Ruling coalition divided again over pension money

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The ruling coalition will meet again on Monday to discuss next year’s state budget, announced Prime Minister Marcel Ciolacu as a top priority. On the other hand, PSD’s ruling partner, the National Liberal Party (PNL) said it will not accept any tax or tax rate increases.

Today we have a coalition, where we will start with the state budget because it is the top priority. We must cover expenses related to the ‘Anghel Saligny’ Program and CNI investments for this year. We started with co-financing from the previous financial exercise to close it once and for all. My challenge, first and foremost, is to present a budget this year so that you can start your new projects from February. No one will confiscate any money from the local administration’s accounts,” said Marcel Ciolacu.

The Prime Minister emphasized that Romania does not have a macroeconomic problem but rather one related to the deficit and prioritizing expenditures. “Romania doesn’t have a problem with money… Romania doesn’t have a macroeconomic problem. Romania has a problem regarding the deficit. It has a problem regarding prioritizing expenditures. That’s the truth! Too much has been spent in all directions, trying to cover absolutely everything, and we forgot an essential thing: by December 31, we close a financial exercise, 2016 – 2020. That is the priority of central and local administration and the priority of Romania,” Marcel Ciolacu stated.

Prime Minister Marcel Ciolacu stated on Monday at the Summit of Local Public Authorities in Romania that Finance Minister Marcel Boloș “ultimately managed, and he made an effort for this, to outshine me and become a sort of voodoo doll that everyone had to poke every day.” Ciolacu praised Boloș’s work at the Ministry of European Funds and mentioned that the current Finance Minister “saw the danger of Romania’s total deadlock, the danger of losing over 70 billion euros, European funds” from the National Recovery and Resilience Plan (PNRR). Ciolacu criticized the level of pensions, stating that “we have the lowest poverty threshold in Europe.”

Finance Minister Marcel Boloș initially opposed the pension law project promoted by the Social Democratic Party (PSD), but later gave a positive opinion on the project.

“I know that those fiscal measures have been taken, and now the heated discussion revolves around the pension law, whether it is sustainable this year, next year, in the years to come. Ladies and gentlemen, I have not had any grandparents alive, and now I no longer have living parents. If you believe that we should continue with an average pension in October, I repeat, the average being 1980 lei, I announce to you that it is no longer possible. It is inhuman. We have the lowest poverty threshold in Europe. This cannot continue! Truly, we need to find sustainability; we need to come up with a tax reform in the coming years, predictable, in 2025-2026, and equitable. We need reforms both at the central and local levels,” said PM Ciolacu.

On the other hand, PNL Member of the European Parliament Rareș Bogdan, the first vice president of the party, declared on Monday at the PNL headquarters that there would be a coalition meeting at 2:00 PM, during which the Ministry of Finance would present where they would get the funds for increasing pensions. He specified that PNL would not accept any trickery involving tax or tax rate increases, risking to destabilize the government and break off any discussion with the Social Democratic Party (PSD).

“Today, we requested a coalition meeting; there will be a coalition meeting at 2:00 PM. We will go to the coalition, and those from the Ministry of Finance will present where they can get these funds because it is essential to know if there is any possibility of bringing in money only through combating tax evasion because we do not accept, at the risk of destabilizing the government and breaking off any discussion with PSD, any trickery involving tax or tax rate increases. Enough!” said the first vice president of PNL. Rareș Bogdan emphasized, “We come with whatever is necessary not to increase taxes and tax rates in 2024.”

“Romanian capital and Romanian and foreign companies in Romania are the ones bringing money to the budget. These people must understand that without a healthy business environment, without strong Romanian companies, without a strong banking system, without investments, we have no source for pensions, for salaries, we have no source for investments. Also, Romania, and Mr. Ciolacu knows very well, without European funds, without funds from the National Recovery and Resilience Plan (PNRR), including the tranche that must be collected by January 1, and without structural funds, Romania will go bankrupt,” he added.

When asked about what PNL will propose in the coalition, Rareș Bogdan said, “We request measures to increase measures against tax evasion, namely scanners at customs. Customs are not led by the National Liberal Party, or at least I don’t remember a liberal being appointed there overnight. Also, on fiscal evasion from the Bucharest ring road, from the large deposits of Arab vegetables and fruits, as well as the entries of fruits, vegetables, and fuels from the Constanta Port. These are real dangerous areas for the economy and where money can be collected.

He mentioned that the coalition discussions regarding pension increases were initially for a mandatory 13.8% increase this year due to inflation, after which they saw statements about a 40% increase.

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