Basescu: We are on way to 8-8.5 pc budget deficit this year

President Traian Basescu stated on Wednesday evening, on the public TV channel, that taking into account the second quarter, Romania is on the way to reach an 8-8.5 percent budget deficit this year compared to 4.6 percent, as initially estimated in the accord with the International Monetary Fund (IMF).

„As a partner, IMF is set to tell us categorically: „Well, well, Romania’s economic downturn is not ascribable to it, but to the international backdrop, and that is why I hope the second installment will go to the state budget – but most certainly I tell you that an 8 percent is in view, so we must cut spending, and instead of going up to 8.5 percent, go down to 7 or 7.2 percent, therefore we must assume our obligations because this is the partnership with the international institutions.

You cannot ask them solely to finance your deficits”, said Basescu.
On the other hand, the head of state stressed that, absolutely, Romania must make efforts now because it would mean less to be paid back when the crisis is over.

„We cannot postpone everything till the crisis ends and then, instead of benefiting of an economic growth, of the re-start of our economy, we will have to pay back the debts we increased in the period of crisis”, underlined Basescu.

Asked if Romania will receive the second loan installment from the IMF, the head of state replied: „This money will come and, unfortunately, due to a higher budget deficit, as a consequence of the 8 pc decline of the GDP, we must see if we can obtain from IMF the right to direct the second installment to the state budget, and not to the national bank”.

President Basescu also pointed out that on Thursday he has a meeting with IMF representatives and this option will be discussed with them.
He said that the second IMF money installment, in case it goes to the state budget, will be also earmarked for investments, not only for wages and pensions.

„The budget deficit is created by the public sector costs – and we already discussed about reducing those – and by investments. We must implement them, in the health care field, the army, sectors you cannot affect.

You cannot say that you have sufficient medical doctors, and have cuts there, nor „we have sufficient public order, so fire the policemen”, because there are shortages in both fields.

We are short of 15,000 military staff, and we need them to guarantee the national security. Therefore, there are zones where no cuts could be made, they being understaffed anyway. So where is the surplus? We all know. And there we are going to operate”, said Basescu.

As regards the political will to implement the measures aimed to cut state budget spending, the head of state drew attention that, „if there is no political will, we will pay salaries from the loans and for those made redundant today we are going to pay from our taxes their share when returning the loans”.

Basescu remarked that Romania needs these loans, but the taken money volume must be diminished and loans should not be taken in order to keep on excessive staff in the public sector.

„Every man proceeds like that in his own household. Look at the commercial companies, they made adjustments without asking somebody from the Government. It is a normal process in crisis situations and I want to be well understood.
I am not cynical, but the society has the interest to face this crisis at as lower costs as possible”, pointed out President Basescu.


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