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Fiscal Council : The agreement with IMF and EU did not help Romania to resume its economic growth

The agreement with IMF and the EC did not help Romania to resume its economic growth but the financing package helped the economy to stabilise and to avoid a deep recession, according to the chairman of the Fiscal council (CF) Ionut Dumitru.

'The main pillars in the agreement of foreign financing which is the basis of the economic growth resumption failed mostly' the chairman of the fiscal council said at a round table at the BNR on Wednesday.

Dumitru mentioned that debts increased, the reduction of the social bill ( salary funds in the budgetary sector, the reform of pensions and social aid) with the view to eliberating resources for public investments failed in 2009 and was postponed for 2010, the absorption of European funds was overestimated, the taxing levels could not be kept at the same level – CAS and excises increased in 2009 and the VAT was increased in 2010. The CF chairman said that the drop in the Romanian economy during the crisis was determined mainly by the major imbalances at the moment of the crisis.

Ionut Dumitru: Romania could not hope economic increase after the crisis due to lack of investments

Romania cannot hope to economic increase after going out of the crisis if they do not draw foreign investments, Ionut Dumitru, the chairman of the Fiscal Council stated on Wednesday at a round table at BNR. « Before the crisis, the capital had an essential contribution to economic growth. During the post-crisis period the economic increase of Romania relies on a substantial contribution of the capital. We have to be credible to draw investment, otherwise we have no change to hope to a big economic growth' he said.

He said that Romania will not come back to the rhythms of economic growth before the crisis as the growth potential is small and the emphasis on foreign financing will be difficult due to the aversion to risk and selectivity of investors to emerging states. According to the Fiscal Council chairman in order to be attractive to foreign investors, Romania needs to choose the way of structural reforms, to improbe the business environment, macroeconomic stability, the increase of infrastructure quality and markets functionality.

Sursa: http://www.actmedia.eu

Tags: growth chairman crisis fiscal economic romania agreement council bnr cas