Occupy the Budget

By Rodica Pricop


The government is preparing for the adoption of the poorest budget after 2008, next week. An austerity budget, revised and approved by the IMF, whose target is to achieve a drastic cut of public expenditure in order to secure a deficit of 1.9 per cent of GDP. The only problem is that the burden of austerity is not going to be equally shared between everybody because, according to the authorities, in Romania there are two categories of people paid from public money: the ordinary ones – retired people, teachers and medical staff – always handled as a negligible quantity and permanently threatened by lay-offs and the luxury ones working in the state’s leading structures such as government, presidency, intelligence and magistracy, who will receive substantial pay rises and will also keep their warm and cosy positions. The budget blueprint indicates a huge inequity as well as the scorn of this government towards some of the most vulnerable categories which incurs the risk of inflating even further the number of people living under the poverty threshold in this country which, according to recent estimations, is 5 million.

If we were to believe the official rhetoric, all public sectors will reduce their costs in keeping with the ‘prudence’ local authorities and international creditors invite to, also warning about a new global recession waiting to kick in next year. But, like any other thing, austerity is also relative. Pensions and wages will be frozen and crucial sectors such as education will receive less funds than in 2011. The draft budget allocates to education RON 8.7 bln although, under the law, the sector should receive three times more – 6 per cent of GDP.

On paper, the Health Ministry has obtained an increase of budget by approximately 13.2 per cent compared to the current year, with the mention that there is no guarantee that the money will ever reach the system given the fact that, at present, there is no money left for the settlement of free or compensated prescriptions. The 2012 estimated health budget amounts to RON 5.4 bln, compared to an initial 2011 budget of RON 4.8 bln. Moreover, the law provides for a pay-roll expense reduction of 9.3 per cent, while the expenditure with projects receiving EU financing is also dropping by approximately 24 per cent. Under these conditions, the medical staff is not going to receive any pay rise or recover unpaid sums won in court and hospitals will not be modernised with European funds. The next logical question is where the money is going to, especially after the disappearance of 200 hospitals this year which should mean huge budget savings. With no regulation in place as far as the public procurement system is concerned, with a system rotten by corruption, nepotism and lack of transparency, the answer comes easy. Anyway, the chance is slim that the money will ever reach the patient.

Another area that will have to suffer is agriculture. Although the authorities keep bragging about the potential Romania has to become the granary of Europe and about agriculture’s capability of being a true engine of economic growth, it seems they have recently changed their mind as they have cut its budget by no less than RON 1 bln.

The Ministry of Agriculture will have a budget of RON 14.9 bln in 2012, with the first consequence being a smaller per-hectare subsidy paid to farmers. For a whole year has the leadership of the ministry promised, with the consent of the European Commission, that the maximum possible amount to be paid to Romanian farmers as additional national direct payment would be EUR 73.56/ha. It had only lasted until the 2012 budget was out. According to a draft government decision prepared by the Ministry of Agriculture and published on November 11, the proposed payment is now EUR 60/ha, which accounts for 81.5 per cent of the maximum possible sum that could have been allocated. But that was not all. The amount as such still needs to be sanctioned by the Ministry of Finance who is in no hurry now as it was in no hurry to make sure the EUR 73.56 would go into the poor farmers’ pockets this year. But there is still more. Farmers’ associations have got wind of the fact that the Ministry of Agriculture is planning to cut subsidies from the national budget as well. Since bad news always tend to put down roots more easily, Romanian farmers will probably remain with just EUR 100/ha given by the European Union. Farmers have already reacted by holding rallies in front of the Ministry of Agriculture, but to no avail.

A second look at the numbers contained by the new budget draft gives birth to new questions. For example, the National Integrity Agency set up by Monica Macovei to fight against top level corruption four years ago has got a triple budget, in spite of its more than disappointing performance so far. Busy digging into the wealth of the opposition and anyone detracting the power, ANI has so far been unable to check the wealth of ministers or other dignitaries for reasons only known by it. Meanwhile, its appetite for expensive vehicles and other exquisite accessories has grown proportionally with Romanian’s obvious defeat on the corruption front. We look forward to seeing what ANI will procure with the money so generously earmarked from next year’s austerity budget.

Another privileged sectors enjoying government generosity are the intelligence services. With no genuine public control, intelligence services are flourishing in Romania these days. No one knows for a fact how many people for in this ‘militarised’ system as it was called by the president a few days ago, but, according to some information, there should be more than 30,000. Despite the number, the services were never restructured or downsized like the other categories of public system workers: doctors, teachers and policemen (10,000 of whom were laid off only in 2011, amidst unprecedented crime surge). In the absence of reasonable arguments for increasing their financing, we can imagine that the government wants Romania to go back to being an over-controlled society, by resuscitating practices dating back to before 1989 when the former Securitate was ‘the eye an the ear’ of the regime. An argument in favour of such sinister theory is the draft law that has been tacitly adopted by the ruling coalition which gives intelligence officers the power to conduct criminal investigations. With no norms and transparency criteria in place, this new law practically opens the door wide for abuse and violation of civil rights, allowing these ‘investigators’ to use intelligence-specific means which are always in the grey area of the law.

Another possible explanation behind the increase of the intelligence budget is that, once the US defence system is deployed here, Romania will become a target for terrorist attacks, as President Basescu was admitting. But the same president had just told us from Washington that, once the elements of the missile defence system are up and running at Deveselu, Romania will have the highest level of security in its history. Does anyone see the contradiction? Maybe it’s just our imagination because, again, everything is relative, as the austerity...

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