Personnel spending exceeds investment

“Romania”s main problems at the moment are an economy with higher consumption than output, and a budget that spends more on personnel than on investments.” This is the conclusion drawn by Giovanni Ravasio, the co-ordinator of the think-tank that advises the Government and Premier Tariceanu on all economic issues. Consumption rose by more than 11% in the first six months of 2005, while investments by only 7.6%. The budget has 5bn euros earmarked for personnel spending next year, some 70% higher than the total for investment projects. Ravasio adds that taxation needs to increase to fund infrastructure projects and address environmental issues. Ravasio worked for the European Commission for 40 years, where he closely monitored the macroeconomic development of the applicant states and is also deemed as being one of the masterminds behind the single European currency. Ravasio is now a member of the managing board of the Romanian Centre for Economic Policies, which comprises some of the finest Romanian economic theorists. “Romania”s economy is currently facing a slight overheating and there is a risk of this being aggravated in the near future. One thing is clear: steps are needed,” Ravasio told Ziarul Financiar. ZF