Traian Basescu accused the Government of putting Romania in a recession. The scandal started after the National Institute of Statistics announced that the GDP fell by 1% in the second quarter of 2014 compared to the first quarter.
Prime Minister Victor Ponta argues, however, that the data actually show an increase in the first half of the year compared to the same period last year. Basescu did not hesitate to bring into discussion the lowering of the social security contributions which he said will put Romania in a worse crisis.
According to data provided by the National Institute of Statistics, the first half of 2014, the GDP increased compared to the first half of last year, up to 2.4% on the gross series and by 2.6% on the series seasonally adjusted. There was however a decrease of 1% in the second quarter of 2014 compared to first quarter.
The decrease was immediately voiced by President Traian Basescu who said that Romania entered into a recession because of the government’s stupidity.
President Traian Basescu said that CAS reduced by five percentage points would put Romania in a worse crisis and would put at risk even the IMF agreement.
The CAS reduction by 5 percentage points for employers was scheduled to take effect on October 1, but Traian Basescu sent the law back to parliament, just one day before the promulgation period expired.
Before doing that, the president invited for consultations the Premier and Minister of Finance. After this discussion Basescu accused the head of the executive that he came unprepared to the discussions. Victor Ponta subsequently presented the sources to be used in order to cover the budget deficit created by the CAS reduction.
Therefore the 4.8 billion deficit can be covered by social security contributions from the new jobs, from the additional tax revenue, debts recovery from insolvent companies or by reducing tax evasion.