Fitch analyst to Romanian authorities: "Don't let the crisis go to waste!"

Restructuring the public sector is an important step to recover to fiscal sustainability, says Fitch manager Douglas Renwick, quoted by Romanian news agency Mediafax.

According to him, even if the fiscal measures include risks, they are viable in the current climate and even more viable than during ordinary times, because the need for reform is clear. „Don’t let the crisis go to waste!”, Renwick added.

He believes that the International Monetary Fund and the European Union requests in the agreement signed with Romania will help complete the reform objectives and the Romanian Parliament approving cuts in salaries in the public represents an encouraging gesture, even if there are legal risks addressing this.

„An insufficient fiscal reform or a detour from the IMF and EU programme will result in much bigger economic negative effects”, Renwick said.

The Romanian Government pledged, during the IMF negotiations, to drastically reduce spending, so that the budget deficit did not go above 6.8% of the GDP by the end of 2010. One of the measures meant for this purpose id to cut public sector salaries by 25% and pensions by 15%.

The Social-Democratic party, in opposition, submitted to the Constitutional Court a notice last week, addressing the breach in Constitution that some of the austerity laws for which the Government is taking responsibility entail.