Government of Romania : Press statements by Prime Minister Florin Cîţu

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Florin Cîţu: Investment and healthcare are the priorities we have announced since last year. We are still in a pandemic, we did not escape the pandemic and to this, we added the vaccination campaign, additional resources for the payment of the vaccine, as well as supporting the vaccination campaign, so the budget started from here. I know that the Ministry of Public Finance will complete today the discussions with the authorizing officers, so, we will have today, a budget proposal closer to what I desire and to what I consider a good budget, able to sustain the 2021 economic growth. We will see today, at the end of the day which were the demands of the authorizing officers and how many of them can be sustained by today's economic situation. We know from the National Commission for Strategy and Prognosis that the nominal GDP stays at the same level, a bit higher than last year, and this would mean that we have three years with a nominal GDP which has not changed too much, although last year, it registered a decrease, this year, we will have growth, but the nominal GDP remains in the same context. Therefore, these are the underlying macro figures.

Reporter: Regarding the increase in pensions, we know there have been discussions on this topic too. Will the pensions rise or not from September 1?

Florin Cîţu: Pension expenditure in the 2021 budget is already increasing by almost 8 billion lei from last year, from last year's pension increase. So that you can realise: 8 billion means about 0.8% of GDP, plus an increase in child benefits, last year's increase plus this year's increase, another almost 3 billion, we are talking about 1.1% of the GDP in addition to what we had last year in the budget, so expenses in addition to last year. From here we start building the budget this year on the legislation in force, of course.

Reporter: Apart from this growth, does it mean that it will not be another growth? For instance, indexation with the inflation rate, as it was publicly discussed?

Florin Cîţu: Currently, and I have publicly stated this, we are looking at the amendment of two laws which created problems to the sustainability of public finance in Romania. We are talking about the unitary pay law which was presented publicly as a law eliminating the inequities from public administration and which created several problems by all kind of exceptions which have appeared lately. You know well that when this law was presented, the Romanian president was said to have the highest salary and from there we start considering the rest of the salaries. This is not anymore so, the Romanian president has not the highest salary anymore, and we need to re-analyze this pay law.

The pension law- this coalition said from the outset: we want to have a pension law based on the contributory principle. And of course, there are two laws we have been working on, and we will see the final form in the next period.

Reporter: Therefore, the pension law which is now in force, and which should take effect as of September 1, will not be applied as of September 1? That new form of calculation, solving those inequities from the pension system?

Florin Cîţu: We will see whether we are ready with a new law of pensions in this period, and we can apply it until then. But the budget, of course, is built on the legislation in force.

Reporter: Linked to the pension law, is it compulsory to index the pension with the inflation rate through law?

Florin Cîţu: I repeat what I have been saying from the beginning: the budget is built on the legislation in force; what the law says to be done, that will be done.

Reporter: But these amendments to the Pay Law and Pension Law should bring much money, left much money in the state treasury. Do you have an evaluation?

Florin Cîţu: It is not the purpose of these laws...

Reporter: Obviously, but...

Florin Cîţu: First of all, I said that it is about the contributory principle at the Pension Law, and this is the underlying principle. As regards the Pay Law, we seek more effectiveness in public administration. In this respect, it's also about linking performance, revenue to performance - there are several things. In addition to wanting to have a clear hierarchy, we should also introduce some performance indicators that are connected to that revenue, so that the increase in incomes should not be politically decided every year; it should be one related to economic performance.

Reporter: What would that mean? Does this imply that the civil servants pass annual competition or...?

Florin Cîțu: There are several variants, there are variants that we introduced and the Ministry of Public Finance was going to introduce them too, something that has been happening in the EU for a very long time, and at the European Commission too. For example, a rotation, for a person not to remain in the same position for 20 years, after a term or two terms as a general manager or in office, to be able to change office elsewhere. There are many examples in the EU of good practice in public administration governance that we will use.

Reporter: You say that you will make an analysis of the bonuses that state sector employees are receiving. I'd like to ask you if you have already done this so far...?

Florin Cîțu: It is not yet finalized. The analysis on the budget is conducted concomitantly with the budget for 2021. You should know that the reforms that we want to introduce will take two years and a large part of the reforms that we will adopt in 2021 will have an impact on the 2022 budget, so we are not just thinking about the budget for 2021, we are thinking about these two years. It is how I look at this budget and at investment and staff costs, and we look at all these considering a two -year span. You have not asked me yet, I am going to tell you about investment. This year, the budget expenditure with the investment will grow, we will maintain the same principle as last year, to finance an increasing number of investment from European funds. Two or three Cabinet meetings ago, I asked the Ministries to identify those investment projects which can be transferred on PNRR. Therefore, this effort we made last year, generated results, almost half the money spent last year on investment was defrayed, we will continue it and we want to increase this percent. The largest share of the money spent in fact on investment, should be from European funds. We have PNR and next financial exercise.

