If we sit askance and judge fairly, as the wise proverb of the elders urges us, we know, we intuitively feel that Valentin Lazeya is right, after which we decide to rebel: what do you mean, he is right? What, I have a car, I have Louis Vuitton bags? Do I go on vacation abroad (well, sometimes to Bulgaria, but not because it is cheaper there)? And then why call me – I! – that I have lived beyond my means for the past seven years? The Romanian is poor and lives in poverty, he is the poor of Europe, what do you mean he lives beyond his means?

Christian FeleaPhoto: Hotnews

But Valentyn Lazea, standing in front of the open accounting books of his homeland, sees on one page our incomes, and on the other our expenses of all who make up this country Romania, and calculates: what we produce (and consume or export), what remittances from Romanians go in the world, come into the country, what foreign investments are made in Romania, compared to what we import to consume and also produce, how much we pay for holidays around the world or the investments we make abroad, what foreign investments return their profits – and, unfortunately, notice that there is a deficit, the so-called current account.

Current account compared to 9 months of 2023 and 2022. Source: cursdeguvernare.ro

From January to September 2023, Romania’s current account deficit is slightly more than 16 billion euros – that is, in the first 9 months of the current year alone, Romania spent 16 billion euros more than it allowed itself as income. Something better than last year, when in the same 9 months we spent 21.147 billion euros more than we could afford. There is also the effect of living beyond one’s means: Romania’s external debt has reached 161.262 billion euros. How did it get here? How is that possible? Is there anything else we can do to make the situation worse?


We know that the well-known indicator of GDP – gross domestic product, which is referred to in many governments’ plans, such as budgeting, is €282.4 billion in 2022. For various reasons, which we no longer know, I repeat, because I wrote about it in other editions, the state’s indicators for the collection of revenues for the budget in recent years amount to 27% of GDP (that is, about 76.3 billion euros).

According to the financial stability rules of the European Union member states, the European Commission recommends that the budget deficit does not exceed 3% – a provision that we actually no longer meet since the Liviu Dragan-sponsored governments – a level that is considered sustainable because it has to be compensated by making loans by the state.

Thus, within reasonable limits, we could create a budget in 2022 of approximately 84.8 billion lei. This is not the case, because the budget deficit was 5.68%, that is, 2.68% of GDP more than it was reasonable to allow. In other words, the Ministry of Finance borrowed more money to finance the deficit than in a reasonable option.

In 2022, the Ministry of Finance is looking at two institutions to help it build the budget for next year, which is 2023, which is where we are now: the National Institute of Statistics and the National Strategy and Forecasting Commission. . Forecasters estimated GDP growth in 2023 by 2.8%, i.e. somewhere over 290.3 billion euros. Hence the new calculations: income to the budget – 78.3 billion euros; the planned budget deficit is 4.4% of GDP, i.e. spending 91 billion euros. These are all purely theoretical numbers (and I don’t want to go into details about nominal GDP, etc.) because, as we already know from the summer, the budget did not meet the planned indicators.

And what does the state do when accounting calculations do not work out? Borrow, of course! Why does he do this? Because it has already taken on the expenses: pensions, salaries, operating accounts of state institutions, investment co-financing (a minority, because the money comes mainly from the Union budget – European funds), investment financing (“Angel Saligny Plan”), provided financing to UATs, payment of interest on overdue foreign loans, etc.

At the beginning of November of this year, the economic growth forecast for 2023 was revised downward by the forecasting commission from 2.8% to 2%, and the budget deficit is apparently growing, by about 5.5%, according to the minister. of European funds Adrian Cachiu. Instead, the Forecasting Commission is very optimistic about 2024 (see here): economic growth of 3.4%, nominal GDP of €350 billion, average net salary of €950, inflation of 4.5%. Where will this wealth come from in 2024, after so many failures in 2023?

Simply, everything has an explanation, but will have corresponding consequences! The explanation lies in the economic theory called “wage-led growth” – WLG (see here the BNR study signed by Cezar Botel), that is, in short, the development of the state based on the acceleration of population growth incomes: the state stimulates the growth of population incomes (wages, pensions, other types of additional payments), which, related to the high taxation of these incomes, also increase state budget revenues, on the one hand, and on the other hand, encourage the population to consume, consumption, which is the engine of GDP growth.

The main supporter of this theory is the economist Christian Sokol, very influential in the PSD and during the time of Liviu Dragni and Marcel Čolaka, as you can see. At first glance, without any knowledge of economics, there are at least two main vulnerabilities of the WLG theory.

The first vulnerability: to increase the incomes of the population, a good option would be to have a budget surplus, but this is not the case for Romania, and then there remains the problematic option (in the case of Dambovice, a vicious one) of borrowing from foreign and domestic markets. Therefore, you undertake to increase the burden of foreign debt through direct action. The second vulnerability: an increase in population consumption, if it does not find an outlet in domestic production, increases imports for consumption and increases the current account deficit. It takes money out of the economy by lending it to other economies. You borrow from citizens’ pockets to put money in other people’s pockets, which gives you the benefits demanded by citizens who suddenly find themselves (through no fault of their own!) with more money in their pockets. The case of Romania, obviously.

In conclusion: WLG may be a theory with some merit, but its application in the case of Romania is comparable to a diet feeding cancerous tissue with glucose and protein. For those who doubt the correctness of my reasoning, consider the case of Greece in 2008-2012.


This afternoon, at the meeting of the Coalition, all aspects related to the Law on pensions, including sources of funding, were clarified. In this way, the Law goes straight to the Parliament, supported by the entire Coalition. At the same time, together with Mr. President Chuke, we decided to submit a project on combating tax evasion and increasing revenues to the budget as soon as possible. I assure the pensioners that we will keep our word! Pensions will be indexed and injustice will be eliminated by recalculation!! – Marcel Cholaku, the message was published on the Facebook account. –

Read the entire article and comment on it at contributors.ro