The Romanian economy is experiencing a structural budget deficit and economic growth will not be enough to solve this problem, said Mugur Isarescu, governor of the Romanian Central Bank (BNR) on Wednesday. “The financial reality can be cynical, ruthless, but there is also another tendency, to only talk about how important social needs are, overlooking the financial aspects. This is something very dangerous. Real money doesn’t fall from the sky and can’t be simply printed as some may think”, said Isarescu according to Mediafax newswire.
He added that the country needs tough budgetary constraints to overcome the current recession, as their lack will lead to fiscal relaxation and social overshelter. Sound budgetary policies should stimulate labor and productivity as well as determine rigor when it comes to spending public and private incomes. The governor also insisted that increasing labor taxes should not be considered an option as there are other issues that need to be addressed, such as the gap between the level of the already existing taxes and that of collected incomes.