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MP Stefan: International financial institutions have no problem with CAS cuts
International financial institutions have no problem with the Romanian Government cutting social security contributions (CAS), and they have hundred percent agreed on it, Deputy Chairman of the Romanian Chamber of Deputies' Committee on Budget and Finance Viorel Stefan of the Social Democratic Party (PSD) said Tuesday after a meeting with head of the International Monetary Fund (IMF) mission in Romania Andrea Schaechter.
'Representatives of the International Monetary Fund and the European Commission have come to the conclusion that the measure is necessary in Romania, and the only problem to be clarified regards the sustainability for implementing such measure. So, during the mission there will be much focus on how the Government will realise its revenue and whether there is a guarantee that no unsustainable deficit is generated following the decrease in the social security revenue,' Stefan explained.
Asked by journalists if the CAS cuts are technically possible on July 1, 2014, Stefan said, 'We are in a country where the Value Added-Tax (VAT) went up 5 percentage point in 48 hours. Let us admit that good measures can also be introduced by urgent procedures that modify the Tax Code.'
He added that the presentation of the IMF representatives was a positive one that appreciates accordingly Romania's progress - economic growth, attractiveness to financial markets, foreign direct investment, a strong exchange rate of the local currency, the leu (RON), low interest rates.
'All this together indicates that things in Romania are improving economically speaking,' said Stefan.
MP of the opposition Democratic Liberal Party (PDL) Andreea Paul said after the meeting on Tuesday at Parliament Palace with representatives of international financial institutions, that the IMF is explicitly demanding offsetting measures, which means either further spending cuts or new taxes and the Government has not prepared itself for such decision, at least not so far.
A mission of the International Monetary Fund is currently in Bucharest, throughout June 16, for a third review of a precautionary stand-by arrangement between the IMF and Romania. This is a joint visit that also includes representatives of the European Commission and the World Bank.