Romania

September 2005 | Risk Summary

Prime Minister Calin Tariceanu has announced a cabinet reshuffle to bolster his government's EU accession-related reform process. The most controversial move was the sacking of finance minister Ionut Popescu, who had come under fire for proposing an unpopular hike in VAT to 22% from 19% from 2006. Popescu is being replaced by Sebastian Vladescu, an economist with previous ministerial experience. Vladescu is likely to continue along the same reform path of his predecessor, and may keep higher VAT rates on his political agenda, given the need to offset the fiscal impact of introducing a flat tax regime earlier this

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