Fiscal Policy Talks

The fiscal relaxation measures provided by the new fiscal code are sustainable, says Prime Minister Victor Ponta.

România Internațional, 11.08.2015, 13:35

The fiscal
relaxation measures provided by the new fiscal code are sustainable, while the
economic growth can offset the impact of their implementation, in addition to
an increased tax collection rate this year, the Romanian Prime Minister Victor
Ponta said on Monday. On the other hand, Victor Ponta claims that unless
Parliament passes the code, public sector employees would not be able to
benefit from a new salary law. The Prime Minister says the current dispute on
the new code is 100% political in nature.

Victor Ponta: Everyone agreed with the
fiscal code until the day president Klaus Iohannis sent it back to Parliament
for re-analysis. From that moment on everyone started looking for flaws, such
as the lack of money. The money is there. Others say a new global crisis is
looming. No one denies this, but I don’t think the crisis will strike because
we lowered our VAT. Others say the increase in the salaries of all public
sector employees starting January 1st next year spells disaster.
This is a lie. The law provides for a several-year period of transition, while
the increase in salaries will be spaced out, within the limits of the budget.

Ponta has thus
responded to accusations and warnings linked to the sustainability of fiscal
relaxation measures voiced by the head of state, the National Bank governor, as
well as international lenders. The IMF and the European Commission have warned
that the simultaneous enactment of such measures could result in serious
macroeconomic imbalances.

Most have
recommended Bucharest to moderate the rate at which these measures are to be
implemented and to revise the spending plans. Parliament will re-discuss the
fiscal code in an extraordinary session at the end of the month. In the
meantime, after several days of heated debates, parliamentary parties have
agreed to hold talks on the code.

National
Liberal Party co-president Alina Gorghiu labeled as extremely promising the
dialogue between opposition parties and the ruling coalition regarding a
project which the political class, the society and businesses all see as
critical. Alina Gorghiu also said that the Liberals would eventually vote for a
fiscal code that supports fiscal relaxation measures to a certain extent.