The higher pensions and child allowances, besides the other promises among the key top priorities outlined by the Social Democrats, will cost Romania’s public budget some RON 30 bln (EUR 6 bln) [per year], according to the former minister of investments and European projects Cristian Ghinea.

This accounts for more than 2.5% of GDP. And Romania can not afford this, particularly as it is under the European Union’s Excessive Deficit Procedure, he sayid, according to News.ro.

The measures envisaged by the Social Democrats, who prepare to enter the ruling coalition, are a threat to the national recovery and resilience program (PNRR) not only because of their impact on budget - but also because they come against the principles of predictability agreed by the Romanian Government under PNRR.

Romania promised a predictable pension law, while PSD wants to revive their version that scared the rating agencies due to the 40% (at that time) hike envisaged.

Ghinea has also criticised the “cap and subsidy” law passed by the Social Democrats and liberals, which envisages large but yet unknown public expenses related to covering part of the energy bills over the coming enter season. The law “looks good” to consumers but is a time bomb in the public budget, he explained, because of the impact that can not yet be estimated.

iulian@romania-insider.com

(Photo source: Inquam Photos/George Calin)