Romania’s Public Budget
Government presented Romanias 2015 budget bill.
Corina Cristea, 12.12.2014, 13:50
Based on a forecast GDP growth of 2.5%, Romania’s budget for next year reflects the acceleration of structural reforms in key areas, the Government argues. The authorities will push for a 3% economic growth rate, but this also depends on global economic developments, the PM’s adviser Cristian Socol explained.
This year as well, the budget focuses on investments and creating new jobs, with the funds earmarked for investments up 24% (nearly 2 billion euros) compared to 2014. According to Cristian Socol, the budget is designed to also support private businesses, by increasing the co-funding for European projects, state aid and state guarantee schemes, as well as by providing more support to farmers, specific facilities for high-value foreign investments and the development of industrial and technological parks, and incentives for the technical education field.
Authorities expect the absorption of EU structural and cohesion funds to improve by up to 80%. In full compliance with Romania’s commitments to the European Commission, the International Monetary Fund and the World Bank, the budget is based on a deficit of 1.83% of the GDP and a 2.2% inflation rate, and guarantees Romania’s financial security by means of buffer funds of 9.25 billion euros, which cover the state’s obligations to its citizens, in terms of pensions and salaries, for six to seven months. This eliminates most risks related to a possible resurging of recession in the eurozone or to problems in international financial markets.
The goal of further strengthening the country’s fiscal system, which is a prerequisite for improving the sustainability of public finances and the credibility of reforms, is accompanied by a complementary objective, that of strengthening the social safety net, which was strongly affected by the austerity measures taken during the crisis. In 2015, the national minimum wages will be substantially increased, and so will the salaries of teachers and the healthcare staff. Pensions will go up 5% and support measures will be taken for vulnerable categories, such as those living in severe poverty or people with disabilities.
The largest amounts have been allotted to the ministries of labour, finances, agriculture, European funding, transport and economy. The smallest budgets are those for the healthcare, culture, administration and the interior ministries.
The Liberals, in Opposition, have already announced they will vote against the budget bill in Parliament, on grounds that the text does not explicitly identify the source of the funds for investments.
