Radio România Internațional

Tag: 2021 budget

  • The 2021 budget under debate

    The 2021 budget under debate

    Lawmakers in Bucharest want to
    adopt the 2021 budget law within less than a week. The law was submitted to
    Parliament for debate last week, in addition to other related laws, including
    an emergency decree on cutting holiday vouchers for public sector employees and
    capping pensions at the level reported last year. The context isn’t great,
    considering the pandemic has pushed Romania into an excessive deficit
    procedure, while the healthcare system continues to eat up considerable funds.
    Lawmakers also need to make sure the business sector is not affected too much.
    The Government says the budget law will allow for a multiannual approach to
    reforms and public finance, by reducing the budget deficit gradually, from
    7.16% to 3.4% in 2024. The law is focused on investment, which will get 5.5% of
    the GDP, the largest allocation so far. The law also enjoys the support of the
    European Commission, which is due to disburse a large amount of funds to
    Romania devoted to reforms and investments, Prime Minister Florin Cîțu has
    said. The Prime Minister expects results from the ministries that asked for
    larger budgets than in previous years.


    We will be using mid-term
    indicators to make an assessment of the budget execution. The same happened in
    previous years, with sectors getting large funds and failing the execute their
    budget. We will also be have a discussion at the end of the first half of the
    year, and some Ministers might leave. We agreed to increase the budget, we have
    a large number of expenses to support, but I would also like to see more
    results. I want to see reforms at the level of state-owned enterprises.


    The Social-Democrats in opposition
    have accused the Government of poor allocation of funds this year. They claim
    the funds stipulated in the law will cover just the first nine months, and that
    additional taxes will be introduced. Social-Democrat Senator Radu Oprea said
    his party intends to vote against the law in Parliament, and will advance
    amendments that will offer solutions for economic recovery and increasing
    living standards, while observing the set budget deficit target. According to
    the European Commission’s economic forecast published last week, Romania’s
    economy will recover in 2021 after shrinking by 5% in 2020. The engine for
    growth this year will be private consumption and investment, determining a 3.8%
    growth of the GDP in 2021 and a 4% growth rate in 2022. The Commission also
    expects exports to recover against the backdrop of an improvement in the performance
    of the main economic operators. (V. Palcu)

  • Political dispute over 2021 budget

    Political dispute over 2021 budget

    One of the most visible effects of the health crisis triggered by the pandemic is the economic crisis. International financial institutions are relentless in their forecasts of a sharp decline in world economy this year, even if they anticipate that things will get better next year, as the long-awaited start of mass vaccination will allow restrictions to be lifted and businesses to breathe. In Bucharest, the left-wing opposition insists on the Liberal Executive’s obligation to present the draft budget for 2021 and has called on the prime minister and leader of the National Liberal Party, Ludovic Orban, to provide information about how the budget is being built. The president of the Social Democratic Party and of the Chamber of Deputies, Marcel Ciolacu, claims that the Government left the Romanians on their own in the face of the pandemic. The Social Democrats suspect the Liberals of intending to increase taxes to raise funds.

    Marcel Ciolacu: If they keep governing, they will increase the VAT and will sell everything that’s left of the state’s assets, all Romanian companies that are profitable. They will do the only thing they know how: cut salaries and lay off people.

    PM Ludovic Orban has replied by stressing that next year’s budget will not include additional taxes and fees. He has explained that, in keeping with the law, in an election year, the current Government has no obligation to submit a draft budget for next year, but the Executive is working on it.

    Ludovic Orban: There will be no increase in taxes and fees in the budget that we are working on. Any increase in incomes that we will include will be based on economic growth, better tax collection, following a more effective activity of the National Fiscal Administration Agency, digitalization and fighting tax evasion.

    The Save Romania group leader in the Chamber of Deputies, Catalin Drula, has stated that the future Parliament, to be formed following December 6th election, has to approve the 2021 budget, an opinion also shared by the People’s Movement party. Its group leader in the Chamber, Marius Pascan, has stated that the Government must set forth the 2021 budget, which, in his opinion, should be focused on investments in infrastructure. The Pro Romania leader and former Social Democrat PM Victor Ponta has warned that, in 2021, the economic crisis will be harsher than the one registered a decade ago. As regards the Democratic Union of Ethnic Hungarians, its leader in the Chamber of Deputies, Benedeck Zacharie, has accused the PM of lack of transparency.

    In the dispute over the future budget, still unknown, everybody seems to be right: the government when it says it is not obliged to present it and that it is up to the Executive resulting from the upcoming elections to propose it, but also the opposition, whom the absence of information about the future budget architecture provides with legitimate electoral ammunition, which it does not hesitate to use. (M. Ignatescu)