Romania's president rejects tax law which could lead to "unsustainable economic growth"

Romania's president has refused to pass into law a series of tax cuts backed by the center-left governing coalition saying they could lead to "domestic and external risks," including unsustainable economic growth.

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President Klaus Iohannis said in a statement Friday the tax cuts which include a proposed sales tax cut from 24 to 19 percent, salary tax cuts, and a reduction on fuel taxes — all scheduled to take effect at the start of next year — were not backed by provisions to increase tax collection.

Iohannis said Romania needed higher revenues in order to hike spending in defense to 2 percent in 2017 in line with NATO demands.

Parliament will now need to redraft the measures.