Diminution of agriculture subsidization fund will generate debates in Parliament, expert

The head of the Analytical Center Expert-Grup Valeriu Prohnitski said the executive overcame the political dissension and approved the 2011 draft budget law, but some of the law's stipulations may generate controversial discussions in Parliament, Info-Prim Neo reports. He mentioned two important changes in the 2011 budget expenditure policy. The first is the reduction in the amounts transferred to the agriculture subsidization fund by 150 million lei, from 400 million lei in 2010 to 250 million lei this year. The second is the significant augmentation of the road fund by increasing taxes. “From economic viewpoint, the decision to invest in the rehabilitation of roads, which is a horizontal sector as regards its impact on the national economy, is a perfectly rational one, but we must understand that the Government takes risks as the farmers are a very influential and important segment of the electorate. We anticipate that the diminution of the agriculture subsidization fund will be reviewed,” Valeriu Prohnitski said. He also said that he and his colleagues discussed the effects of the rise in the public debt, which increased significantly last year compared with 2009, but remains yet at a reasonable level. According to him, rising the internal part of the public debt or the external one imply risks. “The strategy for managing the public debt that was recently approved by the Ministry of Finance describes the volatility of the exchange rate as a major risk to the foreign debt. Thus, the Government would like to borrow more money on the home market. However, the money will be taken from commercial banks and problems may be created to private investments,” Valeriu Pronitski said.