Senators and Deputies,
Distinguished colleagues, members of the Executive,
Distinguished guests,
Ladies and gentlemen,

The Executive is coming before you for the presentation in view of approval, of the state budget law for 2012. Few general considerations about the draft budget. First, I would mention the fact that the Executive proposes a responsible, prudent draft budget, which aims at consolidating the economic growth.
Secondly, I want to outline the fact that this budget lays emphasis on investments, jobs, European funds and supporting the business environment. The budget for 2012 keeps at the same level the 16 percent flat tax, VAT and social security contributions. The budget for 2012 does not put forward diminution in salaries and pensions, but keeps the, at least at the level of 2011. I also mention that in 2012, there will be the payment of 5 percent of the final rulings. One may wonder why we come before Parliament with a prudent and responsible budget. We do it for two motives: one relative to domestic level, and the second, external level. With respect to internal level, we know well the fact that Romanians succeeded in these two years, 2010 and 2011, with the price of their suffering, to help us reach a macroeconomic stability and resume economic growth, from economic decline. This was possible through the effort of all Romanian citizens whom I thank once again for the fact that in all these years, they understood that the only way to save Romania from economic collapse and to stay on economic growth is by responsibility and rationality. Therefore, we are after four consecutive quarters of economic growth. From this point of view, Romania succeeded to get out of recession, as first moment towards exit from economic crisis. Also, I can ensure you that this year, we are on schedule of 1, 5 and 2 percent economic growth, therefore, bigger than 1, 5 percent as it was initially forecast, and we are on schedule of targeting a deficit of 4, 4 percent. These things are won. It is important for them not to be compromised in 2012.
Therefore, the budget for 2012 starts with an economic growth forecast of 2,1 and a budget deficit of 1, 9 percent. We start with a prudent and responsible budget and from a motive relative to international developments. As you could see, we cross the most severe economic crisis of the last 60 years. The uncertainties relative to economic developments, financial markets, economic growth, of the danger of returning to recession in the European Union, decline in economic growth forecasts, both at the level of euro zone, and at the level of non – euro zone, as well as the difficulties to fund deficits and falling due debts, all these uncertainties determine us to be extremely, extremely cautious, realist and responsible, because it is at stake Romania’s macroeconomic stability.
I would add here a few considerations on the last decisions of the European Council. This last European Council was strongly marked by economic crisis and the discussion on the safeguard of euro, and implicitly on the safeguard of the European Union.
For the European Union’s currency, the euro, is, ultimately, the political core of the European Union. As you can see, the decisions were very realistic and very precise about the need of economic consolidation in EU, to regain confidence of markets.
The solution which was released in the last European Council was to propose, the euro area countries, but also those in the non-euro area, an intergovernmental agreement on fiscal governance, stating, necessarily, some elements.
The first element is the consecration of the structural deficit of 0.5%, second, the consecration of the maximum level of public debt relative to GDP, of 60%, thirdly, the introduction of automatic mechanisms for the implementation of sanctions if these rules are not respected.
I want to make a statement: these rules are not new in the European Union. They are part of EU Growth Pact, which were valid in the whole period since the 90s, only that they were not observed, neither the structural deficit, nor the maximum level of indebtedness. In these circumstances, the firm decision is compliance with sanctions with these precise rules from economic viewpoint, promoted by the European Union. A second question: why intergovernmental agreement and not amendment of treaties? To change the treaties, we would need a consensus, unanimity, in the European Council. This unanimity did not exist, primarily because the UK ‘s position, but also of countries such as Hungary, Sweden or the Czech Republic, countries that thereafter returned and showed their willingness to approve this intergovernmental agreement, so at this point, it seems that only Britain remained outside this intergovernmental agreement. This intergovernmental agreement is a future guarantee against populist, demagogic policies, which were not covered in the economy. European Union asks that this intergovernmental agreement, so states which will sign it until March 2012 to ratify it, by a revision of the Constitution, or an equivalent law of the Constitution. Why do you want this? To ensure on the one hand, long-term stability of such an approach to respect the golden rule of public finance - structural deficit of 0.5, the option to balanced budgets or surpluses, limiting the maximum level to 60%, as debt of GDP.
This requires the revision of the Constitutions or laws equivalent to the constitutional level. What is Romania's option?
