Adrian Vasilescu: "There is a need to increase state budget revenues”

In the current context in which budget expenditures are quite high, and the state has come to borrow to cover them, there is a need not only to reduce some of the expenditures, but also to increase budget revenues to pay for these expenditures, but also for the state budget to pay the installments and interests for the loans contracted, argues Adrian Vasilescu, strategy advisor at the National Bank of Romania.

Adrian Vasilescu told us: "What will result from the negotiations at Cotroceni will be a political decision, not a technical decision. There are several parties in negotiations, and what will be decided in Parliament, the National Bank will also implement according to its powers regulated by law. I would like to draw your attention, however, that reducing the budget deficit does not only involve introducing new taxes and duties or increasing others, but also requires reducing the current state expenditures. The state budget is made up of expenditures and revenues, and at this moment everyone is looking more closely at the revenue side, although they should also analyze what expenditures can be reduced. Then there are representatives of the political class who talk a lot about what will be cut, but they do not say anything about what will be added to the revenue chapter. It is probably difficult to add now, in the current context. But there is also a need to increase revenues in terms of the loans made so far. Or, an increase in revenues implies an increase in the tax base or, better said, new taxes and duties, as well as the increase of others. We can judge the deficit we are discussing in the following way: the revenues that the budget can collect plus how much a country can borrow to spend. And even today (ed. - last Friday) we are witnessing this, a loan from the country, based on Fidelis government securities, which are purchased by the population that becomes an active participant in the revenues of the state budget. Then there are loans from abroad. Banks participate in the formation of budget revenues from loans granted to the state. And the problem is how much we can borrow, because we cannot borrow indefinitely, because we risk becoming insolvent. We have the opportunity not to enter into a state of default, if we take the necessary measures for budgetary sustainability, so that the state budget can support the repayment of the loans taken and the payment of the related interest”.

Basically, Mr. Vasilescu claims that there is a need to increase some taxes - such as the tax on gains from stock market transactions, but also to introduce new taxes, because the state budget urgently needs revenues in order not to become insolvent.

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