The Rush to Modernize The Economy Is On In 2007

Romania owes its European Union accession on January 1st to the political vision in Brussels regarding the enlargement.

The EU changed radically its policy from gradual to fast forward enlargement, opening wide its doors to 14 new member states.
Ten of these acceded in May 2004, followed by Bulgaria and Romania a week ago, while Croatia and Turkey are on the waiting list.

That Romania was accepted by the EU on primarily political grounds does not push to the second place the economic criterion. As a matter of fact it gives it a salient position.
The background story is that for the past 17 years of transition Romania struggled with the chronic lack of efficiency of its economy, which came on top of the 50 years before of communist inefficiency.

Post-communist economic policies looked more like targeting to keep the patient barely alive, instead of arriving at his full recovery.
We all paid the price for that approach.

The industry was crushing, overstaffed and with businesses run at a loss due to inept management.
This in turn delayed investments, which made for too few new jobs to be created in order to absorb the people laid off.
Romania also lagged behind in opening up its economy, which only in later years was able to somewhat support the budget and the hike of the purchasing power of the national currency.

The current account deficit cut deep into our GDP for years in a row.
Though steadily falling, inflation stayed high, at 2.5 times the European average. Salaries were rising at a higher pace than job performance would call for.
The health and education sectors were starved for cash as budget resources where funneled to support an inefficient industry.

But the vicious cycle of negative events feeding on each other was broken by the remarkable dynamic performance of small and large Romanian companies, which operated in an often hostile economic environment.

The turnaround started in 2000, when Romania finally understood that not culture and tradition made it worthy of joining Europe, where historically and geographically belonged anyway, but economic performance.

Hence regulations were streamlined, waste channels were sealed up, and inefficiency was reprimanded to build a competitive business environment.
So we closed 2006 as the best year yet for Romania’s economy.

We came a long way, but there is still a lot of walk to walk before reaching the final goal.
We are already lagging behind.
The toughest times are ahead of us, while attempting to make our economy truly competitive.