*PSD President announces that Parliament’s joint plenum will vote on Monday to set up parliamentary inquiry commission into the RON 10 bln shortfall
It’s total scandal between the former prime minister Dacian Ciolos (photo L) and the chairman of the Social Democratic Party (PSD), Liviu Dragnea. The Chamber of Deputies’ Speaker accused that he found RON 10 bln hole in the budget, but Ciolos denies Dragnea’s accusations and counterattacks.
Social Democratic Party (PSD) President Liviu Dragnea pointed out on Facebook on Wednesday that the total impact of the measures that the Grindeanu Government is planning to take in the immediately upcoming period stands at RON 2.65 billion, the PSD leader rhetorically asking what could have been done with the RON 10 billion that “the technocrats lost.”
“This is the response to the latest attacks: the measures adopted by our Government, the Government of all Romanians! Each measure, its beneficiaries, its budget impact as well as the deadline on which it comes into force. And all of these were promises made in the campaign, promises that, lo and behold, we have honoured. The total impact stands at RON 2.65 billion,” Liviu Dragnea wrote on Facebook.
“Do the calculus yourselves… what could have been done with the RON 10 billion that the technocrats lost,” Liviu Dragnea concluded his message.
The measures that will come into force on February 1st are: the hiking of the minimum salary to RON 1,450, the hiking of local public administration salaries by 20 percent, the hiking of actors and artists’ salaries by 50 percent, deducting medical subscriptions from the income tax (EUR 400 per year), eliminating the ceiling for social security and health insurance contributions, eliminating the pensioners’ obligation to pay health insurance contributions, eliminating the income tax on pensions lower than RON 2,000.
According to the PSD leader, the pension point of RON 1,000 will come into force on July 1st, and the minimum pension will be hiked to RON 520 on March 1st.
Starting on February 1st, students will be able to travel by train free of charge and scholarships will be hiked from RON 83 to RON 201 per student per month.
At the same time, the 1 percent turnover tax for micro-enterprises whose revenues are lower than EUR 500,000 will come into force from March 1st to July 1st, while the zero tax on real-estate transactions lower than RON 450,000 and the 3 percent tax on the value surpassing that level will come into force on March 1st.
Liviu Dragnea also announced that, starting on February 1st, the following measures will come into force: the elimination of the profit tax for companies active in the R&D sector for the first 10 years of activity; elimination of the health insurance contributions for supplementary incomes from interest and dividends; hiking to RON 1,450 the monthly income of the personal assistants of persons with disabilities; hiking the minimum monthly indemnity for family leave from RON 1,062 to RON 1,232; hiking the stimulus for insertion on labour market from RON 531 to RON 616.
The emergency ordinance with which the Grindeanu Government has hiked a series of public sector salaries, including the salaries of administration employees by 20 percent, will have a budget impact of RON 5.1 billion in 2017, per the draft emergency ordinance published by the Finance Ministry.
PSD’s leader about former PM Ciolos: No need to answer on Facebook or TV but before investigation commission
The Social Democrat leader stated on Tuesday evening in a talk-show on Antena 3 that next Monday the Lower Chamber and Senate will vote to set up the inquiry commission that will have to reveal why “budget revenues registered a 10 billion shortfall.”
However, Dragnea added, the governing programme of the Social Democratic Party (PSD) and the Alliance of Liberals and Democrats (ALDE) will not be affected by the budget shortfall left behind by the former technocratic Government and none of the measures presented in the electoral campaign will be eliminated.
“What annoyed and surprised me was Ciolos’ posting. I cannot figure out if it’s superficiality, malice or bad faith. (…) He doesn’t have to answer to me on Facebook, or on TV, but he must answer before the commission of inquiry. We have decided today within the joint Standing Bureaus: on Monday, we will hold the joint plenum meeting – the Lower Chamber and the Senate – and we will vote to set up this commission of inquiry and the topics, the minimum questions that must be put to those who have to answer. If they come up with serious explanations, very well. We must find out why there is a 10 billion shortfall. The entire country must find out why there are RON 10 billion missing,” Dragnea said on Tuesday evening for private broadcaster Antena 3.
The PSD President tried to show the calculations of the budget figures and last year’s budget adjustments, meant to prove that there was a shortfall of RON 10 billion in revenues and that “practically” the budget is short of around RON 14 billion, a sum that could have been used to raise pensions and salaries.
“I am not a conjurer, I am an engineer and I have worked and I work with figures. (…) Figures can’t lie,” underscored Dragnea, who wondered who had the clerks of the Finance Ministry fabricate “false papers.”
According to the PSD leader, the budget shortfall shows that the former technocratic governing lost control over tax evasion and the state’s institutions were not functioning properly, so Romania lost RON 10 billion in revenues that could have brought an extra RON 3 billion to the budget adjustment.
