But, by this measure the. Iulian Vacarel and the co-authors, „ Finante publice ”, The 6-th Edition, Publishing house Didactica si Pedagogica,. Bucharest, 64/ on public debt, approved by Government Decision no. .. Văcărel Iulian, (coordonator), Finanţe Publice, Editura Didactică şi Pedagogică, București. Finantele publice sunt necesare, în mod subiectiv şi obiectiv  Văcărel Iulian , Finanţe Publice, Editura Didactică şi Pedagogică ,;. Văcărel Iulian.
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Journal of Economic Development, Environment and People. Volume 4, Issue 4, The article presents an analysis of the way public debt operates in Romania, in the context of states economies trends, of complex and topical financial environments. In the context of a functional market economy, the issues faced by certain states involving high public debt levels or potential budgetary pressure risks converge towards the idea that public finances sustainability need s to be a major challenge at the level of public policies.
Considering this situation, the adequate policies to tackle public finances sustainability need to have, as a launching base, the overall strategy of the European Union, focused on the three component parts, namely abatement of public debt, increasing productivity and employment and last but not least, reforming the pension and healthcare systems. To ensure reasonably sustainable public debt levels, EU member states need to attain medium term strategic budgetary objectives, that would ensure a downward trend of public debt, a condition which can be fulfilled by compliance with budget policies rules, which ground development in the macroeconomic framework.
E60, E61, H60, H Current economic context of public debt.
The financial crises at global level during the latest 25 years resulted in the negative impacting of governments’ capacity to reimburse accumulated debt, which triggered bot h budget difficulties and economic disturbances. At Lulian and world level, financial stability is upset by the alarming increase of states ‘ debts.
Thus, as compared tothe year of the previous world financial crisis, at the end ofdebts at global level increased by 57, billion dollars, reaching a level close tobillion dollars.
Public and Fiscality: Facts and Unknowns : International conference KNOWLEDGE-BASED ORGANIZATION
Public debt managers operate nowadays in sophisticated and complex financial environment sand a global capital market can generate numerous benefits for example, easier access to a larger capital portfolio at a lower cost, more effective internal capital markets and the possibility to better adapt risk through new financial instruments. Nevertheless, public debt strategies may become publce vulnerable when confronted with unforeseen events, such as private sector balance deterioration, which can result in tax ationfinancial and economic crises.
Economic shocks may have, individually or cumulatively, an impact on external public debt of an economy, which leads to the vulnerability of the vadarel debt strategy, which in vacareo may impact on global economy and, last but not least, may seriously deteriorate a state’ s financial situation. Recent examples taken from emerging economies showed that shocks may turn into financial crises, which can make public management difficult and have significant budgetary consequences.
Public and Fiscality: Facts and Unknowns
In this context, states’ needs are covered, to the greatest extent, from taxes, fees, contributions, take-offs, which the state collects from tax payers. In many instances, this kind of resources ordinary ones are insufficient and then, both the state and the local collectivities are made to approach a different type of financial resources, known as extraordinary onesthat is public loans. In the instance of an operational market economy, the state uses this financing source to promote new investments, meant for modernisation, as well as for innovation of existing assets, a context in which the public debt notion emerges.
One of the basic principles of state budget establishment as of any kind of budget, for that matter is the budgetary balance, but this is not obtained, most of the times, automatically, by covering budget expenditure s with budget revenues, in such situations we say the budget is established with a financing deficit,  called budgeting deficit.
Both state budget deficit and public debt of the state are established in a rather wide sense and without considering al l influence factors which can modify their size during budget execution . In our country, the concept of public debt was reconsidered in relation to the new realities and transformations having emerged after the events of Decemberwhich created the social and institutional framework required for the development of a market economy. Up to now, the public debt notion went through the following defining process : Public debt is made of the central administration’ liabilities and includes the following categories: The state loan is a defining element of public debt, as provided in the specialised literature and in the legal texts.
It is important to mention that engaging public debt involves a series of risks, generated pulbice by general and by specific pub,ice .
