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Friday, 28 January 2022

Press conference by Prime Minister Nicolae-Ionel Ciucă and OECD Secretary –General Mathias Cormann


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Nicolae-Ionel Ciucă: Secretary-General of the Organization for Economic Co-operation and Development, Mr Mathias Cormann,

Ladies and gentlemen,

Today, I had the pleasure to welcome the OECD Secretary-General, three days after the OECD Council decided to open accession discussions with Romania. It is the first political objective our Government has met in the short time since taking office. Through its member states, OECD accounts for more than 70 percent of the global production and trade and 90 percent of the global foreign direct investment. It represents a pole of attractiveness for any notable investor and implies through its prestige, political, economic and financial benefits. It equally offers our citizens the perspective of belonging to a system of democratic values generating, stability and sustainable development prospects for its member states.

The opening of accession negotiations with the OECD is a success in itself. This attests to the importance that the Romanian state attaches to the strategic objectives of Romania's foreign policy. It can rightly be considered the most notable result after joining NATO and the European Union because it brings our country closer to a benchmark that will involve recognizing the status of a functioning market economy and consolidated democracy.

This decision of the OECD Council that we welcome and for which I thank Secretary-General Mathias Cormann for his support, is a new stage of a path that Romanians have chosen after the Revolution of December 1989, that of being part of the European Union, of being reliable allies in NATO and of laying the foundations for Romania's development together with the most developed countries of the world. It is a stage success because Romania's strategic objective is to join the OECD.

I convened the OECD Ministerial Committee on the first day, after the accession invitation, and we have already approved the basic binding standards, a necessary step for launching Romania’s roadmap. I welcomed today the Secretary-General with Romania’s formal response letter to the accession invitation and the necessary conditions for starting this process. Romania is as of today in the process of accession to OECD.

Also today, we launched the economic survey of Romania, conducted by OECD and the National Commission for Strategy and Prognosis, which presents the current situation of the Romanian economy and the solutions for its modernization.

By joining the OECD, Romania commits to fulfilling all criteria deriving from its membership in this select club, and we shall do so, as these criteria are on the one hand, in the character of our nation, and on the other hand, they are linked to our country’s strategic potential and competitive advantages.

The first criterion: belonging to a common set of values and principles derives from our EU and NATO membership status and the benefits that Romania has had since joining the two organizations. These are the principles of democracy and the market economy, economic performance, good governance and the rule of law, human rights, active participation in relevant international and regional organizations, development assistance, and compliance with the OECD acquis.

Romania is a country whose citizens have fought for democracy and freedom every time it was needed in our history and it shows that they treasure these values. Romania is a country that respects the rule of law and promotes the values of liberal democracy, including as a country that held the presidency of the Community of Democracies.

Romania is a country whose economic performance has increased in the 15 years since it joined the European Union and which will capitalize on the reach of the almost EUR 30 billion for the economic recovery under the PNRR [National Recovery and Resilience Plan] and the almost EUR 50 billion under the new Multiannual Financial Framework.

Let me give you just a brief picture: Romania's GDP exceeded 220 billion euros compared to about 28 billion euros in 2005. Let's imagine that we put these values in a chart whose heads are before EU accession and 15 years after accession, values that would not have been possible without EU membership, a membership that was facilitated and preceded by the other defining moment in our contemporary history, accession to NATO, the security umbrella that protects our development today clearer than ever.

Among other criteria, such as the ability to positively influence the decisions of the organization's structures or the relevance of the candidate for the organization's aspiration to develop globally, Romania has the advantage of the principle of geographical diversity and has proven its vocation as an actor supporting the anti-corruption and economic democratic reforms in our region.

Whereas the decision to open negotiations for Romania's OECD membership was a political one, technical preparations are central to our country’s path towards accession. Therefore, I assure you of my commitment and the commitment of the Government I am leading, that the preparation of the OECD accession will be at the top of our agenda, along with the other priorities of our foreign policy. We will focus very rigorously on the technical preparations that are essential. As Prime Minister and Coordinator of the relevant Interministerial Committee, I assure you that I will personally follow this preparation process.

