Tanasescu, IMF: We must adjust next year’s budget by some €3 bln

budget, IMF, Tanasescu

These cuts must be made to meet the 5.9 percent budget deficit target agreed upon with the IMF. Also, the Fund warns it will not agree to another increase in arrears to the private sector. “It would be a big mistake to push some of the deficit into arrears. I hope that the experience of the month of June, when we witnessed such behaviour, is not repeated at the end of this year. We would merely move a current burden to next year, which is not advisable,” said Tanasescu.

Former Minister of Finance Daniel Daianu told The Money Channel that this correction of 2.5 percent of GDP equals eight percent of the budget. In other words, the future government will have to narrow the gap between revenues and expenses by eight percent. To achieve this goal, the best thing would be if the authorities cut expenses, analysts said.