Negotiations with IMF ongoing at Ministry of Finances on budget deficit topic

The Romanian authorities and the International Monetary Fund (IMF) on Saturday morning held negotiations at the headquarters of the Ministry of Public Finances (MFP) focused on the budget deficit issue, a release from the MFP informs AGERPRES on Saturday.

Photo credit (c) Liviu SOVA / AGERPRES STREAM

Following talks on Friday over the matter, the parties failed to reach an agreement in what has to do with the deficit, in the context in which, according to the MFP officials the Romanian side's proposal was for a deficit of 1.4 per cent of the Gross Domestic Products (GDP) and the representatives of the international body asked for a deficit of 0.9 per cent next year.

According to Minister-delegate for Budget, Darius Valcov, Romania cannot afford to go below a deficit of 1.4 per cent of the GDP.

'My mandate is not to get below 1.4 percent, which is already too small and yet too demanding for today's situation in Romania. Any discussion of below 1.4 percent is unacceptable. If we started the negotiation at 0.9 per cent cash deficit, we would get to a final kneeling of the Romanian economy,' Romania's Minister-delegate for Budget Darius Valcov told Antena 3 private broadcaster on Friday.

According to the Minister-delegate for Budget, the gap between the IMF demanded level and the level of 1.4 per cent of the GDP proposed by the Romanian side would amount to about RON 3.5-4 billion, money that the government would be forced to cut from the budget, from the public investments most precisely.

When they were discussing deficit for 2014, the Romanian authorities and the IMF established a value of 2.2 per cent of the GDP both for cash and ESA (European System of Accounts) methodologies. AGERPRES