Romania’s Government has been paying back the VAT to companies with an average delay of “perhaps more than 90 days” and currently owes over EUR 5 billion (EUR 1.05 bln, or some 0.4% of GDP), prime minister Ludovic Orban stated on November 8.

He claims that the former Social Democrat cabinet of prime minister Viorica Dancila managed to keep the deficit under the 3% of GDP threshold only by using this trick, local Profit.ro reported.

One day earlier, PM Orban and finance minister Florin Citu disclosed the budget deficit hit 2.8% of GDP in January-October.

“The government maintained the budget deficit under 3% of GDP at the expense of the private companies,” PM Orban accused, explaining that the firms could have used for development the money owed by the Government.

Another trick used by the former Government has been delaying payments to contractors. The construction companies working on Government-funded projects, especially through the National Program for Local Development - PNDL, haven’t been paid on time, thus being forced to borrow money to finance the works that should have been paid by the state, the PM explained.

Former finance minister Eugen Teodorovici was warning in early October, before the no-confidence motion against the Dancila cabinet, that “if the motion passes, nobody will be able to close the budget for next year.”

editor@romania-insider.com

(Photo source: Inquam Photos/George Calin)