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

„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.