Daianu: Budget deficit is gangrene, cuts alone won’t fix it

Daniel Dăianu, President of the Fiscal Council, stated on Tuesday that those who support the idea that the budget deficit can be corrected solely through spending cuts are chasing a chimera, and that such a thing is not feasible. He also said that the current budget deficit is like a gangrene in the body of Romania’s economy and society, and that a substantial increase in tax revenues through significantly better collection is not achievable.

“Those who support the thesis that the deficit correction can only be done on the expenditure side are chasing a chimera. Such a thing is not possible. I speak based on the analysis that we do at the Fiscal Council and based on the judgments that I have. I believe that we cannot avoid increasing the state’s fiscal revenues through some increases in taxes and duties. These are personal opinions”, said Daniel Dăianu in Parliament.
He stated that “this budget deficit is like gangrene for the body of the Romanian economy and society”.
“For years, Romanian society has been living on the budget, far beyond its means. It does not mean that the budget sector is solely to blame for this situation. This is nonsense. Because the incomes of budget employees, the incomes of teachers, doctors, we are not only talking about civil servants in ministries. (..) It is gangrene, we can fight against it to eradicate it”, he mentioned.
According to Dăianu, “a substantial increase in tax revenues, from a much better collection, is not possible”.
“Romania, at the moment, if it does not have a clear, credible plan to increase tax revenues, once again, I repeat, this equation cannot be solved by cutting expenses. What I told Mr. President Bolojan is what I have been saying, publicly, for a long time”, he pointed out.
Dăianu said that he does not believe in cutting 30 billion lei in spending by the end of the year, as President Nicuşor Dan had declared necessary.
“I do not believe so. I do not believe. If you look at the structure of the public budget, you will notice that by far the bulk is held by salaries and pensions. If someone dares… First of all, you cannot cut salaries and pensions as you want. We are decreeing from tomorrow that we are cutting salaries and pensions for people. You can, indeed, cut from spending allocated to goods and services.”
budget deficitcutsDaniel DaianuFiscal Coubcilpresident
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