Romanian top court rejects challenge to 2019 budget plan

Eastern NATO countries Summit in Kosice
FILE PHOTO: Romania’s President Klaus Werner Iohannis talks during a summit of eastern NATO countries in Kosice, Slovakia, February 28, 2019. REUTERS/David W Cerny

March 6, 2019

BUCHAREST (Reuters) – Romania’s Constitutional Court on Wednesday rejected a challenge to the ruling Social Democrats’ budget plan for 2019 leveled by centrist President Klaus Iohannis, who called it unrealistic and over-valued, television station Digi24 said.

The ruling Social Democrats approved a budget plan in mid-February that raises spending on public-sector wages and pensions while targeting an incrementally smaller budget deficit of 2.8 percent of gross domestic product against last year’s 2.9 percent.

But critics have said the budget is based on an unrealistic assumption for economic growth of 5.5 percent, compared with a 3.8 percent forecast by the European Commission.

The budget also relies on a number of new banking, energy and telecoms taxes introduced via emergency decree in late December without an impact assessment or public debate.

The decree, which has triggered wide criticism from employers, unions, the president, the central bank, Brussels and ratings agency Standard & Poor’s, will likely be amended this month, potentially changing tax revenue estimates.

Iohannis can still send the bill, which by law should have been approved in November, back to parliament for re-examination.

(Reporting by Luiza Ilie; Editing by William Maclean)

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