What the newspapers say: November 12, 2010 

The World Bank criticizes the last report on Romania, the country with an irresponsible budget, politically driven and a Finance ministry that has more employees than England. Presidential counselor Leonard Orban warns that the report on justice in 2011 needs to be positive to ensure we join Schengen. And unions warn that at least 7% of the state’s employees were not considered in the 2011 budget.

The World Bank criticizes Romania in a secret report released by daily Gandul. The report criticizes the 2011 budget, which is said to be irresponsible and politically driven with a Finance ministry employing more people than England.

In the report, the international financial institution recommends solutions for each problem identified. Romania’s budget supports unrealistic spending, lacks credibility and register’s the lowest EU fund absorption, a territorial fiscal administration that increases collecting costs, which should be replaced with a well driven IT system and a call center, the Work Bank report reads.

The document obtained by the newspaper is destined for the institution’s administrative board and Bucharest officials and it does not have a public character. According to the WB, on the medium term, state companies should be controlled directly by the Finance ministry through a new agency or department in his subordination.

A part of WB recommendations will be included in the new financing agreement that Romania announced to sign in 2011 with the IMF/ WB/ EC.

Regarding the budget, the report reads that the approved budget is not credible, is based on unrealistic revenues, overestimated to justify big spending. Overestimation of revenues was made at political pressure and the current budget deviates from the initial budget. Due to lack of credibility, it lacks transparency and predictability and fiscal and budgetary disequilibrium increased.

The solutions put forward by the WB: collective commitments from credit coordinators to respect ceilings set in the budget; the Finance ministry should adjust spending budgets proposed by ministers if they exceed ceilings; all laws with an impact on the budget need to contain an impact analysis on the budget set up by the Finance ministry; ministers need to justice new project initiatives and come up with co-financing solutions.

The report recommends simplification of project approvals, involving EU funds, to rush the implementation of big projects like those in the Transports ministry. Another rec regarding EU fund absorption is that Romania should release an ordinance prioritizing the allocation and transfer of personnel to departments that implement EU projects.

Other recommendations involve the modernization of the agency that collects revenues, to develop an IT program to reduce face to face interactions with tax payers; direct control of state companies by the Finance ministry.

The last fight to join Schengen will regard the justice system, Evenimentul Zilei reads on Friday quoting Presidential counselor Leonard Orban. Orban warned yesterday that the first report on Justice, scheduled for January or February 2011 needs to be positive to convince the EU Romanian is ready to join Schengen.

Orban referred to the report on justice because there are many countries that connect, informally, the report with joining Schengen. Former justice minister Monica Macovei underlined that the key word around the EU is trust when it comes to Romania joining Schengen.

The justice system is evaluated either we like it or not and it counts towards the trust EU member states have in Romania, Macovei said.

Evenimentul Zilei quotes unions warning that at least 7% of state’s employees were not considered in the 2011 budget. About 80,000 state employees risk remaining without salaries next year because the current version of the budget sees a decreased salary fund by 3 billion lei.

The union leader explained that, considering the restrictions imposed by international organizations, salaries leave out at least 7% of the current state employees for 2011. This means about 80,000 people.

Deputy President of Sed Lex union Razvan Bordeanu declared for the newspaper that Romanian authorities committed to reduce the salary funds from 42 billion to 39 billion lei next year.

This decrease will be translated in either salary cuts or in layoffs, Bordeanu said. Labour minister Ioan Botis declared that only the Finance ministry can make appreciations about the 2011 budget.