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Fiscal Council: the budgetary consolidation is not possible if the present calendar for the implementation of the new  pensions law is kept

The budgetary consolidation cannot be made if the present calendar for the implementation of the new pension law is kept and the present coordinates of the fiscal-budgetary policy as the budgetary rectification draft aims at the major revision of the budgetary deficit from 2.76% to 4.3% of GDP, announced the Fiscal Council (CF).

The Fiscal Council sent an opinion with regard to the draft of the second rectification of the general consolidated budget for 2019.

They warned that the prognosis of the macroeconomic framework connected to the second budgetary rectification is characterized by a deterioration, the real GDP advance and the indicators of the work market being estimated to decrease, with negative impact on the budgetary income. As such, the considerable surpassing of the threshold of 3% for the budgetary deficit according to the European methodology, beyond which CE can start the procedure of excessive deficit, is quite possible.

At the same time, the substantial increase of the budgetary deficit has as source the diminution of the projection of budgetary income, which is slightly compensated by the reduction of the total budgetary expenses.

Moreover, the negative revision of the total budgetary expenses comes mainly from the reduction of the expenses for investments as the allocations for social assistance are massively supplemented.

As such, CF appreciates that credible measures for budgetary consolidation are necessary, considering  both the present level of the deficit and the perspective for medium term. The latter is considerably influenced by the new pension law which involves supplementary expenses compared to 2019 of 0.7% of GDP in 2020, 2.7% of GDP in 2021 and 3.7% of GDP in 2022.