President Basescu: Romania should better think of a deficit smaller than 3pct ESA terms

President Traian Basescu said on Monday that because of the deficit funding costs, Romania’s 2012 Budget should be built around a deficit that is smaller than 3 percent in ESA terms.

„Because of the current situation in the European Union and the regional economic state, influenced first of all by Greece, the 2012 Budget should be very prudent. And this is not because Romania would not find money to fund the deficit, but because deficit funding is extremely expensive,” Basescu said on Monday in a press statement at the Cotroceni Presidential Palace.

He added that he met Prime Minister Emil Boc, Governor of the National Bank of Romania (BNR) Mugur Isarescu and members of the Government the same day at the Cotroceni Place to look into the economic state of the EU and the region.

„The deficit target has to be reset. Because of the funding costs we should better think of a deficit smaller than 3 percent in ESA terms when building the 2012 Budget. How much smaller will be up to the Government to analyse and come up with solutions to diminish the need for internal and external borrowings,” said Basescu.

He added that they also discussed the absorption of European funds and the capability of the Romanian Government and the local banks to sustain the deficit.

„We discussed the need for transparency of the Budget and I warned the Government, and this was not the first time, that I will send back to them any budget that does not show exactly where the investment money goes,” said Basescu.

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