Tax Hikes Unavoidable If Romania Public Sectors Doesn’t Adjust – Ctrl Bker

„The private sector made the necessary adjustments, which were very big, whereas the public sector did not. Without these adjustments, the wasting in the public sector will continue. Hiking taxes might not be avoidable and this will hinder economic revival,” said Lucian Croitoru, adviser to central bank governor Mugur Isarescu.

Criotoru said he doesn’t favor tax hikes, nor does he support a potential reduction of the duties over the next few years.

The central bank official underlined the importance of the structural reforms included in Romania’s loan agreement with the International Monetary Fund, saying the country’s recovery is very much dependant on their implementation.

Romania and the IMF signed an EUR13 billion two-year arrangement, as part of a total EUR20 billion aid package comprising funds from the EU, the World Bank and other foreign lenders.

In exchange for the aid, Romania committed to implement a series of tough measures, including spending cuts and wage freezing in the government sector, meant to consolidate its public finances.