Fresh News

Thursday, 18 February 2021

Press briefing by Prime Minister Florin Cîțu, Vice Prime Minister Dan Barna and Justice Minister Stelian Ion regarding some measures approved on the Cabinet meeting of February 18

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Prime Minister Florin Cîțu: Good afternoon! In today’s Cabinet meeting, we approved several legislative documents, but two are more important. First of all, a draft law on the abolition of the Section for the Investigation of Judicial Crimes (SIIJ) has been approved. It's clear here, it is a promise made by the governing coalition, but at the same time, a recommendation for the observance of the Cooperation and Verification Mechanism, there are many things we have taken into account there. The details of this draft law will be presented by the Justice Minister. I can tell you one thing: The Superior Council of Magistracy(CSM) gave a negative opinion both when this section was established, and now, but not because they don't want the dissolution of the section, but for other reasons. I repeat the details will be presented by the Justice Minister.

In today's Cabinet meeting, we approved the Emergency Ordinance regarding some fiscal –budgetary measures, and for the amendment of some legislative documents. It is about the Emergency Ordinance we needed to be able to approve the Budget Law. This ordinance will be published in the Official Gazette, and afterwards, tomorrow, we will have a Cabinet meeting, in which we will approve the Budget Law for 2021. You know very well what this ordinance provides for: eliminating the 30 percent salary benefit for the prefect office’s staff,  maintaining the value of the pension point to 1,442 lei in 2021 – a state budget saving of nearly 9 billion lei. The coming into force of Law 195/ 2020 on the status of railway personnel is being postponed for April 1, 2022. A necessary legal framework is being instituted so that the amounts unspent from the allocations for free transport for students can be used by universities over the next years to grant scholarships; the National Education Law is amended, establishing the right of students to benefit from 50 percent transport discount and repealing the provisions which established free transport for students. The holiday vouchers validity has been extended until 2022. The holiday vouchers from 2019, 2020, are still valid and in use. Some questions as the Justice Minister is here prepared to answer you, as well as Mr. Vice Prime Minister.

Reporter: Mr. Prime Minister, tomorrow, we will have the budget. Are any changes likely as compared to the variant which has already been announced?

Florin Cîțu: No, compared to the deficit variant. The budget deficit remains as established, there are amendments, perhaps, inside, different allocations, more commitment appropriations.

Reporter: Are there Ministries receiving more money?

Florin Cîțu: We do not talk of more budgetary loans, it could be possible to have a higher allocation to CNI and PNDL, at the Development Ministry, but for the rest, it is about commitment appropriations, especially amounts to be allocated through commitment appropriations, to allow contracts to be concluded this year and of course, will be paid next year. But the budget deficit remains at 7.16 percent, with the same parameters expenditures and revenues. You have seen very well today the opinion of the Fiscal Council, which says that it is a credible budget and believes that this budget deficit can be reached this year.

Reporter: It is nevertheless a budget which received a negative opinion from the Economic and Social Council.

Florin Cîțu: Yes. Interesting, isn’t it? The budgets that destroyed Romania between 2017 and 2019 received positive opinions, the budgets that increased unsustainable budget expenditures, especially personnel ones, received positive opinions, the budgets that restricted the economic space in Romania and introduced all kinds of interventionist laws received a positive opinion, and this budget, which receives, for the first time, a positive opinion from the Fiscal Council, from professionals, those who are professionals say that it is a credible budget, receives a negative opinion. But in the end, you know how it is, politics is still a problem. Political decisions are still a problem in Romania, that's why I said that we have to make the reform from the ground up and I assume this.

Reporter: Several miners /.../ Regarding the opinions, there are some recommendations from the Fiscal Council, the Economic Council, recommending you to introduce new taxes in order to increase revenues to the state budget. I would like to ask you if you take into account these recommendations if you intend to introduce new taxes this year or the next?

Florin Cîțu: These recommendations are always from the Fiscal Council and other similar bodies, they existed last year too. Last year, contrary to those who believed we will not succeed, we succeeded in keeping the economy afloat, achieving better results than estimated, borrowing cheaper and funding all budgetary deficit without raising taxes. I said in the very beginning, that we will not introduce new taxes, we will demonstrate that we can develop the economy, and avoid tax evasion, through the digital transformation of the public sector and public sector reform. There is no need to introduce new taxes over the next period. The receipts – and you looked at this in the Fiscal Council’s report, we should also look at the part clearly saying that the estimated revenues could be underestimated this year, for the first time. We could have bigger revenues to the budget than estimated and the recommendation of the Fiscal Council is to use these revenues to reduce the budget deficit.

Reporter: Where from could these extra revenues come?