Because here we come to the state budget. Romania's option at this point, expressed by the President, the Government is very clear and direct: support of Fiscal Governance Intergovernmental Agreement. And I want to give you some arguments from the perspective of the State Budget Law for 2012, of which Romania needs - to support the Intergovernmental Agreement of fiscal governance. The first argument is that Romania already since 2010, take such measures, in the direction that the EU now proposes for the euro area and for countries that want to join, from non-euro area, the Intergovernmental Agreement.
As you know, Romania ends with a deficit of 4.4 in 2011, going on a deficit of 1.9 in 2012, with prospects of a zero deficit in 2013. That is exactly what the EU proposes. As regards public debt, Romania is well below 60%, the maximum level in the European Union, as public debt relative to GDP. We will end 2011 somewhere around 33%, around such a percent we will also probably end 2012 too, thus well below the maximum level of 60% of the European Union.
Therefore, Romania cannot miss the chance and it cannot miss the European train of seriousness, stability and economic consolidation.
Second, Romania has always ruled against a two-speed Europe. Romania does not want to be part of Europe, in which, on the one hand, we have a group of euro area of 17 states, and on the other hand, a non-euro group, not known in what direction would evolve. A united Europe, a single Europe, a Europe that speak of performance and accountability, we need that Europe! Romania cannot remain outside the hard core of the European Union because it would mean accepting marginalization and practically not accepting the Intergovernmental Agreement of Fiscal Governance, and it would indirectly mean an auto-exclusion of Romania from the European Union. Because if you are not part of that club that imposes itself rules of performance and competitiveness, it means that you have no place in the European Union.

Thirdly, Romania aims to join the euro currency in 2015. Meeting these benchmarks of Intergovernmental Agreement ensures Romania’s road to Euro 2015.
And fourthly, the Intergovernmental Agreement will be a shield against any populist and irresponsible policies, against any poison gifts offered by irresponsible politicians, to Romanians, the Romanian citizens in the years to come. Because such agreement will not allow you to promote in electoral years, populist policies, as they were promoted in 2008.
Why do I say that? For obvious economic logic was that in the years of maximum growth, as in 2008, to have budget surplus, not deficit of 5.4%. And only in years of economic hardship, like the economic crisis, you may opt for a slight increase in the deficit, but not in years of economic growth, you realize an increase in the deficit, unsustainable increase in wages, pensions and other social obligations of the state. Because, they must be paid in future years too. Well, there are no such policies in Romania, irresponsible policy and irresponsible gifts, if we adopt this Intergovernmental Agreement of Fiscal Governance.
Why do you want a review of the Constitution? I said it before: for stability! And here is the mistake of Mr. President Victor Ponta, who proposed a law to adopt the Intergovernmental Agreement. This is not what the European Union asked. Why? Because Mr. President Ponta is wrong in interpreting Article 148, which refers only to situations of accession to the acts revising the constituent treaties of the European Union. Mr. Ponta, European Union, through the European Council has not decided a revision of the treaties, because I explained that unanimity was required, but only an intergovernmental agreement is needed. An intergovernmental agreement, as we adopted anti-missile shield, shall be adopted in the Senate, by a simple majority of those present.

So if the Senate has those necessary to ensure the quorum of the meeting, 70 senators, the intergovernmental agreement shall be adopted by 35 votes, and all with 35 votes, it can be changed. Or, EU requires stability, predictability and impossibility to change these rules of gold, very easily, in the Parliaments of member states.
And that requires a revision of the Constitution, to establish the stability of such golden rules and to not return to the language of populism and demagogic policies. I know this is a hard blow for those who still believe in the theory of large deficits and those who still believe that excessive debt can guarantee economic growth. It is over, such policies go to the museum of antiquities, such policies specific to 2008 also in Romania, are sent to the museum of history of political and economic responsibility. Because you can achieve performance, only in conditions under which you orient a budget towards surplus, balanced one or at least a structural deficit of 0.5, but compensating with structural reforms in long and average term, to ensure the sustainability of country's revenues and expenditures. Or, just on this route is Romania, adjusting budgetary spending, so you get to a balanced budget, reducing state operating costs and multiplication of amounts for making investment and structural reforms, we talk about education, health, payroll, Justice, Labor Code or state enterprise reform, these reforms ensure a diminution in the structural deficit and ensure balanced budgets.
