Romanian parliamentary committees endorse central government budget for 2014

By bne IntelliNews November 29, 2013

The joint committees for budget of Romania’s parliament have endorsed smoothly the 2014 central government budget and the ruling coalition expects to have the whole general government budget law endorsed by the joint chambers next week, Ziarul Financiar daily reported.

Nonetheless, problems with the 2014 budget planning endorsement are expected to come from President Traian Basescu – who warned to reject the bill unless the government gives up the envisaged supplementary taxes. The political debate over the 2014 budget might thus reach a deadlock later in December, which might eventually have a significant impact on the country’s arrangement with the IMF.

The ruling coalition holds a majority of over 70% in parliament and despite the objections expressed by Basescu and the opposition parties, did not accept major adjustments to the 2014 budget planning. The main objections expressed by the president are related to the supplementary excise tax on car fuels.

Investors, however, expressed bigger concerns related to the new 1.5% tax on special industrial assets. Regarding the methodology of calculating this special tax, finance minister Daniel Chitoiu has shown flexibility and said that corrections might be operated in early 2014 – since the first payment is due after Q1.

President Basescu will send back the 2014 budget planning to lawmakers and will challenge the bill to the constitutional court in case the ruling coalition sticks with the supplementary car fuel excise tax. The government is siphoning public money for electoral campaigns before the European and presidential elections next year, Basescu has claimed. He issued his first warning at a press conference on Nov 24 and reiterated it a day later on Nov 25 in an interview for the public radio station.

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