Financial Measures Proposed by the Government in Bucharest
A joint delegation of the IMF, the European Commission and the World Bank is in Bucharest for a new assessment of Romanias precautionary agreement with those financial institutions.
Corina Cristea, 15.01.2013, 13:28
Romania has reported delays in meeting its pledges towards its international lenders and has called for a respite of several months in order to clear the ground for talks on signing a new agreement, Romanian Prime Minister Victor Ponta has recently announced. Pending issues include the privatization of large state-owned companies or the privatization process in the case of companies such as TAROM, the Oltenia Energy Compound or the Company Electrica.
Other unsolved issues are related to the overhaul of the taxation system, streamlining healthcare expenses, monetary policies endorsed by the National Bank of Romania and measures aimed at monitoring the Romanian banking sector. These days a joint delegation of the International Monetary Fund, the World Bank and the European Commission is in Bucharest for another assessment of the 5-billion-euro precautionary stand-by agreement Romania signed with those institutions in the spring of 2011.
According to the Minister Delegate for the State Budget, Liviu Voinea, talks during the first week of the first visit, scheduled to end on January 29th, will focus on finalizing the draft budget for 2013. Romanian authorities expect no major problems in that respect, as all requirements regarding the budget deficit and expenses have been accounted for in the draft budget. Minister Voinea underscored that the 2013budget was not an austerity budget, but a development budget, after in 2010 and 2011 the budget deficit was cut back at the expense of the living standards of the population, while in 2012 inefficient investments and loss-making companies were discarded.
Economic analyst Dan Suciu believes that, apart from meeting all the requirements laid down in the agreement, Romania faces yet another challenge, that of delivering sustainable economic growth, which has been virtually the sole purpose of all reforms and budget adjustments over the last years. Government officials will also discuss with international lenders the opportunity and impact of certain measures the Government intends to introduce, such as increasing the national minimum salary from 155 to 177 Euros or slashing the VAT for basic foodstuffs.
Labour Minister Mariana Campeanu said salaries and pensions would be increased according to the government programme of the Social-Liberal Union made public during the election campaign, namely a 4% increase in pensions and restoring public sector salaries to the level prior to the June 2010 cuts.
