Isărescu: Without pension adjustment, we cannot talk about economic growth

The Romanian state needs to rebalance the pension system deficit, which is currently being corrected through inflation - inclusively by cutting or levying tax on pensions, this is the harsh message conveyed by National Bank Governor, who in mid-year stopped talking about the economy returning to growth, even warning that the measures proposed in order to force a rebound could lead to tougher corrections.

"Too much hope is put on it (the economic growth i.e.). It was plus one, then minus one, and because of this we can no longer pay pensions. Budgetary problems are structural, they are enormous. We can record an 8% growth and we still need to make adjustments. Now we are not doing it directly, this is a back door approach, through inflation," the governor said at the seminar "Mugur Isărescu and guests" organised yesterday at the NBR. He warned that the state would have an increasingly harder time borrowing if the Government failed to cut spending and to come up with a coherent public rhetoric. The main issue at present is the social security deficit, of 3 billion euros this year, says Isărescu, adding that NBR's entire gold reserve would dry up in just one year, were it to be spent to cover it. However, in previous years, when the economy was going full speed ahead and the Tăriceanu Cabinet was squandering money, the Governor did not stand out as harshly critical of the then government.