President Nicusor Dan conveyed a message of confidence to institutional investors, who are crucial for Romania, regarding the country's trajectory and credibility in the period ahead; this was stated on Tuesday in New York, on the sidelines of the UN General Assembly, by Interim Finance Minister Alexandru Nazare.
"We held a series of meetings, including one at the JP Morgan headquarters, with institutional investors who are very important to Romania because they hold significant volumes of public debt and Romanian securities in their portfolios. I believe the President conveyed a message of confidence to these investors regarding Romania's trajectory and credibility for the upcoming period. It was crucial to hold such a meeting now, during a time of political turbulence back home, to send messages of confidence to investors on whom we rely heavily. I think it was a very good meeting," the interim minister stated during a briefing for Romanian journalists.
He explained that Romanian authorities had also met with representatives of these investors in both Bucharest and Vienna, adding that "this meeting complements the series of actions we are currently undertaking to signal to the markets that the situation in Romania, regarding public finances and work on the 2027 budget, is under control. It is vital to convey these messages at all levels to ensure a stable situation." Alexandru Nazare stated that "there is justified concern among all investors as long as Romania does not yet have an invested government," noting that this is "self-evident." On the other hand, he also highlighted that, in his assessment, budget execution during this period has been very strong.
"Essentially, we have a deficit gap of 26-28 billion compared to last year; we have kept the budget deficit under control, there has been no slippage, and this has effectively sent a very positive signal to both investors and rating agencies. So, as long as there is no slippage, the situation can still be managed, but we obviously need a credible budget for 2027, drafted as soon as possible," he argued.
He explained that efforts were made to address, one by one, the issues caused by the delay in a budget revision, a measure particularly necessary for the healthcare system. "We have done our utmost to find solutions to resolve these issues. You have seen that we restructured the quarterly funding allocation for the health sector; this effectively provides a much-needed boost, covering spending needs up to and including October, I believe. Ambulance-related issues will be resolved through a reallocation of funds by the Ministry of Health. We even made an advance payment of nearly one billion for energy subsidies and compensation schemes; so, we have tried to address all the most pressing issues on a case-by-case basis, and we will continue to do so," said the interim Finance Minister.
On the other hand, he emphasized, "it is crucial that, in the coming period, once a government is invested, we carry out the budget revision and begin work on the 2027 budget."
Alexandru Nazare declined to comment on the possibility that the newly designated Prime Minister, Siegfried Muresan, might fail to form a government, or that the budget revision might have to pass through Parliament as a standalone bill.
"I do not wish to open a discussion about that possibility. I hope that in the near future, as soon as possible, either the Siegfried Muresan government is invested or Romania secures a fully empowered government, because there are many issues and outstanding matters to resolve before the year ends," Nazare said. When asked what signal the prolonged crisis in Romania sends to S&P ahead of the rating agency's scheduled October review, Nazare acknowledged that "it is not something the agencies would view positively."
"All agencies and investors want us to resolve the political crisis as quickly as possible. (...) At this moment, we have not yet hosted the visit by S&P experts. As I speak to you, coordination discussions are taking place back at the ministry, where we are thoroughly preparing for the talks scheduled for Thursday and Friday. Therefore, it would be premature to say that this situation would inevitably lead to a downgrade," Alexandru Nazare stated.
He acknowledged the existence of the risk but noted that efforts are being made to keep it under control, just as was the case with the Fitch and Moody's reviews. "However, naturally, there are expectations regarding the future, Romania's conduct in the coming years, and we must address those expectations," the minister added.
Comentează