A reputed economic consultant makes a “serious” diagnosis, according to the fiscal measures announced by Bolojan: it seems that the state is determined to cut with Barda

Romania is facing the worst budget crisis in the last 15 years, and in order to avoid the disaster the Bolojan Government proposes these austerity measures that are not necessarily meant to solve the problem of the budget deficit, but to rebuild the confidence of rating agencies in Romania, says economic consultant Adrian Negrescu.

“We are in the most serious budget crisis in the last 15 years, with a budget deficit that, after the first five months, instead of decreasing, has increased by four billion lei. It is an unprecedented situation, which, unfortunately, requires harsher emergency measures than we estimated three to four days ago. How did we get here? Artificially the benefits, they spent as much as they could waiting for the moment at which the new expenses will be said by the new Bolojan government. Negrescu in an interview with Agerpres.

He said that the experts of the Fitch rating agency, recently visited in Bucharest, “put their hands on their heads when they saw the budget situation of Romania”, requesting “harsh measures meant to restore public expenses on the waterline”.

“There are measures meant to maintain the rating of Romania and I think this is the main current focus of the current government, to maintain the rating in the category recommended for investments, because a 'junk' downgrade would, unfortunately, mean catastrophic effects: a euro course that could pass 6 lei, after doubling the interest, an inability to the loan, to pay their loans ”, explained the economic consultant.

In the opinion of the economist, Romania has, in the next period, “three extremely important hopes”.

“A first payment of 12 billion lei this month, another 10 billion payment in October and another payment of 16 billion lei in November, in the account of public debt, money that the state does not have. There are desperate measures, but measures that must be viewed as a kind of intensive therap The economy in a recession, which will extend for several years, ”said Negrescu.

The consultant pointed out that the situation is so serious from a financial point of view that it is no longer time to “cut with the scalpel” in the hope of saving what can be from the perspective of Romania's rating.

“It seems that the state is determined to cut with Barda, in the hope of saving what can be from the perspective of Romania's rating. Probably later, after this package of measures that will be approved by the Parliament, in an extraordinary meeting, to see also the structural reforms, especially in the area of ​​the expenses discharged from public companies,” the economic consultant said.

VAT, the only fee that brings money immediately to the budget

Regarding the increase of VAT, Negrescu claimed that it is considered by the authorities “the only tax that immediately brings money to the state budget”, given that “the financing requirement can no longer be covered by loans”.

“” There is some despair of the authorities in making an urgent money, and the VAT is the only fee that brings you money from one day to another to another to the state budget, given that, attention, the financing requirement at the moment can no longer be covered from loans. The state loans, and from the external level we did not take any loans before the elections.

According to the quoted source, in the second part of July we will see a first budget rectification that will also cut from the expenses for parties.

“On the other hand, I expect the Bolojan Government to come to Parliament in an extraordinary session with a package of measures meant to stop the allowances of tens of thousands of euros in public companies, absolutely aberrant payments to the budget aristocracy through a specialized legislation. Law to abolish the aberrant management contracts signed in recent years by the pseudo-manners of state companies and to eliminate largely of the privileges, especially those who are in the board of directors, ”said Adrian Negrescu.

Last but not least, the economic consultant transmitted that there is a risk of a “typhoon of economic measures” that could be put into practice since October, not by the Bucharest Government, but by the IMF.

“It is time to go through a financial storm, I hope, in the summer, so that we do not reach a typhoon of economic measures that could be put into practice in the worst case in October, and not by the Bucharest Government, but by the IMF, in a stand-by type agreement, in which, together with the experts, we have to decide. We practically restore the state budget on the payment line ”, said Adrian Negrescu.

The payment note of the “budget party”

At the same time, it estimates that the impact of austerity will significantly affect the consumption, the main engine of the economy, which could lead to the decrease of the budgetary receipts and the need for new measures in the fall, including “an increase of VAT to 24%”.

“Unfortunately, the real receipts of the state tend to decrease as the effect of these austerity measures will be seen in the economy. Consumption, the main engine of the economy, will suffer. To cover the budget deficit towards the end of the year.

In his vision, both citizens and Romanian companies will be severely affected by all these austerity measures.

“Unfortunately, we are in the area of ​​the budgetary mahmure at the moment, after a party that has spread over two years when the politicians spent on public money as in the recent history of Romania, and now the payment note to this great party is paid, the citizens, and the Romanian companies that will be severely affected by all these measures. Let us not drown because of this cold shower that we will do from a fiscal point of view, ”said Negrescu.

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