Public spending, to be reduced
The Romanian ruling coalition has decided to cut expenses with ministries goods and services by 10%.
Roxana Vasile, 09.05.2023, 14:00
Soon after the information that the Government in Bucharest was planning to cut public spending was in the media, the leaders of the ruling coalition started making reassuring statements. Thus, the Social Democrat Marcel Ciolacu said salaries and pensions would not be affected, while the Liberal PM Nicolae Ciuca announced that large incomes would not be overtaxed overnight. Nevertheless, both leaders agreed that in order to play down the effects of a number of concomitant crises, the Romanian Government must come up with very clear rules regarding public spending. The posting, on the Finance Ministry’s website, of a draft emergency order in this respect on the first day of this week, shed light onto the authorities’ plans.
PSD, PNL and UDMR, making up the ruling coalition, have decided to cut by 10% the ministries’ expenses with goods and services and ban the purchase of cars and furniture, also suspending employment in public institutions. Exempted from this rule are two sectors – healthcare and education – which are severely understaffed. Moreover, the number of jobs in the public dignitaries’ offices and chancelleries in central public administration will be reduced by half, while board membership is limited to two companies. According to the draft emergency order, schools, healthcare and military units will purchase Romanian food products for their canteens, in keeping with clear rules in this respect.
The Finance Ministry estimates that the measures will generate savings to the state budget of over 1 billion euros, given that in the first quarter of the year expenditure with goods and services at the level of consolidated general budget increased by 17% as against the same period in 2022. Moreover, the number of jobs in public institutions also went up by more than 9 thousand in March 2023, as against the same period of the previous year. Adding to these is the fact that Romania has been in the excessive deficit procedure since April 2020, which it has to end by 2024 and which is still at a very high level.
USR, in the opposition, says the draft emergency order imposes general rules, without considering the particular needs of local public administrations and that the Government only plans to save 1 billion euros although the budget deficit is 3 billion euros, and very likely to double by year-end. (EE)
