The official voiced hope BNR’s position towards the budget would determine politicians to lower expenditures. Isarescu will take part along with senators and deputies at the drafting of the 2008 budget bill.

Romania’s fiscal policy should not relax and for adjusting the macroeconomic balance, fiscal, budgetary and salary levers should be used.

Isarescu warned Romania’s top economic vulnerability resides in its external deficit. “The excessive use of monetary policies as an adjustment instrument is a very dangerous thing,” Isarescu said.

The increase of salaries outpaces labor productivity, he emphasized. When combined with the appreciation of the leu, the two lead to the widening of the external deficit, the BNR official explained. The governor reminded the country’s economic policies must be strengthened during longer election periods.

The government approved the 2008 state budget bill on October 10. The document shows revenues to the general consolidated budget will total 172.8 billion lei, while expenditures would stay at 184.7 billion lei. Romania should have a budgetary deficit standing at 2.7 percent of the GDP.

The macroeconomic indicators the budget was built on consist of a 6.5 percent economic growth, a 3.8 percent inflation and a 13.3 percent of the GDP current account deficit.The unemployment rate should stand at 4.3 percent, down against this year’s 5 percent.