“I was recently in London, where we had 30 meetings. The world does not compare us to the Czech Republic, Hungary, but with Colombia and Panama from the perspective of public debt,” says the chief economist of a big bank

“We are between the hammer and the nicoval. The deficit must be funded and no one speaks of costs, which are already at an unsustainable level. There is always speech cuts. But around 90% of the tax revenues go on expenses that are very rigid: pension salaries, expenses with interest. The annual conference of the Association of Financial-Banking Analysts, hosted by the National Bank.

The main problem is the very low income base. If the collection to the EU average were improved, two more percentage points in GDP would probably “solve”, but it takes time. “And the fiscal adjustment had to be done yesterday, which means that we will most likely not escape without tax increases,” says Dascălu. In his opinion, Romania has lost a lot of credibility. “I had practically the last years fiscal skids and here has been lost a lot of credibility, and the financing costs have increased quite a lot,” says the economist.

Even if our country does not have the Hungarian funding costs, we are after Hungary, the second country with the highest cost of tax revenues. He helped inflation a lot, admits Dascălu, in maintaining as well as under control the ratio between public debt and gross domestic product.

Basically I consumed debt, we created economic growth in other countries, and this sees the twin deficits.

“In 2016 I was studying Croatia. Croatia was then about two raing steps under Romania and borrowed more expensive than Romania, with about 100-2 200 basic points. Now, Romania borrows more expensive than Croatia, with over 300 basic points. Also, Romania borrows more expensive than Serbia, which is no investment than a rating.” Dascălu.

He said he was recently in London, where he had over 30 meetings. “The world does not compare us to the Czech Republic, Hungary, Poland, but compare us to Colombia and Panama from the perspective of public debt and financing need. We are one of the most debt issuers in emerging countries and this implicitly put a pressure on the cost of financing,” explained Dascălu.

In his opinion, there is no place to return with fiscal consolidation. “Only from the new financing costs we practically accumulate public debt and increase the ratio between public debt and the gross domestic product. Assuming we will have a tax consolidation plan as soon as possible, this will probably buy us some time, but we should rebuild our credibility, which once lost, it is difficult to regain!”