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October 2, 2022

President Iohannis sends to Parliament for re-examination 2019 State Budget bill. PSD: Iohannis does not understand economy, does not know to read budget

President Klaus Iohannis Friday sent to Parliament, for re-examination, the 2019 State Budget bill.

The president specifies in his request that, apart from the reasons of unconstitutionality, the law needs to be re-examined because the allocation of budgetary resources is “on the one hand grounded on an unrealistic forecast, and on the other hand does not ensure the real functioning of some public institutions with an essential role in society.”

“The European Commission and international independent bodies have all forecast economic growth rates substantially lower than the ones provided by the National Strategy and Prognosis Commission (CNSP). For instance, the International Monetary Fund has forecast 3.4pct, the European Commission 3.8pct, while the World Bank prognosis parks at only 3.5pct, and the Fitch ratings estimates a merely 3.2pct,” Klaus Iohannis said.

According to the president, the advance of the investment forecast at 6.9pct is “far too much” given that the investment in 2018 only saw a 1.5pct growth; the exchange rate prognosis is “unrealistic” given that the tensions on the foreign exchange market are high, and Romania is facing “the highest macro-economic imbalances” in the region, respectively a budget deficit of EUR 15 billion and a current account deficit of EUR 9.4 billion; the budgetary revenues are “over-estimated” and the 33.51pct share of the GDP of the total incomes provided for in the General Consolidated Budget is “unrealistic”; while “incomes are over-estimated, the budgetary spending is under-dimensioned which has consequences by creating certain blockages” at the level of the main authorizing officer; the situation of DNA [the anti-graft directorate, ed. n.] and DIICOT [the Directorate for Investigating Organized Crime and Terrorism, ed. n.] where the staff spending for 2019 is forecast significantly smaller than in 2018, a reason why the sums allocated for salaries will not be enough to cover the entire year; the Romanian Intelligence Service (SRI)’s budget was cut by 18.04pct “with the consequence of the non-coverage of the pat expenditure for the last four months of the year; the Foreign Intelligence Service (SIE) where the cut was 9.58pct, the spending with the staff’s payment have no coverage for the last two months of the year, and the Guard and Protection Service (SPP) saw its budget cut by 21.29pct, the staff spending being insufficient for the last three months of the year; following the growth of the pension point by 10pct, the monthly spending with the pensions last year was rd RON 5.51 billion, and considering the forecast increase of the pension point by 15pct with 1 September 2019, out of the calculations results a necessary of RON 69.5 billion, by RON 1.4 billion higher than the budgeted spending in the social security state budget, of RON 68.1 billion; Parliament should analyse the spending related to the quantum of the contribution of Romania to the European Union’s budget, since after the public debate and the draft adopted by the gov’t, the contribution is sliced from RON 9.18 billion to RON 8.66 billion; for the local authorities, the 2019 budget “will roughly ensure a subsistence funding with zero investment” which will be a source of reorganisation and redundancies; the amount dedicated to the political parties “goes against the electoral reform’s principles of 2015” that aimed at setting certain ceilings for the sums spent in the electoral campaigns.


PSD: Iohannis does not understand economy, does not know to read budget


The Social Democratic Party (PSD) maintains that President Klaus Iohannis “does not understand economy,” “does not know to read a budget,” but blocks the current Government, “instead of apologizing,” after the Constitutional Court rejected his notification against the Budget Law.

“Instead of apologizing, after the Constitutional Court has rejected his notification against the Budget Law, Iohannis insists on blocking the PSD Government in the hope that the citizens will not vote for this party at the upcoming elections. (…) In fact, Iohannis does not understand economy. He proved it even on Wednesday when he showed us that he did not know how to read a draft budget. He said that local administrations would receive one billion lei less, although in reality the draft budget proposes 4.6 billion more,” according to a PSD release issued on Friday for AGERPRES.

The Social-Democrats also say that the real problem of local communities is not the budget proposed by PSD, which allocates extra money, “but the fact that Iohannis has blocked the budget.”

“The real problem of local communities is not the budget proposed by PSD, which allocates extra money but the fact that Iohannis has blocked the budget. For this reason, the local elected officials cannot collect 100pct of the income tax, but only 71.5pct, as it was stipulated in last year’s budget. Also because of Iohannis, mayors cannot start new investments worth about 5 billion lei.”

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