Pensions and roads to benefit from budget correction

This budget correction requires that the budgets of 40 public institutions be sacrificed. Thus, the Ministry of Labor will receive RON 5.32 billion (€1.276 bln, computed at an average exchange rate estimated for 2009 of RON 4.2/€1) for paying pensions and unemployment benefits, and the Ministry of Transportation over RON 756 million (€180 mln) for investments in transportation infrastructure projects and subsidies for supporting public passenger railway transport, according to the draft “Ordinance regarding the correction of the state budget for 2009 and the correction of the social security state budget for 2009”, sent by the Ministry of Finance to trade unions.

Until now, the only minister who publicly announced that he will request further funds for his institution’s budget is Radu Berceanu, Minister of Transports. Of the funds allocated to the Ministry of Transports, almost half, namely RON 365 mln will go to the CFR state-owned railway company. Berceanu said yesterday, after meeting the trade unions, that he will request this amount for the correction, but that he was not sure if he will get it.

The ministries whose budgets were significantly cut are the Ministry of Regional Development and Housing (-€180 mln), the Ministry of Education (-€36.66 mln), and the Ministry of Health (-€26.9 mln). In spite of the information according to which there will be massive layoffs in the field of education, personnel-related expenses in this sector will be supplemented by some RON 23 mln (€5.4 mln). The document states that some €1.3 bln will be allocated from the state budget for the payment of pensions, considering that the revenues in the public pension system fell some €1.2 bln, according to this document. As far as the unemployment insurance budget is concerned, which has a present revenue shortfall of approximately €53 mln, this will be supplemented by €204.2 mln.

For this year, the government expects a drop in revenues to the state budget of RON 7 bln (€1.65 bln), of which RON 4.2 bln (€1 bln) from value-added tax (considering that the industry declined eight percent, the construction sector by 16.9 percent, the service sector by 6.2 percent, and the agriculture by 12 percent), RON 443 mln (€105 mln) from the profit tax (mainly due to the drop in net sales and in labor productivity), and RON 362.2 mln (€85.7 mln) in excises, since the tobacco product manufacturing industry fell two percent.