The government is to approve the budget rectification draft in its August 5 sitting.
The rectification is negative, with deficit mounting to RON 20 billion – 1.94% of GDP. Several ministries, including Transport, Education and Health will be losing funds, while intelligence services, except for STS, will be receiving more.
However, the rectification has been criticised by PSD’s ruling partner ALDE, which could break up the coalition. “If the draft remains this way, we won’t endorse it”, ALDE vice-president Varujan Vosganian threatened. ALDE is opposed to the cuts on investment and main ministries due to previous agreement within the coalition earlier this year.
ALDE is also opposing the almost half a billion RON allotted to the intelligence services. The Transport Ministry will be losing the highest amount following budget rectification, almost RON 300 billion, which is more than 20 percent of the budget.
The main reason for this loss is the ministry not complying with investment plans. More precisely, the Transport ministry spent only 30 percent of its budget in the first half of 2019. The Education Ministry is losing RON 2 billion as no project has been funded by EU money this year, namely the project to introduce interactive whiteboards into classrooms. The Health Ministry will be losing RON 400 million.
However, the Presidential Administration will be allocated over RON 9.5 million, the Romanian Intelligence Service (SRI)- RON 390 million, the Foreign Intelligence Service (SIE)- RON 46 million and SPP RON 42 million. STS will lose RON 70 million.
Austerity measures in sight
The Government is preparing to decrease the positions of state apparatus by halving the number of secretaries of state and offices of those remaining. Sources from the Executive have revealed that a draft project is in store to cut 15 percent hazard pays in some sectors, as authorities have determined there were certain state institutions claiming it for air pollution in Bucharest, for instance.
The hazard pay cuts will not affect doctors, teachers, policemen or magistrates, but officials said their wage benefits will have a fixed value, rather than 15% as before.
Equally, the job offers in the public sector will be blocked, except for within Healthcare, Education and the Police.
Among other intended measures, the excise duty on cigarettes will be increased, while special pensions will be taxed.
The austerity actions are considered to be an effort by the Government to raise almost RON 2 billion to keep budget deficit under 3 percent.