A draft law on fiscal responsibility already submitted to Parliament for debate and mentioned by Prime Minister Boc among the legislative priorities of the Government aims to keep total spending and staff costs within certain limits and to contain spending growth at below the nominal growth of the Gross Domestic Product.
The draft law provides for, among other things, establishing a Fiscal Council to be composed of five members appointed by Parliament upon the recommendation of the National Bank of Romania, the Romanian Academy, the Academy of Business Studies, the Romanian Banking Institute and the Association of Romanian Banks. The Fiscal Council should be an independent body and it should not request or receive instructions from public powers or any other institution or body.
The Fiscal Council should analyse and come up with suggestions and recommendations related to official macroeconomic and budgetary forecasts; analyse and come up with recommendations concerning a fiscal and budgetary strategy and assess its compliance with the fiscal principles and regulations provided for in the legislation in force, and it should also assess the fiscal and budgetary performance of the Government against the fiscal objectives and strategic priorities specified in the fiscal and budgetary Strategy.
Under the same draft law, the Romanian Government would define and carry out its fiscal and budgetary policy based on the principle of transparency in the establishment of fiscal and budgetary objectives and carrying out fiscal and budgetary policies. At the same time, in accordance with the principle of stability, the Government would have to secure predictability for the medium-term fiscal and budgetary policy in order to preserve macroeconomic stability.
In order to strengthen fiscal discipline in the public sector, the draft forbids increasing total staff costs during a budget year. Negotiations over rights established under collective employment contracts will have to be finalised only after the fiscal and budgetary framework of the fiscal and budgetary strategy has been approved.
In an attempt to secure the Government receipts, the Finance Ministry would have to publish an annual revenue collection plan for the Government budget, the social security budget and the special fund budgets and do so within 45 days of the publication of the Government Budget Law and the Social Security Budget Law.
The fiscal responsibility draft also bans more than two budgetary rectifications a year. ‘Total aggregate spending, European Union financial assistance excluded, can be supplemented in a budgetary rectification only for the servicing of the public debt or the payment of Romania’s contribution to the European Union Budget,’ reads the draft.
The fiscal and budgetary strategy would be submitted to Parliament each year by May 30 and cover the next three years. Within one month of the submission of the draft version of the strategy, Parliament might introduce its comments and recommendations to the Government concerning the strategy and approve the limits mentioned in the fiscal and budgetary framework.