Seitan: I do not believe we shall reach that alleged one million unemployed people

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The increase in employment will probably occur in Romania at the end of the current year or in early 2011, estimated Minister of Labour Mihai Seitan, who was invited to the conference titled “Labour Force Market in 2010: Challenges and Opportunities.”

Seitan said that getting out of the recession did not have immediate effects on the labour force market and that there was a few-month inertia between the two moments.
“If things go as we foresee them, at the end of this year or at the beginning of next year we shall have visible effects …
The optimism in me can say that, if economy invigorates a little, at the end of the year we can have an unemployment rate lower than the one we had in last December,” said the Minister of Labour.

In the opinion of the Labour Ministry official the fact that in February the unemployment rate was the same as in late January, namely 8.1 percent, is “an unassuming signal, which still exists.”
In this context Seitan said that he did not believe that “that million of unemployed people, which was circulated during various debates,” would be reached and, even if the unemployment rate grows in the time to come, at the end of the year, if the economy invigorates a little, Romania might register an unemployment rate a little lower than the one reported in December 2009.

According to the Minister of Labour, currently the number one problem in Romania is the macro-economic equilibrium, a situation the authorities are trying to stabilize by applying a “very restrictive” budget, with a deficit intended not to exceed 5.9 percent of the GDP, in keeping with the agreements with the International Monetary Fund, the European Commission and the World Bank.

“The examinations made by these international entities revealed the fact that we so far managed to observe our targets and, consequently, we received the two tranches from the IMF, about 2.45 million euros. Half of the money goes to BNR [National Bank of Romania] for supporting the national currency and the remaining one, to the State Treasury for supporting the budget deficit. If you ask me what is to become of this money, I am answering you in a very simple way: they are going to cover the budget deficit,” said Mihai Seitan.

The official explained that, by these agreements, with the IMF and the EU, they avoided borrowing money form the market, at the current interests, the sums necessary for covering the budget expenses referring to investments, salaries, pensions, education, health, etc.
“This is quite good as the interests to be paid to these international institutions are half the ones we would have to pay if we borrowed money from the free market, a reason for which many countries resort to such agreements,” mentioned Seitan.

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