Strikes, such as those in education, involve costs. More precisely, their solution. With the state in a very bad position in terms of revenue and a hole of 20 billion lei was announced before the teachers took to the streets, it is clear that the pressure on the budget is increasing.

There are additional costs, plus there are other budget categories that require similar things (health care and public order). It is normal for people to have a decent salary. Adjustments must be made in the budget.

Even Adrian Cachiu said that correcting the budget would be difficult, talking about 4 billion lei in extra spending this year due to salary increases.

Whether we’ll see them in short supply or not remains to be seen what the first and second fixes will look like. It is not known how much ANAF will be able to restore since the beginning of the year, given that the budget was drawn up on unrealistic figures, which most economists, including the Fiscal Council, say.

Of course, a deficit means borrowing.

In reality, in the first quarter, the state looked pretty good from the point of view of the budget deficit, if you look strictly at this figure, from the point of view of cash. The amount of 38.7 billion lei was planned, but 22.7 billion lei was realized.

*Revenue loss amounted to 17.2 billion lei in the 1st quarter compared to expectations

Although revenues decreased, the problem was expenditures, which reached only 80.5% of what was planned. That is, more than 33 billion lei. The expected investment was not made (see below).

This is recognized by the Ministry of Finance in the report for the first quarter.

The report of the Ministry of Finance: there are problems with the PNRR and calls on the ministries to use European funds

The Ministry of Finance (Ministry of Finance) says in the report: “The expenditure of the general consolidated budget has been fulfilled in the first quarter of 2023, they were below the programmed level for all expenditure items, significantly lower levels were recorded in the case of investment expenditure, both capital and in the case of expenditure on projects financed by external non-reimbursable funds.”

The institution also notes: The biggest discrepancy between the programmed level and payments was recorded in the case of expenditure with projects financed from PNRR, both from the grant and from the loan.

“The significant funds allocated by the European Union must be used optimally, which is a central element of budgetary sustainability through the prism of the investment strategy and the irreversible nature of these funds.

We believe that the main managers of credits need to pay special attention and make maximum efforts to use budget credits allocated for these purposes, to accelerate the implementation of projects, so that the funds raised from external non-refundable funds, as well as those related to projects financed from the PNRR, in the next period to restore the gap recorded in the analyzed period, taking into account that 2023 is the last year of compliance with the framework financial programming for 2014-2020,” the quoted document shows.

The ministry urges to be careful in spending.

“In the case of the main credit agencies, prudence is needed in the adoption of new expenditures and greater rigor in the programming of budget expenditures, as well as the urgency of attracting non-refundable external funds both for the framework of financial programming for 2014-2020 and 2021-2027, as well as those that concern the PNRR”, – states the Ministry of Finance.

According to the results of the first quarter, given the fulfillment of trade union demands, investments will most likely be sacrificed. In fact, even today, we are doing very poorly there, if you look at the budget. Historically speaking, investment doesn’t happen because institutions don’t do their jobs. 10% of GDP can also be allocated for this. If the institutional capacity is limited, then it is in vain: during the second correction, they are reduced, because they are not implemented.

More use of European money would support the budget and it would be much easier to fit the parameters with the new salary increases.

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