Friday's government meeting was interrupted, because PSD ministers Florin Barbu, Alexandru Rogobete and Bogdan Ivan refused to sign the GEO regarding the cuts in the administration.
PHOTO Government
Florin Barbu explained the reasons for the opposition of the PSD ministers: “Cuts don't mean reforms, they mean austerity. This thing is demonstrated”.
For 3-4 years we have been living in “reforms” led by the PSD and part of the PNL, the old USL, reforms that meant large “incomes” from loans. We reached a deficit of 9.4% of GDP, external debt of 60% of GDP, and the risk of entering “junk”, that is, of running out of money for pensions and salaries.
PSD now wants an economic recovery program, which means money we don't have, or slogans, so that PSD voters are satisfied. If economic recovery were possible without a lot of money stuffed into the economy, all countries would be happy. And PSD wants money for its political clientele, not for the entire economy.
Bolojan understood the economic reality of Romania. To pay 12 billion euros only in interest, and another 30-40 billion euros in loan installments, from a budget of 133 billion euros, is madness. That is why he increased fees and taxes last year, and the population remained dissatisfied because the reduction of state operating expenses was not achieved, mainly due to the PSD opposition.
The budget deficit has been reduced to some extent, which is why the Fitch rating agency maintained our BBB- rating, with a negative outlook.
Here is what the Fitch agency says:
“Romania's 'BBB-' rating is supported by EU membership and related capital inflows, which support revenue convergence and external finance, while GDP per capita and governance are above 'BBB' peers.”
“These strengths are balanced by large and persistent budget and current account deficits, rapidly growing public debt, political polarization and fairly high net external debt” “However, the socio-economic cost of fiscal adjustment, tensions within the governing coalition and strong support for far-right populist parties remain significant political challenges. In addition, the two largest parties in the coalition – PNL, Bolojan's centre-right party, and PSD, the centre-left party – have agreed that Bolojan will make way for a new PSD prime minister in 2027, which could lead to political uncertainty.”
It is a clear statement, in favor of Bolojan and against the PSD. Romania's ability to borrow depends on the decisions of the rating agencies, so to have money for pensions and salaries. It is difficult to understand only for the political-economic “philosophy” of Ciolacu and Grindeanu, whose first mission is to retain PSD voters for the 2028 elections. I do not understand that Romania can collapse like Greece did in 2011. And Greece was in the euro zone, and escaped easily, if the sale of some Greek ports and other assets can be called easy.
PSD applies the economic “philosophy” of Cristian Socol, the economic ideologue of the socialists. We increase salaries, increase sales, therefore Romania's revenues from VAT and other taxes. From these revenues, we increase salaries again, and so on, perpetuum mobile in the economy. The fate of Greece and the countries that have done so does not seem to impress them.
What does PSD want in the end? To come to government, instead of Bolojan, and apply “perpetuum mobile” in the economy, with the risk of putting Romania in “junk”? To run the hungry Romanians with stones in the streets?
The budget for 2026 is coming. I don't think that Bolojan will sign an absurd budget, with overestimated revenues, to meet the demands of PSD's political clientele.
It is a difficult question, the fate of the country depends on the answer given by PSD and PNL-Bolojan!
