“I smiled when I heard some say that accession is good for Romania”

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Shortly after Romania’s accession to the Schengen area, the first effects are already visible, and they generate heated debates. The economist Radu Georgescu recently published an analysis on Facebook, in which he draws attention to a paradox: while free movement facilitates our access to goods and services from other countries, this can accentuate the vulnerabilities of the Romanian economy, especially in the context of a trade deficit already worrying.

“We can already see the first effects of Schengen accession. The resorts in Hungary and Bulgaria are full of Romanians. I smiled when I heard some say that joining Schengen is very good for Romania’s economy. I am an economist. My obligation is to understand the economic impact of events. After joining Schengen, I explained that the free movement of goods and people is economically beneficial only for countries that export more than they import. Romania has the largest trade deficit in the EU in relation to GDP. That is, we import much more than we export”, draws attention to the economist.

According to him, another sector affected by this dynamic is tourism: “In tourism, we are even worse. According to the BNR, Romanians spent 4 billion euros abroad more than foreigners spent in Romania. You know what’s funny? There is a country on planet Earth that also has a large trade deficit. This country is called the USA. To protect domestic production and help local companies, the Americans want to introduce, in 2025, tariffs of at least 25% on all imports. But wait a minute… Americans want to protect their economy?

And we are happy that we will consume even more of the import? I guess Americans know some economics. The top 3 economics faculties in the world are in the US. Romania does not have any economic faculty in the first 100.”

In closing his post, Georgescu offers an interesting reflection: “We are influenced by 2 laws: Gravity and the economy. In the Universe, all things move because of gravity.

On planet Earth, everything is moved by the economy. That’s why it’s very important to understand how the economy works.”