The accession process will allow Romania to continue the necessary reforms and to capitalize on the advantages and benefits that will come from this process, from improving the country's rating to attracting foreign investments.

Like the instruments at the EU level, such as the European Semester, accession negotiations and OECD membership will open the door for Romania to a world-class club of expertise, which we will be able to access and where we can receive assistance for the reforms our country is undergoing in terms of public policy, governance, anti-corruption reforms, fiscal policy, transport infrastructure, agriculture and education. A set of reforms that will have to bring us even closer to another important goal, that of achieving economic convergence at the EU level and the changeover to the euro.

We will have all the ingredients to make Romania even more institutionally attractive and more resilient to shocks and, I wish, more tempting for Romanians who will be able to return home, “at home” means and will mean a consolidated, democratic Romania, with a functioning market economy and an involved and influential part in the most successful organizations.

We, therefore, have a stage success, the invitation we received to start the accession negotiations, and before us, lies the responsibility of a country project that I urge all political and institutional actors to contribute to, for the benefit of Romanian citizens. Thank you!

Mathias Cormann: Thank you very much, Mr Prime Minister. It is a real privilege for me, a secretary-general of the OECD, to be in Bucharest, here, today, to present the OECD’s economic survey of Romania for 2022. It is a particular privilege to be here, just a few days after the Council of the OECD decided to formally open accession discussions with Romania on membership of the OECD. We know how committed Romania has been for a very long time, to OECD membership. We have appreciated your consistent strength of engagement, the way you have worked with us on reforms to lift standards and to better align with OECD standards, to participate in OECD bodies over many years. And this is now an important step to take the final step towards membership. I have appreciated the Prime Minister today, his letter responding to my letter earlier in the week, confirming Romania’s adherence to the vision, to the values and priorities of the OECD, as outlined on our Vision Statement, indeed Romania’s adherence to our Ministerial Council Meeting Statement, released in October last year.

Romania has done very well over the last several decades in growing the economy, lifting living standards, in reducing the emissions intensity of the Romanian economy, but there are still areas for improvement and there are still some problem areas that need to be addressed.

I am confident and I’m looking forward to the opportunity that working together, bringing the benefit of the best policies, best practice experiences from across the OECD membership into the conversation, into the engagements with the Romanian Government, we can help deliver even better policies for better lives here, in Romania. We are very much looking to the process of engagement as part of the roadmap to accession which will unfold over the coming years, months. In this survey, what we have focused on, is areas, for potential improvements in this study.

Short term, medium-term reform priorities. In the short term, the biggest risk in Romania as it is in countries around the world are future new waves of infection of Covid and indeed, the need for further economic restrictions which will be the biggest downsized risk for sustained economic recovery at this point. In Romania, one of the downsized risks is particularly accentuated because Romania has a comparatively low level of vaccination, so we know that the Government is very focused on this, we know there is a broad consensus across the political spectrum in support of boosting vaccination, I guess what I would say to the people of Romania, to those who are hesitating: do it for yourself, for your health, and your future opportunities, do it for your family, do it for your community, do it for your country. Get vaccinated, get boosted, it is good for your health, it is good for your future economic opportunities. Over the medium to long term, it is going to be important that these substantial funds that are viable under the EU’s funded Recovery and Resilience Plan are invested wisely. It is an area that the Prime Minister and I together with his colleagues, had the opportunity to discuss now, in the context of the economic survey of Romania. And indeed, a number of pressures need to be addressed, population’s ageing, workforce participation levels, better access to education, in particular for those from disadvantaged backgrounds. Education success in Romania, compared to other parts of the OECD, is more significantly linked to the socio-economic background of parents, and that is an area that really needs attention and I know that the Government is very focused on that.

There are many other areas of reform that are being addressed in the report, we had the opportunity to get through in some detail now during the meeting, which I believe was publicly broadcast for the most part so I am not going through these specifics again but let me just say that we very much appreciate Romania’s enthusiasm to become an active contributor to the OECD family. Romania has come a very long way, Romania has been a very positive partner for us, for a long time. We very much look forward to working through this process ahead which we hope will lead to further substantial reforms which will improve the opportunities and the living standards for the people here, in Romania.

