Green Finance in the European Union and Romania: A Normative-Institutional Analysis of the EU Taxonomy and its Implications for Emerging Economies

Green finance has become an essential component of modern financial systems, situated at the intersection of public policy, financial regulation, and sustainable investment practices. This paper analyzes the conceptual evolution and institutionalization of green finance, with a focus on the European Union framework and its implementation in Romania. The study provides an original theoretical contribution by proposing a normative-institutional typology of green financing. The paper establishes the functional dimension, the instrumental dimension, and the institutional-systemic dimension, which can be applied to the analysis of any emerging economy. The results highlight the transition of green finance from a restrictive, environmentally-focused approach to a systemic paradigm that integrates ESG criteria and supports the structural transformation of the economy. Special attention is given to the EU Taxonomy (Regulation (EU) 2020/852), analyzed as a normative instrument with informational, allocative, and transformative functions. Although it contributes to increased transparency and the reduction of greenwashing risks, its effectiveness in redirecting capital flows remains uncertain, in the context of compliance costs and the risk of over-regulation. The case of Romania shows a gradual but uneven development of green finance, supported mainly by public funds and European instruments, while private sector involvement remains limited.