Just before Easter, on Good Friday, Romania's president Klaus Iohannis made firm statements against fiscal austerity policies, saying that as long "as he has a voice in this country," nobody will dare to make redundant any employee in the public sector or cut wages in order to curtail the public expenditures in line with the budget deficit target.

He admitted that the revenues were overestimated and more work should be done on the collection side while expenditures could be curtailed as well.

President Iohannis said he sent a strategy to Government, indicating how to balance the fiscal policy without touching the public employees' incomes or workplaces.

"I wish to cut where we can cut from, without putting anyone in trouble. I have conveyed to the ruling coalition a detailed plan, a smart plan. I'm not going to accept expenditure reductions without a proper assessment. We are not in a position to make significant cuts," Iohannis said, quoted by Adevarul.

He didn't elaborate on specific ideas but mentioned the EUR 80 bln he negotiated with the European Union (the Resilience Facility and the MFF), saying that there's enough money for investments and the country's economy is thriving anyway.

The statement comes after the Q1 budget revenues fell RON 4.7 bln below the target, resulting in a projected full-year RON 20 bln (EUR 4 bln, over 1% of GDP) supplementary deficit on top of the 4.4%-of-GDP target.

In response, PM Nicole Ciuca invited all his ministers to estimate where and how they could cut expenditures, but the response was modest. 

(Photo: Alex Nicodim/ Inquam Photos)

andrei@romania-insider.com