Isărescu's adviser, message for Romanians who “hold on to using only cars”. “I don't expect my popularity to grow”
“The most severe constraint of the Romanian economy is, by far, the budget deficit”, wrote Eugen Rădulescu, advisor to the BNR governor, in which he claims that the “only rational option” between reducing the budget deficit or the fuel tax, which represents “more than half the price at the pump”, is the former.
In an opinion article on the National Bank website, entitled “Playing with fire: throwing gasoline on the budget deficit”, Mugur Isărescu's adviser describes the problem of fuel prices as “a thorny issue” and states that, in his opinion, “car owners could experience public transport for a short time”.
He said that “the war in Iran blew up the hydrocarbon market.”
“The price of oil and liquefied gas has doubled in a few weeks, and the prolongation of the conflict could push prices much higher than they are today. Of course, the implications of these developments are severe: many products and services will become more expensive, which will push up inflation rates and, more than likely, lead to a reduction in economic growth,” wrote Eugen Rădulescu.
“We are paying for the budget disaster of previous years”
The adviser to the BNR governor claims that the Bolojan Government “has shied away from promising reductions, even temporary, of excise or other taxes”, because “we are paying for the budget disaster of previous years”.
“It is perfectly rational to have a reserve fund in the budget. But when you destroy it by flagrantly violating the rules in fiscal matters, there comes a moment when irresponsibility pays. That moment has come! I am now waiting for those responsible for this disaster to point the finger at the current government, which is unable to help too much the consumers affected by the rising price of fuels”, continued Eugen Rădulescu.
He said that “over half the price at the pump is tax”, as is the case “all over Europe”.
“Gasoline from us will be more expensive than that in Bulgaria, but it is cheaper than in the vast majority of other EU states. The budget is based on these taxes – that is, the one that should reach a deficit of 6.2% of GDP this year,” added Mugur Isărescu's adviser.
Rădulescu, about drivers: “I think they could experience public transport for a short time”
Eugen Rădulescu believes that “the only rational option” between reducing “the fuel tax or sticking to the goal of reducing the budget deficit” is the first.
“I think that car owners could experience public transport for a short time, and that's how big cities are suffocated by road traffic, if the increase of 50-100 lei in the cost of a full tank of fuel is considered too high”, Rădulescu also stated.
The adviser to the governor of the National Bank of Romania drew attention to the fact that this year the Romanian state will pay “more than 60 billion lei only in interest on the public debt”.
“I don't expect my popularity to increase after such comments. What I understand, perhaps better than many others, is that this year we will pay more than 60 billion lei just in interest on the public debt. If we insist on using only cars for any road, at “acceptable” costs, these interests will increase to such an extent that we will have no resources left to pay them. And the “acceptable” costs will remain just a memory”, concluded Eugen Rădulescu.
