The National Bank of Romania (BNR) does not consider that the objective of Romania joining the eurozone is feasible at this moment, BNR Governor Mugur Isarescu said on Tuesday.

„The National Bank does not consider that at the moment the objective of joining the eurozone is feasible in a certain perspective, because everything depends on the way in which the country will manage to narrow the public deficit to 3% with correct, consistent policies. If that can be done in four years, in five years, in seven years, probably then we will have a changeover to the euro, not earlier. Things are linked,” Isarescu told Parliament’s budget-finance committees at a joint hearing on Tuesday.

According to him, a country like Romania cannot meet its objectives – highways, investment – on government revenues of less than 30% of GDP, only by eradicating tax evasion, reducing tax incentives as much as possible, and through political will.

„I don’t see how the deficit brought below 3% in European rules could be narrowed other than by combining measures on the expenditure and revenue side. Only on the part of reasonable spending – anyone has the opportunity to look at the figures, to do the math – that is impossible. (…) You can’t find a European country, except for Ireland, which is a very specific case, where government revenues are below 30%. (…) I don’t see the model in which this country, which still has to build highways and investments and so on, can find its balance on revenues of less than 30%. And then the revenues must be boosted for the deficit to be narrowed. And there’s how it can be done: one – eradicating tax evasion, two – reducing tax incentives as much as possible (…) Reducing cronyism as much as possible, the loopholes through which tax incentives are granted (…) There is no impossibility here. (…) The IMF will come again and be demanding of us. We are not in a position to make an agreement with the IMF as the public debt is below 60%, so this is not a necessity. But let’s make the tax reform so that our markets believe us and cut costs, funding costs,” said Isarescu.

He added that measures exist, they can be conceived. „It is about political will, about a decision that categorically cannot be taken in an election year.”

Isarescu added that, on the other hand, companies running on foreign capital should be financed from Romania through banks, so that they no longer borrow from abroad, adding that that local Dacia automobile maker borrowing partially through Renault is reflected in Romania’s private external debt.

AGERPRES