[ad_1]
Raising pensions by 40% would increase spending on wages and pensions to 90% of tax revenue, which is aberrant, Dan Bucşa, chief economist for Central and Eastern Europe at UniCredit Bank London, said on Monday, according to Agerpres. .
Also read: Ludovic Orban CLARIFICATION: NO mask for running outdoors
“My basic scenario is that we will not reach a 40% increase in pensions and for that I think it will be necessary for the elections to be held on December 6. If we look at Australia, the idea of postponing the elections until March is not good because Australia had a peak of the epidemic exactly what it would mean for us in February-March, so it is unlikely, if we believe what happened in Australia , that December looks worse than February-March. Hugely things and Romania will have a much better isolation testing and monitoring system in three months, I personally doubt it, and then the forecast for 2021 reflects a 14% increase in pensions, with no salary increases for teachers of 20%. Either the Constitutional Court will reject Parliament’s amendments, or the Constitutional Court will allow the Government to implement these measures, it will say that they should be implemented, but they will be implemented when there is money, 2025 – 2026, probably. ed so fast since then. If not, next year we will have these non-discretionary expenses, only with salaries and pensions, because there are others, at 90% of income from taxes and duties. Which is aberrational. It’s aberrant for any country that wants to be a model, ”said Dan Bucşa.
He explained that the remaining 10% plus non-tax income, which is uncertain, will have to cover the rest of the expenses, such as Health, Education, Defense, the operation of the Administration, “which is impossible.”
The economist also referred to the idea that by reducing special pensions, there will be room for an increase in pensions by 40%.
“I would also like to talk a bit about the idea that I have seen in some publications that if we reduce special pensions we are ready to increase pensions by 40%. It’s false. First of all, special pensions are an anomaly. “Some of these people did not contribute at all. So I don’t see why they should have special pensions, especially when their social contributions were zero or regular at most. But if we look at special pensions as volume, not level, 86% of them they are for the ex-military, police and secret services. I have not seen anyone in society say “we want to reduce military pensions”, or finally, very few people. focus on parliamentarians, the judiciary and the Court of Auditors , which is a “huge amount” of 0.1% of GDP, I am not saying that they should exist, but that reducing them is not the solution to raise regular pensions. 40%. Something more is needed, “said Dan Bucşa.
He added that “something else” comes from tax increases and increased collection.
Dan Bucşa also said that PSD has the solution to increase the payroll tax, but the party leaders did not mention a percentage, so he ran a simulation for an increase of 25% and 30%, which is not enough to meet all the promises of Parliament. In his opinion, if all the measures of Parliament are adopted and the payroll tax is increased by 25%, the deficit would remain above 9%.
“If there is this increase in spending, the public debt will reach more than 50% in Romania for the first time since the 1980s and as a result, it is very likely that we will lose the investment rating. It is almost certain that,” said Dan Bucşa.
According to the cited source, in the basic scenario, respectively, if pensions increase by 14%, the NBR could cut interest twice more, ROBOR could fall below 2%, Romania’s rating will probably remain in the category investment and the government could borrow cheaper.
“In the risk scenario: if pensions increase by 40%, salaries, allowances double, etc., the NBR will probably maintain the interest or in an extreme scenario it will have to increase the interest to defend the leu, and the Romania’s rating “Depends on two of the three rating agencies. It is enough for investors to get out or ask for much higher interest rates. Basically, we end up being persecuted by another category of investors, “Bucsa warned.
He also said that Romania could register an economic decline of 5% this year, and the biggest contribution to the recession will be private consumption because it is the engine of economic growth in normal years. Romania could see economic growth of around 4% next year, with a higher investment contribution than in normal years, said Dan Bucşa, chief economist for Central and Eastern Europe at UniCredit Bank London. A
[ad_2]
