Romania shouldn’t be an austerity champion, while other countries spend and thus develop, said Finance Minister Eugen Teodorovici. The decision to cut taxes is not an accounting one, but a political one, he added.

“An administration must assume a particular policy. By resending the Fiscal Code for reexamination, President Klaus Iohannis has created a breach that can affect the markets’ perception. Now there’s a sentiment that if another Government comes it will not apply the adopted measures,” Teodorovici said in an interview with Ziarul Financiar.

He added that the central bank governor Mugur Isarescu’s objections about the Fiscal Code were “natural”, but they also represented a “conservative” approach.

“We need to have a more daring approach. I am a pro-business Minister. I am changing the approach according to which there is nothing beyond figures.”

President Iohannis rejected the new Fiscal Code law, which was recently passed by the Parliament, which included the VAT rate cut from 24% to 19% starting January 1, 2016. He sent it back to the Parliament for review on Friday, July 17. T

he president said that Romania might exceed its deficit target of 1.2% of the GDP assumed for the next year with the European Commission, because of the fiscal relaxation measures. Finance Minister reacted by saying that Romania didn’t necessarily have to refer to this deficit target.

“I am not saying that we need to grow on debt, but we need to be positive.”

editor@romania-insider.com