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November 29, 2021

President Iohannis: Future Gov’t mustn’t endanger fiscal sustainability; I’ll ask for consultations

President Klaus Iohannis on Thursday said that he will draw the attention of the future government not to endanger the fiscal sustainability through “imprudent policies and hazardous measures” and announced that he will have talks with the government in this respect and ask for consultations with those in charge in the area of economic policies.

“For 2018, is obvious that the attention must be placed on the business environment, which has been recently confronted with the most unnatural challenges in terms of the economic measures quality and predictability. I assure you I am updated on the concerns and difficulties that the business environment is facing. In this respect, I will draw the new government’s attention as well, same as I have done each time, on the responsibility of the political decision-makers to above all ensure Romania’s economic stability. The future government must understand how important it is not to endanger through imprudent policies and hazardous measures the fiscal sustainability and Romania’s long-term development potential. In this respect, I will discuss with the new government and ask for consultations with those in charge in the area of economic policies so that there are guarantees of stability from the government,” the head of state said at the reception organised at Parliament by the Romanian-German Chamber of Commerce and Industry.

He showed he wants a health economy, benefiting from a “responsible governance with predictable policies, so that today’s benefits don’t become illusory tomorrow or impose undeserved costs for the future generations.”

“I hope that, through good-faith, transparency and open dialogue with the political decision makers, the business environment will manage to support its priorities and consolidate its achievements,” Iohannis said.

President Iohannis pointed out that in 2017 Romania’s economy registered a record growth rate in the European Union, however these figures, unfortunately, don’t reflect the quality of the economic policies, the progress of the business environment being rather obtained in spite of these policies.

“The macroeconomic picture doesn’t lack risks in an economic and financial area, risks which mean additional responsibilities for the decision-makers in 2018,” the head of state said.

He gave as example the fact that the budget situation in 2017 shows that the descending trend continues in the area of public investment, through the diminution of the share in the GDP of the capital expenses compared to the previous years and highlights that it is not enough for the budget to provide “only on paper investment allocations, but the investments must be made, in order not to neglect key-areas, such as infrastructure.”

“At the same time, in spite of a record economic growth in the European Union, the government, or to put it better, the successive governments encountered difficulties in ensuring the fiscal-budget framework that should observe the 3 percent of the GDP deficit target. In the context of some imprudent fiscal policies, the government had to adopt ad-hoc measures, namely to reintroduce the additional fuel excise, take over enhanced dividends from the state-owned companies or block some payments of the credit release authorities at the end of the year. If all these are added the fiscal rollercoaster, on the grounds of some modifications of the Fiscal Code, challenged by almost everyone, there results the lack of any concern from the governors to ensure the economic predictability which the business environment rightfully invokes all the time,” Iohannis said.

On the other hand, the head of state said that Germany is currently Romania’s first economic partner.

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