The budget planning is based on an economic growth target of 1.6%, an average annual inflation rate of 4.3%, an average exchange rate of 4.5 lei for the Euro and a budget deficit of 2.1% of the GDP. In addition, the draft budget provides for a 4% increase of pensions as well as for a 7.2% increase of salaries, which would in fact bring salaries back to the level prior to the 2010 cuts.

As expected, the power and the opposition are divided over the two bills. Whereas the Ponta Cabinet claims the state budget for 2013 will re-launch economic growth, the opposition has filed thousands of amendments to the two draft laws, none of which has been approved. Moreover, the opposition argues that the draft law would slow down the country’s development. The Liberal Democratic Party in opposition has warned that the draft budget would have a negative impact on the entire population, particularly on the middle class, the agricultural and business sectors. The Liberal-Democrat Gheorghe Ialomitianu, a former finance minister, explains:

Gheorghe Ialomitianu: “It is a poverty-inducing budget, since people’s purchasing power is falling from one day to another. Taxes have gone up, investments are down, which will trigger a drop in the number of jobs”.

Government officials were quick to respond to such criticism. Minister delegate for the state budget Liviu Voinea has argued in favour of the project.

Liviu Voinea: “Pensions and salaries will increase, investments in EU-funded projects will also hike. How can this be a poverty-inducing budget?”

“The budget for 2013 is prudent and balanced”, Liviu Voinea went on to say, adding that a positive adjustment may be operated by mid-year. Advocates of the budget bill say the law provides for higher expenses as compared to last year, as well as a better system for collecting revenues. On the other hand, 73% of the social security budget will be made up of social security contributions to state-funded pensions schemes, 0.6% will come from contributions pertaining to occupational accidents and diseases, 0.2% are non-tax revenues while the remaining 26.2% will be covered by subsidies from the state budget.