Romania’s government, after a meeting on Friday, August 29, announced in a press conference that it approved five of the six chapters designed to be part of a second package of budgetary reforms. The sixth chapter, on public administration, was tackled during a meeting of the ruling coalition two days later, when this chapter was deferred for two weeks over disagreements about cutting down the staff in the local administration institutions, according to Digi24.
The first five chapters of the second package of budgetary reforms, already sent to Parliament, will be legislated under the simplified procedure, with prime minister Ilie Bolojan expected to request their endorsement without debates in the evening of September 1, after possibly accepting amendments filed by lawmakers in a government meeting earlier the same day.
The procedure allows the lawmakers to file a no-confidence motion against the government and overthrow the executive in case a majority of the Parliament backs it.
As a technical detail, each of the five chapters is subject to separate accelerated legislative procedures, meaning the opposition can file five separate motions. But this also allows part of the chapters to be enacted in case the Constitutional Court spots issues at one or more of them requiring time-consuming revisions – with the chapter on magistrates’ pensions being the first candidate to such complications.
In the press conference after the government meeting on August 29, the ministries provided basic and already known elements of the five chapters approved – but it remains unclear whether the draft laws published in advance for consultations were amended or not.
The five chapters approved by the government regard magistrates’ pensions, the reorganisation of the public health system, the streamlining of the management in the state-owned enterprises, the streamlining of the regulating bodies (ANRE, ASF, ANCOM), and a package involving corporate taxation, regulation, and insolvency procedures.
While the draft law on magistrates’ pensions is the most likely to receive a negative review, hence a veto from the Constitutional Court (requiring revisions), the package involving corporate taxation, regulation, and insolvency procedures is likely to generate major complications in case it is enacted in the form it was republished by the Finance Ministry.
The fiscal/insolvency package was the sole of the six chapters that was republished after the public consultations – but this failed to gain the support of the tax experts who still see it highly problematic in terms of it breaching EU regulations and, more generally, economic principles.
Finance minister Alexandru Nazare in the press conference after the government meeting estimated the [annualised] impact of the package of corporate taxation, regulation and insolvency procedures to generate a budgetary impact of RON 3.7 billion (EUR 740 million) which should in principle be seen on the higher revenues side, while the other four endorsed chapters would have an impact of RON 6.9 billion (EUR 1.3 billion) resulting into a total of just over EUR 2 billion or around 0.5% of GDP.
iulian@romania-insider.com
(Photo source: Gov.ro)
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