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The President of Romania, Mr. Klaus Iohannis, sent to Parliament on Friday 13th November this year for re-examination the Law on the rejection of the Government Emergency Ordinance no. 123/2020 for the modification of art. 3 of Law no. 61/1993 on the state allowance for children.
“The law submitted to promulgation is intended to regulate the rejection of the Government Emergency Ordinance No. 123/2020 amending Article 3 of Law No. 61/1993 on State Allowance for Children, published again in the Official Gazette Romania, Part I, No. 767 of November 14, 2012, as follows:
“Art. 3. – (1) The state subsidy for children is established in the amount of: a) 600 lei for children up to 2 years or up to 3 years, in the case of a disabled child; b) 300 lei for children between 2 and 18 years old, as well as for young people provided for in article 1 paragraph (3); c) 600 lei for children between 3 and 18 years old, in the case of a disabled child. (2) The amount provided in par. (1) will apply from the rights related to July 2022. (3) From the monetary rights related to August 2020, the amount of the state allocation will be increased by 20 percentage points, applied to the amount resulting from the difference between the amount provided in par. (1) and the amount previously granted, in July 2020. (4) During the period January 1, 2021 – July 1, 2022, the increase foreseen in par. . (3) will be applied twice a year, starting respectively with the rights related to January and the rights related to July of each year. (5) From d For the rights related to January 2023, the amount of the state child allowance will be indexed annually, ex officio, with the average annual inflation rate. (6) In the conditions in which the state budget can support a greater amount of the state allocation for children, by decision of the Government, a level higher than that provided in par. (5). (7) The holder of the right to state child benefit is the child. (8) The state subsidy for children provided in par. (1) on. a) It is accumulated with the monthly allowance, the monthly incentive or the insertion incentive, provided for by the Government Emergency Ordinance No. 148/2005 on family support for the upbringing of the child, approved with modifications and terminations by Law No. 7/2007, with subsequent modifications and terminations, respectively, by the Government Emergency Ordinance No. 111/2010 of leave and monthly allowance for raising children, approved with modifications by Law No. 132/2011, with subsequent modifications and completions. (9) Yes, based on the calculation of the amount of the state allocation for children provided for in par. (3) – (5) results in money fractions, the amount is rounded to the leu in favor of the beneficiary ”.
Through this normative act, the Government established a gradual application of the measure imposed by Parliament through Law No. 14/2020 regarding GEO approval no. 9/2019, identifying the necessary resources to grant as of August 1, 2020 an increase of 20% of the expected increase, an amount that can be covered by the financial effort of the state in the current context, “said President Klaus Iohannis in motivation a.
Budget impact of more than 6.6 billion lei
“According to the explanatory memorandum and justification of the Romanian Government to the issuance of GEO No. 123/2020, the total amount paid to cover the state allowance for children was, in 2019, 6,400,000,000 lei, and for the application of the Law No. 214/2019, in which the amount of the state allocation was increased by 100%, an estimated budget of 7,419,000,000 lei.
Applying the provisions of Law No. 14/2020, as of February 2020, the estimated amount for the payment of these rights would have amounted to approximately 14,060,359,000 lei, with the budgetary impact exceeding 6,600 million lei.
Faced with an imminent entry into force of a regulatory act without establishing certain sources of funding and in the context of unforeseen economic efforts by the Romanian State in the fight against the spread of the new coronavirus, including those affected by measures to increase benefits. inevitable not benefit from the realization of their rights. Therefore, significant budgetary spending jeopardizes not only the proper functioning of the entire child social protection system, but even the ability of the Romanian State and Government to fulfill their role and responsibilities.
In this context, the Government acted swiftly, using the instrument of the emergency ordinance to prevent harm even to the beneficiaries of the measures in question. Otherwise, the Government would have been in a position to decide to which categories of beneficiaries will not be granted certain rights provided for by law, contrary to the provisions of the legislation on the active fund, conduct contrary to the principles of the rule of law ” . President.
The budget, affected by the pandemic
From this perspective, in a spirit of loyal cooperation with Parliament, the Government maintained, including through the GEO text n. 123/2020, the amounts established by Parliament and identified a solution for the gradual increase in allowances, with 20% of the difference between the two (the previous one and the one provided for by the effect of the provisions of Law No. 14 / 2020) Therefore, without representing a measure to counteract the legislative policy of Parliament, the Government identified the way to implement the law, so that the proper functioning of the State is not in danger, all the more in the context of an uncertain evolution of the current pandemic.
Fully respecting the legislative policy of Parliament, the Government offered a normative solution that would allow the timely execution of all the monetary obligations of the State towards citizens. Rejection of this solution by Parliament is likely to hamper the Government’s efforts to ensure the availability of budgetary resources. An estimate of the budget impact of these financial increases on child allowances is in the sense of a further significant increase in budget spending by the end of 2020 and next year.
In the current context, the pandemic has generated unforeseen but necessary budgetary expenses to take urgent measures, to counteract or reduce unpredictable situations, which aim to support both the health and economic systems. Therefore, public money spending priorities must be aimed at protecting citizens and the economy from the unprecedented effects of the current pandemic crisis. Therefore, it is necessary for the legislative process to be marked by balance and responsibility in the allocation of budgetary resources, supported by an open and efficient dialogue between the Executive and the Legislative.
Romania, as a member of the European Union, must comply with agreed tax rules. In this sense, we remind you that on March 4 of this year, in accordance with art. 126 par. (3) of the Treaty on the Functioning of the European Union, it was found that Romania did not fulfill the deficit criterion, which justified the initiation of an excessive deficit procedure. Although the application of the provisions on European fiscal and budgetary responsibility has been suspended at the EU level, as an exceptional measure aimed only at the budgetary expenditures necessary to combat the economic and financial effects generated by the pandemic, this exception is not intended allocate significant budgetary resources. consumption and without a reliable financial source, measures without effects on the economic recovery effort.
As shown in the Eurogroup report within the National Bank of Romania – “MONITOR Euro Zone – 4/2020”, expenses such as that generated by the rejection of GEO no. 123/2020 moves our country away from real convergence in the medium and long term, which represents strategic and credibility risks in the financial markets for Romania.
Any increase with a pronounced impact on budget expenditures can have the effect of a fiscal slippage, with significant consequences on the country’s rating, with negative economic implications and a direct impact on the stability of the Romanian economy, aspects that ultimately they can be reflected in the standard of living of each individual. The revitalization of the economy of our country, after the effects of the current pandemic, will only be possible if the reallocation of budgetary resources is carried out in a balanced and responsible manner.
In comparison with the arguments presented above and considering the exclusive legislative competence of Parliament, as the supreme body of representation of the Romanian people and the sole legislative authority in the country, we request the revision of the Law rejecting the Government Emergency Ordinance No. 123/2020 for the modification of art. 3 of Law no. 61/1993 on the state subsidy for children ”, the president also showed.
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