President: Romania's safety fund is untouchable, country has to negotiate higher budget deficit

Adding to the existing debate on whether Romania has the money to give back the salary cut to state employees, Romanian President Traian Basescu recently said the EUR 5 billion currently in the coffers of the country's Finance Ministry are no-touch and dedicated only to paying due loan instalments in the coming months. To increase salaries and pensions back to the level two years ago, Romania would have to negotiate a higher target for budget deficit with the International Monetary Fund, said Basescu.

“Why was this reserve made? So that Romania is no longer vulnerable to short term loans. [….] So this money bag is not to be touched. It is Romania's strategic reserve,” said Traian Basescu in a statement over the week-end. Romania will have to negotiate an increase in budget deficit from 1.9 to 2.2 percent with the IMF, if it wants to increase salaries and pensions. The president reminded the previous Government also said it was taking into account the possibility to increase salaries and pensions this year, so this option has been discussed with the IMF. The head of the Democratic Liberal Party Emil Boc, who resigned from the PM seat earlier this year, also said that the discussion to increase salaries is 100 percent an effort made by his party, who lost the Government following a vote of no confidence in the Parliament at the end of April. The new Government is made of members of the Social Democratic Party (PSD) and the National Liberal Party (PNL), led by designated PM Victor Ponta., the head of PSD. editor@romania-insider.com