„Two objectives of the agreement have been reached, but not the third. An economic revival without a complete adjustment (of the public sector) is not worth wanting. The major imbalances must be addressed, or the growth won’t be healthy,” Isarescu told a news conference.
He said the IMF agreement has helped Romania avoid a series of dramatic effects of the recession, such as the leu’s depreciation or the state’s incapacity to pay salaries, but the public sector still lags behind the private one in terms of adjustment.
Romania could enter a vicious cycle, because the government revenue are getting lower while the economy remains in a state of „quasi-stagnation” or it advances at a very slow pace, Isarescu said.
„The correction now must be applied to the government sector.”
Isarescu said Romania’s planned spending cuts in the public sector face strong resistance from politicians.