Former Prime Minister Dacian Ciolos told PSD President Liviu Dragnea that the country’s budget “is not a bottomless pit” and “cannot be administered to the likeness of Robin Hood,” claiming that the Social Democratic Party (PSD) is covering up its “failures and false promises by resorting to diversions and propaganda.”
“Confronted probably with a few figures and facts of Romanian economy that I have been saying for months, aware that he doesn’t know how to get out of trouble to finance the promises made during the elections campaign, Mr Liviu Dragnea pulls a trick and announces that he supposedly has found, I quote, ‘a ten billion shortfall in the budget’. For any person with the least economic knowledge, such a ‘shortfall’ would have meant either revenues lower or spending higher than foreseen and anyway it should have appeared in the budget deficit – which is not the case. This “hole” does NOT exist,” Ciolos stated. He added that in 2016 revenues were higher than in 2015 and the final deficit was below the level foreseen.
Dacian Ciolos: It’s easier to blame the technocrats
Ex-Premier Dacian Ciolos says that the accusations levied against the former Government regarding the existence of a budget shortfall are groundless. He pointed out that the Finance Ministry has all the data necessary to clarify this issue, however “it’s easier to blame the technocrats,” News.ro informs.
Dacian Ciolos claims that the parliamentary inquiry into the budget adjustments carried out by the Government he led “is part of the same populist category, because if those who came up with this commission really wanted to know how things are it would have been simple, they could have asked the Finance Ministry where all the data and all these elements that would help them understand the topic are to be found.” “These are issues that have to do with budgetary technique, what happened this year with the budget is no novelty and that’s precisely why I hope that if an inquiry is really wanted it will cover the last ten years, to see how things were in the last ten years in what concerns forecast budget revenues and actual revenues,” the ex-Premier told RFI.
Ciolos pointed out that the lack of budget funds would have been reflected in the budget deficit. “At first there was talk – and now I see this idea is no longer developed, I believe things have been clarified – about a “hole” left in the budget. This hole or this missing money could not have existed without it being reflected in the budget deficit. We established, we forecast at the beginning a budget deficit below 3 percent, 2.8 percent was our target and the deficit stood at 2.6 percent, so not only was there no hole left in the budget, but even the deficit was below the level forecast, against the backdrop in which at the end of the year, as it generally happens with the budgets, many payments were made, including the arrears registered in paying back last year’s VAT, which we did not roll into this year’s budget,” the ex-Premier said.
He pointed out there were higher estimates on the European grants that Romania was expected to receive, however these were not fully met because sufficient projects were not started in previous years in order for the payments to be made by the European Union.
“There were higher estimates for European grants, however we had no way of paying more on European grants than we did, as long as there were no projects prepared. So for us to have paid European projects from the budget and then recover the money from the European Commission, so to register expenditures on one hand by paying the European grants bills and then to recover the money from the EC and to introduce them on the revenue side, in order to compensate the expenditure made; so here, you see, things are connected, revenues with expenditures, but this would have entailed us already having the projects ready in 2014, 2015, to be able to implement them in 2016 and to make these payments. This did not happen. Last year we paid around EUR 7 billion from European grants, but not as much as estimated,” Dacian Ciolos said.
He considers that the budget revenues scandal has been created to move attention away from the promises made during the elections campaign.
“There are aspects related to budgetary technique, which are not explained but certain things are speculated, erroneous messages being suggested for the interest of some who made promises during the elections campaign and who are now probably wondering how they will keep them so, in contrast to what was done throughout 2016 too, it’s easier to blame the technocrats,” Dacian Ciolos concluded.
President Iohannis: A hole in budget is out of question, it’s an amount that couldn’t be achieved
President Klaus Iohannis stated on Wednesday that a hole in the budget is out of question, as leader of the Social Democratic Party (PSD) Liviu Dragnea claimed, but it is “an amount that couldn’t be achieved.”
“I have briefly discussed about this matter. For reasons that I don’t know, initially the phrase of a hole in the budget was spread, which it’s out of the question. It’s about an amount that simply wasn’t achieved, in payments, for reasons that others have to explain, not me. The ones who governed. It’s clear that nobody took the money home,” the head of state said, at the Cotroceni Palace, at the end of the meeting he had with Prime Minister Sorin Grindeanu and with Finance Minister Viorel Stefan.
Iohannis mentioned that this topic should be left to those “who know.”
“I believe that is best to take it slowly with these investigations coming from Parliament. I believe it would be best that those who know these matters to carry out a serious analysis and not to reduce the discussion on a level of political contradictions,” Iohannis added.