Transcript C. Measures to boost economic growth

Romania: 2008 – 2010
Reform implementation and
sustainability - learning from
experience
Andreea Vass-Paul
Counselor to Prime Minister, Government of Romania
For understanding and correcting the current
economic situation, the grasping of it’s real causes
is mandatory
In the last decade the economic growth was accompanied by:
§ Severe macroeconomic imbalances
§ Unsolved and postponed structural issues
§ Inappropriate economic policies
§ Financial unsustenabile social policies
§ Unfavorable privatization for the state and for the
Romanians
§ Costly and prodigal bugetary aparatus
§ Bureaucracy
§ Corruption
2
In 2008, the Government faced 2
major opponents:
A. The Economic Crises, accompanied by a high public deficit
(even in 2008, the year with the biggest economic growth) that
lead the EU Commission to trigger the excessive deficit
procedure.
B. An unreformed state with consistent unjustified debts:
• 7 normative acts which approved wage increases in 2008 for
magistrates, registrars, policemen, military staff, prison officers, civil
servants and contractual personnel, health personnel, university
professors and personnel in primary and secondary education;
• 2 increases of pensions: increase of the pension point by 7,4% in
January 2008 ((581,3 RON) and by another 20% in October 2008
(697,5 RON).
3
A. Adjusting the public deficit 2008 – 2011
bn. RON
0
2008
2009
2010
2011
-15
-24
-24,8
-30
-33,7
-36,4
-45
4
B1. Evolution of the number of public personnel:
2008 -2011
1.398.757
1.379.892
1.266.550
2008
2009
2010
1.256.609
Feb. 2011
5
B2. The reduction of the gaps between public and
privat average gross earnings 2008 - 2011
Public
Total
Economy
Privat
6
B3. Adjusting the public expenditure: 2008 vs. 2011
68,1
bn. RON
70
54,2
60
45,6
50
40,6
32,6
40
35,2
30
20
10
0
Cheltuieli de
personal
Personnel Expenditure
Asistenţă socială
Social Assistance
(inclusiv pensii)
2008
Cheltuieli de
investiţii
Investment Expenditure
2011
7
Major measures taken by the Government in
order to reform the state:
1. Economic recovery
2. The reform of the fiscal framework
3. The reform of the Public Administration
4. The reform of public sector’s employees payment
5. The reform of the Public Pension System
6. The reform of the Labor Legislation
7. The reform of the Education Law
8. The reform of the Health System
9. The reform of the Social Dialog
10. The reform of the Social Assistance
11. The reform of the Judicial System
8
1. Economic recovery
9
Romanian GDP Quarterly Growth Forecast: 2010 - 2012
Prognoza actualizata a cresterii produsului intern brut
- serie bruta 6,0
- modificari procentuale fata de perioada corespunzatoare an precedent -
5,0
4-4,5%
4,5
4,5
4,50
prognoza
4,0
4,50
4,50
3,8
2,8
1,5 - 2,0
2%
2,00 2,00
2,0
4,50
4,6
2,5
2,00
2,00
1,4
0,5
0,0
-0,5
-0,6
-1,20
-1,20
-1,20
-1,3
-1,2
-2,0
-2,1
-2,5
-4,0
Tr. I
2010
Tr. II
Tr. III
Tr. IV
Tr. I
2011
Tr. II
Tr. III
PIB-trimestrial
Tr. IV
Tr. I
2012
PIB anual
Source: National Forecast Commission, april 2010
Tr. II
Tr. III
Tr. IV
10
Government's vision in dealing with economic
and financial crisis
A. Responsible attitude grounded on two premises: avoiding
indebtedness of the nation and avoiding major economic
slippages.
B. Measures for reducing the budget deficit and for the
recovery of public finances through a major effort of the
Government, out of which:
§ Two-thirds focused on improving and reducing public
expenditure ;
§ One third focused on increasing revenues.
C. Measures for relaunching healthy economic growth and
on the long run, at times of major accumulated
macroeconomic imbalances which limited the fiscal space
necessary for triggering economic recovery.