Among general factors acting in the financial puublice, the special regulations providing different conditions for certain loans are extremely important.
Another series of general risk factors is that of the high ly complex issues, which may emerge in the unfold of current processes. Furthermore, the special conjunctures on international financial markets may negatively impact on state loans contracting conditions. Structural factor s may be, in certain instances, risk generators when the public debt management system component parts are not sufficiently regulated. Specific risk factor s in the field of public debt refer to the conditions in which a certain loan is contracted or to the decision that the state guarantees a certain loan.
The decision to make a sub-loan involves recovery risks. The foreign exchange risk is another relevant issue, which needs to be considered when concluding a foreign currency loan, whether this is conducted on the domestic or the external capital market.
Inflationist phenomena, known as factors eroding public debt, also have a negative influence on budgets, especially in the instance of external public debt, since their effects impact stronger on non-convertible currency than on convertible ones.
Considerations on public debt sustainability. Furthermore, legal provisions  established certain principles grounding the implementation of an efficient management of public finances, respectively of the public debt which would serve long term public interest, of an economic prosperity, as well as to anchor fiscal-budgetary policies in a sustainable framework.
In this context, national institutions having competences in this field are under the obligation to prudently conduct the fiscal-budgetary policy and to manage budgetary resources and liabilities, as well as the fiscal risks so as to grant the sustainability of the fiscal position, on medium and long term. Public finances sustainabilityfrom this perspective involves Government being able to manage, in the medium and long run, risks or unforeseen situations, without being forced to operate significant adjustments of the expenditures, revenues or budgetary deficit swith destabilising effects from the economic and social point of view.
In modern times, these issues are divided into four large categories: From the analysis of the above, there results that public debt sustainability is a concept inter-relating with public finances sustainability.
The Romanian economy, as a component part of world economy, displays the same trends, respectively an increase of public debt in a rhythm superior to the economic growth one, so that public finances sustainability needs to be a major challenge at the level of public policies .
Adequate policies to tackle public finances sustainability challenge s need to be grounded in the overall EU strategy focussed on the three component parts, namely, abatement of public debt, increase of productivity and of employment and reform of pensions and healthcare systems and the main causes of the problems relating to public finances sustainability confronting various member states.
To ensure sustainable levels of public debt it is important that EU member states understand certain medium term budgetary objectives, which would result in a descending trend of public debt, through strict compliance with budgetary policy .
Analysis of public debt sustainability. The analysis of public debt sustainability is meant to offer answers and solutions relating to the capacity of a government to maintain the same direction of expenditures and revenues or, in case they have to make an adjustment, to turn government public debt constant as a proportion of the GDP.
Thus, the analysis of public debt sustainability is a complex exercise, with multiple implications and which needs to consider the following : The following chart is an illustration of the public debt level evolution, of the Romanian GDP, in the period The analysis of this data shows that inas compared topublic debt went up in a rhythm superior to the economic growth one, a situation in which public finances sustainability needs to be a major challenge at the level of public policies.
The evolution of public debt percent of the GDP indicator for the period —  is shown in the following chart, as follows: The evolution of public debt percent of the GDP indicator for the period —.
Furthermore, it can be seen that certain significant increases of this indicator were also recorded inrespectively Afterthe weight of the public debt in the GDP had an upward trend, reaching the maximum The evolution of the indebtedness at UE member states level for the period is further presented, in order to offer an overall image and to be in a position to assess the stage reached by Romania, as follows: The evolution of indebtedness of EU member states, in the period — The analysis of the above-mentioned data shows that, even if the indebtedness of Romania continues to be lower tha n the indebtedness of other European national economies, its tendency to accelerate is worrying, which makes it necessary to analyse sustainability of public debt and of budget deficits.
As of its accession to the European Union, Romania had one of the lowest public debt level within the EU The periodcharacterised by higher budgetary deficits, practically lead to the doubling of the public debt. According to the data listed by EUROSTAT in the period —the average level of public debt within EU 28  had an upward trend, from 11, million euro to 12, million eurorespectively an increase by 7.
