The discussion we had this evening with the chairman of the Guarantee Fund, refers to the budget for 2012. First, the good news I could give to the President of the Fund, was that we will increase the social capital of the Fund by 250 millions lei, to be able to support the jobs maintained and created at present. On this money, we hope that in 2012, we could keep and save other new 100.000 jobs besides the 240.000 jobs which have already been saved.
Now, a few general data about the budget, because we started directly with the core of the problem, being at the National Guarantee Fund for Loans to SMEs. The draft budget for 2012 departs, as I announced, from a deficit of 1, 9 perecnt and an economci growth of 2,1 percent – these are the data from which we depart. I say from the start that Romania has the chances, in case the situation in Europe is geeting worse, to go up to a deficit in ESA terms of 3 percent from GDP, in 2012.
Why do we depart in the budget for 2012 from a 1, 9 deficit? It is a responsible, reasonable and cautious gesture. Why so? It is a Romanian saying, better safe than sorry, and we repeated this too. We want to take cautionary measures and if things do not improve economically in Europe, and in the world, we will not be obliged to cut other social obligations of the state. If things do not get worse, and go towards good, and economic growth forecasts are confirmed, then Romania is likely to increase the deficit up to 3 percent, in ESA terms, according to commitments with European Commission and IMF.
What does this mean? That there is the likelihood to have certain better things for everyone, I repeat in the conditions in which things do not get worse from economic standpoint, in our region, because you see – the situation is not stable either in Greece, the evolution in Italy is hard to see, the situation of banks in Europe, as well as the economic growth on decrease, revised by the European Commission are signs advising us to be cautious for the next year. I have told from the very beginning that we will not approach the budget for 2012 in electoral terms. We did not hurry up to salary and pension increases until we are not sure that these things can be done if economy allows and the European context does not worsened. If it does not get worse, we might talk of a certain increase in salaries and pensions in reasonable and decent limits, in the second part of the year, after the first evaluation of April – May with the European Commission, when you may know if the situation for 2012 follows the optimist scenario or the pessimist one. Therefore, I wanted to clarify these things. From where results this possibility to increase the deficit at 3 percent?
The commitment that Romania has with the European Commission, as Romania is on the excessive deficit procedure in the first place with the European Commission and in the letter we have both with the EC and the IMF, there is stated that the maximum deficit of Romania for 2012 is 3% on the ESA terms, but for reasons of prudence, as I said, we start with this deficit of 1.9% on cash.
That means 3% in ESA terms, it means 2.6 on cash depending on losses of state companies or bills which were issued and are outstanding. This is the margin of movement; allow me to finalize all the mechanism I will expose!
Secondly, Romania maintains its goal of joining the euro in 2015. Why do I say that? With a view to achieving this goal, we need to keep fiscal –budget policy in controllable limits, without excesses. What does this mean more concretely? Romania's public debt will reach a maximum of 33.9% in 2012, by a lot below 60% of GDP, the maximum allowed by the Maastricht Treaty, therefore, we do not want to indebt the country, this is the conclusion just because 2012 is an election year, but rather to maintain it to an as low level, only four EU countries have a smaller debt than Romania and it is an advantage that allows us to continue the road to accession to the euro, as deficit below 3% opens the way towards the same objective, correlated with the fact that we have the lowest inflation in 20 years. There are at least three arguments that Euro 2015 objective is currently on schedule.
Now, that is the keystone of the budget for 2012. It is not populism. They are not election promises, they are not irresponsible gestures. Keystone is the investment and jobs, or simply, we adopt the state budget for 2012 with full responsibility in terms of interest of Romanians and Romanians’ biggest interest for 2012 is jobs and how to achieve this by investment.
Some arguments of the budget say that investment and jobs are the centerpiece of this draft budget. One, increase in spending on investment financed from the budget or from European funds, from 35.4 billion in 2011 to 37.8 billion in 2012.
Therefore, increase in money for investment in 2012, from the budget and European funds, reaching 37.8.
Secondly, state guarantees of 3.3 billion euro. To these state guarantees, we add the guarantees given by guarantee and counter-guarantee funds, guarantees by credit fund for farmers and guarantees through Exim Bank. All these guarantee mechanisms will further support investment, jobs, will support companies to have access to lending.