11
A. Avoiding major economic slippages
The general budget deficit would have been close to 10% of GDP in 2009
and to 14% of GDP in 2010 and 2011, in the absence of the austerity
measures taken by the Government:
0
2008
2009
2010
2011
- 4,4
- 4,8
-5
-6,5
-7,3
-10
-9,9
-13,7
-13,8
-15
Deficit bugetar in absenta masurilor guvernamentale
Deficitul bugetar efectiv/estimat
12
B. Measures to reduce the budgetary deficit
B. Measures to reduce the public expenditures
50% reduction of fuel
consumption expenditure for
public institutions and 20%
reduction for goods and
services remained to execute
in the second half of 2010.
Reduction of 8,000 posts by
reorganization of institutions,
public authorities and
120 government agencies.
Prohibition of cumulating pension
with wages in the budgetary
system, for individuals with
pensions higher than the
gross average wage in the economy
25% wage reduction in
the public sector,
15% reduction of
unemployment benefits
and those for child growth.
Improvement and
reduction of the
public
expenditure
Refigure special pensions the service and State
military pensions
State – and their inclusion
the public pension system.
Not according vouchers
to the
the public sector staff.
Blocking the access to
vacant positions and occupancy
of 15% of any position that
subsequently became vacant in
the budgetary system.
Freezing pension point value
in 2010 and 2011 and labeling
with 100% inflation
and 50% real growth oif the
gross average economy wage.
B. Measures to reduce the budgetary deficit
B. Measures to increase the budgetary revenues
Increasing the
standard rate of
VAT from 19%
to 24%.
Increase duty on
tobacco, alcohol,
petrol and gas oil.
An increase by 3.3
percentage points
for social
contributions.
Measures to
increase the
budgetary revenues
Tax Increase
for individuals owning
more buildings.
Extension
of the health insurance
contribution of 5.5%
for pensions higher
than740 RON per month.
Broadening tax basis
by vouchers taxing and
increasing tax on
interest and some local taxes.
Increasing
charges and tax
collection through
reducing tax evasion.
C. Measures to boost economic growth
C.1. Measures to save jobs and boost the absorption of unemployed
§
Regulating technical unemployment through the exemption from paying
the social security contributions and social insurance for the employer, for
a period not exceeding three months. The employee will receive 75% of the
base salary for his job.
Beneficiaries: 548,999 persons employed and 13,459 employers up to 31st
December 2010.
§
Exemption from paying the social security contributions for companies
that hire unemployed people.
Beneficiaries: 6072 persons employed and 3625 employers up to 31st
December 2010.
C.2. Fostering public and private investment
§
Increasing the budgetary allocations for public investment: from 6.3% of
GDP in 2008, to 7.1% of GDP in 2009, 6.6% of GDP in 2010 and 6.5% of
GDP in 2011 (from 33.8 billion RON in 2010, to 35.2 billion RON for 2011).
§
The implementation of the Public-Private Partnership Law (PPP)
C. Measures to boost economic growth
C.3. Diminishing the fiscal and administrative burden for companies in
difficulty
§
Compensation of the VAT to be paid with the VAT to be reimbursed -
development of a unified computer selection system of VAT returns from
the national database, keeping to the principle that “the oldest return goes
first”.
§
§
Improvement of the payback procedure of the VAT
Reglementation of the possibility that forced execution can be suspended or
delayed - applyed in case the taxpayer has an application for
refund/reimbursement on the way or submits one and the amount requested
is equal to or greater than the fiscal claim because of which the execution
started.
§
Reduction of the level of interest rate due for tax debts to the state budget,
social security budget, not paid on time from the actual 0,05% (18,25%
annually) to 0,04% for each day of delay (14,6% annually). For budgetary debts
owed to local governments, the interest rate was reduced from 3% to 2% for each
month of delay.
C. Measures to boost economic growth
C.4. Fostering private investment through state aid
§
Supporting large investment projects through state aid scheme for projects
over 5 mil. euro that employ at least 50 people.
Beneficiaries: 10 investment projects worth 711,7 mil. Euro in 2010, creating 4767
new jobs. The state aid approved was 214.5 mil. Euro.
§
Supporting SMEs’ investment projects through the “de minimis” state aid
scheme
Beneficiaries: the projects of 905 SMEs were approved during 2008-2010. The total
amount paid was 202 million RON.
