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August 17, 2022

Basescu and Ponta meet on budget issues at Cotroceni, no positive results

President Traian Basescu yesterday evening had talks at Cotroceni Palace with PM Victor Ponta, Central Bank (BNR) governor Mugur Isarescu, Deputy PM Daniel Chitoiu and the delegate minister for Budget, Liviu Voinea. According to a communique issued by the Presidential Administration, the meeting was held at the suggestion of the premier, who proposed to the president talks over the memorandum with the IMF and the draft budget for 2014.
After the meeting, PM Victor Ponta told the media the President did not change his stand. Ponta said the cohabitation agreement is suspended until the head of state observes the laws, as the president is not entitled to draw up the laws, and until he gives up drawing up the state budget, which is the prerogative of the executive.
President Traian Basescu late on Monday said he decided not to approve the memorandum referring to the negotiations with the International Monetary Fund (IMF), the World Bank and the European Commission because the government included an excise hike for fuel by EUR 0.07 per litre.
PM Ponta said the next step is for the parliament to vote the state budget, the president will return it to the lawmakers and the parliament will send it back to the presidency again. Ponta told the media that president Traian Basescu has told him he is going to challenge the budget law to the Constitutional Court, if not on the excise increase, on other issues.
As a consequence of the political uncertainty, the national currency came out of stagnation late Monday and it depreciated after news that the President had refused to sign the memorandum with the International Monetary Fund surfaced. Tuesday’s exchange rate was 3.25 bani higher than Monday’s exchange rate of RON/EUR 4.4369.
The International Monetary Fund said on Tuesday it is waiting for Romanian authorities to decide on whether they want to modify the measures necessary in view of reaching the deficit target for 2014 before submitting the memorandum to the Board of the financial institution.
In his turn President Traian Basescu replied PM Ponta has understand nothing, so he will return the draft budget to parliament. Basescu pointed out the discussion was aimed at the excise for fuel and not at the budget.
“People with low income are going to be hit by increases in price for foodstuff and transportation. Some 8 per cent increase is expected,’ Basescu said referring to the excise hike.
President Basescu said PM Ponta hasn’t understood what the discussion was all about. ‘He talked about the budget, I talked about the excise increase and its consequences,’ he said.
Basescu underlined there are resources for pensions’ indexations and for increasing salaries, he said. He also said he is a supporter of the guaranteed minimum income.
President Basescu insisted on the fact that the government’s decision is aimed at increasing incomes for the ruling parties in view of European and presidential elections next year.
Basescu admitted his refusal to sign the IMF and WB memorandum has no significance, as the IMF agreement is to be halted only if macro-economic criteria are not observed.
Traian Basescu finally vowed he would return the draft budget to parliament

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