The 2014 state budget was promulgated

President Traian Basescu has promulgated Romanias 2014 state budget, after the Ponta cabinet postponed for three months the decision to introduce an additional excise duty on fuel.

Ştefan Stoica, 19.12.2013, 14:55

The communication gap between the president and the prime minister runs the risk of pushing Romania into a deadlock. Aware of this danger, the two officials held on Wednesday decisive talks on the 2014 state budget, more precisely on the controversial additional excise on fuel, that the government had intended to introduce as of January the 1st. The compromise became possible in the end. The Ponta cabinet has postponed for three months the decision to introduce the excise, and the president green-lighted the budget. Prime Minister Victor Ponta has hailed the solution:

“We have reached a small compromise, in order to have a budget and to be able to pay pensions and the doctors’ salaries as of January the 1st, to be able to allot subsidies and to do all the important things that we want to achieve. I believe that this is a sacrifice worth making. I’d be happy to see that we don’t need the money we would have levied on fuel after all.”

The additional excise duty on fuel is contested not only by the president, who sees it as an obstacle in the way of economic recovery and a burden on the population, but also by road carriers, the first to be directly affected by fuel price-hikes. Traian Basescu has made it clear he will like the government to give up this excise for good, and believes the Government was wrong to agree to it, in the negotiations with the IMF and the European Union. Traian Băsescu:

“I’m sure the excise can be completely avoided and this is my goal during the talks with the IMF and the EU, due in January. I will not validate any letter to the IMF board, stipulating an increase in the excise on fuel.”

Traian Basescu has said the introduction of the excise would only bring 600 million lei (some 140 million Euros) to the state budget. The president has even suggested that this amount can be taken, for instance, from the Development Ministry or from additional taxes on natural gas. The president says containing tax evasion and giving up the additional taxation on fuel for good, will create the prerequisites for reducing the contributions to the welfare budget, a request made by companies and promised by the government. In the opinion of those who drafted the budget, the new excise on fuel is a must, in order to be able to support the budget and maintain a deficit of 2.2% of the GDP, as agreed with international lenders. The budget is based on an estimated growth rate of 2.2% of the GDP, a 2.4% inflation rate and an exchange rate of 4.45 RON against the Euro.