Financial consolidation "saved Romania from bankruptcy"

The Minister of Public Finance, Gheorghe Ialomiţianu. Photograph: Agerpress

"Romania would have declared insolvency if the financial consolidation had not started", the Minister of Public Finance, Gheorghe Ialomiţianu, declared on Thursday in an interview for the public radio station.

"You see, right now all the countries are using the financial consolidation, because without a financial consolidation, a drift would occur. All that I’m trying to say is that if the financial consolidation had not started, Romania would have run the risk of not being able to pay its debts".

"We had a realistic budget, because there has to be a correlation between the deficit and the financing method. As you can see, countries like Germany, Italy, Spain are facing serious problems with the funding", Gheorghe Ialomiţianu said.

The Minister of Finance also mentioned that the deficit into which Romania went three years ago had a negative influence on the financial markets.

"I explained to my colleagues from the opposition that we cannot use excessive deficits, because they are very difficult to support, and if we may say so, the crisis is worsening as a direct result of the excessive deficits. Many countries have chosen the excessive deficits and now they cannot fund these deficits anymore and are forced to take drastic measures."

"At the end of 2008, we had an excessive deficit of 5.4 percent, which affected very much the next period, and Romania lost its credibility on the financial markets. Therefore, we had to make an agreement with the Monetary Fond", the chief of the Ministry of Public Finance said.

Gheorghe Ialomiţianu also stated for Radio Romania Actualităţi that in 2012 the rate of the excise duties will increase according to the agreement with the European Union, fiscal amendments will be introduced in tourism and a partial limitation to 50 percent of the deduction rights of the VAT will be imposed to companies that want to buy cars and fuel.

Listen here to the interview granted by the Minister of Finance Gheorghe Ialomiţianu to Radio România Actualităţi.

Translated by: Violeta Mavrodin
MA Student, MTTLC, Bucharest University