A law of fiscal-budgetary responsibility which is firmly based and structured can outline the general parameters which can constitute the basis of creation of some decisions in sustainable fiscal politics through stipulating fiscal principles, rules concerning with budgetary incomes, public debts, deficits, expenses and risk management.objectives, principles, legal definitions, fiscal council

Ardealeanu - Popa Carmen

Cirmaciu Diana

English

Research Papers in Economics

302 
 
CONSIDERATIONS REGARDING TO THE LAW OF FISCAL-BUDGETARY 
RESPONSIBILITY 
Ardeleanu-Popa Carmen 
University of Oradea 
Faculty of Law 
Private Law Department 
Cîrmaciu Diana 
University of Oradea 
Faculty of Law 
Public Law Department 
 
A law of fiscal-budgetary responsibility which is firmly based and structured can outline the 
general parameters which can constitute the basis of creation of some decisions in sustainable 
fiscal politics through stipulating fiscal principles, rules concerning with budgetary incomes, 
public debts, deficits, expenses and risk management.   
 
Keywords: objectives, principles, legal definitions, fiscal council 
 
Code JEL: K34 
 
Fiscal responsibility is essential to creating a better, stronger, more prosperous nation for the next 
generation. The choices we make today will determine our children's future. 
It is known the fact that the main goal of the fiscal politics is concerned with reaching credibility 
and stability of the public finances, though this cannot be reached only through the followings:  
-continuation of fiscal consolidation in the direction to accomplish the target deficit of 
3%  from  the  gross  domestic  product  (GDP)  to  structural  measures  which  assure 
sustainability for a medium
286; 
                                                       
286 We must take into consideration the fact that the Economic and Financial Affairs Council (ECOFIN) 
edited  recommendations  for  Romania  regarding  to  the  measures  which  will  be  taken  to  correct  the 
excessive public deficit, reevaluating in the same time the established calendar to reduce it under 3% from 
the gross domestic product (GDP), which is the reference value established by the EU Treaty. Practically 
the Economic and Financial Affairs Council (ECOFIN) extended the correction period of the deficit, taking 
into  consideration  the  damage  in  the  economy  of  the  country,  more  sever  than  the  level  which  was 
foreseen, beginning with July 2009, when it was initialized the procedure of excessive deficit, and the 
Council edited their initial recommendations.  
The Council urged Romania to reduce its deficit to 3% from the gross domestic product until year 2012 
instead of 2011, presenting a strategy to reduce the deficit and establishing the date of 16 August 2010 as 
limit term to apply these corrective measures. 
The excessive deficit procedure is governed by the Article 126 of the Treaty and the Council Regulation 
regarding  the  acceleration  and  clarification  of  the  excessive  deficit  procedure  implementation.  The 
excessive deficit procedure sets down the criteria and the deadlines for the European Council (ECOFIN) to 
adopt a decision regarding the existence of an excessive deficit. The excessive deficit Procedure is initiated 
when  the  actual  or  forecasted  deficit  exceeds  the  3%  of  GDP  ceiling,  except  the  situation  when  the 
deviation is of an exceptional and temporary nature outside of the control area of the respective member 
state and has a major impact on the fiscal position, or due to a major contraction of the economic activity – 
http://discutii.mfinante.ro/statistic - 26.04.2010 /15.00 303 
 
