During a public speech on Wednesday related to the presentation of the inflation report, BNR Governor Mugur Iserescu, a veteran of all economic crises in Romania since December, issued a series of warnings to the government.

The business environment should not be burdened by taxes. But everyone has to pay taxes, without tax breaks

Verbatim what Iserescu said:

The business environment should not be burdened by taxes. But everyone has to pay taxes. Tax benefits, if they are targeted, are calculated for 1-3-5 years. Once you get over 15, they are no longer a privilege, they become a rent that distorts the market and creates problems in terms of solidarity and cohesion

When you increase income taxes, people earn less and demand decreases, National Bank of Romania Governor Mugur Iserescu said Wednesday as he presented the inflation report.

Great caution in fiscal correction. If this is not enough for the financiers of the country, then they will pay “to whom you are not waiting”. And this will also be seen in the exchange rate

Verbatim what Iserescu said:

Regarding the fiscal adjustment, Isarescu warns that if it does not reach the level expected by international institutions and markets, the adjustment will be paid by “whoever least expects it.” In terms of country risk, we are rated above all else. The correction will take place because there will be no more money in the country. Even if we protect price pressure now, liquidity will disappear from the market, so interest rates will rise. Without us changing the rate of monetary policy in the slightest!

Nothing is clear yet. “We don’t know what the program will ultimately be, nor the implications of these measures to limit commercial supplementation.”

Verbatim what Iserescu said:

I made one thing very clear: this forecast, the inflation forecast, is subject to uncertainty. We do not know what the program will ultimately be, nor the implications of these measures for limiting commercial supplementation.

But if this fiscal consolidation is not done properly, we won’t even be able to get the International Monetary Fund to sign an agreement that they will fix our markets first

Romanians will not remain minimal. They want tax cuts

Verbatim what Iserescu said:

There is such an illusion with a minimal state. “Romanians will remain minimal.” (Romanians…) will not remain minimal. They want lower taxes than any other country.

Romanians want a state like abroad, with highways, education, hospitals. These are expensive public services that (all along…) have been undervalued. How to make a minimum state with an income of 27% of GDP? We must recover. If we don’t recover, a market correction will come and pour a bucket of cold water on our heads

Reduce evasion and simplify the tax system

Verbatim what Iserescu said:

“There is evasion.” Well, when you have so many tax benefits, how can you avoid evasion? It’s called tax optimization, right? They have been accepted for so many years. “It was a story, Creanga, wasn’t it? With the man who was trying to scoop up water. You have a tax system with many exemptions, you have poor collection and you blame ANAF and whoever. It is necessary to simplify the taxation system. This is the government’s job,” Iserescu said.

In order for state institutions to function normally, they do not need to be “raised” with reforms every day

He specified that the institution he heads supports the Government in finding solutions, but this is a decision of the executive power regarding the reform of the state apparatus, not of the BNR.

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Verbatim what Iserescu said:

“This is a political decision. It is not easy. As businessmen say: we want predictability, we want to be able to look into the future, so do state institutions, if we want them to function as they should, we don’t need to upset them every day with reforms. . It’s hard work here. This is a political decision. I carried out the reform in 2000 and I know what it is like. Romania’s problem is much more serious from a fiscal point of view than is currently being discussed in fragments. Why? Because they say: we want a country like abroad. We want quality public services, we want highways, we want quality schools, we want quality hospitals and health care. And if you add all these requirements, it turns out to be 40-50 percent of GDP. I was the prime minister, I sat at the table also in the coalition government, the requirements were 40%. And I had to solve the problem. 40% to cover them only 32%. Let it be so. But how are they more than 40%, and we want to cover their 27% of income. Hard work. Therefore, we support the Government in finding solutions. This is the government’s decision, not ours,” Mugur Iserescu said.

From the same conference, see also:

Iserescu VIDEO: When you raise income taxes, people earn less and demand falls / If fiscal adjustment fails to satisfy international institutions, it will be paid by “those who least expect it”

Why it is not possible to reduce salaries in the BNR / Iserescu: We cannot reduce the salaries of specialists in the BNR below what other central banks offer

Iserescu: When tax benefits exceed 15 years, they become annuities / I understand that some want a lifetime annuity. It is impossible

Mugur Iserescu: Romania’s problem is much more serious from a fiscal point of view / They say: “We want a country like the outside” / If you meet all the requirements, you will reach 40-50% of GDP