Few signs of a prosperous New Year
As the festive season approaches, we at The Diplomat – Bucharest have another reason to celebrate: our eighth anniversary on the market. It’s an achievement we’re proud of – especially given that many other local businesses have succumbed to the hostile market conditions
It seems that these days we are always asking the question: when will the country emerge from the crisis that everyone is talking about? We have been feeling its effects – keenly – for a long time now and we have had enough. We are tired primarily of the economic problems that the crisis has brought, but also because it is quite often used in this country as an excuse, when it comes to cutting or freezing pensions and wages. And freezing prices? Not so much.
And yet, the time has come for the 2012 budget discussions, unfortunately still a budget built on a deficit. The problem is that, like every year, the attention is focused on cuts to investments, education, culture, agriculture, justice and Parliament, while the budget increases for special pensions, for the presidency and intelligence services go by unremarked.
Before breaking down these budget variations further, we have to look at the differences in the sums allocated in absolute value, the exception being the budget for special pensions, where a RON 1 increase is “rude”, to use a term so beloved of local politicians.
It is not possible to make such a fuss about these special pension categories without seeing that not only has the budget not decreased, but it is expected to grow, while at the same, the majority of the pensions – thanks to the billions of euros of debts run up by the Government – remain frozen for 2012, despite the lifetimes of hard work put in by the contributors.
This can mean only two things: either the law was not applied to the special pensions, or the law was poorly conceived and serves no purpose, as not only has the special pensions budget failed to make any savings, but it actually adds to the deficit!
Back to the budget, where there are marked differences between the labor and agriculture ministries. Both ministries are important, given the fact that this year Romania’s agriculture supported the economic growth.
For next year the significant cut will come from the unemployment insurance budget, which will fall to an estimated RON 2.4 billion, from RON 4.4 billion. No bad thing, if the savings made were to be because some of the unemployed people found a job, but, unfortunately, the projections foresee only a slight decrease in the average unemployment rate. This is even more worrying as it is estimated that over 40,000 graduates will form part of this unfortunate cohort next year.
The Government must work out where a RON spent will bring added value. The austerity measures seem like they will never end and will not fully solve the current problems. We’ve cut enough in recent years, and, in principle, there has been enough time to fill all the holes that were sucking in money with no justification.
Obviously some downsizing was a necessary evil. But it is now time for the cuts to be “frozen” – to use the fashionable word among politicians these days – and for the Government to start thinking about development policies.
It seems that money is spent far too easily and for nothing. And we are not talking here about spending on pensions and salaries, which are the normal duties of a civilized state, as Romania claims to be. We are talking about other “obligations”.
As one foreign citizen said when comparing his own homeland and Romania: “In our country they steal as well, but they also do something for the citizen.” In other words, if the money is spent, it should be spent usefully. If there is a clear aim in mind for the next couple of years, we may be able to say that it was worth the sacrifice.
Because so far, let’s face it: except for cuts, the government has not actually come up with a clear, constructive strategy.