Speeches & Transcripts

Remarks by Cyril Muller, Europe and Central Asia Vice President, at the Signing of Memorandum of Understanding between Government of Romania and World Bank

January 11, 2016

Cyril Muller, Europe and Central Asia Vice President Signing of the Memorandum of Understanding between Government of Romania and World Bank Bucharest, Romania

As Prepared for Delivery

There is much for which Romania should be proud, and what a difference five years can make.

In five years, Romania has managed to pull itself out of the grips of the global financial crisis, and in 2014 and 2015, attained one of the highest growth rates in the EU. With disappointing growth rates around the world, Romania’s growth rates continue to exceed expectations, with upward revisions to growth projections through 2018, outperforming not only its EU counterparts in the west, north and south, but all the countries on the European continent, including Turkey.

While continued prudent stewardship of the economy will be key, Romania should be proud of its performance thus far.  Romania’s fiscal consolidation has been nothing short of remarkable, with difficult macroeconomic adjustment resulting in a drastic fall in the fiscal deficit from 7.3 percent of GDP in 2009 to 1.9 percent in 2014. Romania is progressing well along this sometimes painful path towards for more inclusive and sustainable growth, but making difficult choices for the greater good can often bring a great reward. Increasing growth rates in Romania have allowed a clean break from the post-crisis trends of increasing levels of poverty which stubbornly lingered through 2012 as the economy adjusted to the post-crisis realities. The Romanian authorities should be proud that growth has been shared with its poorest citizens and poverty rates are expected to further decrease in the coming years. With Romania’s continued reform efforts, EU convergence and more inclusive and sustainable growth are within reach.

The World Bank acknowledges and welcomes the successful economic efforts of the Romanian authorities in the last years. Moreover, we reconfirm our position as a supportive partner in implementing the structural reform agenda in Romania aiming at continued and sustainable economic growth and EU convergence.

Again, what a difference 5 years can make.  The World Bank with the support of the European Union first launched a new way to provide technical assistance, as embodied in the previous Memorandum of Understanding. In the five years since then, Romania was able to grow this program to the layout in the Bank and to leverage knowledge worldwide to help develop partnership with the World Bank to establish a modern public administration and support structural reforms. 

Romania has become a model of engaging with other EU member states in a wide spectrum of sectors and cross-cutting themes. The World Bank has supported the Government design its EU operational programmes and national strategies, including on early school leaving, lifelong learning, tertiary education, active ageing, and social inclusion and poverty reduction. Thus, helping the preparation for the 2014-20 EU programming period and supported Romania in meeting EU ex-ante conditionalities.  In five years, Romania’s absorption of EU funds grew by leaps and bounds, reaching over 70% by the end of 2015.  The strength of the partnership between the Bank and the Government of Romania allowed a great many achievements, of which the Romanian authorities and the Bank are proud. 

One example of such work is the first online platform for paying taxes in Romania launched in 2014 to decrease the cost of compliance while easing the way of paying taxes. This was part of a 23-month World Bank engagement establishing a Delivery Unit (DU) in the Prime Minister’s Chancellery. Its mission: Get better results quicker in four priority areas, including tax administration. The DU estimated that they could save the taxpayer up to 12 days a year of waiting at the tax office. The implementation of the platform also led to the introduction of an innovative, SMS-based citizen feedback mechanism to evaluate the quality of public services in Romania. This was the first time the Romanian Tax Agency sought proactive feedback on its services. (In the era of booming technology and online services, the citizens welcomed it. Close to 40% responded and 86% percent of citizens report an improved perception of tax services provided in Bucharest.  More broadly, this exercise can be considered the trigger of the start of fundamental changes in the Romanian public administration – to make government more responsive to the needs of its citizens. The DU showed a modern way of doing things, with a data-driven approach focused on the feedback and the constant changing needs of the citizens, by using innovative tools and modern technologies.]

It is clear that Romania has embraced the new way of doing business and plans to roll out the innovative approach nationally.

Under this new Memorandum of Understanding, the partnership between Romania and the World Bank aims to strengthen and accelerate this path to a modern European administration, and yield even greater results to benefit all Romanians.