§
Supporting microenterprises investment projects, active for less than 2 years
(The “START” Program).
Beneficiaries: 658 people have applied online with 240 projects in 2010. 71
contracts have been concluded. The absorption rate is 100%. For 2011, we have
allotted a budget of 10 mil.RON, almost 30% higher than in 2010.
§ The Program to encourage the establishment and development of
microenterprises by young entrepreneurs, started in 2011
Beneficiaries: Up to 4th May 2011, 3438 companies were recorded at the ONRC,
out of which 2100 of them are currently already registered.
C. Measures to boost economic growth
C.4. Fostering private investment through state aid
§
Supporting business incubators
Beneficiaries: 49 business incubators - The program is implemented
by
UNDP in Romania, in partnership with AIPPIMM and local authorities from target
areas. The Government allocated 2.9 million lei for 2010 and 6.15 million lei, a
double budget, for 2011.
§ Supporting women's entrepreneurship development through the multi-annual
national program during 2005-2012 from small and medium enterprises sector.
Beneficiaries: 826 ladies have applied online and 232 ladies followed the
entrepreneurial training course in 2010. Absorption rate is 100%.
C.5. Fostering private investment through state guarantees
§
Supporting SMEs through the FNGCIMM
Beneficiaries: 9000 guarantees, worth over 650 mil.Euro in 2010. The Fund
granting activity lead to the creation and maintenance of over 195.000 jobs in 2010.
C. Measures to boost economic growth
C.5. Fostering private investment through state guarantees
§ Providing government guarantees of 80% of the loan for beneficiaries of
projects financed from structural funds in priority areas for the Romanian
economy, for maximum 4 years
Beneficiaries: FNGCIMM issued guarantees that amount to approx. 19 mil. RON in
2010 for the implementation of investment projects of about 450 mil. RON. Total
ceiling of guarantees that may be issued in 2011 amounts to 300 million Euros.
§ Helping SMEs through the Fondul Roman de Contragarantare (FRC)
Beneficiaries: FRC issued in 2010 1860 indemnities, totaling 371.6 mil. RON for
funding projects of 1.401 million RON, for 1.630 SMEs, employing over 45,350
employees.
§
Supporting market traders and services through the development and
modernization program
Beneficiaries: 5 million RON were allotted for this program in 2010 - 1793
companies have applied 188 projects online, out of which 117 contracts were
concluded. For 2011, the budget allotted is 7 million RON, 40% higher.
C. Measures to boost economic growth
C.6. “Prima casa” Program
Beneficiaries: Over 34,633 guarantees worth 1416.6 million Euros were granted
since the beginning of the “Prima Casa“ Program up to 31st December 2010. In
2010, the guarantee ceiling was raised to 70,000 Euros for new dwellings and
remained at 60,000 Euros for old dwellings. The budget allotted for this year is
200 million Euros. Through this program approx. 33,000 dwellings will be traded,
approx. 500 companies will be supported and about 10,500 jobs will be saved.
C.7. “Rabla” Program
Beneficiaries: 189,193 cars taken from collectors, 61,532 new cars purchased, out
of which 25,298 Romanian Car. Total funds allotted: 722 million RON at th end of
January.
C.8. „Primul siloz” Program
Beneficiaries: since the beginning of the program in 2009, 164 certificates of
deposit were issued. Currently, 52 certificates remained in circulation, guaranteed
by the administrator of the scheme, the Fund of the Rural Credit Guarantee, of the
amounts allocated by the Ministry of Agriculture and Rural Development.
C. Measures to boost economic growth
C.9. Measures to accelerate the absorption of Eu funds
The granting of financial facilities to the beneficiaries:
• Doubling the maximum pre-financing quota, from 15 to 30% of the eligible value of the financing contact;
• Providing pre-financing also to the private beneficiaries which enjoy state support, up to 35% of the grant’s
value;
• Enhancing the flexibility of the eligibility criterion with respect to the lack of debt towards the public budgets;
• Introducing the possibility to pledge/to mortgage assets relevant for the project;
• Introducing the option, for the private beneficiaries, to open project accounts not only to the State Treasury, but
also to commercial banks;
• Discarding the obligation for the micro-enterprises to provide the co-financing of the European projects in the
form of their own contribution to the eligible costs (in the POR);
• Providing the financial resources from beneficiaries that are institutions of the central public administration by
means of granting, through the public budget, of the full project value;
• The approval of the Support Program for the beneficiaries of the projects in priority Romanian economic fields;
• The speed up of the bidding procedures, by modifying the legislation concerning the acquisitions.
