The approval of the budget remains the main stake in receiving the next IMF tranche, with Marek Belka, the head of IMF Europe, stating that Romania has a ‘good outlook’ in that sense.
Starting today January 4 and until January 7 the MPs will be able to file their amendments, with the budget-finances commissions of the Lower Chamber and the Senate set to debate and devise the report on the 2010 state budget and social insurances’ budget from January 8 to January 10. On January 11 the Parliament will have a plenum meeting in order to debate the 2010 budget draft. At the end of last year the members of the two chambers’ leaderships have established the timetable for debating the budget draft.
‘This extraordinary Parliament session will last until the budget is adopted,’ Liberal Ludovic Orban, the Vice President of the Lower Chamber, stated. He added that the Parliament could adopt the draft budget until January 15, pointing out that the date is a realistic one. ‘The Parliament is sovereign, the plenum decides and at political level we are not absurd and we will be rational so as to synthesize the amendments,’ Orban stated. He said that he knows that there is pressure placed on the Government in order for it to adopt as quickly as possible the 2010 draft budget in order to release the IMF tranches and that is why the joint Permanent Bureaus have established ‘an extremely tight’ timetable in order to adopt the budget.
Marek Belka, the head of IMF Europe, has stated for Reuters that Romania has a ‘good outlook’ for the next quarters and that the approval of the third tranche of the agreement should meet no difficulties, with the only problem being the approval of the 2010 budget in Parliament.
He seemed confident that Romania will receive the third tranche of the loan package after the approval of the austerity budget for 2010. ‘Romania is a European Union member country with an independent and strong central bank. I don’t see any problem here. I consider that Romania has a good outlook in the coming quarters,’ Belka said. An IMF mission will arrive in Romania in January in order to evaluate the agreement.
New lump-sum tax formula
Premier Emil Boc announced on the last day of 2009 that he asked Finance Minister Sebastian Vladescu to rethink the lump-sum tax that is applied to companies and that ‘exhausted its resources.’ ‘Now this has to be reoriented and limited only towards those domains where tax dodging cannot be tackled through other means, domains such as the hotel industry, the restaurants,’ Premier Boc added. He pointed out that the new lump-sum tax will enter into force after the Finance Ministry will prepare the project on rethinking the tax.
Fiscal responsibility law to be urgently adopted
Premier Emil Boc asked Parliament on December 29, 2009 to urgently debate the fiscal responsibility law. The Premier and the Finance Minister will sign a statement through which they assume their responsibility in front of Parliament that the budget and the fiscal strategy provision the efficient use of money and that the Government members that break the fiscal responsibility law will be held politically liable. The provisions are included in the fiscal responsibility draft law approved last week by the Government and obtained by Mediafax.
According to the document, each year on May 30 the Government will present in Parliament a budget-fiscal strategy for the next three years, along with its statement of responsibility, with the Parliament afterwards set to approve the limits concerning the total balance and the compulsory personnel expenditures for the next two years in one month’s time. The governmental fiscal strategy will include the expenditure priorities and their detailed argumentation, as well as an explanation for the way in which the Government plans to improve its policy towards the business environment.
At the start of a new mandate the Government will announce if its programs fall within the previous fiscal strategy approved by Parliament or whether a new document has to be drafted. Each year before the end of April, July and October the Government will present an evaluation of the quarterly budget execution as well as measures meant to reduce the expenditures or to improve the collection of revenues in case the established targets are not reached. The financial impact will be evaluated by the Ministry of Finances that may consult the Fiscal Council. The same fiscal responsibility draft provisions that those state companies that surpass the established upper limit of expenditures would no longer contract or draw loans and would no longer benefit from state guarantees until they improve their financial situation and in the year that follows they won’t have the right to hike their upper limit of expenditures and credits. Likewise, the budget rectifications will be limited to two annual revisions and won’t take place in the first six months of the year, with the total budget expenditures set to be supplemented during the rectification only for the payment of the public debt’s interest and of the national contribution to the EU budget.