Parliament in plenary session on Friday cleared the 2019 State Budget Bill, 275 to 122 and 2 abstentions.
Several amendments to the state budget bill proposed by the Gov’t were adopted, one of which referring to supplementing the 2019 Labour Ministry budget so as to raise the child allowances starting with 1 March, from RON 84 to RON 150, and for the under 2 year-old from RON 200 to RON 300.
According to Speaker Liviu Dragnea, in order to ensure the funding source for the above-mentioned allowances, the budget deficit related to the estimated consolidated general budget is going to rise. To enforce such a provision, the law on the ceilings of certain indicators specified in the fiscal-budgetary frame on 2019 will be amended, by increasing the budget deficit from 2.55pct to 2.76pct.
The plenary session also decided to diminish the Romanian Intelligence Service (SRI)’s budget, at Speaker Dragnea’s proposal, by RON 445 million, the External Information Service (SIE)’s by RON 30 million and the Protection and Guard Service (SPP)’s by RON 50 million, and added to the budgets of the Health Ministry and the National Health Insurance House (CNAS) to finance the programme on vitamin D, the “Panorama” programme that envisages prenatal tests of the pregnant women, the tumor markers’ testing programme and the “Juvenile diabetes” programme.
Moreover, the Education Ministry’s budget was also supplemeted in order to finance the “Hot meal” programme. In exchange, the budgets of the Permanent Electoral Authority and the Public Finance Ministry were diminished.
The Romanian Academy received an extra amount of RON 350k through an amendment for the editing and publishing of the Romanian literature’s classics in integral scientific editions.
Another amendment adopted in the plenary session was proposed by the People’s Movement Party (PMP, opposition) Deputy Ionut Simionca and provides for the funding with RON 5,360,000 of a sports complex in the commune of Rodna with the Bistrita-Nasaud County, the budget of the Ministry of Regional Development and Public Administration being supplemented to that end.
Parliament has also passed the four amendments admitted by the Finance-Budget select committees for the Transport Ministry, one of which aimed at allotting RON 23 million for the review of the feasibility study of the Ungheni – Iasi – Targu Neamt segment, part of ”Unirii” Motorway. The money is ensured through redistribution within the Transport Ministry budget.
Social Security Budget Bill for 2019 passed by Parliament
The 2019 Social Security Budget Bill was adopted by Parliament with 272 votes in favor and 125 against.
The state social security budget for the public pension system has revenues of 71.662 billion lei and expenditures of 68.761 billion lei, with a surplus of more than 2.9 billion lei, according to the new draft budget published by the Ministry of Public Finance.
The insurance system for accidents at work and occupational diseases is set at revenues of 181.435 million lei and expenditures of 130.919 million lei, with a surplus of 50,516 million.
The unemployment insurance budget for the unemployment insurance system is set at revenues of 1.35 billion lei and expenditures of 1.583 billion lei, with a surplus of 320.335 million lei.
The average gross salary used when devising the state social security budget for 2019 is 5,163 lei.
PM Dancila in Parliament: 2019 budget realistic, carries development prospects for Romania
Premier Viorica Dancila declared on Friday in the Parliament plenary, before the final vote on the draft budget was cast, that this is a realistic budget that carries development prospects for Romania.
“The budget reflects Romania’s current economic and social reality, as well as the political conception and the political program of the alliance that has very clearly won the 2016 parliamentary election. The construction of this year’s budget was based on the fact that after all these years of uninterrupted economic growth, we have a higher GDP, a larger budget, a lower deficit and a falling public debt. At the same time, just as any budget in our country or elsewhere in the world, it cannot meet all the expectations, yet it is a realistic budget that carries development prospects for Romania,” the Prime Minister said.
Dancila mentioned that 2019 is the “year of investments” that are directed to areas such as transport infrastructure, health, the construction of kindergartens or local development projects, and stated that the investment amounts have been supplemented by over 15 billion lei compared to the previous year.
“After two years of substantial rises in pensions and salaries, it is natural for the citizens to be mainly concerned with investments in transport infrastructure, healthcare, kindergartens, schools, agriculture and, of course, local development projects. Therefore we have listened to the voice of the citizens and prepared a budget to meet these expectations. We supplemented the investment budget by 15.7 billion lei compared to last year, 6 billion of which are added directly to the transport infrastructure budget. This year we want to speed up works on expressways and motorways. We will continue to complete the connection segments of the Transylvania motorways, but this year we will also start expressway projects, motorways in Moldova or the country south, in order to reduce development gaps. It is absolutely necessary to link the western border to the Black Sea in order to put Romania on the map of major trade routes to Central and Western Europe, but at the same time we need to overcome the development gaps in Moldova and the country south, because all Romanian citizens deserve a decent living,” the Premier said.