The simplification of the guides for the applicants:
• Some documents are no longer required when the project is submitted;
• Some documents are replaced with an affidavit of the applicant;
• Copies „according to the original” are accepted, instead of legal copies;
• A “Summary of the project” is no longer required;
• The list of the requested documents is highlighted when the financing contract is about to be signed;
• The obligations of the beneficiary are clearly stated after the signing of the contract.
Absorption rate: total payments to beneficiaries: 2.37 billion Euro, representing 11,74% from the allocation from
2007 to 2013. In the period 1 January to 30 April 2011, payments have increased by a third compared with the
situation at 31.12.2010.
Economic impact of the taken decisions
•
Collected budgetary revenues in GDP reached in 2010 the highest level in the
last 20 years (33% of GDP)
•
Budgetary deficit is under control
•
As compared to 7,3% in 2009, the budget was elaborated in 2011 in order to
reduce the deficit to 4,4%, and in 2012 to less than 3% of GDP.
•
Current account deficit is less than half
•
It is currently 4,3% of GDP, as compared to 11,6% of GDP in 2008;
•
Vulnerability caused by the large short-term debt was corrected
•
In 2010: 18,7 bn. Euros, as compared to more than 22 bn. Euros irresponsibly
engaged in 2008;
•
The share of short-term debt in total debt decreased from 49,3% in 2008 to
35,2% in 2010;
•
Medium inflation is decreasing
•
From 7,85% in 2008 to 6% in 2010 and we are forecasting a level of 5,1% in
2011;
•
Credit recovery is taking place through the major cost reduction
•
Monetary policy rate decreased form 10,25% in 2008 to 6,25% at the moment.
22
Better economic results in 2011 as compared to 2010
•
In 2010, exports recorded their highest level in the whole history of
Romania.
•
The total value of 37,25 bn. Euros in 2010 euro exceeded with more than 3,5 bn. Euros in
2008; trade deficit in 2010 halved as compared with 2008.
•
In the first two months of the year, goods export was 2 bn. Euros higher than the same period
of 2010, which is 41% higher; trade balance (FOB-FOB) a fost practically zero;
•
Good speed for foreign direct investment (FDI)
•
FDIs increased more than 2 times in the first two months of 2011 as compared to the same
period of last year, totalling 294 mil. Euros.
•
In the first three months of 2011, industrial production and tourism recorded
growth over 10%, as compared to the same period of 2010.
•
The activity in constructions partially recovered in March 2011 and the
contraction in this sector slowered in the first three months to -4,4%.
•
In February, the volume of construction works was 7,5% higher than the level recorded in January
2011 and slowly below that in February 2010 (-0,7%);
•
For the first time from June 2009, the real estate sector records growth of activities. In the
“residential building” sector the raise was of 12% in February 2011 as compared to February 2010. In
March 2011 as compared to March 2010, the number of authorisations issued for residential buildings
decreased by only 3%.
23
Romania has real chances to come out of recession
•
Romanian industry remains a pillar of economic growth:
•
Industrial production grew by 5,5 % in 2010 as compared to 2009 and by 11,4% in
the first three months of 2011, as compared to the same period of last year;
•
The productivity of work is increasing considerably in this sector, by 17% in 2010
compared to 2009 and by 30% compared to 2008;
•
The turnover in industry grew by 24,3% in the first three months of 2011; new
industrial orders increased by 26,4% in the first three months of 2011;
• The unemployment rate is stabilising this year at the level recorded in
2008
•
After an increase from 5,8% in 2008 to 8,36% in March 2010, the unemployment rate
started decreasing every month, to 5,92% at the end of March 2011, a similar level to the one
recorded before the economic crisis;
•
The number of people receiving redundancy payments has diminished by 43,7 thousand
people in February 2011 compared to December 2011, which means that the number of people
who got employed exceeded the number of people who were laid off, as a result of better
economic activity;
•
In the first two months of 2011 a number of 47 thousand people got employed; for the
24
whole year 2011 we are estimating a number of 338 thousand people.
