Budget Consolidation under Crisis Circumstances - the Romanian Experience

The paper focuses on the concordance between the fiscal consolidation strategy adopted and applied in Romania in the context of the current crisis, and the theoretical reference points used in the literature, targeting to highlight inconsistencies, explicative factors and its registered or estimated impact, as well as the rigors of a smart fiscal consolidation, and the formulation of some recommendations of public policy, useful for the decision bodies.

The first part of the paper analyses if the strategy for fiscal consolidation adopted in Romania met the rationality prerequisites, highlighting inconsistencies, their sources and modalities to avoid them in the future, as recommendations of public policy useful for Romania, as well as for other countries.

The second part of the paper starts from the need of a new vision in approaching the traditional fiscal consolidation, as showed out the current crisis. Taking into account that using fiscal stimulus for consolidation is not a viable solution for a large number of countries, it seems to be needed a new model of fiscal consolidation, „smart”, that would not affect education, innovation, research and development, as sources of increase in medium term.

Practically, not only the crisis, but also the complexity of nowadays socio-economical life leads to the impossibility to follow it using the appropriate tools for public budget incomes and expenses, the efforts needing to be integrated and channeled to different aspects, such as the performance of the public sector (its efficiency) and its management the social investments, the management of public sector intangibles and its rational and efficient exploit.

Starting from these considerations, we propose also a conceptual delimitation of the rigors of a smart fiscal consolidation, as support in order to analyze the reaction of the Romanian authorities, accentuating un-concordances in its explicative factor, as well as its influence factors and its estimated impact.

Based on the research results and taking into account the lessons to be learned during that crisis, using some financial positive reconsideration, according to the suggestions of a smart fiscal consolidation, reconsider the fiscal policy, in connection with prerequisites for smart fiscal consolidation.