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Prime Minister Marcel Ciolacu on Monday said that Romania's objective is to keep its government deficit at 4.4% of the GDP in 2023, otherwise European funds and the implementation of reforms under the National Recovery and Resilience Plan (PNRR) could be negatively impacted.
"We all know that at one point Romania had a deficit of 9.2%, the largest deficit in the European Union; it was an explosion, coming after a deficit of less than 3%, after Romania's external debt of about 37%. All this happened in a very short period of time, under an accidental statesman prime minister in Romania. We hope that such accidents will be increasingly rarer, and we have reached a challenge, with Romania being the only EU member state that has an agreement on keeping its deficit within certain limits. This year we have to stay below 4.4%. There is a budget implementation throughout the middle of the year reported by the Ministry of Finance and it is normal to have an analysis as well, because Romania's objective is to fall within this deficit, so that refunding interest rates will not increase," said Ciolacu.
He added that failure to comply with the deficit agreement with the European Commission may negatively impact the possible European funds for Romania and the implementation of PNRR reforms.
"We have requested an overall analysis of this entire chain, something that the finance minister has already started to present to us, I've had a first meeting with the minister together with former Prime Minister Nicolae Ciuca and the former finance minister. We won't make any decisions until we talk to the big players in each field. That's the first thing. The second thing is, I don't think it's appropriate to levy new taxes. It's something that can't be done when there's still an economic crisis. On the other hand, we still have a challenge, there were measures taken by former Prime Minister Nicolae Ciucă, I also came up with other measures in this short period of two weeks, so as to reduce inflation. (...) Falling inflation would lead to economic growth and a higher purchasing power of the Romanians, that's why we are coming up with investment and economic aid schemes," added Ciolacu.
The prime minister went on to say that the World Bank, the International Monetary Fund and the European Commission have been recommending Romania for years to start repealing tax incentives.
