Well, one of the Romanian welfare system's biggest long-term risks is low natality leading to an aging population. So, reducing benefits for new-born children seems penny wise but pound foolish.
Still, given that the welfare system is mostly financed out of current taxes, if the population can be stabilized (or even increased), it can be self-sustaining. We are not in a good place right now, but we were in a much worse place 10 or 20 years ago, so there are reasons to be hopeful things can be turned around.
Also, lots of people are leaving exactly because welfare is not good enough in the country (while the legal benefits are nice, often times the quality of the actual services is well below par). So again, I don't think reducing welfare will have a positive impact, in the longer term.
> one of the Romanian welfare system's biggest long-term risks is low natality leading to an aging population.
That is true for every welfare system based on social responsibility structure. Society pools money to pay for retirement of everyone at a fixed rate. Young people are entered into the system to fund old people's retirement today and promised that they would get funded by young people tomorrow.
This works as long as enough young people enter the system at intervals to continue the payouts except when that doesn't happen due to demographic collapse or some other reason. Think of a legal pyramid scheme.
> if the population can be stabilized (or even increased), it can be self-sustaining
Not necessarily. Many countries underestimated the life expectancy of people retired and had to run on a deficit as a result so they are taking money from pensioners of future today. They had to fix this by increasing the retirement age, cutting down benefits, removing benefits for people with private savings, etc.
They will only keep cutting. If not, it will fall.
> lots of people are leaving exactly because welfare is not good enough in the country
I see unemployment among youth as the major reason. Welfare won't be funded by unemployed.
> So again, I don't think reducing welfare will have a positive impact, in the longer term.
Reducing unsustainable welfare will because money can be used elsewhere to create jobs, attract businesses, increase employment, etc.
Still, given that the welfare system is mostly financed out of current taxes, if the population can be stabilized (or even increased), it can be self-sustaining. We are not in a good place right now, but we were in a much worse place 10 or 20 years ago, so there are reasons to be hopeful things can be turned around.
Also, lots of people are leaving exactly because welfare is not good enough in the country (while the legal benefits are nice, often times the quality of the actual services is well below par). So again, I don't think reducing welfare will have a positive impact, in the longer term.