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Ionut Dunitru: Limitation of budgetary deficit and public debt must be accompanied with adjustment measures

Introduction in the constitution of some limits regarding the budgetary deficit and the public debt would be an important step in ensuring the sustainability of the public finances, but there must be included also measures of adjustment if the limits are reached, the head –economist with Raiffeisen Bank Romania Ionut Dumitru said.

The presidential administration proposed on Wednesday that the Constitution has included two provisions which establish that the budgetary deficit cannot be higher than 3% out of the GDP and the public debt cannot be higher than 60% out of the GDP.

« I think that, besides the deficit limits and/or the public debt there should be included the adjustment measures necessary in the situation where those limits are reached » Dumitru said.

He says that the initiative to establish limits for these indicators come in a European context characterised by the preoccupation to reestablish the sustainability of the public finances and increase of the coordination of economic policies.

« We already have the positive example of Poland, which has in the constitution (since 1997) provisions connected to the limits of public debt which draw automatically fiscal consolidation measures, in general and austerity at the level of social expenditure, in particular. At the same time, there is the example of Germany, which has in the constitution (since 2009) provisions limiting the budgetary deficit at 0.35% out of GDP for the federal government and at zero in the case of local authorities ( lands) » Dumitru said.

Sursa: http://www.actmedia.eu

Tags: public limits measures adjustment budgetary deficit

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