These budgets will also provide more money for investment, combined with what the government did, imposing cost standards for investment and prioritization of public investments. This is the way, I repeat, chosen by the European Union. So, Romania has a choice to make: self – isolation or self – exclusion from the responsible policies in the European Union and again succumb to populism and demagoguery, or opt for the path of responsibility, the European Union language of balanced budget and surplus to bring safe prosperity in the long term, to the Romanians.
In these circumstances, the option of the state budget for 2012 is consistent with what is expected in the European Union. That is, little by little, balanced budgets and limiting deficits and public debt. In this context, Romania has only one path - the path of constitutional revision. Until March, the intergovernmental agreement on the basis of negotiation and, from March to December, the revised Constitution has to be signed, in order to reach what is performance in the European Union.
That, if we are interested in the fate of this country. If you just want cheap votes for a campaign, we can once again embrace the politics of 2008, but the results and poisoned presents were paid with too much money, by all Romanians, to go back there, where hardly we managed to get off. With respect to the macroeconomic indicators, on which is built on budget for 2012, apart from those mentioned on the growth and deficit, I would mention that revenues are 33.7%, as a percentage ... 33.7 billion lei, compared with 33.3 in 2011, so revenues are increasing, public spending is declining, from 37.7 in 2011 to 35.6 in 2012, again, in billion, the average exchange will be kept in 2012 too, to a balanced level and kept under control, 4.26, inflation - 3.4% compared with 5.9% in 2011, a slight decrease in unemployment from 445,000 to 410,000, so a decrease in unemployment rate, a slight increase in average gross wage - from 2.026-2117 lei per month.
There are several indicators, again, showing a healthy way of strengthening economic growth. Direction is safe growth and conducive to strengthening it and not to electoral alms or policies to endanger Romania's macroeconomic stability.

I also said that the primary objective of the budget is to support investment, employment and healthcare and business performance. To this end, we propose ten measures, to support investment, jobs, healthcare and business performance.
In short, these measures should be following - a: maintaining a flat tax of 16% - and you know how hard it has been to maintain it in these years of economic crisis. We did and we will continue. Second, investment spending will receive additional allocations of money. What does this mean? That although the deficit is down from 4.4 to 1.9%, we increase investment spending from 36.1 billion RON to 38.1 billion RON. What's that mean? Exactly what I said, towards macroeconomic consolidation, and ensuring sustainability of economy in the medium and long term. I also want you to know that Romania ranks first in the European Union, according to Eurostat data, followed by Poland, which has the largest share of public investment in GDP, in 2010. This will continue for years to come. It is a proof of Romania’ seriousness, which was able to put aside, it is true, with the political price paid by many politicians - and thank once again the ruling coalition because it had the strength and power to resist the temptation of populism in these years and here the results are seen. And I am convinced that in the 2012 elections, Romanians will confirm the correctness of such a rational point of view. Why? For Europeans today and euro area countries do what we started doing in 2010. What other proof is better than this, that the path we took, supported by you, was one right? From this point of view, for 2012, we suggest to build and support the major investment works, which will be finalized in the coming years.
Speaking of highways, for the following year, we provided financial resources so that, during 2012-2013, to complete 434 km of highways and 1,800 kilometers of national roads. I repeat: 2012-2013. Do you think that if we followed the policies in 2008, when they finished five kilometers of highway, on a background of economic growth of 8%, I could talk of the completion of infrastructure works in these years? We can speak of 90 km already, because they drive on them, 32 kilometers will be completed on the Arad-Timisoara motorway, and you know them. And in 2012, they will work on the following priority projects: Nadlac-Arad, Arad bypass road, Timisoara-Lugoj Lugoj-Dumbrava, Deva- Orastie, Orastie -Sibiu, Cernavoda-Medgidia Medgidia-Constanta, Constanta bypass, Bucharest-Ploiesti which will be ready in spring, the 62 kilometers Suplacu de Barcau - Bors, that continuation of works in another regime, the Transylvania Highway, after the Minister succeeded- and deserves congratulations - to re-discuss Bechtel contract and get the opportunity to fund further work on Transylvania highway, including from European funds.