2. Fiscal framework reform
• Fiscal-budgetary responsibility law 69/2010 represents a turning point in
public finances and establishes the principles, objectives and priorities of
the multiannual budgetary and fiscal policy:
• introducing expenditure ceilings
• reducing the number of budget adjustments
• eliminating the risk of populist decisions on election campaigns and
setting the Council Tax etc.
• The main objective is to gradually reduce the budget deficit to 3% in
2012.
• These reforms aim at reducing the tax burden:
• Reduction of fiscal and para-fiscal tarrifs, from 491 in 2008 to 263
actually;
• Simplification and unification of fiscal declaration starting with 2011,
and their online payment;
• Elimination of minimum tax starting with October 2010;
• No taxation for reinvested profits;
• Maintaining a flat tax rate of 16%.
• Public funds are primarily directed to investments;
• Debt by the central and local authorities to economic agents halved.
Recent changing of the accounting law
• 2 specific objectives:
• reducing costs to firms preparing the financial statements;
• reduce bureaucracy in financial administration.
• We introduce a simplified accounting system for small
businesses that meet two conditions: their both assets and
turnover are less than 35,000 euros:
• These companies will prepare two financial statements instead of five;
• These companies do not make half the balance, but balance each year;
• Balance sheet and profit will be drawn in simplified accounting system
with a small number of components and a plan of 50 accounts instead
of 400 accounts;
• Accounting documents can be signed by people with higher economic
studies, not only by expert accountants, based on civil convention.
• 349 000 companies are benefiting from these measures,
namely 57% of active companies on the market.
Structure of budgetary revenues during 2008 – 2011 (%GDP)
10
9
8
9,5 9,6
8,9 9
8,5
7,9
7
7,6
6,9
6
5
5,4
4
5,6
4,8
5,2
3,6 3,7 3,5
3
3,4
2,7
2
3,43,4
3,1
2,5 2,4
2 1,8
1
0
1,9
1,6
1
0,6
SCC
VAT
2008
Other
revenues
Tax on
salaries and
income
2009
Duties
2010
Profit Tax
Amounts from
EU
2011
27
Structure of public expenditure during 2008 – 2011 (%GDP)
14
12,8
12
10
13,4
12,5
10,5
8,9
8
9,4
8,3
7,5
6
6,4
4
5,7 5,8 5,2
6,3
7,1
6,6 6,5
2
0
Social
Assistance
2008
Personnel
Expenditure
2009
Goods and
Services
2010
Investment
expenditure
2011
28
3. Public apparatus and government agencies reform
• Imposing personnel norms in central and local public
authority, the public apparatus was reduced from 1,398,757
persons in December 2008 to 1,256,609 people in March
2011.
• 141 governmental agencies were abolished, merged or
restructured
• E-government in order to eliminate bureaucracy:
Ø Development of National Platform E-ROMANIA and National
Electronic System (SEN)
Ø Electronic Single Point of Contact - sets out the online interaction
between public institutions in Romania and service providers
Ø Results: savings of around 3 billion RON in 2010 as a result of the
development of transparent procedures for electronic procurement
SEAP
4. Reform of the public sector employees’
payment
• The Unitary Payment System Law regulates the payment of all categories
of personnel paid from public funds, unlike the previous period when this
remuneration was comprised in 39 Laws.
• Expected results:
• Ratio between basic minimum salary and maximum level of wage
among public sector employees is 1 to 15, approaching best European
practices;
• Harmonization of payment system for the public sector employees take
into account the importance, the responsibilities and the complexity of the
activity and the required level of education for the activity;
• It is being created a new hierarchy of basic salaries, between different
fields of activity and in the same field, depending on the complexity and
the importance of the activity;
• Wage increases necessary for achieving this objective take into account
the macroeconomic indicators and the evolution of social indicators;
30
• Compliance with the salary bill of 39 billion RON for 2011.
