BNR's Isarescu says tax preferences are just for a limited period, advocates fiscal normalization

Governor of the National Bank of Romania (BNR) Mugur Isarescu argues that a tax preference is only granted for a limited period, and has to be removed at some point so that everyone is taxed the same.

The governor emphasized that the fiscal adjustment is a must, "is crucial", and Romania must get out of the excessive deficit position.

"This is a political problem. We try in every way to stay politically neutral. The only thing we strongly insist on in all of the National Bank's statements, and this is also my answer, is that the fiscal adjustment must be done, it is crucial. Romania must get out of this excessive deficit position. We are the only European country with such a deficit and it costs us. It costs the budget, it also costs the country. You've seen that we have a high risk premium. Indeed, it is not simple. It is not simple and, I repeat this, it's not about the technical aspect. Technically, everyone can find a solution. It's not simple from a political and social point of view, because when there are so many tax exceptions, preferential situations, the pressure is to get back to normal," he added.

On the other hand, Isarescu refused to comment on the "budget hole", noting that the central bank does not work with such notions "that are slightly obscene".

The central bank governor mentioned that the BNR has worked very well with the government and the latest "inflation-related achievement" is not only the result of the monetary policy, but also of this very good cooperation with the government.