That means a responsible approach. Also for 2012 we have provided entry into the execution of other 114 km of highway, after completion of tender procedures. We refer here to the Dumbrava -Deva - 72 kilometers or Gilau-Nădăşel, continuation practically of the Transylvania Motorway or Bacau bypass, to the profile of the highway. There are works that will enter into work in 2012. Also, regarding the railway sector, we aimed through the budget for 2012, the rehabilitation of 205 kilometers of railway on Pan-European Corridor IV or upgrading of 21 stations with European funds, worth about 230 million euro.
It also aims to extend the subway network in Bucharest and in 2012, will begin execution, of the segment Parc Bazilescu – Lac Străuleşti on Corridor IV, Gara de Nord - Străuleşti, with an estimated value of 230 million euro . Or further work on Thoroughfare V, the first new one since 1990, on the segment Raul Doamnei – Eroilor, and execution works are contracted for Eroilor- Pantelimon. Finally, developing specifications for the next ThroughfareVI, Otopeni, until the third quarter of 2012, or feasibility study for the next VII thoroughfare Bragadiru - Voluntari, through the first quarter of next year.

Regarding other works in this area, infrastructure, I just want to mention that through allocations to the Ministry of Development, there will be carried over 480 kilometers of county and local roads, there is allocated in the budget for 2012, the amount of 450 million lei. Also, financial allocations for the development of water systems for 788 villages, which will complete the network for 85 villages and sewerage systems and wastewater treatment networks for 57 villages, of which many of them will be completed.
I want to make a statement here that is very, very important for infrastructure development. We consider reallocation at the end of 2011, of money from European funds.
Priority will be reallocation of European funds for program of thermal insulation of blocks of flats. This will be made by the EU and the first money that we will get from the reallocation, will be directed towards the thermal insulation of blocks, a program with multiple meanings for people, ie a lower bill payment and for what means jobs, investment, supporting small and medium enterprises and ultimately the general urban layout.
Obviously investment works will be in education and health, and culture, works aimed at the pursuit of objectives started in 2011 and completion of many of them. This, again, would not have been possible without the support of an investment and jobs policy-oriented. A third measure for backing investments, business environment and employment: the state guarantees instrument.
And there are four elements here: first - the budget of the Ministry of Finance, for state guarantees, is 10 billion lei to support, again, investments that bring added value to the economy. Second, guarantees based on the Counter-Guarantee Fund for Small and Medium Sized Enterprises. Very little is spoken about this fund, but its horizontal implications are major for saving jobs and supporting businesses.
I just know that in 2009-2011, through this fund, there have been saved 240,000 jobs. There were given guarantees amounting to 1.35 billion euro, which supported loans of more than two billion euro. And for 2012, we achieved an increase in the fund capital by 250 million lei, which will allow supporting loans of over 1.1 billion euro, with the 580 million euro. This will lead to additional saving or maintaining another 100,000 jobs. There are horizontal things that happen every day, but this would not have been possible if the budget did not allow us in previous years, and for 2012, support for these funds for SMEs to benefit from support.
Thirdly, there is the Credit Guarantee Fund for Agriculture. The fact that in 2011 there were granted by the Ministry of Agriculture, subsidies in time, and the fact that the Credit Guarantee Fund for Agriculture granted loans to farmers when they needed, contributed alongside the weather component to a good agricultural year.
For 2012, 1.6 billion lei is money ensured for Credit Guarantee Fund for Agriculture, so that farmers can get loans to support its work.
And the fourth element is: the guarantees provided by Exim Bank. If, between 2009 and 2011, there were given guarantees worth 3.1 billion lei, in 2012 they will benefit from the guarantees of 556 million lei and on this component to support companies, to support business and jobs .
The fourth component: State aid schemes - de minimis schemes and aid for large investments. From this point of view, the Ministry of Finance has 850 million lei, to ensure that financial support for de minimis projects or aid of large investments that bring added value to the economy. And you know that major investments have benefited from state support to generate jobs.
I'm just saying that during 2009-2011, large investment projects generated over 4433 new jobs, approved state aid was 229 million euros to over 20 large investment projects.
