04 March 2008 Bucharest _ The Romanian Government will cut the budget of almost every ministry in a bid to reduce its financial deficit this year, the government said Monday.
The total cuts are worth 2.6 billion lei (€ 787 million).
The Defence Ministry will see the biggest cuts in its budget, worth 800 million lei, the Ministry of Agriculture will see cuts worth 450 million lei, the Health Ministry 433 million lei and the Ministry for Education, 200 million lei.
This should lower the budget deficit by 0.4 %, from 2.7%, according to the government.
In February, Romania's Finance Minister, Varujan Vosganian, said the European Commission will not penalise Romania, despite an excessive budget deficit predicted for 2008.
He assured the European Commissioner for Economic Affairs, Joaquin Almunia, that Romania's budget deficit this year would be lower than in 2007, by cutting some expenses.
Last year, the deficit was 2.4% of GDP according to the Romanian authorities. The European Commission, EC, however uses another calculation system, called ESA 95, which showed that the Romanian deficit budget was as high as 2.6%-2.7%.
The country's budget this year forecasts a deficit of 2.7%, but EC calculations show that the deficit will exceed 3% of GDP in 2008 and 2009.
The EC can impose penalties under the Excessive Deficit Procedure, against EU members that fail to achieve a budget deficit lower then 3% of the Gross Domestic Product, GDP.