The PM went on stating that “European programs will continue at full throttle” and that one of the major goals she has set herself as a Prime Minister for this year is that the absorption rate exceeds the EU average.
“We have recovered the delays of 2016, we have caught up with the European average absorption rate, and this year we already have many mature projects, which will contribute more money for investment in our country. All this European money goes to the development of Romania, of local communities, and will help improve the living conditions of Romanian citizens. We will fight for these European funds because, as I have said before at the meetings with EU representatives, Romania wants to be a country fully integrated with Europe, but at the same time we want equal treatment for Romania. And equal treatment also means our country’s access to the Union’s development funds. For this programming period we already have a good expertise acquired in the previous years. Everyone is familiar with the mechanisms, so we have everything we need to top the EU average absorption rate,” said Dancila.
“The only way we can increase allowances is to increase deficit”
She specified that the only way children allowances can be increased, as stipulated in the amendment brought to the 2019 budget law adopted by Parliament, is by increasing budget deficit, which is now within the European parameters, below 3 per cent.
“This is the only way. For how could we use the surplus, since we will only find out how much that is in the end of the year. So how can you increase [the allowances – editor’s note] in March, when you will only find out the surplus in October or even later. You cannot rely on the surplus. Which means that the only way is the one that I have already mentioned. However, the deficit is now below 3 per cent, 2.76 per cent more precisely, within the European parameters, so everything is all right,” said the PM.
Dancila also specified that the allowances will be increased as of March 1 with the possibility of a prorogation. She said that an emergency ordinance will be adopted to adjust the calculations for the allowances.
“PSD will be, again, the one to solve this problem too, the Romanian Government that is. I would have believed in PNL’s (National Liberal Party) good intentions if they came with a correct argumentation. But the manner in which they found this solution to finance allowances from the social security budget is not correct and we cannot do it. As you already know, we were the ones who identified this solution of taking from the deficit to increase the allowances. More than that, the Law referring to allowances is Law no. 61/1993, with the subsequent modifications and supplements, especially article 3. So, in order to be able to modify the children allowances, we need to issue a government ordinance to adjust the calculations for these allowances,” said Dancila.
Moreover, the PM accused the initiators of the amendment of lacking seriousness in indicating the source for financing for increasing allowances.
The plenary sitting of the Parliament on Thursday adopted an amendment to the Labour Ministry’s budget for 2019 by which children allowances will be increased as of March 1.
“The proposal is to supplement the amounts stipulated in appendix 3/20/01 of the Labour Ministry, title 9 “Social Security” by 2,130,528,000 lei, to increase children allowances as of March 1 2019, from 84 up to 150 lei, and from 200 up to 300 lei respectively for children 0-2 of age,” said the initiators of the amendment, Liberal Robert Sighiartau.
The Prime Minister tells Parliament Romania tops the rankings of EU’s fastest growing economies
Prime Minister Viorica Dancila said on Friday in Parliament that Romania has recorded one of the highest economic growth rates of all the member states in the European Union and provided a state of the play in investment, local administration appropriations, as well as increases in pensions and wages.
“In the two years of the PSD-ALDE [Social Democratic Party – Alliance of Liberal and Democrats] governance, Romania has witnessed spectacular economic growth, which has been reflected in substantial increases in the income of the population. This year, we allocate 50 billion for investment, which will boost sound economic growth and that explains quite well, among other factors, why we are counting on a 5.5pct increase in 2019. Romania’s Gross Domestic Product (GDP) will exceed the 1 trillion lei mark for the first time, a third more than when it took over government in December 2016. Last year, we had an economic growth three times higher than the European average, and public pay and pensions increased as promised,” Dancila said in a speech to Parliament.
She told the MPs to look at figures to see that the national government’s revenues reached their highest level ever.
“This year, net average earning will be 50pct higher than in December 2016. Government revenues have reached an all-time high, even as the share of revenue collection in relation to gross domestic product is lower, which is normal when rates and taxes are cut and tax incentives are provided for the economy. And in this regard, I would like to point out that this year will be the first time with a surplus in the pension budget; it will be for the first time when more money are contributed toward pensions then are spent, and I am telling all Romanians today to trust in our national economy, to dare believe in Romania, which tops the rankings of the fastest growing member states in the European Union,” added Dancila.
