Economy minister Vosganian on 2008 economic risks facing Romania

Romanian Economy and Finance minister Varujan Vosganian says in an interview for BBC-HotNews.ro that he has proposed – and the prime minister allegedly accepted – that a hugely controversial tax on the first registration of cars, which has sparked trouble with the European Commission, be kept but be paid according to the value of the cars. He also says he expects natural gas price rise by one figure starting January 1, 2008, salaries increase by 20% next year and the 2008 budget not be affected by social deals between the governing Liberals and the opposition Social Democrats.

On the first registration car tax, about which Romania faces an EC infringement procedure, he says that he proposed that the tax for second-hand cars be paid according to the value of the cars. Thus, the lower the market value of a car gets, the lower the tax on its registration, the minister explains.

Speaking of the 2008 budget, Vosganian says it provides considerable amounts of money for investments. He says it would not be affected by political deals between the governing Liberals and the opposition Social Democrats and claims the budget bill was passed in the Parliament in a format 98% similar to the version pushed by the government.

He also says he believes that 2006 and 2007 were the best years in the history of Romania from an economic point of view.

But he said that 2008 comes with risks and said that should the current account deficit stay at its current level it would no longer be sustainanble starting 2010.