Romanian finance minister says child allowances will increase by “around 15%”

Child allowances will increase by “around 15%” starting August 1, Romania’s finance minister Florin Citu said on Monday at Realitatea Plus news channel.

The finance minister also said that, in his opinion, the law that doubles child allowances is populist and unconstitutional, as the Parliament voted it after the state budget for 2020 was passed without mentioning the financing source. However, the Constitutional Court ruled that the law was constitutional, and president Klaus Iohannis promulgated it without objections.

However, the Government has delayed implementing the law as it is struggling to finance its growing budget deficit.

“We will apply the law and we will increase child allowances starting August 1. The prime minister will announce the growth percentage,” Citu said, quoted by Mediafax. “It will be around 15%, and we will make another increase on January 1. We won’t stop here,” Citu said.

He explained that the global economic context must also be considered and that the Government has made “tremendous efforts” because some companies have closed down, and the budget revenues have decreased.

The finance minister also said that a decision on the pension increase would be taken at the budget amendment in mid-August. The Parliament voted last year that pensions should increase by 40% starting September 1 this year, which would put more pressure on public finances. At the beginning of this year, Government officials said that they would observe the law and that the financing for this increase was included in the state budget. However, they changed their statements amid the economic crisis caused by the COVID-19 pandemic. The Government now considers a two-step increase in pensions to lower the impact on this year’s budget.

(Photo source: Inquam Photos / Octav Ganea)