Talks on the sustainability of the 2017 state budget
The construction of Romanias state budget for 2017 has stirred various reactions.
România Internațional, 15.02.2017, 14:07
Romania’s President, Klaus Iohannis, on Tuesday voiced concern after he held talks in Bucharest with Prime Minister Sorin Grindeanu and Finance Minister, Viorel Stefan, about the 2017 state and social security budgets, which had been submitted for promulgation. The president has said the budget bill is problematic, because the deficit might exceed 3% of the GDP. In his opinion, the draft budget is based on an overestimated level of revenues and on a high level of spending.
Klaus Iohannis: “An enormous amount of money, some 54 billion lei, is earmarked for the so-called commitment appropriations, which will impact the country’s budgets for the following years. Together with my team, I will make a thorough analysis of these two public budgets. Naturally, we will also take into consideration the standpoints of the Prime Minister and of the Finance Minister, but, overall, I must admit I am worried.”
In response, the leader of the Social Democratic Party, Liviu Dragnea, has said the 2017 state budget is balanced and sustainable. He has also said that some people just try to find reasons to delay the publication of the document in the Official Journal.
Liviu Dragnea: “I believe in the sustainability of this budget. The commitment appropriations do have an impact on future budgets, in the sense of boosting investment. The budget is balanced and sustainable, and the requirements related to a 2% level of defence spending and a 3% limit for the budget deficit have been met. Actually, if the president has some fears, he should have them in a reasonable period of time, because we would like Romania to have a budget this year.”
On Monday, the European Commission highlighted in its winter forecast that this year Romania’s budget deficit would stand at 3.6% of the GDP, which might trigger the excessive deficit procedure. The economic growth forecast for Romania has been improved to 4.4% of the GDP in 2017, but it is below the Government’s estimates of 5.2%. There are also experts who say, in their turn, that the deficit target will be exceeded, if the economic growth rate is lower than the figures estimated by the Government, as this means budget revenues will be significantly lower than those forecast by the cabinet. The former Finance Minister, Mircea Coşea, has said on Radio Romania that the 2017 budget is based on a debatable vision, namely it maintains consumption as the main engine for economic growth.
And just as the international experience shows, we should be aware of the fact that if this engine is maintained on medium term, between three and five years, then the economy develops unhealthily, it is no longer based on investment, but on capital, modernisation, research and development, that is on everything that creates a high added value, Mircea Coşea says.
(Translated by Diana Vijeu)
