Priorities of the New Budget Bill
Pay rises for state employees, smaller taxes and a significant economic growth is what the current technocratic cabinet inherited from the former leftist cabinet and the basic elements of the 2016 budget structure.
Ştefan Stoica, 15.12.2015, 13:31
For the technocrats making up the Ciolos cabinet, the first cabinet with no political affiliation in Romania’s post-communist history, drawing up the 2016 state budget has not been an easy task. And neither will be for them to keep the deficit at maximum 3% of the GDP, as established at EU level. To say nothing that that target will have to be maintained against the background of an increase in public sector salaries by 10 to up to 25% and fiscal relaxation, which could favour businesses on the long run but might also prove risky on the short run.
On the other hand, the largest parliamentary parties, the Social Democratic Party and the National Liberal Party, the only ones that could truly oppose the budget bill have no interest in challenging a government that offers them a one-year break, which is exactly what they need in an election year. The quick pace at which the 2016 state budget nears its adoption proves that no one plans to challenge it. On Monday the budget bill was submitted to Parliament with very few amendments. Prime Minister Dacian Ciolos made it a point to assure the MPs that the government would abide by important provisions related to fiscal relaxation and pay rises for state employees. He recalled that the priority sectors considered when drawing up the budget were education, healthcare, research, defense and investment.
Dacian Ciolos: “The healthcare system will be allocated an extra 700 million euros, the education system an extra 500 million euros and research an extra 110 million euros. Investment in research will go up by around 23% in 2016 because we believe that research is also instrumental to a sustainable economic recovery.”
Prime Minister Dacian Ciolos also said he was aware that the Government had to decide, by year-end, whether the minimum salary should be maintained at the current level of 230 euros or should go up to 260 euros. Ciolos explained that raising the minimum salary, something that the Social Democrats insisted on, could not be done before an impact study was conducted.
Dacian Ciolos: “What I’m particularly concerned about is not the impact on the state budget, which is minimum after the state employees’ salaries have already been raised by 10%, but on several sectors with a small level of profit. I think we should carefully consider the possible impact of our decisions on those sectors.”
The National Union of Romanian Employers has announced they support the increase in the minimum salary, on condition that the taxes and duties paid by companies to be calculated based on the current level of the minimum salary.
(Translated by Elena Enache)
