ECONOMY FINANCE&BANKING POLITICS

President Iohannis meets PM Grindeanu and FinMin Stefan, delays promulgation of draft budget: At first analysis, budget is problematic and risky; I am worried

President Klaus Iohannis announced on Tuesday, after meeting Premier Sorin Grindeanu and Finance Minister Viorel Stefan, that in the following days he will analyse the state budget law and social security budget law, before saying whether he will promulgate them or not. The head of state emphasised that the figures included in the budget drafted by the Grindeanu Government are worrisome and that at first analysis the budget “is problematic and risky.”

“I found it appropriate to know the opinion of the Government before making a decision on promulgation or resending to Parliament. At first analysis, I found the budget problematic and risky. There are forecast incomes that, in my opinion, are overoptimistic, and, on the other hand, very high expenditures are provided for. There is the real risk for the deficit of 3 percent to be exceeded.

“We can but notice that we are dealing with an extraordinarily high sum when it comes to the so-called commitment appropriations, totalling 54 billion, which will weigh heavily on the following years’ budgets. I’ve transmitted all of this to the Government, which has its own point of view, which it will make public. In the following days, we will deepen the analysis on these two budgets. We will also consider the points of view presented by the prime minister and finance minister, but overall I must admit I am worried. I will take the decision in the following days,” Klaus Iohannis stated at the end of his 30-minute meeting with Premier Sorin Grindeanu and Finance Minister Viorel Stefan.

On Monday, President Klaus Iohannis invited Premier Sorin Grindeanu and Finance Minister Viorel Stefan, through a letter, to take part in a discussion on the state budget for 2017 the following day, at the Cotroceni Presidential palace, a week after Parliament approved the two bills.

“Considering that the Romanian Parliament sent the state budget law and the social security budget law for promulgation today (Monday – editor’s note), I consider it opportune to have a meeting regarding the two legislative acts, a meeting I invite you to take part in, alongside Finance Minister Viorel Stefan, on Tuesday, February 14, at the Cotroceni Palace,” President Iohannis’s letter reads.

The budget draft for 2017 is configures on a macroeconomic framework with a GDP value of 815.195 billion lei and a 5.2 percent economic growth. The cash budget deficit is estimated at 2.96 of the GDP, while the ESA deficit stands at 2.98 percent of the GDP, keeping within the under 3 percent of the GDP budget deficit target, according to the Maastricht Treaty,” Grindeanu told the Parliament plenary meeting,  last Tuesday in the debates regarding the budget draft for 2017.

The Premier and the Finance Minister were previously invited at Cotroceni in early January. After that meeting, President Klaus Iohannis expressed his scepticism regarding the Government’s ability to implement the governing platform while staying within the limits of the budget deficit target of 3 percent of GDP.

 

Speaker Dragnea: President should worry within reasonable time for us to get a budget this year

 

President Klaus Iohannis had better worry about the 2017 national budget within a reasonable timeframe so that Romania may get a budget this year, Speaker of the Chamber of Deputies Liviu Dragnea, also the national leader of the Social Democratic Party (PSD, ruling), said Tuesday.

He added that he discussed with Prime Minister Sorin Grindeanu the meeting on Tuesday at the Cotroceni Presidential Palace and heard later on the president’s statements on the 2017 national budget.

“It is the president’s right to analyse, but there are various reasons popping up to delay the publication of the budget. This country needs a budget. They previously had a discussion at the Supreme Council for National Defence (CSAT) meeting concerning the budget of some organisations and they agreed there were no problems with the operation of those organisations. The budget has been analysed by the committees and passed by Parliament. I believe in the sustainability of this budget. (…) The budget is balanced and sustainable; it includes what we decided in the election campaign, and I said there will be 2 percent for defence spending to keep the deficit below 3 percent (…) In the end, should the president worry, he had better worry within a reasonable timeframe because we would like for Romania to get a budget this year, because the operation of many institutions hinges on it and in the end the economic growth of the country as well. If reasons to delay the coming into force of the budget keep popping up, then problems will indeed arise,” Dragnea said at Parliament Palace.

Asked for his take on European Commission’s recent forecasts for Romania reading economic growth of just 4.4 percent and a budget deficit of 3.6 percent in 2017, Dragnea pointed out that the Commission had its share of worries in the previous years as well.

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