The PSD-PNL government brought public debt to a record level of 52.4% of GDP / Prime Minister Ciolacu constantly criticized right-wing governments for debt / The state borrows for pensions and salaries, all reforms are stopped

Romania’s public debt reached 841.292 billion lei in February 2024, exceeding 52.5% of the Gross Domestic Product (GDP), according to Economedia. It is the highest level of public debt, reached on the basis of the loans made by the Ministry of Finance in the first months of the year on account of the need for financing for the whole year. The accelerated rise in public debt in the PSD-led coalition government comes amid Prime Minister Marcel Ciolacu’s earlier criticism of right-wing governments.

“Why don’t you ask Cîțu? Why didn’t you scream when he incurred debts of 9.2% of GDP?”, says Prime Minister Marcel Ciolacu in November 2023 when he was asked about the increase in public debt since that time.

Ciolacu also criticized the Ludovic Orban government in 2020 for the public debt. “What does PNL do? He abolished almost all successful national programs and destroyed what remained either out of incompetence or stupidity. Instead, the country is in debt every day through burdensome loans for decades to come,” says the head of the PSD in the midst of a pandemic.

Now, it is the government led by the PSD that is constantly increasing the public debt, against the background of the advance taken by fixed expenses with salaries and pensions.

We remind you that, in the years 2023 and 2024 – pre-election and electoral – the PSD-PNL coalition government decided to increase pensions in two stages, as well as salary increases for several categories of budget workers.

In parallel, however, the Ciolacu government postponed all reforms that could lead to a decrease in budget expenditures.

The reform of special pensions was the first to be sacrificed by the government, with the new law keeping the privileges of special pensioners almost intact.

Later, the mini-reform of the public administration, announced in the summer of 2023, was also postponed. The restructuring of government ministries and agencies received new deadlines, the reorganization of budgetary institutions disappeared from the public agenda.

Economedia wrote in December 2023 that an emergency ordinance adopted by the government just before the Christmas holiday postponed by half a year the reorganization of public institutions, that is, the measure that the PSD-PNL government said would bring the biggest budget savings. Postponing the reorganization of the budgets until after the European Parliament elections means that the private sector is the only one seriously affected by the austerity measures: tax increases, the introduction of new taxes and the elimination of some tax facilities.

In the fall of 2023, Prime Minister Marcel Ciolacu and Finance Minister Marcel Boloș recognized a hole of 20 billion lei in the budget and announced austerity measures both for the private sector and for budget holders. At that time, Ciolacu (PSD) and Boloș (PNL) announced that, in addition to the new taxes and fees imposed on companies, the budget officers would also be involved in tightening the belt by reorganizing public institutions.

Now, however, the PSD-PNL government has decided to postpone for six months the reorganization of public institutions. Thus, the reorganization of public institutions was postponed until June 30, 2024.

One of the few austerity measures for budget workers is the provision that budget workers will not receive money in 2024 for overtime, but days off. However, there are exceptions: the “special” categories (policemen, gendarmes, military, secret service employees) who will receive money for additional work, according to GEO 115/2023.

Moreover, the government increased the number of posts at some state institutions and established new institutions, such as the Office for Industrial Licensing, an institution headed by a liberal former director of the Shaormeria and head of sanitation in Craiova.