-promotion of an anti-cyclical fiscal politics which can offer sustainability for the 
process of economic increase; 
-efficiency of control and increase of the responsibility of the units which are outside 
the central administration (local authorities, auto-financing institutions and companies 
of the state) even to reduce the arrears of the state;  
-reform of fiscal administration;  
-increase of the efficiency of the fiscal-budgetary politics and the improvement of its 
predictability taking into consideration the fact that stability and predictability of the 
fiscal-budgetary system represents directive principles for a viable economy. 
The institution of the frame-politics which assure sustainability
287 and fiscal predictability for 
long term presumes the promotion and the adoption of the Law of fiscal responsibility, taking 
into  consideration  the  fact  that  the  fiscal-budgetary  politics  promoted  in  the  last  years  had 
demonstrated the evident fragility of the institutional frame and the lack of some adequate rules 
which could diminish the discretional fiscal space.  
The Law of fiscal responsibility outlines the principles by which the fiscal-budgetary politics will 
be guided to respect the long-term objectives of the European Union and the standards which 
must be fulfilled to create an added value for stability and economical increase. 
The necessity of adopting the Law of fiscal responsibility
288 is related to the requested conditions 
for closing the loan adjustment with the International Monetary Fund
289, but it is an important 
moment for Romania because through this normative document are established some „normal 
things” which were not respected, becoming exceptions. 
At the other hand even the harmonization of the fiscal-budgetary politics of the member states of 
the European Union urges the implementation, with continual and permanent character, of a 
severe and unconditional fiscal-budgetary discipline, realized practically through the adoption of 
this law. The Law of fiscal-budgetary responsibility aims to assure predictability in spending the 
public money.  
At the same time Law no. 69/2010 has as regulation object the establishment of a legal frame 
which allows to assure and maintain a strict, clearly defined financial-budgetary discipline, which 
being respected offers the opportunity that the public finances could be efficiently managed.  
The  legal foresights  created  this  way  are  applicable
290  for  authorities,  institutions  and  public 
entities foreseen by art. 2 point 30 of Law no. 500/2002 regarding to public finances (like The 
Parliament, the Presidential Administration, the Ministries, the other organs of specialty in public 
administration, other public authorities, the autonomous public institutions, like the institutions 
coordinated by these and financed either integrally by the budget of state, by the social insurance 
budget of the state, by budget of special funds; or by own income and subventions offered by the 
budget  of  state,  the  budget  of  social  insurance  of  the  state,  the  budget  of  special  funds;  or 
                                                       
287 For realizing the sustainability of public finances through fiscal sustainability it must be applied some 
measures which imply the reduction of expenses, without influencing the vulnerable groups, avoidance of 
the increase of taxes (which would have a negative impact upon the employment of the labor and upon 
investments).  
288 Law no. 69 from 16 April 2010 of fiscal budgetary responsibility, published in the Official Monitor of 
Romania No. 252 from 20 April 2010. 
289 Together with the Law of unique salary of the budgetary personal (respectively Law no. 330 from 5 
November 2009 regarding to the unitary salary  of the employees paid from public funds, published in the 
Official Monitor of Romania no. 762 from 9 November 2009) and  Law of the reform of the system of 
pensions.  
290 Art. 2 of Law no. 69/2010. 304 
 
integrally by own incomes) respectively by art. 2 point 39 of Law no. 273/2006 regarding to local 
public finances (the general name of local public institutions, including villages, cities, towns, the 
sectors of Bucharest, districts, the city of Bucharest, institutions and public services under the 
control of these, with judicial person, financed either integrally by the local budget, or by own 
incomes) like to other entities finances in proportion of over 50% by public funds, established 
according to European norms.  
For the exact conceptual clarification of some notions the legislator tried to define some notions 
like fiscal-budgetary strategy, the general consolidated budget
291, primary expenses of the general 
consolidated budget, economic cycle, expenses with employees etc. 
The legal principles of the fiscal-budgetary politics are the following: 
-the  principle  of  transparence  regarding  to  the  establishment  of  fiscal-budgetary 
objectives and the application of the fiscal and budgetary politics, the Government 
and the authorities being obliged to publish and maintain in debate for a reasonable 
period  of  time  all  the  necessary  information  which  allow  to  evaluate  the 
implementation method of the fiscal and budgetary politics, the results of these and 
the situation of the central public finances and that of the local one;  
-the principle of stability; 
-the principle of fiscal responsibility;  
-the principle of equity;  
-the principle of efficiency
292; 
-the principle of the efficient management of the employment expenses paid by public 
funds.  
In the content of art. 5 of Law no. 69/2010 there are also treated the objectives of the fiscal-
budgetary politics, respectively:  
-to maintain the public depts. At a sustainable level for a medium or long-term
293; 
-realizing of a sold of budget generally consolidated near to zero for the period of economic 
cycle, in the same time with assuring the competitivity of the country; 
-the prudent management of the resources and of the entered obligations of the public sector and 
of the fiscal-budgetary risks; 
-maintaining and adequate level of the budgetary resources for the payment of service of public 
dept; 
-assuring the predictability of the quota and of the basis of taxation level.  
The efficiency and the positive evolution of the fiscal-budgetary politics will be assured also by 
respecting some established fiscal rules in the matter of the sold of the general consolidated 
                                                       
