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Friday, 19 February 2021

Press statements by Prime Minister Florin Cîțu at the end of the Cabinet meeting of February 19


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Florin Cîțu: Good evening! We approved the Law on the 2021 state budget. This is the document.

We also approved the Law on ceilings, on specific indicators set out in the fiscal-budgetary framework for 2021, and the Law on the 2021 social security budget. Of course, they are accompanied by the 2021 - 2023 Fiscal-budgetary strategy and the Report on the 2021 macroeconomic situation and its projection for 2022 - 2024. They will all be made public, they were in the decision-making transparency process. The approved version will be released when the budget is referred to Parliament for debate and approval. There have not been important amendments in today’s meeting. The deficit stays the same. Total expenditure under the general consolidated budget is 397,515 million lei and personnel expenditure stands at 109,511 million lei. The state budget provides for a total expenditure of 223,702 million lei, and personnel expenditure stands at 55,834.9 million lei.

The general consolidated budget deficit or the balance of the general consolidated budget deficit amounts to 80 million lei. Nothing has changed.

Also today, we approved the evolution of the deficit, the annual structural balance of the public administration, the annual deficit. As per structural estimates, it is 7.42 in 2021, in 2022 - 6.07 and in 2023 - 4.83. This is the structural balance that is calculated in relation to the potential GDP. There have been some changes, transfers from certain chapters, for example, some transfers were made from the reserve fund to finance some investment projects that were included in certain annexes. Otherwise, the budget remains within the initial parameters and goes to Parliament for debate.

Reporter: I wanted to ask you if at the Ministries – especially at the Health Ministry, there were a lot of public dissatisfaction in this respect, were there amendments to the budget for 2021?

Florin Cîțu: I see it is a recurrent topic and I do not realize how. I have not noticed such public complaints. The Health Ministry’s budget was bigger in the beginning, but on today’s meeting, certain amounts were reallocated from the reserve fund on today’s meeting, for certain objectives of the Health Ministry. The budget of the Transport Ministry was also supplemented, but not very much, with certain objectives financed from the Reserve Fund, at Government’s disposal.

Reporter: What amounts are you talking about?

Florin Cîțu: The total amount which was amended – around a few hundred million, 200, 300 million, it is not exact, we’ll see, but not only for these Ministries. There are several objectives that were financed from the Reserve Fund, projects which are important for communities and help develop certain communities.

Reporter: And a question for another topic: about the salary benefits. We understand that they will be capped or eliminated, through the salary law which we are working on, at the Labor Ministry. I wanted to ask you if these amendments take effect in 2021, regarding those salary benefits which will be eliminated, those amendments will be applied from 2021 including.

Florin Cîțu: Let us see first how the salary law looks like. My objective is not to eliminate something, but to re-arrange the way the revenues are allocated in the public sector, we want to make this direct connection between performance and revenues. It is about that. At the same time, we have some other principles, one that was very many times presented publicly: it was about the president’s salary, it should be the highest salary in the public sector. From here, all kind of exceptions. We want to correct these exceptions. I would like us to be very clear: the new unitary pay law wants to introduce this modern approach. We said that we are speaking not only about this law. I will propose to the Coalition on Monday, that the leading positions be two terms of office at maximum in public administration, with evaluation at every three years. That means a civil service body, the way is in all developed countries, we still do not have something like this now.

Reporter: If you allow me, can you say if the Labor Ministry can stipulate in the law when it takes effect in 2021, or 2022? How will it be?

Florin Cîțu: Of course, it will stipulate. When we have the law, we will see when it takes effect.

Reporter: I would like to ask you if you consider you had 100 percent the PNL support in this reform implementation you requested?

Florin Cîțu: Surely! The National Liberal Party is a party that wants reform, and you will see that we will make reform alongside the National Liberal Party, however, you have seen the PNL leaders endorsing reform publicly, exactly in the aforementioned direction. We have a programme for government, setting out clearly the principles underlying this society we are building now and it is clear that we have the PNL support.

Reporter: As regards the salary benefits, what is your message for the Romanians who in 2020, for instance, lost their jobs or receive the unemployment benefit, and I see nevertheless that the state sector employees further receive all kind of benefits?

Florin Cîțu: In 2020, I allocated record sums to make sure that Romanians do not lose their jobs. 1,400,000 people have been furloughed, by the help of amounts that have been received from the state budget. I helped their return to the job by paying 41. 5 percent of their gross salary. If we look at figures, we see that we did not lose jobs, on the very contrary. The unemployment rate constantly declined last year, and we had one of the lowest unemployment rates in the EU again, and the fact that it did not go down or these effects are not seen in the economy, is due to having the biggest growth in the EU, in the fourth trimester. Therefore, it is clear that the economy has achieved performance, that jobs remained. We take a look at consumption. Revenues have been there, therefore, the sums allocated from the budget covered that cost that might have appeared in the economy.

