The Minister of Finance announces that the final form of the budgetary rectification will completely cover the “essential needs”. Where do 10 billion lei go

By the final form of the budget rectification, all the essential needs are covered “in full,” the Minister of Finance, Alexandru Nazare explaining that he refers to pensions, salaries and social assistance on Thursday evening.

According to the government official, all these total about 10 billion lei, and about 3 billion will go to the Health House.

“Through this rectification, we cover all the essential needs in full. We talk about pensions, we are talking about salaries, we are talking about social assistance. All these needs are covered and all three means around 10 billion. It was not easy and it would not have been possible to cover these essential needs, we also talk about the health house, of course, which is not more than three We do this if we have not been able to negotiate a deficit that will allow us to include these expenses.

The minister said that the essential discussions on rectification take place in Bucharest and the decisions are also taken there.

“The decisions on rectification are made in Bucharest. But given the economic situation in which we are today and the supervision in the excessive deficit procedure, on the essential targets, these essential targets must be explained in detail in Brussels. The more we are aligned, not on the intestines of the rectification, the easier it is to Romania, the easier it is to Romania. (…) We are committed to making a deficit of 7%, there are not 8 (percentages).

The minister was asked if the highest expense is represented by pensions and salaries.

“Yes, of course, there are expenses with pensions and salaries, there are expenses to ensure salaries in the public sector, personnel spending in the public sector. These are fixed expenses. Integral, and this rectification is an effort, it is a projection.

“Deficit is a symptom of the fact that we are not sufficiently disciplined”

Nazare also said on Thursday night that the budget deficit is a symptom that there is no sufficient fiscal-budgetary discipline.

“It is an extremely difficult economic context, certainly, but you have seen that in the last three months, that this government is practically three months ago, the assumptions I left has changed. I had three consecutive confirmations of the rating agencies, the external credibility strengthens the internal stability. That there are risks and each rating agency expresses these risks that are related to the regional context, potential events in the area, crises that could arise, our vulnerabilities in terms of public debt, which are real, but all these things are counterbalanced by the measures taken and by the economic projections of Romania for the coming years, ”explained the minister.

According to him, the financing for 2026 will be at a very high level.

“Including the financing for 2026 will be at a very high level, almost 260 billion, from 235, is of rectification, because the level of financing is taken into account for rectification. The deficit target, the new deficit target of 8.4% of GDP, is the equivalent of a financing that we must obtain of 260 billion. Pressure on financing, but this will be seen over time, in 2026, returning to a target of 6 and the level of financing will decrease, “said the minister.

“Deficit is a symptom, it is not a subject in itself. It is a symptom that we are not sufficiently disciplined from a fiscal-budgetary point of view, that we do not yet know how to build precise budgets, with clear rules, with clear procedures, that we do not know very well to make the financing. Type of financing in part to see which financing had an effect, which means the quality of the projects that fall into these financing, but we finance them much and fragmented.

According to the official, budget titles related to PNRR and the loan component have exhausted several ministries since August or September. He added that, when this happens, “it is clear that they were not correctly budgeted, it was not the entire financial need evaluated correctly.”

An explanation for VAT growth

The Minister of Finance also claimed that if Romania had not raised VAT by two percentage points, then the Fitch agency would not have confirmed its rating in mid-August, and this would have meant that the value added tax would be increased by 4%.

“Probably, if we had not raised VAT by two points, in the first two weeks, the Fitch Agency would not have confirmed our rating. The Fitch agency confirmed our rating in mid-August. Today we were in the situation where we should increase the VAT not by two points, but with four points. The deficit of 8.4, I was today in a much more complicated situation, which would have had an effect on inflation much greater than the one we have today and a much greater effect in the purchasing power, ”said Nazare.

The leaders of the coalition met on Thursday morning in a new meeting to discuss the final form of the budgetary rectification, which will be put into public debate, and then adopt it next week, according to the calendar presented by Prime Minister Ilie Bolojan.

According to the current form of the project, the Ministry of Investments and European projects will lose 3 billion lei.

In addition, money will receive the Ministry of Labor (2.5 billion lei), transport (2.1 billion), health (250 million), National Health Insurance House (3.5 billion).

These amounts are rounded and do not represent the final variant of rectification. On Monday, the leaders of the coalition will meet again for a final discussion on rectification.

“It ensures everything that means investments on infrastructure projects and national projects. Plus social things – pensions, salaries, allowances, etc. The total amount that is actually given is 22.8 billion lei, at a deficit target of 8.4%,” sources from HotNews said.

The budget rectification project was expected to be published in decision -making transparency Thursday evening or at the latest Friday morning.

The leaders of the coalition also established that a new rectification will take place in November.