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What the newspapers say: January 29, 2010

de C.B.     HotNews.ro
Vineri, 29 ianuarie 2010, 8:44 English | Press Review

Romania can only borrow three billion euros in 2010. Elsewhwere in the news, Romanian IMF representative claims that ex-IMF chief Kenneth Rogoff rushed to judge when saying that Romania risks to be unable to pay back. Last but not least, Romanian Work Ministry proposed that the retirement age should be 65 for both men and women in order to save the pension fund.

Romania can only borrow three billion euros in 2010, Gandul reads. Starting 2011, Romania will have to survive from its own savings. The local economy cannot support a public debt bigger than 35% of the GDP, Romanian IMG representative Mihai Tanasescu claims. In January 2010, Romania's public debt was already 29%. Tanasescu said the development needs to continue and the real economy should support the Government.

The publication estimates that Romania's public debt might reach 33-34% by the end of 2010, namely 43 billion euros. This means that in 2011, Romania can only borrow 2% of the GDP, that is three billion euros, depending on the economic growth this year. Romania's public debt doubled in two years and a half. The country can afford to borrow less compared to other states because it has little access to reasonable interest rates, budget revenues are low and the funds allocated to paying up bank interests continue to grow.

The Finance Ministry can now borrow with a 7.88% interest rate for lei credits, instead of 14%, the interest in 2009. The newspaper estimates that Romania will get new loans to pay old ones. Tanasescu says Romania has a good potential for economic growth in the years to come and estimates the growth this year at 1.3-1.5%.

According to Cotidianul, Tanasescu claims that ex-IMF chief Kenneth Rogoff rushed to judge when saying that Romania risks to be unable to pay back, whether or not the IMF agreement continues. Tanasescu motivates by indicating that a current account correction took place, Romania's reserves are 29 billion euros, the fiscal policy focuses on consolidation and the drop in interest rate is happening.

Tanasescu added that Romania will have no problem in paying up pensions, salaries, foreign debts and 2010 will be a stable year. Kenneth Rogoff claims that many European states are still facing the danger Romania faces - Ukraine, Latvia, Lithuania, Hungary and Greece and maybe Ireland and Portugal as well. Rogoff stated that the IMF managed to buy time for these countries, but believes that not all of them will manage the intolerable huge deficits, NewsIn reads.

Romanian Work Ministry proposed that the retirement age should be 65 for both men and women, Adevarul informs. According to Work minister Mihai Seitan, it is the only way to save the pensions' system, or else it would collapse. According to the current pension law, a state-employed man contributes with over 300,000 lei in 44 years of work and his pension fund is 47,000 lei, the publication goes on.

Seitan explained that the pensions' fund deficit amounts to 1.8 billion euros, namely 7.5 billion lei. There are five millions and a half Romanians contributing to the social insurances fund and five million and a half retired. Romania's population is aging and many young people migrate, therefore the budget contributors - retired dependency rate could go up.

It presently reads 0.98%. Men retire at 63-64 and women at 58 - 59. Life expectancy in men is 69 years and in women - 76. In Romania, a man hopes to receive his pension for an average of five years, while women, for 17 years.
























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