The European Commission "could agree to a bigger deficit than the one assumed by the government in Bucharest"

The European Commission could agree to a larger budget deficit than the one initially assumed for this year by the Bucharest government, announced Prime Minister Marcel Ciolacu, after the meeting in Brussels with the head of the Community Executive, Ursula von der Leyen.

There is flexibility at the moment, said Prime Minister Marcel Ciolacu. He also mentioned the package of laws that he will assume in the parliament and stated that among the fiscal measures there will not be an increase in VAT over 19%.

The outcome of the discussions seems to be auspicious for Romania, and the prime minister states that the negotiations have reached a middle point without jeopardizing the standard of living or the tolerability of some reforms. One of the very important elements is the fact that the VAT on food will not increase to protect the population from another shock. On the other hand, VAT will generally not increase to more than 19% for the rest of the goods and services that are below this rate.

The deficit target also seems to be a flexible element for the European Commission, under the conditions in which defense expenses and, in fact, all expenses caused by the war in Ukraine will be recognized.

The prime minister says, on the other hand, that Romania will not compromise on reforms and will assume this in the parliament.

Another conclusion is that the pension system will be reformed, small pensions will increase based on a socially correct algorithm and inequities will be eliminated.

In the same way, salaries in Romania will not decrease, but the same inequities will be eliminated.

Translated by: Radu Matei