“The public sector wage bill will remain at 6.7% of GDP, as in 2011. In light of the interruption of EU fund reimbursements for a number of programs, capital outlays, including for co-financing of EU-funded projects, will need to slow down to remain within the budgetary envelope,” says the letter, obtained by MEDIAFAX.
“Co-financing of EU-funded projects from the privatization fund will not be undertaken and any unspent funds from the [National Infrastructure Development Program, PNDI] will be saved.”
The Fiscal Council has recommended the Government limit spending on co-financing and keep a tight watch on the expenses of local authorities, so as to meet the year’s budget deficit targets.
The target is 2.2% of the GDP in cash terms, or 3% of the GDP according to ESA95.
The initial 2012 budget provided revenues of 12.53 billion lei (EUR2.8 billion) and expenses of RON11.64 billion from the absorption of non-reimbursable EU funds. The revised budget states revenues of RON10.67 billion and expenses of RON10.86 billion, meaning a RON200 million deficit.
By mid-2012, Romania had paid EUR824.8 million to the EU budget, from an annual quota of EUR1.42 billion. In the first six months of the year, Romania absorbed EUR713 million in structural and cohesion funds, slightly over 18% of its total allotment of EUR3.78 billion.
According to the Fiscal Council’s data, Romania’s absorption was better on other segments – EUR665 million (45.2% of 2012 allotment) for rural development and fishing, EUR910.7 million through the European Agricultural Guarantee Fund. (EUR1=RON4.487)