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January 25, 2022
ECONOMY FINANCE&BANKING POLITICS

Government approves this year’s second budget revision; FinMin Caciu: Deficit target maintain of 7.13 pct of GDP

The Government will approve, at its Friday’s meeting, the budget revision, Prime Minister Nicolae Ciuca informed, while asking the Minister of Finance to ensure the continuity in activity in order to implement the revision, considering that November 29 will be considered a day off.

“We have three important items on the agenda. The first is the draft emergency ordinance on the revision of the state budget for 2021 and the establishment of the legal framework for granting a subordinated loan by the Romanian state, through the Ministry of Finance, as a shareholder, to CEC Bank SA. The second – draft emergency ordinance for the revision of the state social insurance budget for 2021,” Nicolae Ciuca stated, at the beginning of the meeting.

He mentioned that the Gov’t will also approve a draft decision by which November 29, 2021 is a day off.

“November 29 will be a day off, the decision includes a series of provisions concerning enterprises and production units that need to work continuously, with provisions provided at the level of each ministry to be observed, while each structure needs to ensure a continuity of work. But, in view of the fact that this budget revision is to take place, I believe it’s necessary for the Minister of Finance and the other ministers which consider that they will have implications on how the budget changes impact each ministry to ensure continuity of work so that we do not delay in any way the manner in which this part of continuity in the process of ensuring the funds for the beneficiary structures is ensured,” the PM said, according to Agerpres.

 

FinMin Caciu: Deficit target maintain of  7.13 pct of GDP

 

The government adopted on Friday this year’s second budget rectification, maintaining the deficit target of 7.13 pct of GDP, announced the Minister of Finance, Adrian Caciu.

“The rectification of the state budget has been adopted, we maintained the deficit target of 7.13 pct of GDP. We provided the necessary resources for this year, until December 31, and we managed to find a solution to unblock the critical situation at CEC Bank,” said the minister.

He recalled that CEC Bank has been looking for the solution for two years so that, after the share capital increase in 2019, it could comply with the rule requested by the European Commission to be able to have the necessary exposure and guarantees to enter the lending market.

“As a result, we have established that we will grant a loan of 1.4 billion lei to CEC Bank for several purposes. Firstly, the Romanian state will immediately receive 900 million lei in dividends. Secondly, this banking company and the other banks will support us in implementing the government program because it contains not only money from the state budget, but also European funds and we need co-financing, so that the beneficiaries of European funds have a place from where to get loans that are targeted at the implementation of the public policy programs that the Government will adopt in the next period. As far as I am concerned, this was a key moment. From this moment on, from the point of view of CEC Bank, we no longer have a risk on the banking system,” the government official maintained.

According to Caciu, having to reallocate money for pensions and salaries from other budgets at the end of the year has been a structural mistake, one that will not happen again the following year.

“Today’s rectification shows us some structural shortcomings in the way the budget projections are made in Romania, because we end up in the last month of the year having to allocate additional amounts for pensions and salaries, but the saddest thing is that we have to take money from European-funded projects, from investments, not because you have to take money from somewhere, but because those investments only existed on paper in a budget. This is a lesson I am quickly learning myself, and so is the Government and which we must not repeat in 2022,” the minister gave assurances.

According to a press release of the Ministry of Finance, the deficit of the general consolidated budget, in absolute amount, calculated according to the national methodology (cash), increases to 84.905 billion lei, while standing at 7.13 pct of GDP.

 

Photo: www.gov.ro

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