Measures to reduce public spending

The government of Romania passed an emergency order to reduce budget expenditure

Corina Cristea, 15.05.2023, 14:00

With a budget deficit in the first 3 months of the
year above the government’s estimates, an emergency order designed to help
reduce budget expenditure was adopted at the end of last week in Bucharest.

The finance ministry, which drafted the order at the request
of PM Nicolae Ciucă, mainly focused on cutting non-urgent spending. The order
sets monthly expenditure ceilings for each ministry, and reduces expenses with
goods and services procurement by 10%, except for those in the public
healthcare and education sectors. The order also freezes hiring in the public
sector, with exceptions to be endorsed in separate government memoranda, the
finance minister Adrian Câciu explained:

Adrian Câciu: Exams or contests to fill permanent or
temporary vacancies in the public sector will be suspended, except for unique
positions. Basically, the various sectors will apply for governmental
derogations, in separate memoranda, in case further hiring is necessary,
including in public healthcare and education.

The decision concerns the nearly 1.3 million posts in
public institutions and authorities in Romania this March, around 64% of them
in central public administration, according to data made public by the finance
ministry. The largest number of people, nearly 300,000, are employed by the
education ministry, another 125,000 by the interior ministry, 72,000 by the
defence ministry, 25,000 by the finance ministry and 19,000 by the health
ministry.

Adrian Câciu also said that the clause concerning a
bonus for Ph.D. holders has been scrapped, and new rules in this respect will
be introduced in a future salary law.

The number of jobs in the PM’s office will be cut down
to a half, and the same person will no longer be allowed to be a member of the
board of directors of more than 2 public companies. Moreover, public
institutions will no longer be permitted to purchase cars, furniture and office
equipment this year.

The order also introduces a short farm-to-fork chain,
reducing the number of intermediate operators between farmers and consumers, in
an effort to protect the national agrifood industry. To this end, schools,
hospitals and military units will be bound to comply with strict rules
concerning the procurement of Romanian-produced foodstuffs for their cafeterias
and mess halls.

According to the finance ministry, the measures will
lead to estimated overall savings of little over EUR 1 bln by the end of this
year. (AMP)