Romania crosses swords with the troika

Romania crosses swords with the troika

Bucharest, December 8, 2014 / Independent Balkan News Agency

By Daniel Stroe

Romanian PM Victor Ponta  has today said he expects negotiations with the IMF, European Commission and the World Bank to conclude over the day, but pointed out Romania doesn’t need a renewed agreement with the troika next year, while criticizing EU’s executive arm’s “ever rigid and difficult positions”.

“Today, tomorrow the latest, we will finalize discussions with the troika IMF-EC-WB along the lines we have previously announced: no new taxes, the tax on constructions decreases from 1.5 to 1 per cent, while the cut of the social insurance contribution remains in force”, Ponta said, adding the next year’s budget will most likely be sent to the Parliament on Friday. A vote on it is expected on December 21, when Romania’s President-elect, Klaus Iohannis, will be sworn in.

Ponta refused to answer whether the Romanian Government and the troika have reached any conclusion over next year’s deficit, with the foreign creditors pushing for 0.9 % while the Romanian authorities asking for a 1.4 5 limit, saying no decision has been yet made.

But speaking to Realitatea TV, the Romanian prime-minister argued Romania doesn’t need a new agreement with the troika next year, after the current one ends in March, because “we are an even solider economy and we stand well from a fiscal-budgetary perspective”. Ponta then criticized what he called rigid positions of some of the international creditors. “More and more, the most difficult and rigid positions are those of the European Commission, and not IMF’s. And the European Commission is there to stay after we conclude the agreement and what bothers me and I think it is a weakness of Romania which can be fixed as of January is we have no influence on a European level”, he underlined, referring to France’s large deficit and EU condoning it.

Earlier, on Saturday, Ponta warned Romania would not accept a 0.9 % deficit under any circumstances, saying “IMF clears itself on the student in the last desk”. Sources quoted by the Romanian media said the troika finally accepted the 1.4 per cent deficit the Romanian side asked for, with a confirmation pending.

“Without fail, from our perspective, there is no way we can accept a 1.4 % deficit for the following reasons: we are the country confirmed by Eurostat as having had the largest economic growth in the EU in the third quarter. So this has to be sustained by the measures we have taken to stimulate the economy and investments. So, if we cut, it is hard to keep the rhythm”, Ponta concluded.

Ponta is under fire for a series of measures passed over the electoral campaign in which he ran for presidency but lost to Klaus Iohannis, mayor of Sibiu. Last week, President Traian Basescu criticized the international creditors for lack of reaction over what he called “fiscal adventures” of the Ponta Government, of which many have been labeled by the Romania media as “electoral alms”, such as salary and pension increases.