Prime Minister Ilie Bolojan said on Thursday that the VAT increase in July had been necessary and that if the Government had not gone to the European Commission with a package of measures negotiated in advance, Romania would have had its EU funds suspended.

Bolojan was asked whether the VAT rise had been a mistake, as some political leaders had claimed.

‘The VAT increase was a necessity. Tax rises in general are not a good thing, to be clear, but the VAT increase in July, when we adopted the first package, was a necessity. Why was it a necessity? First of all, as I have already said, July was Romania’s evaluation. If we had not gone to the European Commission with a package that had been negotiated in advance with the Commission, bear in mind that our EU funds would have been suspended. What does the suspension of EU funds mean for Romania? Around 50% of the investments Romania is carrying out, especially in these years and next year, are financed with EU money through the PNRR programme. We have absorbed 11 billion, we still have 10 billion to absorb through the other programmes, the cohesion funds and so on,’ Bolojan told Digi 24 private television broadcaster.

He noted that Romania was among the countries with the lowest taxes.

‘All the data we had on state budget revenue showed that we had among the lowest state budget revenues in the European Union, partly due to the low level of taxation, partly due to the exemptions we ourselves introduced and partly due to tax evasion. We cannot have Anglo-Saxon style taxation, so the lowest taxes, have Nordic style social assistance policies and Balkan behaviour in managing money. This is an economic Molotov cocktail that will explode and we can see where we have ended up,’ he said. AGERPRES