Concordia: Private environment needs transparency, predictibility and fiscal-budget discipline

The private sector needs transparency, predictibility and fiscal-budget discipline, while building a budget on realistic bases represent an important step in this direction, say representatives of Concordia Patrons' Confederation in a message to decision makers.   According to the source, budget rectification is a correct and transparent action, both for investors and all of Romania's partners.   In the present context, this process is needed to ensure the best functioning of state institutions and to increase the predictibility level in front of creditors, Concordia mentions.   At the same time, business representatives referred to the cost of the lack of predictibility. “We come after a period in which budget execution exceeded the initial budget, offering unpleasant surprises to investors. This kind of behaviour has direct and measurable consequences: it affects the investors' confidence and determines the increase of Romania's financing costs,” the press release shows.   According to the analysis, two worrying signals illustrate the gravity of the situation. The first one is the cost of Romania's loans, above that of Serbia, a country which does not benefit from the investment grade, while the second is the share of expenses with interest rates, which rank Romania third in EU.   “The first one: Romania makes loans in euro for 10 years, at costs of about 6%, while Serbia, a country which does not benefit from the investment grade status, can access financing at 4.6%. This difference is worrying and not healthy for sustainability of Romanian public finances. The second: the share of expenses and interest rates is estimated to reach 7.5%, at the end of 2025, placing us third in EU, after Hubgary and Italy. These countries have a share of public debt in GDP higher than Romania. We pay more for a lower debt,”the organization mentions.   Concordia representatives say that economic literature shows that fiscal sustainability depends on the relation between interest rates and the economic growth.   “When the cost of debt exceeds GDP increase, every loan becomes a higher burden for future generations. In Romania's case, the problem is not the absolute value of debt, although it is on the rise, but the high cost of financing which erodes the fiscal space available for productive investments. As for budget rectification, the most ample adjustments were made for the interest expense category (+29%), being followed by expenses with personnel transfers, where percentages are lower (about +4.5%)”, the mentioned source pointed out.   Considering the figures of budget execution at the end of August 2025, the new targets represent a connection to the reality of expenses assumed by Government since 2024.   “In the income area, the incomes dynamic was good, in general, but it comes on te background of higher taxes or the elimination of fiscality as of January 1,2025, while in 2024 a fiscally restrictive policy was promoted. The share of incomes from taxes and contributions reached 27.3% of GDP at the end of 2024, closer to 2013-2015 levels. Although at the end of 2025 we will probably exceed 28% of GDP, the deficit continues to be a major problem. It is obvious that the important problem comes from the current public expense chapter, which has grown more than incomes, generating instability,” the document points out.   On the other hand, budget execution at the end of August 2025 also brings good news about responsibility. Monthly staff expenses remained 14.5 billion lei starting April, recording even a slight drop, Concordia mentioned. “In comparison, 2024 started with 11.8 billion lei, in November we had 14.3 billions and in December 16.6 billions. A better management was noticed for expenses with goods and services, where the increase against the same period of the previous year was only 4%, below the inflation rate. Such evolutions show the fact that fiscal discipline is possible and there is room for efficiency, without compromising the functioning of the state,” the press release shows.   Concordia Patrons' Confederation represents 20 of the most important sectors of Romanian economy and is a representative partner of social dialogue at national level. With a contribution of 30% of GDP and over 450,000 employees in 3900 large and small companies, with Romanian and foreign capital, Concordia is the only organization in Romania member of BusinessEurope, the International Organization of Employers and Business at OECD (BIAC).