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October 28, 2020
ECONOMY FINANCE&BANKING POLITICS

Parliamentary investigation on budget revisions in 2016 approved by Parliament

The joint plenary session of the Chamber of Deputies and the Senate on Monday passed a draft decision to carry out a parliamentary investigation by the joint budget committees in order to check the conditions in which the state budget revisions in August and November 2016 were completed.

The draft decision passed by 248 ayes to 102 nays.

According to the draft decision, the budget-finance committees with the two chambers of the Parliament will have to identify the answers to several questions, among which: ‘What is the way in which the potential incomes were established so that a positive rectification could be done?’, ‘What are the state bodies that have foretold upon these incomes and which was the incomes’ level proposed by each body?’, ‘To what extent were the total incomes of the consolidated general budget achieved at 31.12.2016?’, ‘What were the estimates for the total incomes of the budget at the moment of the budget construction for 2016?’.

 

 Liviu Dragnea asks Court of Accounts to urgently investigate 2016 budget

 

The Lower Chamber’s Standing Bureau approved on Monday the letter through which Lower Chamber Speaker Liviu Dragnea is asking the Court of Accounts to “urgently” investigate the adjustment of the 2016 budget.

“There are serious doubts about the observance of legal procedures concerning the approval of Government Ordinance no.14/2016 and Emergency Government Ordinance no.86/2016 adjusting the state budget for 2016, and especially about the level of expenditures and revenues considered the grounds of these legislative acts. (…) Bearing in mind this situation, I am asking you to put on the order of the day (…) a draft Decision that would ask the Court of Accounts to urgently carry out (…) an audit” into the aspects that the PSD President has raised in the form of 15 questions, reads the document approved by the Lower Chamber’s Standing Bureau.

Some of the aspects raised by the 15 questions include: What were the budget’s total revenues on 31.12.2016? What were the total budget revenues estimated when the 2016 budget was built? Why weren’t the total budget revenues correctly estimated at the moment of the first and second budget adjustment?

PSD’s Lower Chamber Secretary stated that the PSD President’s letter has been approved by the Lower Chamber’s leadership.

 

Former PM  Ciolos: Budget hole, ‘smoke screen’ by those who look for excuses to not accomplishing electoral promises

 

There is no such hole in the budget on 2016, says former Premier Dacian Ciolos, adding that this idea is in his opinion a ‘smoke screen’ of those who are looking for excuses to not being able to accomplish the promises the PSD and ALDE (Social Democratic Party, Alliance of Liberals and Democrats) have voiced in the electoral campaign.

“There is no such hole in the budget of 2016. If such a ‘hole’ existed, it should have had an impact upon the deficit. I have closed the year with a 2.6pct deficit, smaller than initially presumed (of 2.8pct), which proves that we have ruled responsibly and cautiously in a year with a lot of electoral pressure. This idea could rather be considered a ‘smoke bubble’ of those who are looking for excuses in order to explain why they cannot carry out promises voiced in the electoral campaign by the PSD and ALDE,” Ciolos writes on his Facebook page.

He thinks that at the very most one can talk about ‘a too ambitious estimate’ when the budget projection on 2016 was done as regards the non-reimbursable external funds chapter, but adds that the initial estimate was carried out by the Ponta Government in 2015, the Ciolos Cabinet only taking over this estimate that existed at the then Ministry of Public Finance when the budget was adopted.

“In 2015, the Ponta Government estimated that around 12.3 billion lei could be cashed from European funds in 2016. The estimate proved totally unrealistic, given that the European financing programmes were stalled or way delayed. Should we look at everything that Romania has received in 2016, we could say we had a record collection, by over 7 billion euro, the largest amount of money Romania has ever received since its integration, in 2007, in only one year, so far,” Dacian Ciolos explains.

According to Ciolos, the PSD government has failed to absorb European funds in its first two years, 2014 – 2015, only drawing 0.44 billion lei.

The former Premier says that in the last years the incomes from the European funds were way too much overestimated and adds that the non-achieving of some budget incomes estimated in 2016 has no negative impact on the budget of 2017.

Referring to the budget amendment carried in November 2016, Ciolos explains that considering the economy’s evolution in the first half-year, which recorded a 5.2pct growth a positive budget amendment is justified for the second half-year, given that the real incomes were higher than estimated.

