Legislative rules Boc Gov't must submit 2010 budget

The Parliament passed yesterday a decision allowing the Boc government to come in the Legislative with the draft budget for 2010. Vasile Blaga, interim minister of the Interior, told Hotnews.ro that PDL will challenge the Parliament's decision at the Constitutional Court. During the same meeting, after the plenum of the two Houses decide with majority of votes, to bring two fresh topics on the day's agenda, the Parliament expressed his full commitment and support for the observance of economic indices, as provided in the accord with the IMF, which must lay the basis for the future Law of the state budget for 2010. The Parliament passed both decisions with 259 votes (PSD, PNL, UDMR and minorities) against 4, and 120 abstentions (PDL).

Under the Constitution, the Boc Government - dismissed last week through no-confidence vote - may not bring the draft budget in Parliament. The draft Decision that allows the acting government to submit the Budget Law for 2010 in Parliament provides for derogation from Law 90/2001 on the structure and functioning of the Executive. The title of the draft Decision mentions: "Decision authorizing the Government of Romania to transmit the draft state budget and the draft budget of state social insurances for year 2010." To this view, senators and deputies passed with unanimity a political statement writing that only in such conditions will Romania overcome the economic crisis and affirm its status as a credible partner for international bodies. The initiative taken by the new majority is based upon the wish of PSD and PNL to put an end to PD-L's accusations that it leaves the country without a government, at a moment of economic crisis, by refusing to invest the Croitoru Cabinet.

The document also mentions that the Boc Government did not fulfil its legal obligation to bring in Parliament the draft Budget, until October 15, 2009, as provided by law. The adoption of the budget is a condition of the accord with the IMF, in view of releasing a new loan instalment next month. Late last week, Emil Boc said the Government will complete the draft budget for 2010 in the first decade of November and the act might be sent to Parliament under the form of a legal initiative by the Cabinet members who are also MPs.

Exports - main source of economic growth in 2010

Also yesterday, the chief of the IMF delegation to Romania, Jeffrey Franks said reforms are hard to make during electoral campaigns. However, in the future, the effects will be beneficial. In his position as IMF official, Jeffrey Franks analyzed how reforms are being implemented across 12 states. The moment when electoral campaigns began, reforming the system proved to be more difficult. Otherwise, the respective states would have been able to enforce the measures themselves, said Franks, quoted by news agencies. Furthermore, the IMF official warned the budget deficit must be curbed to 5.9 pc of the GDP in 2010, compared to the 7.3 pc target agreed for 2009. To this view, Romania might also use European funds, Franks explained. According to the IMF official, exports will be the main source of economic growth for Romania in 2010, with a significant contribution also held by European funds, as domestic demand will recover later. Setting the inflation target to 3% for 2011 was an "excellent" choice of the BNR, in view of Romania's wish to join the Euro-zone, and until now, inflation rate has undergone a sustainable drop, he added.

The IMF delegation held a fresh round of talks with caretaking premier Emil Boc yesterday night, focused on the draft budget for next year, official sources told Mediafax.

Interim Finance Minister Gheorghe Pogea yesterday said the Boc Government met its deficit targets at nine months. The Finance Ministry will take all measures to keep budget deficit within the limit of 7.3 pc of the GDP in 2009, despite "the very strong pressure" which might influence the level of the deficit, Pogea explained. He further said the budget continues the policies initiated in 2009 and the reform processes that have already started must be included in next year's budget. "The budget must be assumed by a Government voted by the Parliament. (…) The next Government should appear as soon as possible on the political stage of the country, because it is the one to assume responsibilities." (…) Asked what would happen if the budget does not pass until the end of the year, Pogea explained that, under the Law of public finance, the next months - January and February - will be financed with 1/12 of the annual expenses provided for the previous year.

In his turn, Constantin Dascalu, state secretary in the Ministry of Transport and Infrastructure, who is in charge with the ministry's relation with the IMF, told Agerpres that the Fund demanded complete transparency in drafting the 2010 budgets of the companies reporting to the Ministry, as part of the accord with the international financial institutions. Thus, next year's budgets of the six companies - the National Roads and Motorways Company, Metrorex, CFR SA, CFR Calatori, CFR Marfa, and Electrificare CFR - must range within certain parameters - no losses, no arrears, salary increases under the inflation rate.

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