The study, conducted by a group led by the first vice-governor of the National Bank of Romania, Florin Georgescu, recommends “legislating and implementing a progressive tax on the global income and assets of citizens” after analyzing the national wealth per capita and the financial and non-financial assets of the population. In Romania, the authorities have not published an indicator of national wealth since 1990.

The savings of 59,500 Romanians are 100 times greater than the deposits of another 14.1 million citizens

The financial assets of the population increased significantly, namely by 8 times (by 112 billion euros). They are strongly polarized, this characteristic is demonstrated by the distribution of deposits, so that 0.4% of depositors (59,500 people) at the end of the III quarter of 2022 accumulated 26% (64.6 billion lei) of the total amount of deposits of citizens, containing an average of 1.08 million lei per person, corresponding to the equivalent of 220,000 euros.

At the opposite pole are 99.6% of depositors (14.1 million people), who own 74% of deposits, the average amount of savings of these people is 11,000 lei, which is equivalent to only 2,200 euros.

Non-financial assets represented by goods such as housing, various structures, agricultural/forest land, furniture, automobiles, other types of vehicles, jewelry, paintings, as well as durable goods for various purposes.

Financial assets these are cash, bank deposits, shares and stakes in various companies, accounts receivable, their total amount reduced by the amount of payable liabilities (including bank loans)

The population’s cash in euro equivalent grew 12.4 times (from 0.9 billion euros to 11.2 billion euros), faster than the savings of the population in banks, which grew only 9.1 times (from 6 billion euros to 55 billion euros ).

The reasons for the significant increase in cash also lie in the growing tendency of the number of citizens (including through enterprises) to carry out, against the background of the vagueness of the legislation, unrecorded economic transactions, the income received at the same time cannot be justified in relation to banks for the purpose of creating hoarding of deposits in various forms, many of which are new, and feeding, in a closed circle, the informal economy

National wealth per capita increased in the period 2003-2019 to EUR 32,700, 2.9 times / The EU-27 average is EUR 102,000, which is 3.1 times higher

According to this indicator, Romania ranks 24th among the 26 EU countries (immediately ahead of Bulgaria with 28,300 euros per inhabitant and Greece with 21,200 euros, Poland has a concession regarding reporting to Eurostat

The first EU-27 countries in terms of wealth per capita with values ​​of the indicator significantly exceeding the European average are Luxembourg – 286 thousand euros, Denmark – 212 thousand euros, Austria – 187 thousand euros, the Netherlands – 176 thousand euros and Germany – 163 thousand euros.

Non-financial assets per inhabitant

The level of these assets increased by 3.2 times (from €12,000 in 2003 to €38,000 in 2019. The EU-26 average is €100,900 per inhabitant, correspondingly 2.7 times higher than in Romania, we we are in the penultimate place in the European hierarchy (25th place out of 26 countries), just ahead of Bulgaria

Luxembourg, Ireland, Austria, Denmark and Sweden take the first place in this parameter

When measuring national wealth, the World Bank, IMF, OECD pay attention to such components

• 1. Product or physical capital (railways, ports, housing, cars, infrastructure)

• 2 Financial capital (bank accounts, shares, bonds, money claims, etc.)

• 3 Natural capital (agricultural land, mineral deposits)

• 4 Human capital (includes the collective knowledge, skills and abilities of the population resulting from lifelong learning)

• 5. Social capital (includes the norms and behaviors that determine the interaction between members of society, including foundations such as rights, laws, social integration and governance)

Financial wealth per inhabitant

The indicator shows a negative level, actually representing a net financial debt per inhabitant of 5,100 euros (7.7 times growth), this debt reduces the national wealth of the country

Since non-financial wealth per capita is €37,800 and financial wealth is minus €5,100, the total national wealth per capita is €32,700, as previously stated

These developments reflect our country’s growing dependence on external financing, including foreign direct investment, which indicates systemic vulnerability

National wealth per capita – ratio with GDP and public debt

In the Eurozone (which dominates the EU), national wealth (+3.2% annual average) is growing faster than gross national disposable income (GNI). In Romania and other developing European countries, the opposite is true: GNI grows faster than national wealth (for example, in the case of Romania, national wealth increases by 6.9% and GNI by 9.5% on average per year

At the same time, the public debt in euro equivalent grew in the same interval at a rate of 15.2% per year, which

is 1.6 times more than the annual growth of VNBD. The reasons for such events are also represented by tax evasion and the informal economy.

Proposed solutions, according to the authors of the study

• Development of a sectoral economic, demographic and demographic policy to increase the level of education of the population with a favorable effect on the components of national wealth

• Actions of local competent authorities regarding inclusion in the national wealth of land and buildings (after completion of the cadastre, as well as natural resources (based on their identification and assessment in accordance with European practice)

• Digitization of state institutions, especially the Ministry of Finance, ANAF and their integration into the system of protecting national wealth from its erosion due to losses caused by subjective factors.

• Legislation and application of a progressive tax on global income and wealth of citizenswhich will create an opportunity to increase the transparency of individual wealth and significantly reduce economic and social disparities

• Strengthening payment discipline in the economy and significantly reducing tax evasion, these measures will contribute to increasing the efficiency of the real sector of the economy, increasing state revenues, reducing the budget deficit, slowing the growth of public debt and preventing the erosion of financial assets, increasing their volume and, implicitly, the national wealth of the country

See the summary of the study