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January 23, 2022

Tanasescu: Romania no longer needs new austerity measures in 2013

The Ponta II government must have three economic goals in 2013: budget, investments and European funds, the vice-president of the European Investment Bank considers.

Romania no longer needs new austerity measures next year, but it must prioritise its expenses, the vice-president of the European Investment Bank (EIB) Mihai Tanasescu said on RFI. He believes that the country certainly needs “financial discipline” and it already implemented “very strong” austerity measures during previous years. The EIB official explains that “austerity does not always mean cuts or this word is not necessarily related to cuts, to lack of financing. When the budget is better administered, to say so, spending by public ministries are well administered and well implemented, there certainly exists a huge potential that next year’s budget includes the necessary resources for development, and also for covering the social expenses that currently exist in Romania.”Tanasescu also considers that “one cannot be either very relaxed, or very strict, one must find a balance in order to reach the targets one has set: a small enough fiscal deficit, under 1.8 pc, a sustainable current account deficit, an increase of Romanian companies’ competitiveness and generally of Romania on foreign markets, finding drivers for economic growth. These lead to only one conclusion, that fiscal and commercial policies, economic policies must be very well balanced and conceived in the years to come,” the EIB vice-president mentioned.According to Tanasescu, in 2013 Romania has high chances to move along this road of economic growth. “It will certainly be a modest economic growth, same as in the case of most EU countries.”Mihai Tanasescu also believes that the Ponta government must have three economic goals for 2013: budget, investments and European funds. “The most important is the budget for next year, which must be realistic and reflect the continuation of structural reforms, also of structural reforms in key sectors like fiscal administration, state companies. (…) Also very important is how prepared the central and local administration will be for attracting new resources from the European Commission, as structural and cohesion funds. I believe this is the key to success, in order to have a good economic growth in the year to come,” Tanasescu concluded in relation with this subject.

The Ministry of European Funds, a very good idea

Creating a Ministry of European Funds is “a very good idea” and splitting the Ministry of Finance in two ministries is “a political decision”; it is important to avoid overlapping attributions, Tanasescu mentioned. “I do not see any impediment to this proposal of having two ministries – one for the Budget and the second of Finance – but the attributions of the Public Finance (Ministry) must be very coherently and correctly defined,” the EIB vice-president explained.Tanasescu also considers forming a Ministry of European Funds as a very good idea. “We know that other EU states adopted this governance model. Having the management of European funds from all ministries merged in just one ministry is a good idea. (…) A structural change in this field is more than necessary,” he explained.

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