“There is more and more talk throughout the European Union about a possible return of the recession in 2012. I believe this is a major concern and we could slip back into recession anytime. To avoid that, we have no choice but to continue reforms, only spend what we can afford, and make investments,” Boc said during an economic seminar.
He gave assurance the state budget for next year targets macroeconomic stability and disregards the fact that 2012 is an election year. Boc added he is aware such a move may cost the ruling coalition votes but said it will prove the coalition is responsible and reliable.
Sources within the Hungarian minority party UDMR, a member of the ruling coalition, told MEDIAFAX Monday the party is calling on the Government to seek ways to raise public wages and pensions next year.
Boc said Tuesday, however, the country needs responsible budget policies and politicians should refrain from making the same mistakes they made in 2008, which forced Romania into austerity measures.
The prime minister also said the Government will prioritize investments and will limit the budget deficit at a maximum 3% of the gross domestic product, included the losses incurred by several state-owned companies.
Boc said Monday the Government has finished drafting the state budget for 2012 but will send it to Parliament for adoption after the European Commission releases its GDP growth forecast on Romania and after it settles a deficit target with the International Monetary Fund and the EU.
The law requires the Govenrmnt to send the state budget bill to Parliament by October 15.
A joint mission of the IMF, European Commission, and the World Bank will be in Romania next week to review Romania’s stand-by precautionary loan agreement.