291 We must mention that in form of project, the Law of fiscal-budgetary responsibility defined at art. 3 
point 2 the notion of general consolidated budget as being „the ensemble of the component budgets of the 
aggregated and consolidated budgetary system to create an unitary thing: the budget of state, the budget of 
social insurance of state, the budgets of special funds , local budgets...” but the Commission for budget, 
finances and banks of the Parliament of Romania considered opportune to substitute the notion of local 
budgets with the notion of  central budget of the administrative-territorial units, and invoked as reason in 
this sense the necessity for clearer definitions in the sphere of the general consolidated budget and the 
possibility  to  review  these  in  conformity  with  the  European  norms  and  with  the  evolutions  in  the 
administration of the public funds. 
292To include all the non-repayable funds offered for Romania, including the communitarian and other 
programs, whose donators of non-repayable funds are not member of the European Union, the Commission 
for budget, finances and banks of the Parliament of Romania had changed the definition of the content of 
the principle of efficiency, replacing paragraph „financed by funds offered by the European Union” with 
the text „financed by non-repayable funds offered by the European Union or by other donators” 
293 The establishment of a medium/long term for the maintenance of the public dept at a sustainable level 
must be done because a strategy must foresee a longer period. 305 
 
budget, the total expenses of the general consolidated budget (including the annual rate of growth 
of these) etc.  
In the matter of employment costs, the Government, the credit accountants and any authority with 
attributions of elaborating politics and payment agreements from the public sector must assure 
itself that all these politics are in concordance with the principles of fiscal responsibility, with 
fiscal rules, as with the objectives and limits of the fiscal-budgetary strategy. 
Also  trough  Law  no.  69/2010  are  promoted  essential  rules  in  the  matter  of  budgetary 
rectifications and to solve the problem of the excessive expenses and that of the overrating of 
incomes, there must be elaborated and implemented a credible fiscal-budgetary strategy for 3 
years, which must include macroeconomic
294 frame, fiscal-budgetary frame, a frame of expenses 
for a medium term and a declaration of responsibility
295. 
The fiscal-budgetary strategy must be a key document of politics which must offer information 
and objectives allowing a better process of taking decision in the annual budgetary process even 
for  a  medium  period,  which  can  be  elaborated  by  the  Government  and  approved  by  the 
Parliament. Compliance towards the fiscal strategy will be followed through reports of semester 
and annual progress which must deliver the feed-back for the Government upon any adjustment 
which could be proven to be necessary to respect the aims and the limits. The reports and controls 
done by the Ministry of Public Finances and by the Government contributes to the promotion and 
increasing of the transparence of the fiscal-budgetary politics (in this sense we can mention as 
example: the obligation of the Ministry of Public Finances to publish a semester report referring 
to  the  economic  and  budgetary  situation,  a  report  about  the  final  budgetary  execution,  the 
obligation of the Government to publish a report about the economic and budgetary situation at 
the end of their mandate etc). 
The law foresees also the creation of a Fiscal Council compound by 5 members
296 nominated by 
the decision of the Parliament at the proposal of the National Bank of Romania, the Romanian 
                                                       
