Mugur Isarescu: “I think this year’s fiscal policy will be normal, in the sense that it will not be continuing an adjustment, a massive curtailing of deficit, as last year, but it will rather consolidate. I think that by adequate fiscal discipline – meaning cautious public spending – there is no need for austerity. This year, fiscal policy will be normal, in the sense that it will closely follow what happens in terms of inflation, calibrating all the instruments we have at our disposal. The general framework remains that of the accords with international financial institutions.”

Romania, over the last few years, has faced unpopular austerity measures, convened with international financial institutions as part of lending agreements. Right now, Bucharest is party to a precautionary agreement worth five billion Euros, funds to be accessed in case of need. This accord was signed in the spring of 2011, after the previous accord had ended in 2009, and is scheduled to terminate in the first half of this year. The Romanian Prime Minister Victor Ponta said, when his new government was sworn in by Parliament, that the executive is bent on signing a new precautionary agreement with the IMF, the EU and the World Bank because the EU is in the middle of an economic storm.

He emphasized the fact that not all the proposals made by those institutions are perfect, but that this type of accord is very important. The head of the National Bank believes that what he called a ‘positive’ accord with the IMF will provide enough room for collaboration for the whole of 2013. A joint evaluation delegation from international lenders will arrive in Bucharest on 15 January. By then, the Ponta government said they would finalize the draft budget for the current year. The head of the executive announced that on Thursday he would give a state of the nation speech, focused on the national debt situation, the 2013 budget, and projects for the next four years, the period of his term in office.