Teachers collected 160,000 signatures to cancel austerity measures in Education. The citizens’ initiative will be submitted to the Parliament on Thursday, but it runs into a constitutional provision that could block the project.
The teachers have far exceeded the minimum threshold of 100,000 required to initiate such a legislative approach, according to the announcement made by Marius Nistor, the president of the Spiru Haret Education Federation.
The list of signatures is due to be tabled in Parliament on Thursday, June 25, less than a week before the end of the current parliamentary session, raising questions about whether the initiative can be debated and voted on before the recess.
Also, the initiative runs into a constitutional provision that could block it from the start.
According to Article 74, paragraph (2) of the Romanian Constitution, “fiscal issues, those of an international nature, amnesty and pardon cannot be the object of citizens’ legislative initiative”.
Since the cancellation of austerity measures implies the modification of some fiscal and budgetary decisions, the initiative could be rejected on this legal basis.
Marius Nistor: “There should be a minimum of respect for the 160,000 teachers”
Despite this constitutional impediment, trade union leader Marius Nistor, president of the Spiru Haret Education Federation, expressed confidence that the initiative can be turned into a bill that will be voted on in Parliament, even in the few days left until the parliamentary vacation.
“Yes, it should be done (not a bill in this parliamentary session), if there is a minimum of respect for the 160,000 teachers who signed the initiative. We will submit them to the Parliament on Thursday”stated Marius Nistor for “The Truth”.
Asked about the parties that have shown themselves willing to support the project, the union leader stated: “You’ll see from Thursday.”
Economic analyst: Poor chances for reversal of austerity decisions
On the other hand, economic analyst Adrian Negrescu is much more reserved about the chances of the initiative succeeding.
Negrescu emphasizes that, in the absence of a significant increase in collection, the Government will maintain or even deepen the austerity measures in order to reach the deficit targets assumed in relation to international partners.
“The unions can have any legislative initiative they want and their frustration is understandable following the barrage of cuts applied without any logic and without any impact study by the Government. We can see this initiative as a way for the unions to express their frustration.
Education unions are preparing for a mega-protest. 20,000 teachers are expected in Bucharest on June 17
The big problem is that, from a financial point of view, no one is going to undo the spending cuts that have been made over the last two years right now. From a financial point of view, the state will have to reduce the budget deficit from 7.2% to 5% in the next two years.
I don’t think we should have any illusions that ANAF will increase the level of collection; therefore, it is hard to believe that he will not continue the policy of cuts”the economic analyst sent for “The Truth”.
A study shows that there would be no need for austerity if we collected as much as Hungary
In this context, a recent study conducted by the economist Cornel Ban and the sociologist Cristian Pop, entitled “How do we rebuild the budget? Three scenarios, three fiscal philosophies”brings an alternative perspective on the issue.
Research published by the Friedrich Ebert Foundation shows that, if Romania managed to collect taxes at a level similar to that of Hungary, there would be no need for austerity measures.
The study highlights that Romania loses approximately 30% of potential public revenues due to non-collection of VAT, tax evasion and non-compliance, which translates into a 30% VAT gap.
“Romania collected about 21.4 billion euros in VAT in 2023, which represents only about 70% of what the state should have collected, hence the VAT gap of 30%. If we divide by 0.7, it turns out that the total amount it could collect is almost 30.5 billion euros.
If we had a collection level like in Hungary, where the gap is only 7.4%, we would collect in the budget about 92.6% of this total, i.e. around 28.3 billion euros. The difference compared to how much we collect now would be around 6.9 billion euros per year.
If Romania were to reduce the VAT gap reaching Hungary’s level, the additional revenues, of approximately 6.9 billion euros annually, would be equivalent to almost 60% of the entire education budget, calculated at 3.3% of GDP”the study shows.
The authors of the study propose three fiscal reform scenarios to reduce the budget deficit.
Scenario A, already adopted by the Bolojan Government, focuses on increasing indirect taxes and freezing spending, but comes with negative social and economic effects, such as inflation and anemic growth.
Scenario B has as its objective a moderate-progressive fiscal consolidation, inspired by the models of the countries of the Visegrad group (Czech Republic, Poland, Slovakia and Hungary), which would involve the introduction of a progressive income tax in three stages, the broadening of the capital tax base and the reform of the ANAF, being able to reduce the deficit to approximately 6% of GDP.
Scenario C, inspired by the Nordic and Slovenian social democratic models, proposes greater tax progressivity, targeting capital and large financial incomes, including the high net worth, potentially bringing the deficit to around 5% of GDP without resorting to austerity measures.
