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Romania Ctrl Bank: High Deficits Don’t Buy Time To Recover From Crisis

Postponing corrective actions against Romania’s budget deficit in an attempt to buy time and emerge from the recession would only deepen the recession and will deplete financing resources, central bank governor Mugur Isarescu said Tuesday.
Romania Ctrl Bank: High Deficits Don’t Buy Time To Recover From Crisis
18 mai 2010, 14:24, English

„Some say let’s keep a high budget deficit to come out of the recession (…). Their propositions will only make things worse and we won’t get past the crisis,” Isarescu told a banking seminar.

Romanian authorities recently committed to a series of austerity measures to reduce spending and lower the budget gap to 6.8% of the gross domestic product in 2010, from 7.4% of GDP a year earlier.

According to Finance Minister Sebastian Vladescu, the country’s public debt will rise to around 37% of GDP this year and further to 40% of GDP in 2011.

If the spending cut measures are not implemented, the public debt is bound to reach 50% of GDP by end-2011, Vladescu said.