The Importance of European Funding on Public Finances in Romania - Implications for The General Consolidated Budget of The State

The "health" state of the economy which will receive European funding is a key element in the efficiency with which these funds can be used, the effects that the injection of foreign capital entails are being significant at the macroeconomic level, since a Member state of the European Union eligible to receive finance capital can absorb a flow of up to 4% of GDP. The manner of the allocation of these funds is also a key component of efficient use of European funds allocated under the multiannual financial programming period. Annual indicative allocation corresponding to the seven years of a programming period allows to identify specific priorities for investment of these funds and the co-financing obligation incumbent upon the recipient state has the role to lead to a more responsible and appropriate use of these funds. However, the gradual release of these cash flows in the national economy may lead to a delay in the occurrence of short-term positive results for the economy, given that the allocation is made after approval by the European Commission of some strategic documents that the recipient state assumes to follow according to common objectives. Beyond the effort that the recipient state must make to become eligible for European funding, the longterm effects of the injection of capital into the economy are significant and certainly favorable to the economic and social development as a whole. One of the controversial issues on the opportunity of accessing European funding is represented by the financing cost that this entails. The problematic issues that the injection of foreign capital flows have on fiscal policy and their implications on the general consolidated budget of the state are complex and are a subject of debate among researchers in economics.