1. Romanian economy within the EU – A conceptual analysis Florin Bonciu, Ph.D. Bucharest June 14, 2016

2. Contents The wider context of analysis; Economic integration: prerequisites of success Comparing theory with reality: Central European countries and Romania; The need for a Romanian country project - Achieving the status of developed economy Conclusions

3. The wider context of analysis EU and the world economy. Where it stands, where it goes ? EU and Europeans. Recent perceptions. What about the future ? The need to talk more about people than about numbers, directives or scenarios …

4. In 40 years (1980 – 2020) the EU’s share of world GDP declined from 30 % to 15 % despite several enlargements

9. EU – what about the future ? We propose to shift the focus from: Unity in diversity to Diversity in Unity European Union is characterized by diversity. This diversity should become a strength instead of being a weakness.

10. Economic integration: prerequisites of success 1) A similar level of development; 2) A political will in favor of integration based on a large support from the citizens. In 2007 Romania had definitely the second (with over 80 % popular support) but (at about 30 % of the EU average GDP/habitant) lacked entirely the first.

11. The limits of the cohesion policy The cohesion policy has been designed to address exceptions and not entire countries. The cohesion policy is supposed to be implemented by the authorities of the member states. When there is no similar level of development a vicious circle appears.

12. Correlation between levels of development and efficiency and effectiveness of national authorities Developed countries = more efficient and effective authorities; Less developed countries = less efficient and effective authorities. In an objective way, less efficient and effective authorities can not act as those from developed countries and can not raise the less developed countries by themselves. – See next slide.

13. Baron Munchausen pulls himself out of a mire by his own hair (illustration by Oskar Herrfurth).

14. OECD – a proxy of the development level Central European countries became OECD members BEFORE their accession to EU: Czech Republic – 1995 Hungary - 1996 Poland - 1996 Slovak Republic – 2000. After accession: Estonia - 2010 Slovenia – 2010 Lithuania invited in 2015 Latvia invited 11 May 2016

15. The need for a Romanian country project In our opinion, Romania can be better off within the EU by adopting as a country project the Achieving of the status of developed economy based entirely on tangible indicators (infrastructure, housing, education, environment, health care, etc.) Best practices are widely available in the EU.

16. Conclusions In order to achieve sustainable growth and participate as a full member of the European Union Romania should become first a developed state; Particularly given the current geopolitical context EU and US should assist Romania in becoming a market economy, capitalist developed state; Remember East – West Berlin or North – South Korea; or the reunification of Germany …. New approaches and mechanisms are needed but they are fully within reach.