Secondly, also on this component of state aid schemes and support for companies, there are programs at the Ministry of Economy. I speak here of the Mihail Kogălniceanu program or card for lending the SMEs: 70 million lei, start up program for companies: 10 million lei, in 2012; program for young beginners in business: 21 million lei; so funding from the state budget to support these programs backing companies that create and generate jobs.
The fifth measure: the continuation of programs that have proven to be effective. I refer here to the "First Home" and the government's commitment is to continue in 2012, the "First Home", as, the Car Scrap Programme, as presented by the Ministry of Environment and that it has been shown to be extremely beneficial for the Romanian economy and, last but not least, the continuation of the "Casa Verde" through Ministry of Environment.
The sixth measure: EU funds. I said, in a previous intervention that from 2012 there comes the period to pick up the results of the projects submitted, evaluated, approved, auctioned and under implementation. Now practically, it is time when we can reimburse the money from Brussels, because European projects are in execution, and we can the necessary money to modernize infrastructure in Romania. We target 6 billion EUR from European funds for 2012, out of which 3, 5 billion EUR from cohesion funds, 2, 5 billion EUR from funds on agriculture. I also mentioned the fact that we take into account the re-allocation of money from European funds, major priority being as I said, the insulation programme of houses.
Seventh: for the business environment, increase in competitiveness, we aim at minority privatization of some state companies as we have to directly say it: the state companies sector is not a reformed one and it remained so in the last 20 years. Any state company producing losses means money taken from the citizen’s pocket. This is why, the firm commitment of the Government is to restructure the state companies, minority privatization where it is the case, to impose the private management or state enterprises governance, on the basis of the ordinance adopted by Government. This is how starts the path to performance of state companies, as the black holes of the Romanian economy which produced structural deficits in economy, should be stopped. It is not easy, as we undertook the reform of other structural sectors in the Romanian economy; we will carry out the restructuring of state companies. With a view to a minority privatization, some share packages of 15 percent in Transelectrica or Transgaz or Romgaz or some packages of 10 percent from Nuclearelectrica and Hidroelectrica enter into sale. The eighth measure, supported by the budget aims at tax simplification. We take into account the following elements: cut by 50 percent of delay penalties in case of main obligation and related interests, until June 30, 2012. We know that until December 31, the 100 percent exemption is valid for those paying the principal obligation, 100 percent exemption from the payment of delay penalties. In 2012, we will go up to June 30, with the 50 percent exemption for companies that, I repeat, pay the principal and the interest, they benefit from an up to 50 percent exemption from delay penalties.
Second, timing of payment of tax liabilities for taxpayers in financial difficulties for a period up to 5 years. This measure, I repeat, go ahead and is enforced. And last but not least, the third measure, already in place: extinguish with priority of all main obligations and then accessories, in order of seniority. It is a measure both desired and expected by business environment and which will still be applied. Ninth, we consider the maintenance of reduced VAT rates, as follows: maintaining reduced VAT rate of 5% for social housing up to 120 square meters, whose value does not exceed 380,000 RON and also maintaining reduced VAT rate of 9% for drugs, textbooks, books, newspapers, magazines, hotel accommodation and other cultural services are maintained in 2012 too, as an additional element to support economic activity. And the tenth measure, related to the recently passed law on public-private partnership, aims to implement these projects which cannot be supported by public funds. The most important projects are as you know, those on infrastructure, and we here consider, first, Comarnic-Brasov highway, Sibiu-Pitesti highway, but also in energy sector, Tarnita-Lapustesti hydropower and, completion of nuclear units 3 and 4 of Cernavoda or AGRI project. There are projects that will be done under public-private partnership and support, as well as locally, of these projects to be backed by local public authorities’ participation.
Ladies and gentlemen, I limit myself to these general specifications on indicators and support of business environment and investment and jobs, because they are key to strengthening economic growth and a healthy one, on medium and long term in Romania. I did not come up with a budget with huge pledges, with a populist budget, one to request votes in exchange for electoral promises; I came up with a realistic and responsible budget. And I trust that, as so far, the ruling coalition, perhaps, eventually, the opposition, will understand that populism time has passed, and in Romania it is time to give signs of responsibility and rationality, through a draft budget with coverage in the economy. Thank you and I solicit your support to consolidate Romania's economic growth. Thank you.