Florin Cîțu: From economic performance above expectations. If you look there, the Fiscal Council stated that it expects an economic growth between 4- 5 percent, which is much more than what all these institutions estimated for Romania a few months ago.

Reporter: I have one last question: regarding salary benefits; we saw that, again, this time, the CSM is dissatisfied, first of all, with the statements of the Minister of Labor, Raluca Turcan, regarding the cut of extra salary benefits. I would like you to tell them if you still think that the benefits in the budget system can be cut or at least capped this year?

Florin Cîţu: As I said, the salary benefits or the Salary Law was passed by the Romanian Parliament. It is normal to submit a salary law in the Romanian Parliament, which will re-establish all this – the payroll, the salary benefits system; but what I want to remind Romanians is: there are 110 billion lei worth staff costs, in 2020. Of these, almost 27 billion represent salary benefits, so almost a third is represented by the salary benefits. These staff costs doubled in the period 2016-2020. I just ask the Romanians if they felt an increased performance of those who receive benefits representing a third of their salaries and had their salaries doubled during this period? It's a question we all need to answer, and that's why I remember the need of reform and linking performance to revenues. And then we can talk about salary benefits. Thanks.

Reporter: If I may ask you another question, several amendments are being prepared in Parliament for several infrastructure projects, and more. If there is money left and could it be adopted in Parliament?

Florin Cîţu: We have allocated resources in this budget at a historical level for investments. As we did last year, and this year, it is an investment-oriented budget and, you will see, this year too, the budget execution will be very good.

Reporter: In the context of salary benefits, I wanted to ask you if you are considering looking at the allowances of the Board members or of the general meetings of shareholders?

Florin Cîţu: Of course. It is a draft law that I am already working on, capping the number of Board members, the number of boards you can be a member of and, of course, the allowance. These will follow too.

Reporter: What could be the limitation, for example, for a ...?

Florin Cîţu: I think we are considering limiting the number of Board members to a maximum of five, but when the draft law is ready, we will present it to you.

Reporter: Recently, you have been talking about increasing pensions, and for 2022 you said that they would be indexed by the inflation rate, to which will be added 50% of the real increase in average gross earnings in the country. I understand that now, this emergency ordinance, which you have tabled for public debate, includes this nuanced change: 50% at most. What remains in the end and what guarantees us, in the end, that pensions will continue to increase by 50%, as you said before?

Florin Cîţu: First of all, we have to be very clear. I do not bring the discussion on pensions, in the public debate, you keep asking me about pensions. Secondly, pensions will increase with the average annual inflation rate, so here, it is a guarantee, which adds 50% at most of the real increase in average gross earnings. So it is a guarantee that they will increase by the inflation rate and by 50% at most of the real increase in earnings.

Reporter: It could be 10%, that's for sure.

Florin Cîţu: It is a guarantee that they will grow. You ask how much they will grow. We'll see it next year. If Romania's economy performs very well this year - and we all need to want this and work for this purpose- then the pension will increase even more. It depends on all of us how much the pensions will increase.

Reporter: And because we're still talking about pensions, do we have that software for recalculating pensions or not, right now?

Florin Cîţu: The Ministry of Labor can confirm us, but I know that the PNRR includes an entire chapter on the digitization of ANOFM.

Reporter: And related to salary benefits, the last question, in the end, do you make the changes through the Pay Law - and I would like a deadline here if you can give us - to the Ministry of Labor or are amendments actually being made now to the state budget in Parliament on pay benefits?

Florin Cîţu: I said that the Pay Law was passed in the Romanian Parliament and should be amended in the Romanian Parliament.

Reporter: The Hungarian Minister of Foreign Affairs met today with Minister Bogdan Aurescu. On the agenda of the discussion was the "Ardeal Economic Development Program" supported by the Budapest Government. How do you view this project dedicated to Hungarian ethnic communities and how do you consider the use of the name "Ardeal" (Transylvania) in a bilateral document?

Florin Cîţu: I will have a discussion with Minister Aurescu, I have not discussed with him yet, and we will see what the meeting elements were. After I have a discussion with Minister Aurescu and I will be briefed, I will come up with details.

Reporter: How do you see the use of the name „Ardeal” given that the regions have no legal statute in Romania.

Florin Cîţu: Allow me to see what the discussion elements were, and I can later discuss this issue. I do not want to give a personal opinion in this respect. We are here at the Romanian Government.

Reporter: Have you received the reports on Piatra Neamt and Matei Bals blaze?