 

Kelemen Hunor: 2016 budget was erroneously drafted. Nobody took the money

 

Democratic Union of Hungarians in Romania (UDMR) President Kelemen Hunor stated that the 2016 budget was “erroneously” drafted, that the two special parliamentary commissions will analyse what happened with the budget and that a commission of inquiry is not being set up.

“At this moment, we are talking about the budget and finance commissions of the two Chambers, not about a commission of inquiry. If a commission of inquiry were to be set up, this would mean we are starting off from the premise that there is a serious infringement of the law somewhere. If the budget-finance commissions, as the procedures have been established so far, are trying to analyse what happened with last year’s budget, then things are far simpler and more correct, because this is what is being proposed at this moment. The joint plenum should task the two special commissions with analysing what happened with the budget, if this shortfall exists and why, whether the draft 2016 budget was correctly done or not,” UDMR President Kelemen Hunor stated for RFI.

“This is where things should be verified, whether there really was and is this shortfall of ten billion [lei]. Of course, such a sum was not stolen. The draft 2016 budget was erroneously made, this thing is clear, 100 percent. We warned the members of the Ciolos Government, back then too, (…) that this draft budget is not very well made. For instance, they earmarked no funds for County Councils in order to balance the Local Councils’ budgets. This correction was not made during the first budget adjustment either,” the UDMR President said, being quoted by Mediafax.

Kelemen Hunor added that the Romanian Tax Authority’s “aggressiveness” has led to the closing of many companies and this should be investigated within the budget commissions.

“I believe things were extremely clear and simple at ANAF [Romanian Tax Authority]. ANAF’s aggressiveness in 2016 led to the closing of many companies and because of this they were issuing a fine for naught when entering a company’s headquarters without first checking the paperwork, they had nowhere to collect the money from. Here we are talking about an erroneous approach on ANAF’s part and these things should be analysed within the budget and finance commissions,” the UDMR leader added.

Kelemen Hunor stated that nobody took the money from the budget, the budget being erroneously drafted instead and budget revenues falling below those projected for 2016. “It was an error of unprofessionalism from the start,” Kelemen Hunor said.

UDMR supports an investigation carried out by the special commissions, not by a commission of inquiry.

“We will support this option, we won’t support a commission of inquiry; but, as I understood, the setting up of a commission of inquiry is not even on the order of the day of the two Chambers,” the UDMR leader added.

 

PNL’s Citu: Liviu Dragnea, moral culprit for disastrous budget adjustment of autumn 2016

 

In his own report on the issue of the budget adjustment carried out last autumn, economist Florin Citu, PNL Senator and Deputy Chairman of the Budget Commission, expresses his doubt that the Ciolos Government was justified in carrying out a positive budget adjustment. At the same time, he presents PSD President Liviu Dragnea as the moral culprit for the budget adjustment. Citu proposes the hearing of other officials involved in the budget adjustment process.

“The positive budget adjustment of 23.11.2016 stems from budget revenues assumed to be 2 percent lower than those of the previous year. At that time, it was already known that on 31 October 2016 the revenues from European grants were 9,000 million [lei] lower than the sum budgeted for 2016. Moreover, bearing in mind that the budget adjustment was carried out during the last days of November 2016, it’s obvious there was already data on the first 2 weeks of the month and it was known that the revenues from EU grants were not improving. On the contrary,” Citu says.

Higher revenues by year’s end would have been required to carry out a positive budget adjustment. The positive budget adjustment of 23 November 2016 supported higher expenditures based on revenue hike estimates precisely in the sector where there was already a shortfall of 9 billion lei, he added.

“In my opinion, the positive budget adjustment is not justified, bearing in mind the data on the evolution of the budget exercise publicly presented so far. Compared to the budget adjustment of August 2016, this adjustment was less transparent and raises more questions. These questions appear especially in connection with the revenue estimates without which the second adjustment wouldn’t have been possible,” the economist claims.

At the same time, Florin Citu recalls several episodes in which PSD President Liviu Dragnea was publicly asking for the hiking of some expenditures despite knowing the public finance situation.

“Although surprising for the whole society, the budget adjustment was not a surprise for PSD President Liviu Dragnea,” Citu says. He cites messages that Dragnea posted on Facebook. In one of them, posted right on the day on which the budget adjustment ordinance was adopted, the PSD leader was asking the Ciolos Government to earmark, ahead of time, the funds needed to pay the subsidies for farmers. In another message, Liviu Dragnea was publicly asking the Government to earmark 1.3 billion lei for the arrears of the local development programme.

 

 

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