Reporter: A question for Mr Mathias Cormann. When, what year, could Romania become a member of OECD and what are the reforms, those essential things we should undertake for this to happen, the OECD accession?

Mathias Cormann: I am not in the position to put a specific date on it, but I would say that it will go as swiftly as possible and take as long as necessary. Romania has already adhered to 53 OECD standards, as a participant in many OECD bodies, we know each other well, what will now happen is a technical review through 20 technical committees of the OECD, really reviewing very thoroughly all the policies and practices in Romania, that we believe can and should be further improved to align policies and practices, arrangements in Romania, with all that is applied across OECD. It really depends on how the process evolves from here. The Prime Minister has indicated to me that he and his Government will be very focused on engaging with us very swiftly, certainly, from our side, we will work through things as efficiently as possible, we two agree, that this is now a technical process. In terms of your second question, beyond the areas that we have covered in the OECD’s Economic Survey of Romania, it will really depend on what the process identifies.

There is a range of areas where we really have to have a particular look at it, for the benefit of Romania and Romanian people, we work with the Government here, to take things forward.

I should have said in my introductory remarks, one of the things which we very much appreciate is the broad political support from across the political spectrum here in Romania, for Romania’s aspiration to be a member of the OECD, that gives us a lot of confidence to work through this process with our partners here, in Romania.

Reporter: I would ask you if the trust of foreign investors coming to Romania might be affected, in the context of security problems at the border with Ukraine.

Mathias Cormann: The geopolitical environment is always an important factor, that’s no question but that goes beyond the scope, I guess, of where the OECD can add much value. Beyond noting the point that you make is a valid point that the geopolitical environment involving geopolitical circumstances have an impact, but of course, Romania is entrenched in a number of very important structures, with the European Union, and NATO and all of that positions Romania very well to deal with some of those challenges but it is a question more properly addressed to the Prime Minister.

Reporter: I would have a question for Prime Minister Nicolae-Ionel Ciuca. I would like to ask you on a more specific topic, because this report also addresses the issue of the sustainability of the pension system, eventually, in the future, and about a possible abolition of special pensions. We know that there is also an internal debate on this subject. I would like to ask you what solution do you envisage for it and when does it apply?

Nicolae-Ionel Ciucă: Thank you! Before answering you, I would like to add, as the Minister of Foreign Affairs Bogdan Aurescu and the Ambassador of our country to France, Mr Luca Niculescu are here, with us. In the beginning, I thanked the Secretary-General and his team for their support for our country to end this stage and receive the letter of invitation to join OECD. I think it is also very important and I want to do it in front of everyone, namely to thank the team that was particularly involved in covering the technical alignment elements at the level of the Romanian state institutions with the technical staff of the OECD. I want to thank them personally, Secretary of State Cornel Feruță is not here, but he was the technical coordinator of the whole activity and, of course, I thank the entire staff of the Presidential Administration and the Government, who dealt directly with this process. Pension system reform is a very important goal and I must admit that, at the level of the Government, the attention must be focused so that Romanians benefit, after a lifetime of work, from an income that will allow them to lead a decent life. Yesterday, we held the first meeting of the PNRR Interministerial Committee. One of the first topics discussed was pension system reform. As such, it is a PNRR target, it is part of the set of reforms that the Government must implement so that it can draw the money available to our country through this program. We will continue to pay all the necessary attention to make sure that this reform is carried out.

Reporter: One of the recommendations of the OECD report makes it very clear that immovable property taxes should be increased, precisely to reduce the budget deficit. When could this happen the soonest and what would be the new ceilings? Thanks.

Nicolae-Ionel Ciucă: As we pledged and said when we presented the programme for government in the Parliament, the Romanian citizen is at the centre of our programme for government. Therefore, I would like to emphasize that, we are currently focusing our attention on increasing the living standards of our citizens and we will do our best that citizens pay the taxes they afford. As such, at the level of the Government, we will do everything humanly possible to continue to increase investments and thus ensure economic growth, and for Romanian citizens to be able to benefit from them. Thank you!

Dan Cărbunaru: Thank you too, Mr Prime Minister. Mr Prime Minister, Mr Secretary-General, the press conference draws to a close now. Thank you very much!

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