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Cronicile

Money for future budget amendment has been found: Army has spent only 8.15% of its endowment budget

de Victor Bratu 17.9.2017

The situation of the salary rights in the Ministry of National Defence was the one that officially caused the resignation of Minister Adrian Tutuianu.

Blocked in the controversy of financial resources available for paying the military wages, various allowances and pensions, the analyses evade another figure that does not look good at all:

In the first eight months of the year, the Ministry of National Defence paid actually only 641 million lei representing invoices for the purchased fighting equipment and related VAT. That is, 8.15% of the procurement budget.

What Army has spent money on

The state of payments made between 1 January and 31 August 2017 in the Ministry of Defence shows that 6.2 billion lei have been spent in the first eight months of the year from the budget allocated to the ministry.

The expenditure structure is as follows:

  • RON 5.6 billion are current expenditures (staff expenditure, goods and services, social assistance, etc.)
  • USD 0.64 billion represent capital expenditures (purchases of military equipment and related TVAS)

In the state budget approved by the Parliament, the Ministry of National Defence has total budget allocations of RON 16.3 billion, namely 2% of GDP.

Relevant: In the structure of this budget, more than 50% of the money is allocated to the military wages and pensions and the current expenses such as utilities, food for the military personnel, subsistence, expenses for missions abroad and the representation missions.

Passing (perhaps too lightly) over the philosophical debate – the 2% must be allocated exclusively to the army’s endowment or can also be used for paying the pensions and wages – one thing is certain: for the Minister of Finance not to cut from the money of the Ministry of Defence at the second budget amendment, the new Defence Minister should sign invoices worth RON 7.3 billion in the following four months.

That depends, though, on the pace for finalizing negotiations with various external suppliers – all major procurement programs being currently at the stage of a memorandum.

In this context: the initial draft of the state budget prepared by the PSD specialists allocated RON 11 billion to the Ministry of Defence and the budget increased by another 5.6 billion only following the intervention of President Iohannis.

It should be mentioned: throughout 2017, current expenditures of the Ministry of National Defence are estimated at RON 8.5 billion

In May 2017, President Klaus Iohannis said at the end of the NATO summit in Brussels that the allocation of 2% of GDP to the defence sector in Romania has been appreciated by the Allies but warned that the money should actually be spent by the Government for what they have been allocated.

At that summit, NATO decided to monitor how the governments of the member states spend the allocation of 2% to the Defence Ministry.

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