When the government of prime minister Emil Boc took power after elections in Romania in November 2008, ministers discovered that pre-election expenditure overruns had left them with the country’s largest budget deficit since the end of the Soviet era, at 4.8% of gross domestic product (GDP). Worse still, the government would need to fund this deficit in the context of a global liquidity squeeze following the collapse of Lehman Brothers, which caused the country's economy to fall by 7.1% in 2009.
“In 2009, we had a budget deficit of 7.4%, even with the measures that we took. Without those measures, we calculated that the deficit would have reached 10% in 2009 and 12% by 2011,” says Bogdan Dragoi, the secretary of state in the Romanian finance ministry.
