Central bank governor requests harsher economic policies

Economic policies must be strengthened, amid international market volatility and an increasing lack of external balance, although there is a lengthy election period ahead, according to the Governor of Romania's National Bank (BNR) Mugur Isarescu.

Isarescu emphasized that the government should adopt a tight salary policy, as of next year, arguing that the current monetary policy is insufficient to keep inflation steady. He added that a rise in salaries should be maintained below the rise in productivity, to avoid macroeconomic distortions, unlike this year, when the rise in salaries was twice that of productivity.

"If Romania aims to reduce the current account deficit, an excessive use of monetary tools becomes dangerous. To reduce external deficit, the focus must be on a mix of budget and fiscal policies meant to stimulate a rise in labor productivity," Isarescu said.