5. The public pension reform
• Under the legislation adopted in the pension system:
• It is ensured the financial sustainability of the pension system on the
medium and long term;
• The contributiveness principle is enforced in the public pension system;
• The retirement laws which do not respect the contributiveness principle
were abolished and special pensions were recalculated;
• It was established a minimum social pension of 350 RON;
• Cumulating pension incomes with salary incomes is prohibited for
those with pension incomes higher than the average gross salary in the
economy;
• Reduction of the number of early retirements;
• More severe criteria are implemented for granting disability pensions;
• Starting with 1st January 2011, working groups I and II are entitled to
grants, this means 1.541.000 pensioners; the budgetary effort amounts to
403 million Euros in 2011.
• In 2012, pensions will increase by 100% inflation rate, plus 50% of the
real growth of average gross earnings for the previous year.
31
6. The reform of Labor Legislation
• A new Labor Code was implemented. Mainly, it
aims at the
• increasing the flexibility of the work relationships;
• adapting the work relationships to the dynamics of the
labor market;
• maintaining the Code’s regulations in line with the
European legislation;
• discouraging the illegal employment by adopting tougher
sanctions;
• establishment of performance as criterion in the labor
contracts and in the work relationships.
32
7. The Reform of the Educational System
By implementing the National Education Law, the Romanian educational
system was fundamentally reformed. The main modifications concern:
• The rethinking of the role of the early education;
• The assuring the quality of the public primary and secondary education
system;
• The re-configuration of the National Curricula;
• The implementation of a Educational Portfolio;
• The implementation of the financing per student principle – the granting of
public money will became transparent and will respect the strategic
educational targets, according to the financing follows the student principle;
• The implementation of the School after School Program;
• The support of the children and of the young capable of high performances;
• The granting of an equal access to study in the universities;
• The typologisation and classification of universities and the implementation
of a proper methodology for the hierarchisation of the programs of study;
• The redefinition of the PhD – introducing two types of PhD, the Scientific
33
and the Professional one.
8. The Reform of the Health System
The implemented measures aim at:
• The decentralization of the health system and the increase of the degree of
participation of the local authorities in the management of the hospitals – of the 435
public hospitals subordinated to the Ministry of Health, 370 were transferred to the
local public authorities.
• The restructuration of the hospital system;
• The introduction of a national health card;
• The implementation of the copayment mechanism, except for the social vulnerable
groups or for those with a small income;
• The control of the expenditure on medicines; the increase of the patients’ access to
modern treatments, on accessible costs, by introducing a new policy of medicine prices
control and by introducing new technologies;
• Increasing the collection basis for the health insurances, by addressing the pension
revenues of more than 74 RON;
• The development of public-private partnerships, and the attracting of the business
environment in the development of integrated sanitary systems;
• The starting of the process of introducing standards at all the levels of the Romanian
health system and of a system that warrantees the quality of the medical services.
34
9. The Reform of the Social Dialogue
• The Government decided to promote the Social
Dialogue Law by assuming responsibility, according to
art. 114 of the Romanian Constitution.
The Social Dialogue Law completes the Labor Code:
• it reforms the way the trade unions, the patron’s unions, the
Economic and Social Council are organized;
• adapts to Romania’s present needs the rules that concern
the collective work contracts and the solving of labor
conflicts.
35
10. The Reform of the Social Assistance
Objectives:
• The orientation of the social assistance programs according to the value of the family venues and
the restructuration of the circa 200 national and local social benefits;
• The consolidation of the guaranteed minimum income program, of the aid for the payment of the
heat invoices and of family allowance in a new single frame;the finalization of the decentralization
of the social services in the field of domestic violence, in order to increase of the local authorities’
liability degree, and to ensure the necessary financial resources; the development of the support
services responsible with the integration of the Roma families in the society;
• The ensuring of the socio-economic equilibrium of the families living in an urban and rural
space, of the elderly, of the disable and of their families;
• The rethinking of the legal and institutional framework concerning the protection of the mothers,
the increase of the birth rate, the diminution of child abandon and the diminution of the domestic
violence phenomenon, the increase of the quality of the children’s life in difficult environments
and the respect of the minimum quality standards in all the special services dedicated to children in
need;
• The rethinking of the social protection measures for the families with special needs and the
increase of the degree of dynamism of the active measures of the family solidarity; the increase of
the active participation of the civil society and the sustainable development of the partnership in
the favor of family development and protection.