She said the draft national budget that passed Parliament have what it takes to cover increases in wages and pensions.
“We talked about investments, about increases in healthcare and education spending; I would not people to believe that we will deviate from the planned increases in the income of the population this year, on the contrary. We have provided the budget with the necessary sums to cover increases in public pensions and wages, as we pledged in the governance program and the uniform public pay law, raise. The minimum wage goes up by 10pct, and pay to the public servants increases on average by a quarter of the remaining raise difference for the 2018-2022. We continue to offer holiday vouchers this year as well of 1,450 lei per employee, as well as a food allowance equivalent to two minimum wages; as for the pensioners, the pension computation point will increase by 15pct, to 1,265 lei, starting September 1, and the minimum pension will increase by 10pct, to 704 lei. The increase for this year has been paid in advance on July 1 last year, and was higher than the indexation provided by law, and on September 1, we will raise in advance by higher amounts than what was initially envisaged,” said Dancila.
According to her, the local administration appropriations will be higher than in previous years.
“Dear MPs, I would like to put aside all the fake news about the local administration appropriations. Reality is one and cannot be contradicted: local administrations will receive more money than in previous years, and many of these additional sums are intended for local investment. The elected local representatives will have an increase in revenues of 7 billion lei, which will come as income tax revenue, which will remain entirely with the local administrations,” said Dancila.
Dancila: “Iohannis must prove responsibility in terms of budget and Transport Ministry”
She stated that she doesn’t wish to comment the appreciations of President Klaus Iohannis in respect to the state budget draft, but added that the head of state must prove responsibility on this topic, as well as on that of appointing an office holder at the Transport Ministry.
“Why do you ask me to discuss what the president said? I believe the president must assume what he said, must assume and prove responsibility for what he does. I mean here, when talking of responsibility, I am referring to both the Transport Ministry, where we still lack an answer, and the state budget,” the PM said in a press statement at the Palace of Parliament.
Asked if she expected Iohannis to send the budget draft back to Parliament for re-examination, after the intelligence services’ allotments were cut, Dancila said the president’s reactions aren’t easy to foresee.
Dancila underscored that at the Transport Ministry and at the Development Ministry ministers are needed, in the context in which a series of projects need implementing and Romania is holding the EU Council Presidency.
“I talked with Mr. President, I called back then, I said I must need to know what I do with the two portfolios. Moreover, the interim leadership ends next week. Therefore, you realise this isn’t a comfortable situation for Romania, either internally, because we already have a budget that we need to implement and you have seen that this budget has provided many projects for the local authorities, on infrastructure, investments, therefore we need ministers. But so much more, think that starting next week… You see the pace at which we work within the EU Council, a very alert pace and we need ministers for what we have tabled on the European agenda. (…) [The president said] that he would give an answer. I have only seen one answer regarding Olguta Vasilescu, I still haven’t gotten an answer regarding the Transport Ministry. Therefore, you are asking me what the president does with the budget. I don’t know what he’ll do about the other minister,” Dancila explained.
Asked if the reduction in the budgets for services represents a problem, she said Parliament is sovereign and Parliament adopted the budget draft.
Speaker Dragnea: Budget deficit to amount to 2.76pct of GDP for increasing allowances
The Chamber of Deputies’ Speaker Liviu Dragnea announced on Thursday that in order to apply the amendment stipulating that children’s allowances will be increased as of 1 March, the estimated general budget deficit will amount to 2.76pct of GDP.
“The source of financing is the increase in the state budget deficit from 36,156.8 million lei to 38,287.33 million lei, thus the estimated general government deficit is 2.76pct of GDP, and the necessary correlations in the text of the state budget law will be made. After the state budget law comes into force, is promulgated and published in the Official Gazette, the Government must issue an emergency ordinance to amend the state allowance law, so that the state allowances can really be increased and children can receive them,” Dragnea said.
Dragnea’s proposal to modify the above-mentioned amendment was adopted by 218 votes “in favor”.
Former president Basescu, about intelligence services’ budget cuts: Budget to be sent back in Parliament
People’s Movement Party (PMP) Senator Traian Basescu said on Thursday that diminishing, through the approved amendments, the Romanian Intelligence Service (SRI) and the Protection and Guard Service (SPP) budgets for 2019 will result in the state budget being redirected to Parliament by the President.
