Romanian Senate Adopts Amended Draft Fiscal Responsibility Law

The fiscal responsibility law is one of the bills Romania must adopt under the EUR13 billion loan agreement it signed with the International Monetary Fund. At the most recent review of the loan agreement, IMF mission chief Jeffrey Franks insisted the law be adopted in March at the latest.

The law will, among other things, set up procedures for improved multiyear budgeting, establish limits on budget revisions during the course of the year, lay out fiscal rules on expenditures, public debt and the primary deficit, create a fiscal council to provide independent and expert scrutiny, and set up a framework for the issuance and management of guarantees and other contingent liabilities.

The law stipulates the setting up of a Fiscal Council as an independent authority tasked with ensuring a neutral and specialist analysis of macroeconomic and budget predictions. The Council's members would be nominated by the Romanian Academy, the National Bank of Romania, the Academy of Economic Studies, the Romanian Bank Institute and the Romanian Banking Association.

According to Finance Ministry state secretary Gheorghe Gherghina, the law will impose stricter budget discipline and increase transparency through quarterly reports on budget spending. Gherghina said the new rules could reduce the deficit to below 3% of GDP by 2012.

The draft was adopted in Senate with 54 votes for, 29 votes against and two abstentions. It still needs to be adopted in the Chamber of Deputies before it can become law.

If you liked this story, please follow MEDIAFAX.RO on FACEBOOK »

The content of mediafax.ro is for your information only. Republishing or using this content is forbidden without express consent of MEDIAFAX. For this consent, please ask for it by mail at vanzari@mediafax.ro.