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January 23, 2022

Fiscal Council: Budgetary execution endangers yearly targets

The way the budgetary execution was conducted in 2013 casts doubts over the relevance of budgetary rules and the commitment to fiscal discipline, endangers the compliance with the cap of 3 pc of the GDP and significantly alters the prospects of the budget for 2014, warns the opinion issued by the Fiscal Council on the draft of the second budget rectification of this year, sent yesterday to the press. According to the Fiscal Council, when the first budget rectification was operated there already existed enough hints about the estimation of budgetary incomes for the end of the year being imprudent, so the Council warned the government in the opinion it issued on the six-months report on the budgetary execution, also on the occasion of the first budget rectification.
The easy in repeatedly eluding fiscal rules this year and the level of expenses, along with those also in effect during the years that passed since the adoption of the Law of fiscal responsibility in 2010 underscore the weakness of constraints exerted by the fiscal rules of the law and casts serious doubts upon the commitment to observing the future fiscal rules that will be instated by implementing in the national legislation the provisions of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union (the Fiscal Compact), the Fiscal Council mentions.
The Council believes that significant supplementary discretionary measures are needed in order to assure the compliance with the budget deficit cap for next year, especially as the budgetary incomes of 2012 and 2013 were favourably affected by the temporary incomes produced by the rental of frequency bands to mobile telephony operators.
Serious reservation about meeting the European funds target
The Fiscal Council further has serious reservation about the possibility of meeting the end-year target set for incomes from European post-accession funds, as three months before the end of the year incomes (RON 5.03 bln) are less than half the sum estimated for the whole year (RON 12.15 bln) and the government’s expectations regarding the absorption performance were constantly higher than real figures. According to the Council, it is essential that the result of the budgetary execution of 2013 ensures that the cap of 3 pc of the GDP is observed (even with a comfortable enough margin that will allow potential subsequent revisions of data), in view of avoiding a new procedure of excessive deficit.

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