Romanian Ctrl Bank Governor Says Arrears Worse Than Large Deficits

"Arrears are one of the explanations why we have both a recession and high inflation. This is a major problem for Romania because it's like a contagious disease keeps spreading and hurts the foundation of a market economy, which is monetary and fiscal discipline, and timely payments. This causes a chain of payment delays worse than deficits," Isarescu said at a seminar organized by the central bank, Alpha Bank and the Romanian Banking Association.

Isarescu on Friday said not paying one's debts has become a "national sport" and called on the government to resolve the general arrears issue and give a positive example to all taxpayers.

"The arrears issue must be solved (…). The state must give a positive example on how to pay the debts on time," Isarescu said Friday.

Romania hasn't met the end-September performance criteria in the sector of general government arrears and it will ask the International Monetary Fund for a new waiver of non-observance, IMF mission chief Jeffrey Franks said in October.

It would be the sixth waiver of non-observance in the arrears sector since Romania signed a EUR13 billion loan agreement with the IMF in 2009.

If you liked this story, please follow MEDIAFAX.RO on FACEBOOK »

The content of mediafax.ro is for your information only. Republishing or using this content is forbidden without express consent of MEDIAFAX. For this consent, please ask for it by mail at vanzari@mediafax.ro.