Radio România Internațional

Tag: financing

  • Budget deficit like in pandemic times

    Budget deficit like in pandemic times

     

    Romania’s budget deficit in the first 11 months of this year reached 7.11% of its Gross Domestic Product (GDP), over EUR 25 bln, according to information obtained by the Romanian media. The government’s deficit target for 2024 is 8.58% of GDP, over EUR 30.5 bln, which means that substantial spending is planned for December as well. A higher budget deficit as a share of GDP was most recently recorded in 2020, the year of the COVID-19 pandemic, when the indicator stood at 9.6%.

     

    The deficit is the difference between the state’s lower revenues and the higher expenses it must cover. Since the government does not have this money, it has to borrow it. The higher and longer the deficits, the more alarming the public debt growth rate.

     

    Together with slower economic growth, as expected for Romania in the coming years, large budget deficits can lead to alarming situations, such as the one forecast for 2031. For that year, the fiscal plan stipulates that Romania will pay 3.5% of GDP (EUR 20 bln) in interest on government debt, as opposed to 2% today.

     

    Official data and data collected by the press show that the new government will take over a difficult economic situation: a huge budget deficit, interest on government loans that have broken the European Union record, and European funds partly suspended.

     

    At the moment, the incumbent government, comprising the Social Democratic Party and the National Liberal Party, cannot draft the budget law for next year. With the new parliament not yet convened, the future parliamentary majority, on which several budget chapters depend, is not clear. And without a national budget, city halls cannot prepare their own budgets, and citizens will immediately feel the effects.

     

    The Liberal finance minister Marcel Boloş acknowledged that “political instability is creating difficulties with regard to the strategy for borrowing on foreign markets to ensure the financing of the budget deficit and public debt, as the budget for 2025 cannot be finalised.”

     

    The Social Democratic PM Marcel Ciolacu said in recent months that the colossal loans taken out by his executive team were primarily intended for investment. He mentioned the example of Western European countries such as Portugal, Spain or Italy, which went into massive debt before creating their remarkable present-day infrastructure. Commentators say, however, that much of the deficit is due to electoral measures—e.g. substantial increases in pensions and salaries in the public sector—implemented by the government in 2024, which in Romania was a year with all types of elections: elections for the European Parliament, as well as local, legislative and presidential ballots. (AMP)

  • March 20, 2018

    March 20, 2018

    PARLIAMENT – The laws on the judiciary have been endorsed by the Chamber of Deputies today, and are to be submitted to the Senate for a final vote. Previously, a special parliamentary committee passed the bill on the magistrate profession and the one regulating the organisation of the Higher Council of Magistracy. On Monday, the same committee passed the 3rd law in this package, the one concerning the organisation of courts. The bills were brought in line with the decisions of the Constitutional Court, after the Opposition and the High Court of Cassation and Justice challenged the changes adopted by Parliament. These changes include by-passing the President of Romania in the procedure for appointing the chiefs of the Supreme Court, and transferring this role to the Higher Council of Magistracy. The National Liberal Party and Save Romania Union, in Opposition, announced that the new amendments give them reasons to bring the new justice laws before the Constitutional Court again. In fact, Save Romania MPs have today resorted to an unusual protest in the Chamber of Deputies, where they lined up wearing T-shirts that read “#NoCriminals. Some of the changes originally operated on the justice laws have generated large-scale protests among civil society and magistrates.




    DEFENCE – The Supreme Defence Council is convening in Bucharest today, in a meeting chaired by President Klaus Iohannis. The agenda of the meeting includes a review of the work of public institutions in the national security sector in 2017, as well as the main objectives for this year. The Council members are to analyse the work of the Cyber-Security Operations Council and the National Cyber-Security Response Centre. The latter focuses on developing the technical capabilities needed in order to improve the cyber security climate in Romania. Last years activity of the Supreme Defence Council will also be analysed, along with other topics relevant to the national security.




    PROTESTS – In Bucharest, the SANITAS trade union federation has today picketed the headquarters of the Ministry for Public Finances. Unionists demand, among other things, the implementation of pay raises for all healthcare and social assistance personnel as of March 1, the scrapping of the ceiling on bonuses and the offsetting of the income decrease caused by the implementation of a new pay scheme on January 1. Also today, representatives of the National Federation of Trade Unions in Industry have picketed the Economy Ministry, against the backdrop of discontent with the law regulating the national defence industry. The union president, Ioan Neagu, said that at the beginning of the year the Government was supposed to issue a resolution to regulate the number of employees that this industrial sector may absorb per year.




    FRANCOPHONIE – Like other countries in the world, Romania is celebrating International Francophonie Day, marked every year on March 20. Last night the Romanian Embassy in Paris and the Romanian Cultural Institute organised a show at the Louis Jouvet Theatre in Paris, to mark 25 years since Romania joined the Francophonie Organisation. In this context, Ambassador Luca Niculescu mentioned that in December 2018 – July 2019, Bucharest and Paris will organise the Romania-France season, a large-scale joint project focusing on contemporary culture and creativity, as well as areas like education, economy, sports and tourism.




    FRANCE – Frances ex-president Nicolas Sarkozy was detained on Tuesday in a case involving the allegedly illegal funding of his campaign for the 2007 presidential election, which he won at that time, Le Figaro and Le Monde report, quoting judicial sources. Sarkozy may be held in custody for 48 hours at most, and it is for the judges to order his arrest pending trial. Ever since April 2013 Sarkozy has been targeted by an investigation following allegations of Libyas former strongman Muammar Kadhafi financing his presidential election campaign. So far, Sarkozy has denied all accusations.





    BREXIT – The European affairs ministers of the EU member states, including the Romanian Minister Victor Negrescu, are discussing in Brussels today the post-Brexit relations between the Union and the UK. On this occasion, the European Commissions chief negotiator Michel Barnier will present general principles for the transition period, i.e. March 2019 to December 2020. On Monday, Barnier and Londons negotiator, David Davis, announced having reached an agreement on these guidelines, which concern, among other things, the rights of the around 4.5 million European citizens living in the UK and the 1.2 million Britons in the EU. At the end of this week the text will be discussed by the EU leaders during a meeting of the European Council.


    (translated by: Ana-Maria Popescu)