Dinu Patriciu: A loan from IMF is a sign of weakness

Different views among Liberals

Dinu Patriciu is one of the biggest tycoons in the local business environment and he is also a key-member of the National Liberal Party, the party that governed Romania in the early months of the financial crisis.

Liberals are now making public different viewpoints on the rescue package Romania called upon from European Commission and International Monetary Fund: if the president of PNL, Calin Popescu Tariceanu said repeatedly that Romania didn’t need to turn to a loan agreement with IMF, the former minister of finance, Varujan Vosganian says the loan is absolutely necessary.

Both the solid ties between the former Prime Minister Calin Popescu Tariceanu and businessman Dinu Patriciu, and their common beliefs are sustained by their position toward an agreement with IMF: “The loan from IMF is a sign of deficiency, of weakness”, Dinu Patriciu told Realitatea TV.

He added that investors could fare far better in crisis, if they knew how to speculate and that the solution lays in the business environment.

“The crisis is only a change of property. You can fare much better in times of crisis if you know how to speculate. I know that a crisis is in fact an opportunity. It means less money and more intelligence”, said Dinu Patriciu.

Dinu Patriciu said only the bold would ride out crisis and the courage and intelligence were the two weapons to battle financial crisis. He mentioned that a 15% reduction of VAT and 10% flat income tax were some reliable solutions. As for the evolution of crude, Dinu Patriciu says the oil “has reached a balance point, but it will go up on a medium to long-term perspective”.

Vosganian: A loan from IMF is absolutely necessary

The former minister of finance, Varujan Vosganian, said Romania needed the rescue package from European Commission and International Monetary Fund, because of the increasing risk stemming from the public deficit. He added that Romanian would need 18-20 bln euros.

“If we had a positive fiscal year and financeable budget deficit, we wouldn’t need to turn to IMF for monetary aid. The problem is that the Government is not capable of assuring a sustainable projection of the public deficit. The public deficit will be higher because a chunk of incomes have been overestimated while another chunk has not been included in the budget bill, and the gross domestic product has thus been exaggeratedly projected. If you want a comfortable projection for Romania, you need 18-20 bln euros”, said Varujan Vosganian, the head of Economic Commission within the Senate at a media briefing in Iasi.

The former minister stressed that the projection for incomes was 3.5 bln euros higher and incomes worth 1.2 bln euros were not included in the budget. “There is a default risk that could total 10 bln euros in the end”, Vosganian concluded.

Tariceanu: Romania does not need to turn to IMF programs

President of National Liberal Party said Romania didn’t need a loan agreement with the International Monetary Fund, but the legislators wanted to find a shield that would “protect them” from a declining credibility among voters.

The former prime minister of Romania added that Prime Minister Emil Boc needs this shield, because he doesn’t have the courage to explain the population that the election promises will not be implemented and the current market status calls for unpopular measures.

As for the budget, we have to admit that Romania does not need to turn to IMF funds. They are overwhelmed by this situation and they are too frightened. They think there is no other solution to ride out the crisis and seek for a shield that would protect them on a political basis, in the event of urgent unpopular measures. We had the courage to say we cannot raise the teachers’ pay, not because we didn’t want to, but because the economy cannot bear this raise. Mister Boc doesn’t seem to have the courage to come forward and state these facts; he just wants to find a scapegoat to say ‘we’re doing these things because we were compelled to do,” said Calin Popescu Tariceanu.

He added that, if he was a prime minister, he would seek aid from European institution as Romania is a member of the European Union.

“I would have said that IMF has no reason to interfere, because we are members of the European Union. If we needed help, we would seek it from the European institutions. IMF is not renowned for its financial stewardship to third world countries”, Tariceanu added.

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