Florin Cîţu: Some of the reports – I received on Matei Bals, Piatra Neamt, but I want to remind you that at Piatra Neamt, I sent the Economic Inspection. I have a preliminary report with which I was not very happy. I asked a re-analysis. I also have a report on Matei Bals. Some things were already initiated. As I said each time, the reports I receive from institutions, Control Body or Economic Inspection – if there are criminal issues, they will be sent to the respective institutions.

Reporter: Will you make them public over the next period?

Florin Cîţu: I will see what I can make public from these reports, and I will do it.

Reporter: I wanted to ask you about the discounts that students will have for CFR trips. Through this Ordinance, the Government offers a 50 percent discount, but there were PNL MPs who said they would amend this ordinance and there will be 24 free trips. Did you talk to the coalition leaders? Do you know about these changes prepared for the ordinance?

Florin Cîţu: Yes, I also saw these amendments. Of course, MPs can table amendments to the draft law approving the ordinances. At the same time, I am the one who was involved, together with my Cabinet colleagues, in drawing up this budget and we fought for any sum of money. Now, if we decide to reallocate some resources that we could send to communities to repair a bridge or a school, let's do it; if lawmakers think it's better to have free student transport, it's their decision. The decision I made was to use these resources for other purposes and I stick to that.

Reporter: As for the unfavourable opinion from the Economic and Social Council for this emergency ordinance, we went through it and we see that there are several criticisms related to the budgetary impact. They said, it is a very small budgetary impact, and the Government did not consult the categories that were impacted by this ordinance.

Florin Cîţu: As for the very small budgetary impact, this is relative. I repeat, there are communities in Romania that need several hundred thousand lei, tens of thousands of lei to survive. Here we are talking about savings of several hundred million lei. Or we are talking about pensions, vouchers, we are talking about billions of lei that we reallocate, as I said, we invest them in the economy, in the area where we have positive returns. Therefore, the budgetary impact is relative. I would have liked to see the Economic and Social Council’s concern for the budgetary impact when money was wasted without any substantiation. I remind you that both the pension law and the salary law approved by the PSD governments had no economic ground, there were no sources of funding. And yet, this Economic and Social Council gave a positive opinion, which makes me question the good faith of those who gave this opinion.

Reporter: You said that it is an unfortunate report related to what happened in Piatra Neamț. The same thing was said by the Minister of Health. Can you explain to us a little why it is unfortunate?

Florin Cîțu: I did not say „unfortunate”. I said I'm not happy with the results. And there is an economic analysis there, there is the Economic Inspection, and I looked at the results and I said they should be re-evaluated because I saw some elements that need to be further investigated. That's why I said that I would like certain aspects to be re-analyzed.

Reporter: Have you been contacted by a mayor who is dissatisfied with the amounts proposed for the administrative-territorial units?

Florin Cîțu: No, we had discussions with the associations. On the contrary, this year, as you know, 90% of spending on centres for people with disabilities has been covered by the state budget. So, this problem no longer exists, we did not have these discussions.

Reporter: What is the health and education budget as a share of GDP compared to last year? And why are the two budgets not clearly visible in the draft budget?

Florin Cîțu: Well, the budgets of the ministries can be seen very clearly. And here I wondered - how no one understands that an 11.43 billion budget is bigger than the 10.5 billion budget last year and more than the 9 billion budget in 2019. But we should look at sectors. And here the issue is that we have the Ministry of Health, but also local authorities that spend money, and manage hospitals under their authority, we also have ministries with subordinate hospitals and we also have the National Health House. I told you that regarding the health sector, this year’s budget provides almost 54 billion lei, I have not yet received the amount for the education sector. Also there, there is the expenditure of local authorities, and also the expenditure made by the Education Ministry. We have to look at the whole sector and I will mention later the exact amount for the Ministry of Health, if I find it by the end of the discussion, now I will tell you how much it is allocated for education. At Health, I told you that it is almost 54 billion lei. Not, in fact, 57 billion lei is allocated.

Reporter: If you allow me, one last question. As a former Minister, what do you think about charging Facebook because Poland has already taken the first steps in this regard and we see what the battle between the social network and Australia looks like?

Florin Cîțu: Let me answer you first - there are 40 billion allocated to the education sector this year, by 2.2 billion lei more than in 2020. Regarding the tax, I am not a supporter of taxation. I think this field or the internet should be regulated, it is true. But I do not think that it can be regulated through taxation. Thank you!

Reporter: It is a full public debate regarding that reduction in the Church’s budget. Why such a large percent, 89 percent?

Florin Cîțu: Last year, there was an allocation, historical measure and this is why, if you look at recent years, there is no very large reduction of the budget, there is no significance whatsoever. It is an amount I have discussed with the religious denominations, it is a sum to support this sector. I have not seen any criticism from the respective sector, therefore, we have not faced these issues. Thank you very much. (...)

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