The Convergence Programme 2018 -2021 continues the Government’s commitment to join the euro area and to observe the deficit limit of 3 percent of GDP

10 May

The Government approved today, through Memorandum, the Convergence Programme 2018 -2021, which continues the Government’s commitment to join the euro area, as well as the policies of directly supporting the economic growth, while observing the limit allowed by the Stability and Growth Pact, namely an ESA budgetary deficit of 3 percent of GDP.

Establishing a concrete date for euro area accession implies comprehensive analyses , especially in terms of the real, structural and institutional convergence, while the sustainability of the nominal convergence criteria fulfillment is also to be taken into account. The document outlines in this respect the fact that the preparation of Romania's accession timetable to the Single Supervisory Mechanism and for the changeover to euro, as well as the necessary actions for the preparation of the economy and the society, fall within the competence of the National Committee for the substantiation of the National Euro Changeover Plan, which began its activity in April, so that the National Plan and the euro changeover timetable will be developed by the end of this year.

The Convergence Programme takes into account the provisions of the fiscal-budgetary strategy for the period 2018-2020 and the medium-term macroeconomic forecast 2017-2021. In the medium term, the document foresees that Romania's economy will continue to perform, considering the positive impact of the measures envisaged in the Programme for government on the business environment and the purchasing power, the economic and social progress recorded in 2017 and over the first months of 2018 , but also the favorable European and global context.

The commitment to join the euro area will represent over the period 2018 -2021, an important anchor regarding the implementation of efficient and coherent budgetary, structural and institutional policies, to ensure lasting real convergence (per capita income), to increase the competitiveness of the Romanian economy, reduce regional disparities and structural deficiencies of the labour market.

Thus, in terms of real convergence, assessed via gaps to European average (UE -28), of the GDP per capita (expressed in purchasing power standards (PCS)), the document approved by Government indicates the perspective that at the horizon in 2020, Romania will reach 70 percent of the European average, compared to only 57.1 percent in 2015, and 58 percent in 2016. For 2017, GDP per capita in purchasing power standards (PCS) is estimated to exceed the 60 percent threshold.

The convergence program details the general framework and the economic policy objectives for the period 2018-2021, presenting the measures already implemented, but also measures that the Government envisages in the field of fiscal policy, the focus being on predictability and improving the tax collection rate. Other measures are aimed at increasing the employment rate, education, road and rail infrastructure, increasing the absorption of European funds and structural reform in the state-owned enterprise sector. In this context, the document mentions the Government's intention to complete the new legislative framework on public-private partnership.



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