Jeffrey Franks: if taxes in Romania are collected efficiently, there is no need to increase them

Romania will receive the next IMF installment, worth 900 million euro after the government imposes the measures agreed on, IMF chief of mission in Romania Jeffrey Franks declared on Monday morning.

The IMF urged the government to reduce its budgetary deficit and Bucharest authorities announced measures to reduce salaries and pensions. President Basescu said that these decisions were necessary to avoid contracting another loan next year.

IMF representatives, their main declarations:

Jeffrey Franks, IMF chief of mission in Romania

• our experts established with the Romanian government the best measures to avoid economic difficulties

• IMF board will meet and discuss the agreement, and will release the next installment, worth 900 million euro for Romania

• March economic performances were good

• We expect an economic increase by the end of the year. In 2011, Romania could reach a 3.6% economic increase

• the impact of the crisis was worse than expected in Romania

• without the measures, the budgetary deficit would have reached 9.11% in 2010

• we agreed on several structural reforms who would lead to permanent fiscal economies

• these measures will pull Romania out of the crisis

• we trust that Romania is on its best way to adjust its deficits. Measures need to be strong, and this is what the government decided

• We urge you to decrease spending and impose structural reforms
• The IMF agreement is going well, the government complied with all our requests
• We revised Romania’s economic increase estimates
• We witnessed problems on the way taxes are collected
• If taxes in Romania are collected efficiently, there is no need to increase them the banking system remains strong and stable

Fabienne Ilkovitz, European Commission delegation chief

• there is a positive result regarding economic measures already implemented in Romania
• we witnessed progress in terms of structural reforms
• we need to work at our fiscal policy
• if there is a deficit, there is a need to cut spending or increase taxes.
• The Romanian government decided to reduce spending, which is a good measure on the long term, even if it is painful
• Romanian authorities promised to implement these measure by end of June
• we need to reach a new budgetary deficit target of 6.8%

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