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| Parliament Debates Budget for Next Year |
| (2011-11-28) |
| Last updated: 2011-11-29 15:10 EET |
The Romanian draft budget for 2012 and the social insurance budget bill have been submitted to Parliament. Government representatives say the main criteria underlying budget-planning efforts were caution and practicality, arguing the unstable economic and financial climate in Europe has kept the Government safe of any populist temptations that the election year 2012 might entail.
When drafting the budget, the Government took into account an economic growth rate of 2.1%, a budget deficit of merely 1.9% of the GDP and an inflation rate of 3.4%. Estimates place the country’s GDP at nearly 580 billion lei, that is a little over 138 billion euros. Public investments will increase as compared to last year and will become the engine for economic growth. Meanwhile, Romanian officials hope to absorb 6 billion euros worth of European structural funds.
PM Emil Boc says the amount is realistic, given that 90% of the projects have already been either signed or implemented. On the other hand, PM Boc made it clear he was hoping to bring salaries and pensions in the public sector back to the level prior to the slashes of 2010. The Government however is not willing to risk overturning the budget balance by introducing unsustainable increases. The Romanian official did no rule out, however, a possible rise in salaries and pensions for the second half of the year, a possibility that is closely linked to the evolution of both the domestic and global economy.
Emil Boc: “Unless national and EU economies see further slumps, there’s a chance to increase salaries and pensions, because we may push the budget deficit up to as much as 3%. At present, however, no one can promise that this will happen”.
On a personal note, PM Boc said he might present his resignation if next year’s budget targets are not met and if macroeconomic stability is jeopardized. Opposition members constantly lash out at the executive’s ineffectiveness and its chronic shortness of ideas. Regarding the draft budget for 2012, the opposition complains that the budget bill fails to provide for growth-stimulating measures and to make new jobs available. The Social Democrats, Liberals and Conservatives threatened to vote against the budget if their amendments aimed at addressing these shortages are not approved. The opposition mainly wants to lower contributions to social insurance schemes as well as to cut back on the government’s expenses.
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