THE "BUSINESS BEHAVIOR IN TIMES OF CRISIS" CONFERENCE ORGANIZED BY THE BURSA NEWSPAPER Finance Minister Gheorghe Ialomiţianu: We shouldn"t venture raising pensions and salaries

Salaries and pensions need to be kept at the levels they had this year, so the money can go to investments, Gheorghe Ialomiţianu, the minister of Public Finances said on Friday.

He added that we need to be careful on how we are going to handle the budget in 2012 and on the deficit levels, because we have a problem with financing.

The Minister of Public Finance said: "We are making medium term loans, with low interest rates. The international context has changed and we are now being forced to borrow for shorter terms. We shouldn"t allow ourselves to be fooled, to go with a higher deficit and to spend it on paying interest. We need to direct more money towards investing. We shouldn"t venture raising wages and pensions. The best alternative is to maintain salaries and pensions to their 2011 levels, so we can direct more money to investments, because we can"t afford to make expenditure adjustments in 2012. We can"t afford to do what we did in 2007-2008, stimulate consumption and either freeze investments, or to slow down their pace. Investments are the only way to outlast this period of crisis".

Gheorghe Ialomiţianu said that we can"t lower taxes and increase spending: "I"ve seen that the USL is imposing some conditions. We have reviewed these measures and it is very clearly visible that there is a discordance, because one can"t lower taxes and on the other hand raise expenses. No country did something like that. This is the result of an unnatural relationship between the Social Democrat Party (PSD) and the PNL (National Liberal Party)".

He added that such a measure could cause the country "to go bankrupt".

"It would mean letting everything we"ve built so far go down the drain", the minister of Public Finance said.

He also said that all the countries have taken the same measures "as Romania did".

The Ministry of Public Finance "is in negotiations" with the International Monetary Fund (FMI) and with the European Commission to determine the deficit level, taking into account the financing possibilities and the level of investments, according to Gheorghe Ialomiţianu. He said that the deficit needs to be established in such a way to allow their financing, so there are no more mistakes.

Gheorghe Ialomiţianu also said on Friday, that a possible alternative for "borrowing on the international markets is in the works", but there is a need to be mindful of the interest rate.