Speaking at the Romania Financial Forum 2011 organized by Mediafax and the central bank, Isarescu updated earlier statements on the issue.
“I never said I was against cutting the social security taxes. If I were to take risks to stimulate the economy, then I think a lower social security tax would be most welcome, because the labor market is overburdened,” Isarescu said.
Tuesday, the central bank’s chief said that lowering the taxes or the social security contributions seem like simple enough solutions to unburden the business environment, but the measure would be short-lived and would only limit the government’s ability to complete existing investments.
“The solutions appear very simple… Cutting the social security contributions would boost private investments, but it would mean fewer resources for public investments. Each unfinished investment is an immobilized resource,” Isarescu said yesterday.
The central bank’s head said there is a huge discrepancy between the number of taxpayers and the number of beneficiaries, and that the difference will not be reduced simply by cutting the taxes.
Romania needs structural policies to stimulate labor, as well as a working pension system.
“We lack functional pension systems,” Isarescu said.