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European Commission: Romania continues to be affected by debts to private sector 

de A.C.
Miercuri, 1 decembrie 2010, 18:10 English | Top News

Even though the government paid 2 billion RON to the health sector to cover part of its debt, the current tendency suggests a new increase of the state's debt due to structurla problems, the European Commission estimates reads. The document reads that the health fund can engage in spending that exceeds its budget. 

Either way, authorities reallocated funds from the state's budget to pay debts to the private secto and they will use any positive performance in the budget for this scope, the analysis shows. Moreover, the document reads about the pressures upon authorities to give up reform measures and on investments, seen as the main increase factor for 2011. 

The European Commission's estimates presumes that authorities will not give up the fiscal consolidation measures adopted in July 2010 but there are risks that jeopardize the current situation.  Authorities are pressured to give up measures implemented in 2010 regarding fiscal consolidation. Such a decision would stimulate internal demand on the short term but there will be high costs for the mediun and longer terms. 

After a decline in 2009 and 2010, private consumption will increase by 1.8% next year as salaries will be readjusted. 

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