Controversy regarding Romania’s finances

controversy regarding romania’s finances Without measures, this year’s budget deficit may reach 4% of the GDP, says the finance minister in Romania’s new Liberal government.

The finance minister Florin Cîţu said on Thursday that the economic and financial situation inherited from the Social Democratic government, in particular his predecessor Eugen Teodorovici, exceeds the most pessimistic expectations. He made unprecedented accusations, saying Romania has been run in the last three years based on two budgets, one presented publicly in Parliament and another, containing real data, used to finance the Social Democrats' local leaders. The mechanism, translated, according to Cîţu, into a mafia-type double accounting system, allegedly used budget adjustments to take money out of investments and redirect it to the party. Minister Cîţu says he is considering getting the criminal prosecution bodies involved to look at whether an organised criminal group was created in relation to the situation of public finance. The deficit discovered amounts to 21 billion lei, the equivalent of 4.4 billion euros, according to the real figures. Florin Cîţu:


"The estimated revenue for the first nine months should have been 249 billion lei. It stands at 228 billion lei, which means 21 billion is unaccounted for. 11 billion represents uncollected money from the economy. The other half comes from European funds. The deficit for the first nine months should have been 2.28%. The budget execution in the first nine months stands at 2.60% and the execution for the first ten months, which I am presenting today, is 2.84%, which is more than it should have been at the end of the year. The pension budget has been discussed repeatedly and Parliament has held an entire debate about the expected surplus to the pension budget. Ten months into the year, the deficit already stands at 2.9 billion lei. The situation looks much worse for the end of the year unless something is done."


The conclusion of minister Cîţu is worrying. Unless measures are taken, especially in respect of tax collection, the budget deficit is expected to reach 4% at the end of the year, 1% more than the figure recommended by the European Union. In response, the former finance minister Eugen Teodorovici has accused his successor of not understanding the budget and categorically denied the idea of double accounting. Eugen Teodorovici:


"I am profoundly disappointed that Mr. Cîţu seems unable to understand the budget. With regard to execution, there was always a difference, which translates as deficit, but if we look at 2019, now, let's say, we have 21.7 billion lei in estimated budget revenue and 21 billion lei in budget expenditure, which very clearly shows that there is no hole in the state budget. Also, I've seen Mr Cîţu's allegation about crime groups and double budgets. I don't think there is a difference between what the finance minister alleges, at least not at the time I left the finance ministry, and reality. These are data presented clearly by my colleagues at the finance ministry and the entire team of professionals and for which they assume responsibility."


The priorities of the finance ministry are the adjustment for 2019 and creating a budget for next year.



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Publicat: 2019-11-15 13:50:00
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