Reporter: But, nevertheless, these salary benefits are 27 million lei.

Florin Cîțu: Billion lei. I presented you with the situation. I told you about the way they are paid today, and the way in which these revenues reach public administration, and we should also demand performance and this is why we will have this pay law.

Reporter: How do you solve the situation of miners who blocked themselves in the underground?

Florin Cîțu: I have read now a piece of news that the protest ended.

Reporter: What did you agree with them?

Florin Cîţu: You know very well that in yesterday's government meeting, an emergency ordinance was approved, through the Wage Claims Guarantee Fund, to qualify, and that means paying salaries for the next three months.

Reporter: When does the money reach the people who protested?

Florin Cîțu: Today, this ordinance has been approved, it has already published. The Ministry of Labor told us that it will have the Government Decision to enforce the ordinance immediately. Therefore, this means that when it is published, the government decision will be discussed in the Cabinet meeting. If it is ready on Monday morning, we will have an online meeting on Monday, just to approve this Cabinet decision.

Reporter: Former Prime Minister Ludovic Orban, the party's president, has announced that he is tabling an amendment on free student tickets, he wants students to benefit from 24 free trips. What is their budgetary impact? And please explain to us precisely what the effects of this amendment would be.

Florin Cîțu: We will see the budgetary impact of the amendment. If this amendment does not come with funding sources, it would mean an increase in the budget deficit. But I am sure that such an amendment will be debated in the Romanian Parliament without affecting the budget deficit, this means that it will come with funding sources from somewhere. Either we cut spending elsewhere, or, I don't know, we'll see what the amendment looks like. But I tell you that we cannot increase the budget deficit, so I am sure that this amendment will also have a source of funding.

Reporter: Do you expect other amendments tabled by the governing coalition?

Florin Cîțu: No, I don't expect anything else, no.

Reporter: Mr Prime Minister, Law 1 of January 2011 provides budget allocations for education of 6%. I understand that you have announced the postponement of that 1% for research for next year, but the unionists in education accuse you and your predecessors of breaking the law through that artifice of extension. Does the Government break the law in this respect?

Florin Cîțu: No. The Government is allocating this year, and last year too, we allocated additional resources for education. The discussions I have with all sectors, not just with this sector, are very simple. I am ready to allocate more resources, but I would like to start linking these resources to performance. And I would like to see in all sectors, in all the budgets that we allocate, an analysis in terms of the quality, and then we will allocate more resources. Because, you should know that in these sectors, very large resources have been allocated annually. I calculated a few years ago, 2 years ago, in 10 years, about 60 billion euros were allocated to this sector. I would also like to know what this money was spent, and if it had any impact if the Romanians feel that this money went to this sector. So, we need to make a clear analysis of how we are spending this money and on what we are spending it.

Reporter: For clarification, please, we know that there are several sources of funding for education, both from other ministries and administrative-territorial units. If we draw the line, please tell us we reach 6% of GDP or what is the exact percentage?

Florin Cîţu: No, we do not reach 6% of GDP, but it is more than we spent last year, it was a record amount.

Reporter: What is happening with Deva students, if the protest ended, and if it continues, do you have a solution for them? We understand that the courses are moving online, because, in fact, the Mintia Thermal Power Plant no longer has coal.

Florin Cîţu: That's what I said, it's moving online, we'll see now if the protest has stopped. I hope the situation has been mended. I am also in contact with the prefect there, I was also with the minister of energy. We see what the solutions are along the way. For now, we wanted to defuse this situation, we go even further and we see how the situation evolves.

Reporter: You told us that more money will be allocated to the Ministry of Transport and the Ministry of Health. I wanted to ask you what happens at the Ministry of Development, if you eventually allocate more money there, to the National Investment Company and for the PNDL budget, which we know is 4 billion lei?

Florin Cîţu: No, no more resources were allocated, these resources remained. Several commitment appropriations have been allocated there because we want the local authorities to build or have projects in the future and we will see what kind of projects they have, but I tell you that I have talked to the Minister of Development and a large part of the projects that were at the Ministry of Development, passed to PNRR. So, we will use these funds from PNRR, for local development.

Reporter: Are there other ministries where you also increased these loans?

Florin Cîţu: Yes, they increased a bit to education, healthcare, transports, but they are not very large amounts, just reallocations of resources from the Reserve Fund.

