In the second day of his visit to London, President Traian Basescu told British business people about the authorities’ decision to avoid “economic disasters” in electoral years and to increase the absorption rate of EU funds.
“For 2011, we expect an economic growth of over 1.5 per cent. The latest evaluation, if we look at agriculture, makes us believe we could grow. However, we stay prudent for now. The budget relies on 1.5 per cent growth,” Traian Basescu said.
The president also spoke of the agreement struck with the International Monetary Fund (IMF), the European Union (EU) and the World Bank (WB), saying that Romania met all the commitments made under the document, making the point that Romania spent nearly EUR 18 bln, of the overall EUR 19.5 bln.
The president also referred to “an honest dialogue between worker and employer,” as national level contracts are no longer the case in Romania.
“Contracts needs to be negotiated by each company, and each worker must sign an individual work contract,” Traian Basescu said.
The head of state also referred to work controls getting tougher, saying that if a company is found to have more than five workers illegally employed, then, the administrator “goes straight to jail”.
“The untaught lessons are inefficient,” Basescu also said, referring to the economic crisis.
The president also stated that the Tax Code will be made simpler and Romania will keep the euro zone 2015 target and accession criteria.
During the meeting, several business people complained to the president that the Romanian state owe them money. Basescu said that he will notify the relevant authorities, more precisely the Transportation Ministry and the Romanian Post Company, respectively.
On the other hand, the British Ambassador to Bucharest, Martin Harris declared in an interview for the Romanian public television that a huge British telecom company plans to invest over 500 million euro to widen mobile-internet infrastructure in rural areas.
Basescu said in a Financial Times interview published yesterday, that Romania was keeping to its target date of 2015 for joining the euro, despite signs that some other central European countries might seek to delay their entries, Mediafax informs. Basescu, the government coalition and the central bank debated earlier this year whether to push the target back and the president considers that they took the right decision. “Keeping the objective of 2015 for the euro generates the necessary discipline,” he added. He also said that Romania would consider very carefully whether it was appropriate to join in 2015, even if it had met the Maastricht convergence criteria. 2012 is an election year, when politicians can get extremely generous with public funds, “but the people will have to pay for that generosity after the election”, he said. “It is relatively easy to reach the budget deficit and inflation objectives,” Basescu mentioned. He suggested looking “at how competitive the economy is.” On the other hand, one lesson learned from this crisis was that it was a mistake to join the single currency zone without having a fundamentally competitive economy, the Romanian president believes. Basescu defended the tough austerity measures taken in the past two years, including a 25 per cent cut in public-sector pay last year – partially reversed in January – and 5pc increase in value added tax. The measures have hit hard the popularity of the president and government, which has survived five no-confidence votes – but markets have praised Romania’s determination to rein in its finances. “Sometimes politicians have to pay the price when people don’t like measures,” said Traian Basescu. “If growth will start to be consistent, probably the ruling party will be saved” at next year’s polls. Otherwise, not.” he concluded.
EU enlargement with Moldova, Turkey, western Balkans
In another interview with The Daily Telegraph, President Basescu said the number of EU member states could increase from 27 to 35 by 2018. “For the time being we can imagine an EU extended in western Balkans, with Moldova and with Turkey. We cannot now imagine a larger European Union. That will be 35, maybe by 2018 or 2020 when this process will be finalised.” He said that the expansion was dependent on EU countries hit by economic crisis.
The Romanian head of state concluded yesterday his two-day visit to the UK and was due to return to Bucharest during the evening. On Monday night he met representatives of the Romanian community and held a lecture at the London School of Economics.