The level of the GDP within the EU 28 had a similar, but less abrupt tendencywhich only went up by 3. Thus, the public debt increase rhythm, at the level of the EU 28, exceeded the econom ic growth rhythm. The relation between the GDP and budgetary deficit highlights to what extent economic development is sustainab l efrom the perspective of resources and debts.
The data in figure 4 show that the highest deficits in relation to the GDP were recorded in by Slovenia and Greece. The countries with the highest budget excedents were Denmark in and Luxembourg in Furthermore, two member states had budget excedents on the overall analysed period, respectively Germany with a peak in and Luxembourg with a peak in Inthe deficit exceeded Evolution of the ratio between the deficit and the GDP in EU member states, in the period — As compared topublic deficit in relation to the GDP decreased in in 10 member states, the Netherlands and the United Kingdom had the same deficits in as inEstonia and Denmark switched from a deficit in to an excedent inGermany recorded a little higher excedent in than inwhile the excedent of Luxembourg had slightly decreased from 3 until T he other 12 EU member states had higher deficits in as compared to Considering the above-mentioned analyses, it can be concluded that the public deficit indicator related to the gross domestic product of our countryhaving a level of 1.
A s it can be noted on the overall analysed period, the population of Romania had a downward trend, so that at the end of there were In this context, with the Romanian population permanently decreasing, while the volume of the country’s public debt increased on a continual, there follows that the population indebtedness had an alert rhythm, reaching at the end of the value of 14, In order to maintain public debt at an acceptable level, it is necessary that the economy of Romania focuses efforts and financial resources to enhance the gross domestic productby developing both the industrial sector through investment in intelligent technologies, which would generate added value, and through the agricultural sector ecological agriculturebut also by developing constructions and services for population.
Even though from the point of view of public debt and of the deficit weight in the GDP, Romania is under the limits provided in the Maastricht Treaty and among the first countries in EU as to the standard of living, a significant gap is found in relation to other EU member states, our country holding the last but one place. The increase of gross domestic product may be reached by abating taxation pressure over economyespecially over the productive sector of all economic branchesas well as by increasing the collection degree of taxes and feeswhich can generate financial resources, funds which need to be oriented with priority towards investment making in the production sector of the Romanian economy.
From this perspective, the openness of Romanian economy shall be influenced in its evolution only by the exports volume, which, in turn, shall depend on the variations of the demand and offer on international markets and on the gross domestic product dynamics.
Economic openness is one of the actual convergence criteria, while actual convergence is obtained by sustained macro-economic policies. The statute as a member state of a monetary union triggers the opening degree of the economy by percent swhich in turn influences the dynamics of the GDP . In this respect, we consider that the moment Romania fulfils the economic growth conditions, it will benefit from acquiring the statute of a member state of the European Monetary Unionwhich will result in an enhancement of the country’s economic opening degree and which will influence the gross domestic product dynamics.
Furthermore, the GDP growth, the increase of exports volume and the diminishing of imports shall result both in the increase of the international foreign currency reserve of the country and in the enhancement of the capacity to reimburse external funds borrowed on the capital markets and from international financial and banking and non-banking institutions IMF, EIBthe World Bankthe Bank of Japan as well as the diminishing of the economy need to borrow funds.
Current economic context of public debt The financial crises at global level during the latest 25 years resulted in the negative impacting of governments’ capacity to reimburse accumulated debt, which triggered bot h budget difficulties and economic disturbances.
Analysis of public debt sustainability The analysis of public debt sustainability is meant to offer answers and solutions relating to the capacity of a government to maintain the same direction of expenditures and revenues or, in case they have to make an adjustment, to turn government public debt constant as a proportion of the GDP.
The evolution of public debt percent of the GDP indicator for the period —Source: The evolution of indebtedness of EU member states, in the period — Source: Year Public Debt mil.
Population of Romania mil.