As I said, I have already decided to increase the share capital of the fund, and the president will give you details, with 250 million lei in order to supplement what the fund has today, and another 100,000 jobs at least be maintained or created in 2012 compared to what we have currently.
The third argument, the first was spending with investment from the budget and European funds, the second I said, state guarantees, and the third - state aid.
Government will continue its policy of state aid on de minimis aid, support through state aid of the large investments that create jobs or provide significant amounts of money in savings, Kogalniceanu Card, we expect that at least 13,000 new beneficiaries to enter the program in 2012. You very well know that we support Kogălniceanu Programme, both in interest and the granting of credit and through Start-Up Program or program for youth who start a business. There are programs that will be supported. My colleague Andreea Vass, state adviser on economic issues, will give you details.
Another item on the budget: revenues to GDP increase from 33.4% to 33.7% and I would ask you to compare with 31.6% as it was in 2008. So, revenues increase in GDP.
Regarding pension funds, we had 47.6 billion lei in 2011, we will have 47.9 billion in 2012. So we have the resources required to pay pensions and to pay salaries. As noted, the policy consists in our being prudent.
If things go for good, there is possibility to increase the deficit so that there are good opportunities for everyone. If you have questions.

Editor: President talks in Berlin about a deficit of 0% in 2013 and second day, you come and say you already think that, in 2012, you increase the deficit compared to the target set with the Fund.
PM Emil Boc: I think it is a misunderstanding and I clarify it now. The deficit for 2012 is the target that we set out with the President, with the IMF, with the European Commission, of 3% in ESA terms, precisely as we talked with all the officials of the Romanian state and under the agreements we have. We start the draft budget from 1.9% and by it , we will leave from the Government to Parliament.
In 2013, our goal is to have a zero budget deficit by 2013. I would ask you not to confuse zero deficit target for 2013. So do not confuse 2012, according to the commitments that we established and indicators that we established, with the draft budget for 2013, where we intend to reach a zero deficit in 2013. Why? To better understand it economically. Normally, how such things should happen? Larger deficits should be allowed when you are on economic decrease, to achieve economic growth. When you pass on growth, you must lower deficits, to pay what you got when you had economic growth.
So, Romania goes from 7% in 2009, minus 1.3 in 2010, to at least 1.5 in 2011, going to 2.2 in 2012.
So in this context, the deficit must come down. And we lowered it. Deficit this year will fall from 4.4% to 1.9% in 2012 and we will go to 0% deficit in 2013. Why? Because economic growth goes in the other direction. This is a responsible policy. Unfortunately, the opposite happened in 2008 when we had 8% growth, we had deficit of minus 5.4. Then you should have zero deficit at most, to have resources for more difficult times.
Editor: Do you have something to complain about Mr. Apostu?
PM Emil Boc: In the case of Mr. Apostu, I have had the same position that I have always had in such situations. Justice is free to exercise their duties. At the same time, everyone benefits from the presumption of innocence and hope that Mr. Apostu proves his innocence before the court. I insist that the PDL is the only political party that has had such conduct in relation to justice, regardless of who is involved.
Editor: / ... /
PM Emil Boc: It is applied according to the statute law of Liberal Democratic Party, especially the provisions in the recently adopted Code of Ethics, and from this view, the decision is that of suspension. The decision is of suspension, and the mechanism of the Code of Ethics is already applied. Colleagues from Cluj have announced it.
Editor: The DNA prosecutors make searches to PDL lawmaker Calian . What do you know about this?
PM Emil Boc: I have no information in this regard.
Editor: Tell us please, to be clear! The budget for next year stipulates amounts for indexation of pensions and salary increases?
PM Emil Boc: If you were careful, we made the following statement: draft budget goes with 1.9% deficit, if the economic situation in Europe in the world in general, in Romania especially does not worsen, we can increase the deficit to 3 percent in ESA terms, 2, 5 – 2, 6 percent on cash, to be rigorous. In this deficit interval, there is room for an increase in salaries and pensions, if things do not get worse. What does it mean? That further to evaluation in April or May next year, together with the European Commission, if economic data are positive, they will show well, then, we can issue an emergency ordinance, by which to index salaries and pensions by a certain percent, only if conditions allow it.
I want to be well- understood! If things get worse in the world, then this would not be possible, and we will all live it. We will look what happens in the right or left, and we will know it, because all this is public money, and it is available to Government, to grant it according to law. I repeat it once again: everything depends on the economic situation in 2012.
