Moldova will go bankrupt if authorities fail to reduce the state budget deficit, Prime Minister Vasile Tofan warned, according to the Russian news agency RIA Novosti.
Speaking during a broadcast on a local television channel, Tofan indicated that the post-Soviet republic faces an inability to pay its debts if the current 6 percent budget deficit continues. According to the prime minister, the government is prepared to take unpopular measures to bring public finances under control, even if those steps trigger protests from citizens.
Tofan noted that in September, as authorities prepared for a difficult winter, the government decided to begin laying off civil servants and merging state agencies. Under that restructuring plan, the cabinet intends to cut between 10 percent and 30 percent of public sector personnel.
Also in early autumn, following the introduction of a state of emergency in the country's energy sector, the prime minister called on fellow citizens to pray for a warm winter.
Energy emergency and Persian Gulf conflict
In that early autumn appeal, Tofan addressed citizens who still go to church and light candles. He asked worshippers to mention in their prayers the need for an end to the conflict in the Persian Gulf, which he described as mad, as well as an absence of cold weather that could help people cope with high utility tariffs.
A state budget deficit occurs when government spending exceeds the revenue collected from taxes and other public duties, requiring authorities to borrow money to cover the shortfall. When a country can no longer meet its debt payments to creditors, it faces sovereign default, commonly described as national bankruptcy. Tofan's remarks were reported by RIA Novosti, a state-owned news agency headquartered in Moscow.
Moldova economy and deficit reduction targets
Moldova is a landlocked nation in Eastern Europe bordered by Romania to the west and Ukraine to the north, east and south. Governed from its capital, Chisinau, the former Soviet republic declared independence in 1991 and operates as a parliamentary republic in which the prime minister serves as head of government and leads the cabinet of ministers.
To prevent a debt default, the head of the cabinet said the government is seeking to reduce the state budget deficit over the coming years. Tofan stated that authorities aim to push the deficit below 5 percent next year and lower it to under 4 percent in subsequent years.
