Romanian MPs Face Dose of Austerity

Economically stricken Romania has decided to cut various allowances for parliamentarians.Romanian MPs are facing austerity, with their monthly housing stipends and travel expenses being halved, according to the assembly draft budget for 2013.

An MP’s monthly allowance for housing will drop from 7,400 lei (some 1,650 euro) to 4,000 lei. Each MP from outside Bucharest can choose whether to rent an apartment or stay in a hotel using this budget.

Money for MPs’ working travels abroad is being reduced from 2.59 million lei last year to some 1.5 million.

“The problem is that the number of MPs has increased significantly while the money for the functioning of the assembly has not grown,” Catalin Ivan, spokesperson of the ruling Social Democratic Party, PSD, said.

Romania’s new parliament has welcomed more than 100 extra deputies following the December general elections, an increase that is raising eyebrows in one of the poorest countries in the European Union.

Parliament consists now of 588 deputies instead of 470. Of those, 412 are in the lower house and 176 in the Senate.

Romania is to adopt a budget for 2013 this week.

Victor Ponta’s centre-left government is planning a growth-oriented budget for 2013, with a target growth of 1.8 per cent and a public deficit of under 2 per cent.

GDP is estimated to reach to around 140 billion euro this year, after dropping to 118.3 billion euro in 2009, when the financial crisis started to wreak havoc with the domestic economy. Revenue for 2013 is set at 46 billion euro, 3 billion euro lower than last year.

The government intends to tighten fiscal discipline, eliminate waste in public funds and act on the principle of social equity. The government has allotted 10.2 billion euro to pay public sector wages and 11.1 billion euro will go on pensions.

Ponta last week said Romania was hoping to conclude a new, precautionary-type agreement with the IMF and the EU, when the ongoing one expires in March.

Romania depends on a 20 billion euro rescue package from the IMF, the European Union and the World Bank. It obtained the loan in May 2009 in exchange for agreeing to push through austerity measures aimed at taming the country’s yawning deficit.

An IMF mission is currently in Bucharest to hold discussions on the next review of the programme.