“My address is related to the accepted amendments for SRI and SPP. I want to caution you of something, you have duped the President [Klaus Iohannis, ed.n.]. These budgets were presented to the President following the analysis of the tasks that these institutions have in 2019. The government has not acted on the threats that the budgets have to be cut, but you do it in Parliament. As such, I want to tell you what a responsible president would do. The first thing is to send the budget back, the second sends the budget to the Constitutional Court, the third thing, he would accuse some of the politicians of misinforming the president and the CSAT [Supreme Council for Country’s Defence, ed. n.], not to mention the scam. I would ask you to think twice when this budget is to be put into operation, because the president is not allowed not take into account the budgets already approved at the proposal of the Government for one reason – these institutions have action plans for the following year, which are also established in the CSAT, their financing is based on the missions they have in the following year. I just wanted to warn you that you will get the budget back in Parliament,” Basescu said, from the stage of Parliament’s plenary session.
President Iohannis: Budget proposed by PSD-ALDE shows total contempt for Romanians’ expectations
President Klaus Iohanis believes the budget proposed by the Social Democratic Party (PSD) – the Alliance of Liberals and Democrats (ALDE) ruling coalition, adopted by Parliament on Friday, shows the majority coalition’s total contempt for Romanians’ expectations, “who want a responsible and credible governance.”
“On the Executive level, however, things are completely different from what the citizens want, and this budget represents the most eloquent example of a governance putting the Romanians’ future on hold,” the Presidential Administration points out.
According to a release issued on Friday, PSD-ALDE came to Parliament with a budget that cannot be executed.
“With a rigid and authoritarian approach, PSD-ALDE came to Parliament, with an unconceivable delay from the legal deadline, with a budget that cannot be executed. The unprecedented delay of the budget shows, in fact, the lack of real solutions of the governance in relation to the promises made,” the Presidential Administration shows.
The release says that the National Liberal Party (PNL) has managed to pass an amendment bringing real benefits to millions of families of Romania: the significant increase in the children allowances.
“In spite of PSD’s attempt to fast-forwardly adopt this budget, the National Liberal Party has managed to pass an amendment bringing real benefits to millions of families in Romania: the significant increase in children allowances. It is an important victory of the opposition, which could have not be singular, if the PSD-ALDE majority had been interested in a real manner in identifying those measures meant to lead to prosperity and a better life for Romanians,” the Presidential Administration points out.
The head of state underscores that the ruling coalition’s budget, “based on speculative funding sources” neglects the persons with disabilities and the orphans.
“Based on speculative funding sources, the PSD-ALDE budget neglects the persons with disabilities and the orphan children. PSD does not only ignore the situation of persons with disabilities, but cynically punishes hundreds of thousands persons with serious disabilities, as well as their families. In the PSD-ALDE budget for 2019, the expenditure for persons with disabilities are entirely left in the task of local authorities. In the context of the critical situation in which the local authorities are brought in respect to budget allotments, there is the risk of being unable to pay all expenses corresponding to persons in the social assistance system,” the release reads.
In this context, President Klaus Iohannis is drawing the attention that the budget is built of a superficial manner, based on overestimated figures in relation to the economic realities, “neglects investments and damages the real needs of Romanians of benefiting from infrastructure, motorways, schools, hospitals, kindergartens, namely all that the PSD has promised and fails to do.”
“It is unacceptable to sell illusions to Romanians and present the 2019 budget as a budget of investments, when, in reality, the budget provides the significant reduction in investments from national funds on a local level from 2018,” the President says.
In this context, the head of state stresses, “it is so much more revolting the excessive increase in the funds earmarked for parliamentary parties.”
“The PSD is taking full advantage of these increases which it awarded itself with such generosity, while it didn’t find budget resources to cover of a balanced manner the needs in so many essential and deficient areas,” the President says.
President Klaus Iohannis underlines that “PSD and ALDE have taken populism and demagoguery to the realm of serious irresponsibility, endangering the economic stability and predictability.”
“The PSD-ALDE coalition does nothing but prove incompetence, opportunism and bad-faith by assuming this budget lacking rigor and responsibility. Instead of being a credible and sustainable budget, meant to consolidate the public finance situation and providing Romania with the necessary predictability, the PSD-ALDE budget is again opposing the economic realities and the citizens’ expectations,” the head of state concludes.