Ministry of Finance: If no new budget or extension after June 10, state can only spend as much as it collects

If there is no budget adopted for the year or a new extension of last year's budget after June 10, the state will only be able to spend as much as it collects. This becomes clear in the answer of the Ministry of Finance on May 23 after a BNR inquiry whether in the worst case scenario there will be funds for pensions and salaries in the public sector. The so-called budget extension law ends precisely on 10 June.

Since it is now almost impossible to pass a completely new budget for the year by 10 June, the most likely assumption is that MPs will vote on a new extension of last year's budget.

No direct answer was given to the question of whether the Ministry of Finance is preparing a proposal for such an extension, despite a query from the BNR, but the clarification was made that in the hypothesis of a new extension "the systems will be financed as in the first months of the year under the current order". This means that the expenditure will be at the level of the same period in 2022, taking into account enacted acts of the National Assembly, the Council of Ministers and other regulatory administrative acts that provide for additional or reduced budgetary allocations.

In practice, there can be no reduction in expenditure, except savings from unrealised activities and projects of first level spending units. One-off expenditure incurred in the same period last year will be taken into account in the reduction, the ministry said.

In the hypothesis of a non-adopted budget after June 10 and provided that the so-called extension law is not extended, then in order to finance expenditure and transfers after June 10, 2023, mandatory under the Public Finance Act, upon the proposal of the Council of Ministers, the National Assembly should set a new deadline for collecting revenue, for making expenditure and for granting transfers.

In this case, the expenditure and transfers granted must be equal to the amount of revenue, aid and donations received and in compliance with the fiscal rules under the Public Finance Act, the Ministry of Finance added.

Source: BNR