Conflicts over the 2014 state budget

The 2014 budget bill and its planned increase in the excise duty on fuel gives rise to heated debates.

Corina Cristea, 04.12.2013, 13:19

Tuesday’s meeting between president Traian Basescu and prime minister Victor Ponta achieved very little in the way of reaching an agreement on the value of the excise duty on fuel, with the two maintaining their opposing views.

While president Basescu fears the budget revenues brought in by the 7-eurocent increase in the excise duty on fuel might be used for election purposes, the prime minister says the increase has already been established with Romania’s international lenders.

Making use of the constitutional procedures at his disposal, Traian Basescu says he will send the budget bill back to Parliament for reexamination, accompanied by concrete suggestions as to where budget allocations may be cut so as to maintain the level of budget deficit agreed with the international financial institutions without having to increase the excise duty. According to the president, one such example is the ministry of regional development, where too much money has been allocated. President Traian Basescu:

“It is my moral duty as a president to warn Romanians that funds for the political clientele are being collected, at their expense, through the state budget. I can but only use the legal means at my disposal, namely to send the budget bill back to Parliament and possibly even challenge it before the Constitutional Court if I believe it contains unconstitutional provisions. This is the extent of what I can do. There is also no other means by which I can force the government to withdraw its emergency ordinance amending the fiscal code, for example. So, I’m sending the budget bill back to Parliament for a new vote and if it passes in the same version, I will have to sign it into law.”

Prime minister Victor Ponta has described the president’s position as inflexible:

“The president will send the bill back to Parliament and challenge it before the Constitutional Court. I only asked him to initiate these procedures, which he himself admitted no other president has used in the last 23 years, within a reasonable period of time, so that we can have a state budget by January 1st. He neither agreed, nor refused.”

In the opinion of the economic analyst Aurelian Dochia, both solutions to cut spending and eliminate tax increases proposed by the government and the president are feasible. At the end of the day, this is a political choice, because technically, there is always an alternative when it comes to the structure of the budget. At this point, however, the conflict between the president and the government has led to an increase in the exchange rate.