Government to save more money

The government in Romania is expected to announce soon a series of measures aimed at curbing public spending

Ştefan Stoica, 24.04.2023, 14:04

With revenue receipts in the first part of the year lower than the estimates, the Romanian government finds itself in the situation of resorting to more spending cuts in an attempt to maintain the budget deficit within its admitted limits. After having assessed the budget structure, experts cautioned over the possibility of overrated budgeted revenues and underrated expenses, as early as last year.

The coalition government in Bucharest is expected to officially make public the reform package aimed at saving billions of euros by the end of the year. The aforementioned measures have been listed in a draft bill to be approved in the first government sitting. The countrys Prime Minister Nicolae Ciuca has again given assurances the measures arent going to affect salaries, jobs or investment as they arent austerity measures but aimed at streamlining the economy.

Nicolae Ciuca: “Through these fiscal measures, we are going to approve after having made a decision within the coalition, we want to make sure we are going to meet the deficit target. And we are not speaking here of austerity measures because we have seen in the past years that not only the Romanian economy, but any other economy cannot develop and function within its normal parameters based on austerity measures. However, we can definitely speak about improvement measures and the appropriate management of public money.”

In turn, Finance Minister, Adrian Câciu, explains that it all comes down to streamlining public spending so that it may create the needed fiscal room for support measures for the economy and people. Various publications in Romania have already made public the aforementioned bill aimed at curbing expenditures, which also provides for freezing state employment in 2023 and canceling any pay rise. So personnel expenses in public institutions arent going to exceed those in 2022.

The bill also provides for procurement and bans any purchase, hire or lease takeovers of cars or office equipment. Only the newly-established public authorities and institutions as well as investment objectives are exempted from this decision. The ordinance also bans the pension-salary accumulation for a state employee except for those working as teachers in various education institutions as well as the specialized personnel in medical units. The measure also targets pensioners from the armed forces, including the incumbent Prime Minister, who is a career serviceman. According to political sources, the document hasnt been endorsed by the coalition yet.

Against the background of the latest debates on the appropriate public spending, pundits are asking a legitimate question: why temperance and discipline in spending public money are being considered only at times of budget deficit?

(bill)