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March 31, 2023

Isarescu: Romania will close the budget within target, no cuts needed in 2013

The government wants to set up the Financial Supervisory Authority by March 15, PM Victor Ponta announced.

The fiscal programme was maintained within the set limits, despite the electoral year and the successive adjustments operated these years, so Romania will exit the excessive deficit procedure, the governor of the National Bank of Romania (BNR), Mugur Isarescu announced Tuesday, quoted by Mediafax. “We only have to be more careful and make the dosage of such nature that we no longer are forced to cut and limit,” Isarescu explained during a press conference held jointly with PM Victor Ponta. According to the Central Bank official, with these targets met, with structural reforms going on and absorbing European funds, Romania can have an important economic growth next year, even stronger than in 2012, regardless of the economic evolutions in Europe.The execution of the general consolidated budget at 10 months ended with a deficit of RON 7.2 bln, respectively 1.19 pc of the GDP, against a deficit of 2.3 pc of the GDP in the similar interval of 2011 and 1.18 pc of the GDP at the end of September. Compared to the first 10 months of 2011, the budget deficit has decreased by RON 6.1 bln. In the accord with the IMF, the government committed itself to curbing the budget deficit to 2.2 pc of the GDP this year, from 4.3 pc of the GDP in 2011. The budget deficit will drop to 1.7 pc of the GDP next year.The governor also mentioned that the unification of the nonbank financial market supervisory authorities is recommended by the European Central Bank, especially in states where the depth of this market is small. Isarescu explained the need for creating the new structure also through the recommendations made by the ECB. “As you know, 94 pc of the financial intermediation represents the bank market. For 3-4 pc of the market, it is a form of small luxury to have three institutions,” Isarescu said.The project of founding the Financial Supervisory Authority was presented yesterday in the cabinet meeting and will be submitted to public debate, and the president of the new institution will be appointed by the Parliament based on the pertinent experience, after consulting the BNR, Premier Victor Ponta announced Tuesday evening. He added that the regulation will be approved by the next Executive and explained the urgency of the document, which will be promoted as an emergency ordinance, through the fact that it is desirable to complete all the procedures in view of founding the new authority by March 15, because “a rapid move” is required in view of adapting the system to the new realities in this sector.The government will disband the acting supervisory authorities in the financial system, except those controlled by BNR, so all the personnel and attributions of CNVM, CSA and CSSPP will be taken over by the new institution – The Financial Supervisory Authority – by next March at latest. In the draft ordinance for setting up the new authority, the government justifies the emergency character of the regulation by invoking the dysfunctions noticed in the operation of the capital market and of the insurance sector, which make it necessary to adopt legal measures aimed at increasing the efficiency of the sectorial supervision activity outside the Central Bank’s area of competence.

Florin Georgescu returns to the Central Bank

Acting Finance minister Florin Georgescu will resume his position with the National Bank of Romania at the conclusion of his governmental mandate, BNR Governor Mugur Isarescu informed. He made this announcement after journalists asked the prime minister whether he will propose Florin Georgescu as Finance Minister once again. In his turn, Ponta answered saying that he will propose Georgescu to keep his current office, but he knows he will turn down the proposal.Florin Georgescu left the office of BNR deputy governor in May this year, to become Minister of Finance in the USL cabinet. At that moment, PM Ponta announced that Georgescu will resume his position with the Central Bank in December.

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