Gov't passes budget revision ordinance

The government has passed an emergency ordinance regarding the revision of the 2020 national budget and the state insurance budget that takes into account the new economic data following the crisis triggered by the ongoing coronavirus epidemic, head of the Prime Minister's Chancellery Ionel Danca announced on Wednesday.

"The budget revision for the year 2020 increases public spending on health, employment, finance, public peace and safety and public works. The budgetary resources necessary for financing the economic support measures of late adopted by the government were taken into consideration, namely funding the guarantee scheme for working capital loans and investment loans for SMEs under the National SME Guarantee and Credit Fund, which resources go up from 5 billion lei to 15 billion lei and, under the same scheme, SMEs qualify for loans on fully subsidised interest rates, zero interest and zero administration fees by the end of this year," Danca said Wednesday evening at the end of a government meeting.

He added that the revision also provides for "the appropriations required for the payment of the short-time working benefits for employees whose employment contracts have been suspended during the state of emergency, as well as for persons providing services based on other contractual forms, such as registered sole traders, individual enterprises and persons included in the category other professionals in the Civil Code."

"There have been allocated the necessary amounts for the payment of the short-time working benefits, namely 4 billion lei for the National Employment Agency (ANOFM), which makes payments for employees on suspended employment contracts and 1.9 billion lei for the other categories of beneficiaries," said Danca.

He added that in the public health area the necessary amounts were allocated "both to meet the demand for medical and sanitary materials in combatting the coronavirus epidemic, and to pay the social health insurance or the rights of health insurance beneficiaries."

"We are talking here about medical leaves, which got appropriations of one billion lei," added Danca.

He specified that the budget revision took into account the macroeconomic data provided by the National Strategy and Prognosis Commission.

"According to the data provided by the National Strategy and Prognosis Commission, a contraction by 1.9% of the Romanian economy is to be expected this year against an economic growth of 4.1% that was the basis of the budget construction at the beginning of the year, which means a contraction by almost 6% in the developments of the Gross Domestic Product (GDP) for this year. Consequently, the budgetary provisions have been adjusted for the new data regarding the volume of economic activities and the estimated revenues for this year, taking into account also the main current priorities of the government concerning the provision of the necessary resources in terms of health efforts to contain the coronavirus epidemic while also containing the negative economic and social effects caused by the pandemic," said Danca.

He added that the allotment for the mentioned measures amounts, after the budget revision, to 3% of the GDP.