| TAX INCREASES, SALARY REDUCTIONS 08/07/2010 |
| (2010-07-08) |
| Last updated: 2010-07-09 15:45 EET |
Based on the 25% reduction of all public salaries and on a 15% decrease in all pension benefits, the austerity plan has taken a dramatic toll on Basescu’s popularity. After the Constitutional Court froze the cut in pensions, the government decided, this time, independently, to increase the VAT from 19% to 24%, as an alternate source of budget incomes. Analysts say the measures have a direct impact on the private economy, which has already been hit by the crisis and which Basescu claims he wants to protect from new shocks. ‘’We had no other immediate and legal option to contain the budget deficit’’, prime minister Emil Boc tried to explain. On Wednesday, in an exclusive interview on Radio Romania, the president challenged the measure:
"I believe this was a mistake, because it failed to act right where the budget is hit by cancer. There are two cancer zones: the extremely high expenses with public salaries and the extremely high percentage of state budget incomes, which we employ in the social area.’’
Daily Gandul writes that “Basescu makes Boc the only person responsible for the rise in the VAT’’. The newspaper adds that the president should have called for the prime minister’s resignation, as the measure “only reflects the hopeless chaos whereby the confused and incompetent Boc government claims to be handling the crisis.’’ On the other hand, the president said that he would agree with Romania making another loan from world financial institutions, provided that the money is earmarked for development and instead of consumption. President Traian Basescu:
“Borrowing more money will spell out the destruction of Romania’s future. I agree on making a loan in 2011, only if we use it for development. My public proposal is to live off our own production and use loans exclusively for development. We should build dams and highways. We have spent the last 12 years making loans, so we have budget deficits and we put money into consumption.’’
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2025-04-03
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