The Finance Minister says the Treasury is not in a "desperate" situation and can afford to resist pressure from banks asking for higher yields on T-bills.

Banks do no have solid enough arguments to justify the substantial increase in the yields they are asking from the Finance Ministry during T-bill auctions, since the National Bank has not raised the interest rate and the sovereign rating has not changed, either, Finance Minister Sebastian Vladescu says.

"Our decision to turn down the offers during successive auctions was generated by the quite heavy pressure coming from banks. Given how they raised yields in a matter of a weeks, without there being anything connected to a trend of NBR's refinancing interest or the sovereign rating, we could not have reacted in any other way. We are not desperate, we have money in the Treasury, so we are fighting banks. They have their arguments, we have ours, it remains to be seen which are more powerful," Vladescu told ZF in an interview.

This is how he explains the three failed T-bill auctions in four weeks, with the Finance Ministry blaming "the unacceptable level" of the yields requested by banks each time. In April, the Finance Ministry had managed to pressure treasury certificate yields down to less than 6%. Now the yields requested by bankers stand at almost 8%.

Vladescu admits banks can use the turmoil created by the situation in Hungary as an excuse, as well as the motion of censure the Government is facing, but does not believe there are enough reasons for the yield hikes, as long as the interest at which they can get cash from the NBR has not changed.

"We say we have an extremely sound programme, which should give them confidence. Banks need us, too, and we are ready to play this game," Vladescu said, throwing down the gauntlet.

The Finance Ministry had announced it had scheduled