Update: PSD’s Dragnea claims 2017 budget has RON 10bn gap, inquiry commission to investigate Ciolos Gov’t. Former PM: There is no such gap

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Social Democrat Party (PSD) leader Liviu Dragnea said on Sunday, that he will consult with the Social-Democrats to decide the possible initiation of a parliament inquiry commission, given that the 2017 budget has a gap worth around RON 10 to 14 billion.

He said that he takes into account the possibility of initiating an inquiry commission to check the decision at the Finance Ministry since the last budget rectification.

“It’s very possible that tomorrow (on Monday, our note), I will consult with my colleagues, we initiate an inquiry commission, because what happened at the Finance Ministry is illegal. They estimated, on paper, probably having as basis some commitments written by some stakeholders, that incomes in Romania at the end of the year 2016 will grow by about 3 million, reason for which they made a positive rectification. This was somewhere around November 23. December 31 shows us that incomes are smaller by RON 10 or 14 billion, I will get all the facts in the morning. This is totally illegal. Who lied about that data, which hasn’t happened in Romania before, must pay,” Dragnea said for private broadcaster Romania TV.

“We are speaking of at least five people who should give explanations: the Prime Minister, the Minister of Finance, the Minister of European Funds, the head of the ANAF and the chairman of the Fiscal Council. (…) Let’s see how Mr. chairman of the Fiscal Council issued preapproval, in fact how he certified the data was real. We are in the situation in which Romania’s budget on 2017 has a RON 10 billion gap, that we will surely cover, but these RON 10 billion could have gone to other better things for Romanians,” Dragnea also said.

Former ministers react. Dacian Ciolos – Mr. Dragnea is making a trick

Former PM Dacian Ciolos says there is no such gap. “Facing the figures and the realities of Romanian economy I have pointed to for months, not aware how to make ends meet for the electoral promises during the campaign, Mr. Liviu Dragnea is making a trick and announces there’s a gap of RON 10 billion in the budget.”

“For any person having minimum knowledge in economics, such a ‘gap’ would have involved either lower revenues or higher expenditures. Anyway, it should have been seen in the budget deficit – it’s not the case. There is no such gap,” Dacian Ciolos said, according to realitatea.net.

“In 2016 the revenues were higher as compared to 2015 and the final deficit was below the forecasted level approved by parliament together with the budget for last year. In December we paid VAT worth RON 2.1 billion to the companies, in order to release the pressure for the next budget. The rest if just fairy tales. Anyway, in 2017 it is another budget. If he cannot meet the electoral promises this year, Mr. Liviu Dragnea cannot blame last year’s budget. But these are details for Mr. Dragnea. Besides that, it is the same approach as when we were governing: the technocrats are the ones to be blamed. PSD covers its lack of achievements and its false promises by diversions and propaganda,” the former PM said.

“The budget is not a bottomless bag and cannot be managed in outlaw style, Mr. Dragnea. Your populist promises will be implemented on the backs of those who honestly work and pay taxes, you will get the country and the future full of liabilities. Even so, why didn’t you say during the campaign that you are going to increase the taxes for some of the employees and you did it in the second government sitting?” Dacian Ciolos wrote on his Facebook page.

Former Fin Min: Such a gap would mean budget deficit higher by 1.3pc of GDP

“The budget deficit is 2.59% of GDP against 2.8% of GDP, the initial target. This does not lead to a RON 10 billion gap. Had this gap existed, then the budget deficit would have been higher by 1.3% of GDP and the overall deficit would have amounted to 4.1% of GDP. Let’s not forget the budget is monitored by the European Commission, we are supervised until 2018,” former Finance Minister Anca Dragu said, according to Hotnews.ro.

“The budget is not a chest with money you keep on your desk and, eventually, you take it with you when you leave”, Dragu added.

“There is indeed an underperformance in expenditures related to revenues. It shows a similar cut in revenues and expenditures against the forecast. There are unachieved expenses for the Health House. (…) There are projects for grant funds. They stick to the budget until year end and one cannot cut the funding because we should also cut the co-funding,” Dragu also said.

“In a new year, there is a new budget, you start from the beginning. When the fiscal year ends, then the budget begins from zero for the next year,” the former finance minister says.

“We have helped the current government by reimbursing the VAT worth RON 2.1 billion, as we noticed the budget was below the forecast. I believe there is confusion and it seems fishy to me that such talk is put on the table. Probably they want to eventually justify a cut in expenditures by RON 10 billion,” Anca Dragu says.


Former Minister for European Funds Cristian Ghinea, currently USR MP, has reacted to Dragnea’s statements: “Dorel is governing. Dorel is calculating how much he can do out of the promises during the electoral campaign. It doesn’t fit in whatever he does. Dorel gets nervous and points to the technocrats, inquiry commissions and extraordinary session. We are shaking already. Dorel, are you in trouble?” Ghinea wrote ironically on his Facebook page.

He added that “Dorel does not know the deficit is calculated at the end of the year or he knows it but wants to save his image from what he had promised during the campaign?”

In his turn, former Health Minister Vlad Voiculescu said PSD was aware there is no money for the promises during the campaign and now he blames Dacian Ciolos.


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