We start with a prudent budget; it is a reasonable, realist decision, and one that has nothing to do with populism and the 2012 electoral year.
I would like to add one more thing: I saw the discussion on the education law and the spending on schools. I want you to know that in 2012, there will be enforced the national education law, regarding the cost per pupil, the spending with the functioning of city halls, in fact, the city halls do not lose or receive more, only that the way the spending is earmarked to finance the school is readjusted, according to the mechanism, financing follows the pupil. We want to avoid situation when some schools avoid spending on maintenance, lightening, heat, because there was not enough money there. Money will be earmarked according to the number of pupils, and this is why the law for 2012 will enforce the mechanism of the national education Law. In concrete terms, what does this mean? That if so far, there were deducted quotas from the income tax earmarked to city halls, we will have now sums deducted from VAT, which will be given with precise end, on the basis of the cost per pupil, to finance schools.
Therefore, practically, it is not about something in minus or in plus, these sums given to schools are rearranged on the basis of the new mechanism in the national education law. Funding follows the pupil.
Editor ...
PM Emil Boc
I want to tell you, we are only in the presence of a draft budget, which was subject to the Fiscal Council, social partners. The final decision will be made in the Executive. I presented here, only the large macro-economic indicators, and the policy on investments and jobs. Thank you.
Editor
Which investments will have priority?
Mr. Aurel Saramet, President of the National Guarantee Fund for Loans to SMEs
The 250 million lei, guarantees mainly oriented, in cooperation with banks too, we cannot dictate alone the trend of lending, but mainly, there will be favored investment towards development, as Prime Minister has announced regarding the change in economic model, increase compared to support of development investment. There will be other solutions as well which we analyze, even aiming at the possibility for some costs regarding guarantee to be reduced, but I cannot give you figures today.
Editor
Do you have a certain prioritization on programmes?
Mr. Aurel Saramet
We have other sources for programmes, we discussed them with Prime Minister, they will be too included in the budget, I know this is number one curiosity, there will be resources for the entire next year from what we estimated, regarding First Home Programme, also on Kogalniceanu Programme, they will continue, they are now in finalisation stage at banks, some hundreds will come, even thousands by the end of the year. Next year, there will be more than 12.000 -13.000 SMEs, for which there are already resources prepared in the respective budget, also for young entrepreneurs, the sums are budgeted, for such programmes to continue next year too, including on city halls, on Ordinance 79, and many others which you know, which we not only prioritize, we will promote them in a way implying some costs, we have them ensured.

Mrs. Andreea Paul Vass, State Adviser
I believe you assist to a change in political mentality which does not infringe anymore economy and basic economy’s rules. From this viewpoint, we have to relate to the current resources or those forecast for 2012, they raise to 33, 7 percent from GDP, and they were divided in an as correct as inteligent way possible, to maximize the chances of economic growth, of economic re-launch. We have to manage a budget under pressure. As I say, under pressure, I refer mainly to a very low rate of economic growth in EU, of 0, 6 percent, Romania fortunately, is much better than the European average, we rely on a growth of 2, 1 percent in the next year, but this does not allow us the luxury to pledge anything.
We only want to promise if things do not get worse, and European economci turbulences do not lead to the recession announced by Ollie Rehn recently, then we may hope in a very slight increase in salaries and pensions next year but no way do I say a figure or make a pledge now which may turn into an illusion or a poisoned gift impossible to honor it very much depends on what happens in the year to come.
Editor: There are institutions that will have more money next year, for example, the Presidential Administration. Is that true?
Mrs. Andreea Paul Vass: There are no such things. With respect to Presidential Administration, it is continuation of the investment process at Cotroceni Museum, which, of course, is related to the Presidential Administration's budget, but not in the sense indicated by attempts to malicious load that the budget of presidential institution. Things are as follows: Cotroceni Museum is continuing its investment in the coming year.
Editor: Culture, Agriculture will receive less money in 2012?
Mrs. Andreea Paul Vass: Increases are indeed very, very small, for the coming year does not allow us to pledge more, there are general principles of drafting the budget, the things are to be finished in the next meeting of government and then in Romanian Parliament.
Editor: There are ministers dissatisfied?

Mrs. Andreea Paul Vass: Everyone is dissatisfied. Thank you!