On October 13, the Government notified the Court of the draft laws aimed at budget rectification adopted by the Parliament.
In essence, “The Executive reiterates the arguments that Parliament ignored the predictability of the law and the prospects of the evolution of the consolidated budget and the general economy, with the consequence of affecting the principle of legal certainty. In addition, the repeal of some articles the pension point from September 1 this year does not automatically lead to the application of the initial law as long as no transitional provisions have been issued “, according to the press release sent by the Government representatives.
At the same time, the Government shows that the parliamentarians did not identify the clear sources of financing the proposed increases, necessary to cover the pursued expenses and to reflect the principle of budgetary balance, according to the constitutional provisions.
“With the entry into force of GEO 135/2020, the new value of the respective pension point of 1,442 lei was applied from September 1, 2020, to the maximum value allowed by the state budget. Applying the increase of the pension point to 1,775 lei as amended by the legislator and the increase of teachers’ salaries would imply “a need for financing from public funds of 11.2 billion lei in 2020, respectively 1.06% of GDP and 34.3 billion lei in 2021 (representing 3.05% of GDP) “, says the quoted source.
But the execution of the general consolidated budget in the first months of 2020 registered a deficit of 45.17 billion lei, respectively 4.17% of GDP. In the current extremely serious health crisis in which the pressure on the state budget is huge due to massive increases in non-permanent expenditures, and the risk of having a huge budget deficit in 2021 is high, Parliament should help correct the budget deficit.
Instead, the Legislature chose to act in the opposite direction to this objective, thus not respecting the European commitments that Romania has the obligation to fulfill.
The executive emphasizes that “the rectification of the state budget for 2020 was built on the analysis and impact studies, representing a balance between all areas that needed funding so that the economic impact of the health crisis is reduced to the lowest possible level. The distortion of the budget construction, by introducing expenses without real basis in the income level, has as finality the economic degradation, with negative impact in the living standard of all citizens, including the presumed beneficiaries of these expenses “, the mentioned source shows.
Also, the management of the current economic context requires a realistic reporting to the international economic situation caused by the pandemic and the maximum precaution in maintaining the budgetary balances for the benefit of all citizens, the press release concludes.
What is provided by the law adopted by the Parliament
On September 22, the Chamber of Deputies and the Senate adopted in plenary session the draft laws approving the budget rectification in the form that includes the PSD amendment that provides for the increase of pensions by 40%.
An amendment was made at the request of the parliamentary groups of UDMR which says that “the ceiling on public debt, according to the EU methodology, for the end of 2020, is 40% of the Gross Domestic Product”.
Another amendment of PSD is the one by which the amounts distributed to the territorial administrative units were increased by one billion lei. Also, for the municipalities the county seat is allocated an additional amount of 500 million lei, which will be distributed equally to the local authorities, without taking into account the political color.
Another amendment repeals Article 43, which provided for the increase of teachers’ salaries next year. Therefore, teachers’ salaries will be increased from this year, as required by law.
At the same time, the budget of the Chamber of Deputies was increased by 5,635 million lei, as follows: “In the budget of the Chamber of Deputies – amounts allocated from the state budget – the budgetary and commitment appropriations are increased as follows: 3,000 thousand lei under title 20 Goods and services and 2,635 thousand lei under title 71 Non – financial assets “.
The amount of 67 million lei was additionally allocated for the Ministry of Agriculture, in order to finance the Program for the implementation of the National Anti-Hail System and for Increasing Precipitation.
“The Ministry of Agriculture and Rural Development is authorized to supplement with commitment the amount of 67,000 thousand lei commitment credits, respectively 45,000 thousand lei budgetary credits, Chapter 80.01 – General economic, commercial and labor actions, Title 55 – Other transfers, Art.01 para .05 – The program for the implementation of the National Anti-Hail and Precipitation Growth System, by decreasing by the amount of 67,000 thousand lei commitment credits, respectively 45,000 thousand lei budgetary credits from Chapter 83.01 – Agriculture, forestry, fish farming and hunting, Title 80 – Loans, Art.30 – Other Loans “, according to the amendment adopted and proposed by the PSD parliamentary group.
Another amendment of PSD was the one by which the budget of the Ministry of Economy is supplemented with 400 million lei, for the Start Up Nation program.
Also, the budget of the General Secretariat of the Government was supplemented with 20 million lei, from the Budget Reserve Fund of the Executive “for the State Secretariat for Cults, in order to financially support the Patriarchal Administration, in order to continue the construction of the Cathedral of the Salvation of the Nation. “, through a fine also of the PSD parliamentary group.
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