These targets should be closely monitored and would allow the Government to quickly correct any failings, says the Fiscal Council’s position on the draft budget for 2012.
The draft budget for 2012 provides revenue from European post-accession funds of 12.5 billion lei (about EUR3 billion), up 60% from 2011. The Government also expects to get RON1 billion in pre-accession funds.
The Fiscal Council’s concern is justifiable, as the budget’s allowance for investments will be reduced by RON1.3-2 billion in 2012 compared with 2011, although the Government hopes to compensate by raising EU fund absorption by almost 50%.
The draft budget for next year provides RON37.8 billion for investment expenses, or 6.5% of the GDP, which is RON2.4 billion higher than the amount stated for this year, RON35.4 billion.
More than RON18.3 billion of next year’s investment budget is accounted for by projects using EU funds, including co-financing; the EU is expected to provide around RON11.6 billion, according to data published by the Finance Ministry. This means the national budget will earmark RON26.2 billion for investments.
This year’s budget provides investment expenses of RON35.4 billion, of which RON13.7 billion are for EU-funded projects, including co-financing. Absorbed EU funds are estimated at RON7.9 billion, meaning the domestic contribution is around RON27.5 billion.
Therefore, the investment expenses stated in the 2012 draft budget are RON1.3 billion lower than those stated in this year’s budget.
(EUR1=RON4.362)