On Wednesday, the fiscal package will be finalized, which will contain all measures to reduce the budget deficit – expense cuts, investment delays, including TVA modifications. The measures will be included in a „train ordinance,” and the coalition will decide on the adoption method, considering also the government’s assumption of responsibility. According to Deputy Prime Minister Dragoş Anastasiu, the final package of measures is established after discussions with the funders – the European Commission, as well as rating agencies.
Anastasiu stated that we are with our backs against the wall because on July 7th, we must have a package of measures adopted and passed through legislation. Otherwise, we risk a country rating downgrade to junk status, which could put us in a situation similar to Greece in 2010.
"Tomorrow or the day after, negotiations with our investors and funders will probably be completed, and then we will present the entire fiscal package. I believe that at this very moment when we are talking, discussions are ongoing with our funders, and we will present this package," said Dragoş Anastasiu on Tuesday on Digi 24.
He specified that the funders are primarily the European Commission, but discussions are also held with all rating agencies, which will soon evaluate Romania.
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"We are waiting for the fiscal package tomorrow. It's a broader package; it will be an ordinance again called 'train,' with many things that we will decide in the end. I believe tomorrow will be the final decision, and you will see what we come up with. Unfortunately, with very little time for consultation, with very little time for debate. Why? Because we are running out of time. By July 7th, we must have a package passed through legislation."
Whether it's called an ordinance or an assumption, the governing coalition will have to decide. But if we don't have this package passed in one form or another, summer will come, we will go into September-October. During this period, rating agencies come to Romania, and we won't escape the worst scenario we could imagine, which is a country rating downgrade, meaning what we have now, known as junk, not recommended for investments. This is the 2010 Greece scenario," mentioned Anastasiu.
However, the Deputy Prime Minister assured that we will not end up in junk status.
"This government has this primary objective, not to reach that point. That's why we come and say this. And if you want, we stand in front of Romanians and tell them. We know it's complicated, we know you are all human beings.
Whether you are in the budgetary area, the entrepreneurial area, whether you are teachers or judges, we know how complicated it is for a human being to be in a situation where something is taken away from them or something is given up. Students, pupils, students, union members, and so on.
It's not that we don't realize or understand how complicated it is for each human being to enter this type of dialogue: you know that from tomorrow, the day after tomorrow, you will have to reduce your income by 3%, 5%, 10%.
This is a complicated moment. Can you imagine that no government, no politician, no deputy prime minister wants to enter such a mandate with cuts?" explained Dragoş Anastasiu.
Asked if the VAT increase will be included in this package, Anastasiu said: "VAT is part of this package. Without a doubt."
However, he did not specify when and how this tax will increase.
"I said that VAT is part of this package. Let's wait until tomorrow, and we will see exactly how. The Prime Minister told us that we will have - and it is written in the government program - two thresholds, not three, so, therefore, there will be movements there. Let's see tomorrow or at the latest the day after tomorrow, what the final package will look like," he added.