Academic journal article Contemporary Readings in Law and Social Justice

Measures of Economic Convergence Factors in Romania in the European Union

Academic journal article Contemporary Readings in Law and Social Justice

Measures of Economic Convergence Factors in Romania in the European Union

Article excerpt


Romania's integration, like any other member country of the European Union, implies the fulfillment of economic and political conditions. If the political criteria are not considered to be a major problem, economic criteria are still met, even if there is some progress in economic reforms. Compared to the some EU countries, there are still large differences in income per capita, high inflation rates (in fact the biggest). We could add the growth of the poorest stratum of population, social cohesion rather precarious, unstable financial system, declining social indicators and some weak government.

Keywords: reform, investment, loss, inflation, market

1. Introduction

The strategic objective of this period being stable economic growth as a part of the European Union, economic reform policies must lead the Romanian economy to a market economy able to face a free competitive environment. What characterizes the Romanian economy in transition is the lack of longterm stabilization. If the macro monetary policies have an effect in the short term and the medium-term fiscal, only reforms in the real economy may effect on long-term. Therefore it is necessary a long-term approach, combining fiscal and monetary measures in the short and medium with a coherent set of structural reforms. In the following years the Romanian economy must attain a sustainable stabilization stage to enable to base development directions will continue the structural reforms needed. It is obvious that the integration process within the EU will be continuously reviewed, revised and updated according to the results obtained during the course of his. It was necessary to establish a lasting institutional mechanism that would be able to formulate, analyze scenarios and to pursue the reform process and to assess the consequences of accession measures.

1.1 Social Protection Measures to Reduce Social Costs

Romania's medium-term objective is to create a functioning market economy, being compatible with the principles, norms, mechanisms and policies of the European Union. The long term objective is to stabilize an economic growth through macro and micro policies which ensures a sustainable growth by satisfying all the conditions and the criteria for joining the European Union (inflation, interest rates, exchange rate fluctuations, foreign debt - within the limits).

Sustainable economic growth is achieved by stimulating inward investment from foreign sources, macroeconomic policies for price stability and exchange rate, restructure the economy in order to increase competitiveness and reduce unemployment, develop human resources and environment by promoting green technologies for nondestructive environment.

Macroeconomic stabilization is essential for recovery of the Romanian economy to stable growth. This is achieved by macroeconomic policies that ensure tolerable levels of fiscal deficits and balance of payments, lower inflation, creating a profitable business by economic structural reforms and by continuing the development of the private sector.

Rising unemployment and falling incomes due to economic recession and restructuring measures necessary reform process led to declining purchasing power of the population and implicitly an increase in poverty, phenomena which, on the one hand, affect the development of internal market, on the other hand, favors the development of economy. Social protection measures target the poorest population: use of existing resources to support social consequences of the closure of loss-making companies (private or public capital) and not for maintaining the function of these companies, replace price subsidies by ensuring a minimum level of income of the poor, support the development of small and medium enterprises capable of achieving an increase in employment and a revival of the real economy.

Macroeconomic stabilization policies are effective in the short term, at best average, but lose their effectiveness in the long term, if measures are not supported by structural adjustment in the real economy. …

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