Reporter: Last week, you said that you did not receive the restructuring plan from companies – it is my last question. Now, that you passed the budget, did the Ministers come with those restructuring plans for the companies where the state is the majority or minority stakeholder?

Florin Cîţu: We will make the state companies’ restructuring this year. The budget requires the restructuring of these companies. I told you in the beginning that if I do not come up with the restructuring plans, through the budget, we will make this restructuring, we will be forced to come up with a restructuring of these companies. Therefore, you see that during this year that a restructuring of companies will take place, and there is an article in the budget clearly stating that at mid-year, we will make the evaluation of the budget execution, and where the budget execution is not the way we planned, then, those sums will be reduced for the respective Ministries and from there, start the evaluation of Ministries or of the performance of every Ministry.

Reporter: Mr Prime Minister, I would like to ask you why you eliminated the holiday vouchers, the free trips for students, you froze the pensions but why you did not also eliminate the salary benefits and special pensions through an emergency ordinance, the way you did with the first?

Florin Cîţu: Some of them were approved by laws passed in Parliament and they would have been very easily attacked, and it would have been a work in vain. What we could do through an emergency ordinance, we did, the rest will be done through the Romanian Parliament. You have already seen, the special pensions of MPs have been eliminated. We will see how other measures will be taken.

Reporter: What is the period of time within which the Labor Ministry’s draft law will be presented, sent to Parliament, regarding the elimination of special pensions and salary benefits?

Florin Cîţu: We will have to discuss this with the Labor Ministry. I know that working groups have already been established for both draft laws. I tell you that both the pension reform system, the pay reform are included in PNRR (National Recovery and Resilience Plan).

Reporter: Will it be debated in this parliamentary session or in the autumn one?
Florin Cîţu: I hope it is in this parliamentary session.

Reporter: When is this draft budget going to reach Parliament and when do you estimate it will be approved?

Florin Cîţu: It may reach Parliament, as there have been certain amendments today to the text, this weekend, and the calendar depends on the reunited Standing Bureau. I hope it to be as soon as possible.

Reporter: Give us some examples regarding those objectives for which you allocated money from the Reserve Fund. Is it about hospitals and what hospitals?

Florin Cîţu: There are also hospitals, and feasibility studies, and an airport, there are several projects.

Reporter: And the last question regarding miners, those from Hunedoara Energy Company. In addition to that short –term solution, what will happen with those people, what is the solution?

Florin Cîţu: I am awaiting a plan from the respective Ministry. You saw last year we were successful regarding the restructuring plan of Tarom. Tarom sticks to that restructuring plan and hopefully, it returns on profit. I am further waiting for a plan from the Energy Ministry.

Reporter: Is it a deadline for this plan?

Florin Cîţu: The deadline is linked to reality. It should be as soon as possible.

Reporter: I wanted just a clarification: you mentioned a deficit of 7.42 pct. Therefore, is it no more 7.16 pct?

Florin Cîţu: It is about the structural deficit. The structural deficit is mentioned in the ceilings law. The structural deficit is the one we calculate regarding the potential GDP. There are several deficits at which we take a look: the cash deficit, the ESA deficit, and the structural deficit. For instance, we look at the structural deficit in the Fiscal Pact. In Romania, we look at the cash deficit. With the European Commission, we discuss the ESA deficit. There are three types of a deficit.

Reporter: That from GDP remains at...?

Florin Cîţu: At 7.16 pct, I told you, I started with that, I said that 7. 16 pct is not modified.

Reporter: You said as of Monday, you can organize a new meeting regarding the Government Decision on the implementation norms or...

Florin Cîţu: The implementation norms for the emergency ordinance regarding the Guarantee Fund for the salary payables.

Reporter: I would like to ask you if nevertheless, amendments are adopted in Parliament, making the deficit harder, what is the solution the Government is preparing?

Florin Cîţu: We will see then what the solution is. I repeat I do not think that we should go beyond that deficit. If there are amendments approved in Parliament going beyond the deficit, we will see what the solution is, we can send the law back to Parliament. I stick to this deficit, we announced it publicly, it is agreed at the international level, and it is a deficit that puts Romania on the right path over the next period.

Reporter: I know that you had a discussion within the Coalition so that the MPs backing the Coalition do not table amendments. Nevertheless, we have statements in this regard, in which the PNL MPs, including the PNL chairman Ludovic Orban and also those from the USR or the UDMR, want to table amendments, especially on areas they represent, for the counties they represent, and certain investments in that area. Did you have that talk and do you resume it on Monday?

Florin Cîţu: I know no amendments will be tabled in the Romanian Parliament. Let us see what is happening in Parliament. For the time being, I know that no amendments will be tabled in Parliament. Thank you.



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