Romanian President Traian Basescu: Romania has means to avoid Greek situation

Romania is no case in the situation of Greece, and has all the instruments necessary to avoid such situation, President Traian Basescu told a press conference Thursday.

“Contrary to what some say on TV that Romania is in the same situation as Greece, we still have 2011 and 2012 … We still have enough time to take measures so that nothing bad happen to us,” said the president, stressing that the only problem is whether the country wants and can use these instruments.

At the same time, Basescu stressed the importance of the solidarity and the support Romania receives from the European Union and the international financial institutions.

“I would not want my statements leave the impression that we are in a rosy situation. Our condition is difficult,” he said, warning that “if we continue like this, we will in the end reach the ‘performance’ of Greece.”

According to him, cutting spending in the budget sector represents an objective the authorities must have. “We must focus on upgrading the budget apparatus and make it more efficient in terms of cost management,” said the head of state referring to the 25 percent wage cut in the public system.

He also said that in the real economy there are only about 3 million employees who must pay contributions to ensure wages for 1. 4 million employees in the public system and for almost six million pensioners.

“The state cannot function under these circumstances, we cannot hope to reach that stage when we spend as much as we produce, while doing nothing right now to avoid collapse,” Basescu said.

He specified that in the past five years the budget expenditure has increase from 17 up to 43.6 billion lei (from 5.66 up to 14.53 billion U.S. dollars).

A process of modernization of the state can not be developed without massive modernization of the budget sector, Basescu stressed.

The Romanian government announced recently to reduce public salaries by 25 percent, while pensions and unemployment benefits will be lowered by 15 percent each, as part of a program to avoid an economic collapse and keep the deficit in the new cap agreed with the International Monetary Fund.

Joint teams from the IMF, EU and the World Bank were in Bucharest until May 10 for the fourth review of Romania’s progress under a 20 billion-euro (25 billion U.S. dollars) loan agreement. The IMF stressed that it will only disburse the fifth tranche of the stand-by agreement after the Romanian authorities implement the cost cutting measures.