Romania's Public Debt Compared To The European Union Member States

Abstract

Through this paper, I aim to highlight the level of public debt as well as the evolution of macroeconomic indicators, in line with the financing policy of the Ministry of Finance regarding the mobilization of resources necessary for the implementation of the financing plan. The main objectives regarding government public debt aim to ensure the financing needs of the central public administration's budget deficit, while minimizing medium and long-term costs; limiting the risks associated with the government's public debt portfolio, and developing the domestic government securities market by maintaining the foreign exchange reserve at a level covering up to four months of gross financing needs.

The purpose of this scientific endeavor is to emphasize the importance of keeping the public debt ratio under control, promptly reacting to changes in the market context and investor behavior, increasing individuals' accessibility to purchasing government securities within the two dedicated programs TEZAUR and FIDELIS within an annual ceiling.

Considering the aforementioned issues that target Romania's public and strategic interest in ensuring the sustainability of gross financing needs in the domestic market, which is 100 billion lei, and the estimated amount to be attracted from the external market is approximately 12 billion (equivalent) euros, through Eurobond issuances within the MTN program, drawdowns under loans contracted from international financial institutions (IFIs) and the European Union, including the PNRR loan component.

If the debt is excessively high, especially as a percentage of gross domestic product (GDP), this may signal difficulties in meeting financial obligations, which could lead to economic instability and significant exposure to exchange rate risk.