exchange.
Thank you once again for welcoming our delegation.
I look forward to our discussion.