294 According to law (art. 19 of Law no. 69/2010) the macroeconomic frame contains information about: 
-situation of macro economy and prognoses: for the actual budgetary year and for 3 ulterior years, the 
concrete results of the last 2 budgetary years, referring to: the gross domestic product and its components; 
indicators of consume prices and deflation of the gross domestic product; unemployment and labor; the 
position of current account of the balance of payments; premises which create the basis of the prognoses; a 
declaration  regarding  to  the  concordance  or  differences  towards  the  prognoses  of  the  European 
Commission;  
-macroeconomic prognoses for a medium term which influence fiscal politics. 
295  The  responsibility  declaration  will  contain  a  declaration  signed  by  the  Prime  Minister  and  by  the 
Minister of Public Finances, where it is certified the correctness and integrity of information about the 
fiscal-budgetary strategy and its conformity with the law, the aims and limits of the fiscal rules and the 
respect of the principles of fiscal responsibility.  
296 Their mandate lasts 9 years, and they cannot be elected once again at the end of this period. The 
conditions which must be fulfilled to become a member of the Fiscal Council are the following:  
-the person must have clean judicial and fiscal criminal report;  
-the person must have Romanian citizenship and right to vote;  
-the person must be graduate of university studies in economic domain;  
-the person must have good reputation and professional experience in the domain of economic, budgetary 
or financial politics;  
-minimum 10 year professional experience.  
The membership of the Fiscal Council is over in the following situations:  
-at the expiration of the mandate; 
-through resignation;  
-through  the  appeal  of  the  Parliamentary  plenum  in  the  following  situations:  by  the  establishment  of 
incompatibility according to the foresights of Law no. 69/2010; in case when a penal conviction with 
punishment of privative freedom towards a member of the Council was pronounces, being definitive;   
 306 
 
Academy, the Academy of Economic Studies, the Romanian Bank Institute and the Romanian 
Association  of  Banks,  which  must  assure  their  support  to  assure  the  quality  of  the 
macroeconomic  and  budgetary  prognosis  and  the  fact  that  the  budgetary  politics  are  in 
accordance with the principles of fiscal responsibility.   
The sanctions introduced in case of breaking some foresights of Law no. 69/2010 are represented 
by contravention amendments, but by art. 52 it is shown that „the breaking of the legal foresights 
by the members of the Government implied the joint political responsibility of the other members 
of Government, according to the foresights of the Romanian Constitution, republished and to 
Law  no.  115/1999  regarding  to  the  ministerial  responsibility,  republished  with  the  ulterior 
modifications”
297. 
In conclusion, we show that reaching some smaller budgetary deficits assumes the considerable 
modification of the budgetary process, and also reforms of the income and expenses politics, and 
the  essential  component  of  the  medium-term  strategy  is  represented  by  the  law  of  fiscal-
budgetary responsibility which: 
-established better elaboration procedures of the multi-annual budgets; 
-establishes limits regarding to the budgetary rectifications done during the year;  
-foresees fiscal rules regarding to total expenses, employment expenses and budgetary deficit;  
-creates  a  Fiscal  Council  which  assures  an  independent  and  professional  analysis  of  the 
macroeconomic and budgetary prognosis;   
-creates an emission and management frame of the guarantees and obligations.  
 
References: 
1.***, Law no.69/2010; 
2.***, Law no. 500/2002; 
3.***, Romania, Ministry of Public Finances – www.mfinante.ro; 
 
 
   
                                                                                                                                                              
-through substitution, in case of definitive impossibility of exercising the mandate. It is considered to be 
definitive impossibility of exercising the mandate any situation which creates an unavailability longer than 
90 calendar days;  
 -through decease.  
297 This way, the supreme sanction for the Governmental members is the joint political responsibility, a 
sanction whose content is not very clear outlined. 

CONSIDERATIONS REGARDING TO THE LAW OF FISCAL-BUDGETARY RESPONSIBILITY

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CONSIDERATIONS REGARDING TO THE LAW OF FISCAL-BUDGETARY RESPONSIBILITY

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