Ionel Blanculescu, PM Victor Ponta’s honorary councillor on economic matters, formulated an analysis to prove that the Fiscal Council’s statements on the “unrealistic assessments” of budget amendment incomes are not true.
The Fiscal Council concluded that the budgetary income performance for the first six months of the year show a “significant non-performance” that resulted in a “major failure” where the absorption of European funds is concerned: the budget includes a 52.3 per cent increase of amounts drawn in 2012, and the six-month performance shows a 5 per cent decrease. By updating the European fund absorption data with the European money that will enter in a few days and based on the maximum level taken into account by the Fiscal Council, valid on 30 June and on the obvious dynamic nature of the situation, we can see that in July – a month that was not taken into consideration by the Council – a total of approximately EUR 730 million entered the country from the EU, reaching EUR 1.47 billion (approximately 60 per cent of extremely ambitious forecasts of 2013) at the beginning of August, analyst Ionel Blanculescu stated.
On the basis of this analysis, Victor Ponta’s councillor on economic matters claims that the Fiscal Council’s conclusions are wrong and the real conclusion is that a governmental performance occurred, namely within a relatively short amount of time the European fund absorption rate tripled from 7 per cent to 21 per cent.
“Perhaps in the future, the Fiscal Council should avoid making classifications, giving out verdicts or sentences and stick to analyses and macroeconomic assessments. Extrapolating the first quarter budgetary incomes situation to its entire duration to make financial predictions, a method probably used before by the Fiscal Council in other budgetary income chapters, for Romania at least, could be problematic and lead to incorrect conclusions, which has happened before in recent years”, Blanculescu stated.
The economic analyst concludes that the Ministry of Public Finance – especially the “Budget” section – and the Fiscal Council should improve their quantitative and qualitative levels of communication.
The data on raising the GDP to 1.7 per cent in the first quarter of 2013 are promising, but this economic growth is fragile, and internal consumption will come back as of 2015, Blanculescu added.
European Commission confirms viability of budget amendment
The European Commission (EC) hails the Fiscal Council’s comments on the budget rectification, but it feels comfortable with the figures the document includes, given that the risks the Fiscal Council mentions are mirrored in the budget figures, particularly in the budget’s considerable reserves, EU Commission vice-president Olli Rehn’s spokesman Simon O’Connor told Agerpres, on Friday.
‘The 2013 budget rectification was discussed during the recent visit by the IMF, EU Commission mission and we are comfortable with the figures the rectification includes. We hail the Fiscal Council’s comments and the ascending role it plays in securing good fiscal policies. The risks the Fiscal Council’s comments refer to are mirrored in the budget figures, particularly in the budget’s considerable reserves,’ Simon O’Connor said.
Late last month, the Romanian authorities and the International Monetary Fund (IMF) and the EC mission reached a technical agreement on the new 24-month precautionary programme.
The financial support will amount to four billion euros, and it is equally paid by the IMF and the EC. The European institution confirms the correct budget amendment decisions made by the government, government councillor Cristian Socol also stated, adding that by its position, the EC sanctions any overreactions on this topic, realitatea.net notes. Socol claimed that the government’s financial adjustments ensure macroeconomic stability and reiterated that the objectives of budget amendment are first and foremost the education and health system, sectors which have been negatively impacted in the past.