An analysis of the foreign deficit in Romania and in other European countries

Romania has maintained an external deficit continuously since 1990, which represents a vulnerability of the economy. The subject analysed is important because Romania is trying to keep under control and limit the negative effects of this imbalance, especially in the context of the process of joining the euro area, as well as for achieving sustainable development. The purpose of this study1 is to analyse the evolution of Romania's current account balance and financial account balance, along with their components, compared to those of other European Union countries. The methodology employed combines descriptive, comparative, and empirical analysis. The study shows that, in recent years, Romania has had one of the most significant current account deficits among the European Union countries. The research also shows that Romania has not received as much capital from abroad as other European Union countries. In addition, almost every European Union country has a specialisation that allows it to maintain a high positive balance in a sub-account, through which to counteract the negative balance of the other sub-accounts.