36
11. The Reform of the Judicial System
Four new codes were implemented – the Civil Code, the Criminal Code, the Civil
Procedure Code and the Criminal Procedure Code – in order to restore the judicial
system’s credibility, by enhancing the transparency, by simplifying the legal
framework and by improving the accessibility degree.
The positive aspects of these reforms are already visible in the reports issued
by the Cooperation and Verification Mechanism. The Law of the Small
Reform of the Judicial System was also adopted (Law 202/2010).
Expected results:
• the speeding up of the trials;
• the simplification of the procedures;
• the diminishing of the costs;
• the improving of the quality of the act of justice by enhancing the accountability and
the specialization of both judges and prosecutors;
• a more effective delimitation of the material competence, the unification of the
jurisprudence and the transformation of the act of justice into a predictable process;
• the adjustment to normal limits of the sanctioning treatment;
• the development of the business environment, both by the revision of contract
regulation and by inclusion of distinct regulation of contracts specific to the banking
sector.
37
Short and Medium Term Plans
1. The Pursuit of the Health System Reform
2. The solving of the arrears’ issue
3. The prioritization of the multi-annual strategic
investments and the absorption of the European
funds
4. Performance in the public companies
38
1. Further reform of the Health System
• Establishing indicative ceilings for quarterly contracts regarding services
developed with hospitals and doctors and creating incentives for doctors
who meet the indicative ceilings.
• Establishing the care package provided by the government in order to
eliminate the coverage for non-essential costly medical services.
• Revising the formula for National Health Insurance House by introducing a
system where "money follows the patient“.
• Revising the list of compensated and free drugs approved by Government
Decision no. 720/2008, for amendment and transfer to generic drugs, where
possible.
• Controlling the pharmaceutical costs for the most expensive drugs for 2012,
by applying strict protocols for the use of drugs and by the new modality of
electronic prescriptions for the Unified Informational Integrated System, in
compliance with strict procedures.
39
2. Solving the problem of arrears
• Implementing the action plan and the improved mechanism for
the control of commitments and measures enforcement by the
end of April 2011, in order to eliminate the existing arrears and
to prevent accumulation of new ones, both at general budget
and public enterprises.
• A better control of arrears at local authorities level, by setting
an indicative target.
• Integration between the accounting system and the Treasury
system of payments (September 2011).
3. Prioritization of multi-annual strategic
investments and EU funds absorbtion
• Creating a database / a list of primary public investment projects to ensure
funding over the next 3-5 years, by a working group under the authority of
the Prime Minister.
• Improving monitoring and evaluation of investment projects to the central
authorities, in particular by improving the database on equity investments
managed by the Minister of Public Finances, which will include
information on state of the projects, such as delays in implementation or
cost overruns.
• Implementing the Government’ Action Plan in order to accelerate the
absorption of EU funds.
• Capital public expenditure reorientation towards a gradual shift from
investments financed entirely from domestic sources to investments
financed by EU funds; ensuring about 4.0% of GDP for capital
expenditures to meet investments financed by EU funds, including external
loans,in 2012.
4. Establishing performance criteria in the
state-owned enterprises
•
•
•
•
•
•
Implementation of a comprehensive strategy to reform the state-owned enterprises
governance;
Introduction of an improved reporting system for the state-owned enterprises already
included in the ESA definition of the general budget, and for those which might be
reclassified and included in the general budget by Eurostat in 2011 and 2012;
Prevention of new arrears and losses for the companies reclassified by Eurostat, as part
of the general budget, and for those which might be reclassified in 2011 and 2012;
Elaboration of strategic action plans for main companies (especially those in energy and
transport) until the end of May 2011 and for all the others until the end of July 2011;
For main privatisations, until the end of August 2011 there will be named the consultant
for these transactions, more exactly a famous international company; the proposals will
be sent by the end of 2011 and the auctions will be organized by mid 2012;
In order to solve the governance related problems, we will elaborate (in consultation
with the World Bank) and we will adopt the necessary legislation required to improve
the governance of these companies; we will introduce the compulsory external,
independent and regular audit activity at these companies and the financial control will
be transferred from the ministries to the Ministry of Public Finances by the end of
September 2011.
42