Reporter: Lately, we have a dispute related to the opening in Bucharest, at least of the restaurants, which would still contribute to the budget revenues. There are voices including at the Ministry of Health, in favor of the extension of restrictive measures. How do you see all this dispute? Should they be open in cities where the infection rate has dropped or not?

Florin Cîțu: I said that if it was up to me, I would like the whole economy to open tomorrow. We need an open economy, we need investment to be able to pay higher salaries and pensions. At the same time, we need to take into account the doctors' recommendations, because this is a difficult period. They need to make a decision first, this is not my decision to make. From what I understand, these relaxation measures regarding Bucharest, these decisions have been taken based on the legislation in force. If they decide to change that threshold of 3 per thousand [cumulative incidence of SARS-CoV-2 infection], to make it 2 per thousand, or 4 per thousand, and of course that they can do this, because they are the experts, and then they will come up with the recommendations and we will make a decision.

On what is happening today, I cannot have another opinion than the one based on the legislation in force. If the effective legislation is observed, and if the indicators we have used for one year, show it is good to relax conditions, then, we relax them, if indicators are changing, and I could hear Mr Arafat saying the same thing, and I hope the others said the same, and the incidence is above 3 per thousand, then, of course, we will return to these measures. Last year, in 2020, we adapted each time. Things have improved, we relaxed the measures, as it happened last summer; as things got worse, we applied restrictive measures.

But to be very clear to everyone, this very little relaxation of the conditions doesn't mean that we must immediately give up the mask, the disinfectant. No, everyone must observe all the conditions in order to protect us against the virus and I hope that, with the help of vaccination, we will have better conditions during the summer, towards the end of the summer.

Reporter: What about the discussion on opening schools? We cannot open them today and close them next week when the incidence rate is higher. What is your personal opinion on this matter?

Florin Cîțu: We said, the president of Romania said as well, that we will make a firm decision on February 2. We are watching until then what happens to the epidemiological situation in Romania if the situation gets worse. Personally, of course, I want, like everyone else, for schools to be opened, and the economy to be opened, but it doesn't matter what I want, what matters is the health situation, because we cannot relax the conditions too much and then have pressure put on the health system. I repeat: the vaccination campaign running well in Romania, despite all criticism, and if we take a look at what is happening in the European Union, we can consider the relaxation of conditions in the next period.

Reporter: Regarding vaccination and COVID, if the new possible outbreak of the new strain of coronavirus should worry Romanians and if other restrictive measures might be taken?

Florin Cîțu: For the time being, I think there is an investigation underway into this new strain. Yes, we should be [worried]. Once again: if we maintain the measures we have had so far - wearing a mask in public spaces, using a disinfectant, social distancing - you have seen that they have worked and worked very well for Romania. We must not give them up, we understand that this new strain coming from the UK seems to be spreading faster, true, but if you wear a mask if you keep your social distance and if you use disinfectant, things stay the same. Therefore, when we give up these aids in the face of the pandemic, then it spreads faster.

Reporter: In France, they considered imposing a new lockdown exactly because of this new strain of the virus.

Florin Cîțu: In Romania, we are looking at our situation. If God forbid, we reach this situation, of course, we will make a decision. But I do not think we will. I repeat, Romanians complied with these restrictive measures, we could see this during holidays, and the results could be seen. I further call on all Romanians to wear a mask in public, to observe physical distancing, and you will see that we can hope in this direction.

Reporter: How do you feel after the first dose of vaccine?

Florin Cîțu: Very well. I have more energy, I do not know if it is from the vaccine or from drinking more coffee, but I am feeling very well.

Reporter: Linked to investment, will we have highways built this year, like healthcare, education are priority areas. Will you have funds for that too?

Florin Cîțu: Healthcare and investment are priority fields in 2021.

Reporter: Education isn't?

Florin Cîțu: Education is too, but we allocate additional resources to invest more in education and healthcare. There will be kilometres of highway built. I said that investment projects should be prioritized. Sibiu -Pitesti should be kicked off, and we need to have a plan, clear planning and a well-devised budget for the next four years. I do not want the budget to be limited to 2021. As regards large projects, the financing scheme should be prepared for a longer time, in order not to strive each year to find money to carry out these projects. Thank you very much.