The Government and measures to reduce public spending

The Romanian Government will assume responsibility in Parliament. The opposition collects signatures for censure motions.

Corina Cristea, 25.08.2023, 14:00

The Bucharest Government plans to take responsibility in Parliament for the package of laws aimed at reforming the state institutions, fiscal balancing measures and measures to combat tax evasion. The waste of public money, not paying taxes and fiscal evasion hinder the country’s development, says Prime Minister Marcel Ciolacu: I will put my mandate on the table in Parliament for reforms and social justice. We have to separate the waters so that Romanians can see who really wants to make reforms and take this country forward and who is against that and fights for privileges and big fortunes. I believe that this is the way Im letting you know I will move forward with all firmness.

Subject to excessive deficit procedure since 2019 and, after the data showed that the budgetary situation after the first months of this year is worse than the Government had anticipated, Romania is in the position of taking urgent adjustment measures, including to avoid losing the European funds. The Governments taking responsibility in Parliament for the fiscal measures means these measures will be adopted without any debate, so much faster.

The Government has prepared more than 50 measures to reduce spending in the public system, and, according to the PM, this is the first real reform in this respect. Among the measures are cutting 200,000 vacant jobs in the public system, the reduction of the number of dignitaries and management positions, the merger between institutions, the decentralization of some services, as well as the prioritization of national investment programs, but also the capping of bonuses or cancellation of holiday vouchers for employees of the public system with incomes above a certain level. All these are measures meant to reduce public spending.

The Government order will also drastically reduce the employees’ salaries, trade unions have argued, saying that the normative act is, in fact, a package of austerity measures. According to the Cartel Alfa trade unionists the solution is not to cut off the employees’ means of subsisting, taxing meal vouchers or food allowances, but rather to significantly reduce the overburdened central government apparatus or even cut public subsidies for political parties.

PM Ciolacu and a number of ministers will go to Brussels next week to discuss with the chief of the European Commission, Ursula von der Leyen, the modification of the budget deficit target of 4.4% of the GDP assumed for 2023. Talks will also cover the package of fiscal measures. In Bucharest, USR (democratic opposition) have already announced that they will table censure motion against the PSD-PNL Government and that, in order for it to pass, they will collaborate with all the political forces in Parliament, except for AUR (a populist, ultranationalist party). The Alliance for the Union of Romanians will also table a censure motion to block the normative acts that, in the opinion of this party, are likely to push Romanian companies into bankruptcy. (EE)