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December 6, 2021

Ten questions by PM Ponta to parliamentary parties before starting debates on Fiscal Code

Prime Minister Victor Ponta says the parliamentary parties should answer 10 fundamental questions for Romania’s economic and social future before starting debates on the new Fiscal Code on Monday.

In a Facebook post, Victor Ponta asks firstly whether the parliamentary parties believe that the newFiscal Code proposed by the Government is categorically a legislative tool better than the one currently in force.

“Does it help the Romanian economy develop further, by keeping and increasing the number of jobs, by paying more decent salaries, smaller and fewer taxes (by supporting the authorities’ effort to fight red tape and tax evasion)? If they don’t agree with these statements, than why vote for?” the Prime minister says.

Secondly, he asks whether the MPs have read this document before voting it. “If they did, why some parties have decided after the vote and after it has been sent to re-examination, that the new Tax Code is irresponsible, unsustainable, wrongly conceived etc?” adds Ponta.

Another question the PM is addressing the parliamentary parties refers to the Opposition’s proposition that the VAT should be cut to 19pct, from 20pct.

“Did they have impact calculations or was it a mere electoral, populist proposition? If it were a good proposal, why did they ask now to return to the 20pct governmental proposition?” asks Ponta.

Then, the Prime Minister is demanding an answer about the estimated impact of the VAT growth from 19pct to 24pct, and of the salaries and social benefits’ cuts of 2010.

“Which of the current parties still believe that the PDL (Democratic Liberal Party – at rule in 2010 – editor’s note) economic vision of ruling was then correct and useful, when hundreds of thousands of companies went bankrupt, over 170,000 stable jobs disappeared, the economic potential was cut by 0.5pct, a drastic economic decrease was witnessed, the tax evasion blew up, the inflation rate doubled as compared to 2009, and the purchase power lowered dramatically even by 40pct when it comes to teaching staff, physicians and low income categories?” asks Victor Ponta.

Another question is linked to the European System of Accounts (ESA) deficit targets.

“What is the current political parties’ opinion – should Romania renegotiate the ESA budget deficit smaller than 1pct of the GDP provided by the current Medium Term Objective or should it keep it with the austerity and accumulate development deficits? Or would it be better to target rd 2pct ESA budget deficits of the GDP and thus accelerate the convergence process as compared to the EU28 average?”, asks Victor Ponta.

The Premier also asks the parliamentary parties about the country’s deficit as compared to some other EU countries.

“Why would Romania be unsustainable if having a 2pct – 2.5pct of the GDP and a public debt of 40pct of the GDP, while Spain with a 3.7pct budget deficit of the GDP and a 103pct debt of the GDP, France with an estimated budget deficit of 4.1pct of the GDP and a 98pct public debt of the GDP, Portugal with 2.8pct budget deficit of the GDP and a 124pct public debt of the GDP, Poland with a budget deficit of 2.7pct and a public debt of 50pct of the GDP, or the United Kingdom with a budget deficit worth 3.6pct of the GDP and a public debt of 91pct of the GDP etc, would all be sustainable?”, he asks.

Prime Minister Victor Ponta also demands if the parliamentary parties knew that 2014 was the first year of the past 12 when Romania has obtained a positive primary budget balance, of 0.1pct of the GDP (ie budget balance without payment of interest was on the plus.)

“Is austerity still a must or do we need measures of economic growth and new jobs? (a fundamental ideological debate today within the European Union),” adds Ponta.

At the same time, the Premier asks the parties as regards their knowledge referring to the fact that “in 2014, Romania has attained the 1pct of the GDP structural budget deficit target defined as fiscal rule in the Treaty on coordination, stability and governance within the Economic and Monetary Union, alongside the Netherlands, Germany, Denmark and Austria” and that “our country has had a smaller budget deficit than the one forecast in its agreements with the IMF /EC/ WB.”

“Is it good to keep this situation or to spend more of our money for development and increase of living standard?” asks Ponta.

The Prime Minister asks the MPs to speak out whether they want a new Stand By agreement with the International Monetary Fund, knowing that Romania meets qualification criteria for another kind of agreement – the accessing of a Flexible Credit Line (as it has similar macroeconomic conditions with Poland).

“Do the political parties believe that the current course of uninterrupted economic growth since 2012, cut in unemployment and increase of the purchase power and of the living standard of the population, is or is not affected by political crises and rows having economic measures as pretext? Or by the absolutely ridiculous legislative inconsistencies (such as “we vote unanimously the Tax Code and after a month, we announce it is wrong and support it no more”)? Is it necessary and could it be closed a political agreement for economic development and living standard growth (to include at least the main objectives regarding the tax level, the average salary and pension, the way of financing in Education and Health) – as things were done for the Defence sector?” also asks Victor Ponta.

Romania’s Senate convenes at 3pm on Monday in an extraordinary session to debate and vote the Tax Code re-examination request by President Klaus Iohannis.

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