Romania can only exit the recession through harsh budget constraints, says the governor of the NBR, Mugur Isărescu, who said that he didn"t agree with the statement that the IMF saved us as a country, made by his advisor Lucian Croitoru yesterday. He said that the IMF simply financed our payment balance.
"The IMF didn"t save us as a country. It was created to finance the payment balance, subject to certain terms. The IMF said that it has done its duty, but Romania did not do its duty towards the IMF. We hope the increase of the budget revenue will stop here. The IMF was not being generous with us at all. Regrettable confusions have been created that are posing problems for us as well. We will only exit the recession through harsh budgetary constraints", Isărescu explained.
Lucian Croitoru yesterday stressed that the public sector has successfully adjusted to the changes that the crisis brought about, but the state failed to cut its expenses, which caused the need to borrow from the EU and the IMF.
"The private sector operated the necessary reductions in spending immediately after the beginning of the crisis, but the state failed to do the same, so we needed the IMF to do what? To rescue the state itself, which let"s be honest would have gone into bankruptcy otherwise. But what the IMF asked for in exchange for this help was to make adjustments where they were needed", said Lucian Croitoru.
In May 2009, Romania signed a 20 billion Euro loan agreement with the European Union, the International Monetary Fund and the World Bank. This year, Romania"s foreign creditors have demanded harsh public spending cuts, as the budget deficit has again climbed to 7% of the GDP, far above the 3% limit of admitted in the EU.
* Increasing difficulties in funding the structural deficits
The financing of Romania"s structural deficits is becoming increa
