“Maintaining financial stability is not a fad, as the market economy cannot function efficiently without it and would ultimately collapse,” said Isarescu.
He said stable prices are not a guarantee for financial stability, as the financial crisis has shown instability can wreak havoc from both directions, either by deflation or high inflation, widening budget deficits and public debt.
Isarescu said it is important to coordinate macroeconomic policies, adding macroeconomic stability is not a luxury and should not be seen as hindering economic growth or fiscal relaxation.
Romania has recently adopted a new tax code, which lowers the value-added tax to 20% as of next year from a current level of 24%. The country cut the VAT rate on food items to 9% in June.