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| The Week in Review |
| (2011-11-19) |
| Last updated: 2011-11-21 13:48 EET |
The government of Romania has passed a second budget amendment this year.
The Romanian government has passed an amendment to the 2011 state budget law this week, the second such move this year, and is redirecting the money saved by some ministries to others that have special financial problems. Other funds were redirected towards new investments. According to Prime Minister Emil Boc, the main purpose of the amendment was to consolidate the economic growth achieved in the first three quarters of the year. The head of the government added that Romania has managed to reach a stage of macroeconomic stability, and in the third quarter the economic growth rate was 4.5% compared to the corresponding period of 2010. The sectors having made the most significant contribution to economic growth are agriculture, industry, constructions, tourism, exports and – most importantly – the budget allocations for investments. Emil Boc said: “By rearranging the amounts in the state budget we have once again prioritized investments, jobs, and the healthcare sector, which are very important for each of us. The Health Ministry budget was raised by 1.2 billion lei, because we want medicines to be available to patients and hospitals must have the resources needed in order to carry out their activity in Romania.”
The authorities also aimed at reducing the arrears of some state-owned companies and ministries, a goal included in the stand-by agreement with the IMF. To this end, additional money has been earmarked for the Transport, Defense and Interior ministries.
The Health Ministry is drafting a new bill to regulate the sector.
A new Healthcare Act will be ready within a month in Romania. The law will define a more restrictive package of services and will introduce competition into the system through private health insurance institutions. The Health Minister, Ladislau Ritli, said a reform was necessary, because the current package is unrealistic, and some medicines and services are used excessively, only because they are free. Under the new law, a degree of public health insurance will be compulsory for all patients, while private insurance will be optional. Private insurers will be able to sign contracts with hospitals and clinics, but also with individual physicians, and patients will be free to choose a private health insurance company to work with.
The Competition Council is pointing an accusatory finger at the companies selling fuel on the Romanian market, accusing them of infringing the law.
Several oil companies active in Romania which have been investigated by the Romanian Competition Council since 2005 have 30 days at their disposal to answer the accusations leveled by investigators, who say there is proof they infringed the law by carrying out unfair practices. The investigation gained momentum over the past two years, as a direct consequence of skyrocketing fuel prices. Early this year, the National Fiscal Administration Agency drafted a report on fuel producers and distributors, saying the retail price was unjustifiably increased throughout 2010. These price increases, they say, were not in response to the evolution of the price of crude oil on the stock exchange, exchange rates or the taxes levied by the state, as has been claimed by the major companies in the field. The European Commission has announced it agrees with the conclusions of the investigation launched by the Romanian Competition Council and recommends that the authorities apply sanctions to these companies. The fines stipulated by the Romanian law could be up to 10% of the companies’ turnover.
The opposition threatens to impeach President Traian Basescu.
The Social Liberal Union, the main opposition force in Romania, has again mentioned the possibility of starting an impeachment procedure against President Traian Basescu. The reasons behind this decision made public by the leaders of the Social Liberal Union are the statements made by President Basescu on the national radio station on the impossibility of increasing the pensions and salaries of state sector employees next year. Without mentioning whether or not he will endorse the opposition’s request to annul the recent draft law which freezes pensions and salaries in 2012, Traian Basescu said there was not enough money to cover pay-rise. He stated that this is the reality of the situation, which can’t be changed, irrespective of the ruling by the Constitutional Court. The opposition, which took the draft law, which freezes pensions and the salaries of state sector employees to the Constitutional Court, is interpreting Basescu’s statements as a possible attempt to infringe the Constitution. They state that they will initiate the impeachment procedure against the president if unconstitutional elements are identified.
Finland agrees with Romania and Bulgaria’s accession to the Schengen area in several stages.
Finland has announced that it agrees with a compromise solution to Romania and Bulgaria’s accession to Schengen, to be achieved in several stages, starting with the initial elimination of air and sea border controls, as of March. A decision on the elimination of land border controls is expected in July. Alongside the Netherlands, Finland opposed to the two countries’ accession, initially scheduled fro March. As the member states failed to reach a consensus on the issue, the vote on Romania and Bulgaria’s accession by the Justice and Home Affairs Council in Brussels, scheduled for September the 22nd, was also postponed. Back then, Finland and the Netherlands claimed that Romania and Bulgaria hadn’t made enough efforts to fight corruption. However, all assessment reports show Bucharest is technically prepared to face all of the challenges on the EU’s external border.
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