Budget rectification in Romania

More money for justice, agriculture, transport, education and defense as well as the payment of salaries and damages to those who won these rights in court.

Bogdan Matei, 03.12.2014, 14:35

In parallel with the talks with the joint IMF and European Commission mission to Bucharest related to the draft budget for 2015, the Romanian government has announced a third and last budget adjustment for the current year. It is going to be a positive rectification made possible by the budget surplus reported at the end of the year. The government wants to cover the debts due to various providers, accumulated as arrears in the budgets of hospitals and local authorities. Also the budget adjustment will also cover the expenses for the payment of the salary differences, which various categories of public sector employees have won in court, following the slashing of salaries by 25% in 2010, when Romania was affected by the peak of the economic crisis.

Among the beneficiaries of supplementary budget allocations are the Justice ministry and the Prosecutor’s Office, the ministries of agriculture, transport and education as well as the National Authority for the restitution of property. In exchange the budgets of the Labor, Development and Healthcare ministries will be cut. The PM Victor Ponta is convinced that the representatives of the IMF and the EC will agree with the budget adjustment proposed by Romania:

Victor Ponta: “They have realized themselves that Romania has reported economic growth and that after only 11 months we have a budget deficit of only 0.2% of the GDP. Through the budget rectification we will be able to make, in advanc, many of the payments that were due next year, and this is due to the fact that we have had high budget returns and less expenses”.

The president of the Fiscal Council, Ionut Dumitru, points a finger to the electoral promises made by the PM which he assumed before the presidential election, which he lost last month:

Ionut Dumitru: “If you don’t increase the fees and taxes you have to reduce expenses more. As regards the expenses, we can undoubtedly save some money, given that we are talking about big inefficiencies, but to be able to save money you need reforms, in the sense that you need to prioritize investments, to allot money according to the cost-benefit criterion, which is a fundamental principle in economy. And we don’t see this happening. Without deep reforms in these areas we cannot save money.”

In turn, the business environment points a finger to the budget structure, which they consider non-transparent. The secretary general of the Association of Business People in Romania, Cristian Parvan has more:

Cristian Parvan: “What guarantees do we have that the money allotted from the budget surplus will go into issues of concern for the society, into infrastructure, schools, hospitals and so on? We don’t have any guarantees.”

Cristian Parvan also says that Romania does not have enough budget resources and that next year many projects will have to be co-financed from European funds.