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Daniel Daianu: if we proposed a deficit of 3.5% in 2020 it would be a performance
A budgetary deficit of 3.5 – 3.6% for next year would be a performance, but to get to 3% is impossible, stated on Wednesday the chairman of the Fiscal Council, Daniel Daianu, at the conference ‘Budget and fiscality 2020: from the official policy to the business environment’ .
‘The budget of 2020 places the seed for the budget of 2021 as the increase of 1 September 2020 triples in 2021. Good people, there is no game here! The markets anyway will react. The markets do not expect the elections in our country. We cannot tell the markets’ Gentlemen, ladies, freeze as we need to finish our elections in Romania’ Such a thing is not done, and the stakes on a superior collection and the drop in other expenses is very risky. The necessary correction is much too big.I think that if we proposed for 2020 a deficit around 3.5 – 3.6% it would be a performance. To go to 3% it is impossible. There is no way. There is no way to crash, as you cannot exaggerate in the opposite direction. We have to change direction. This is what we have to do in 2020’ Daniel Daianu said.
Moreover the chairman of the Fiscal Council c onsidered that a correction through inflation is ‘ stupid’ and it would affect the leu.
‘There is no problem to cut salaries and pensions, I say that as the present government has said, as those who follow the Romanian economy have said. Finally, the increase of fiscal income does not automatically involve growth in taxes. We can have increase of fiscal income, but a major increase is not credible and it is not normal to build the budget on this hypothesis and the monetary policy of BNR cannot compensate for the pro-cyclicity of the budget’ Daianu said.