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The draft budget law for 2008 may be commented from two viewpoints or on two directions in terms of quantity and quality, if saying this way. In terms of quantity we mean the basic macroeconomic and financial indicators used to elaborate the state budget and in quality terms we mean all kinds of investment and socio-economic projects stipulated by primary version of the draft. We think that this draft budget is trying to conciliate a potential economic crisis with possible social pressures, since it is first a political and then an economic document.

The expenses for education, healthcare and social protection have been raised by about 500 million lei. In fact, we think that this is a good move, but if comparing the rise of these expenses with the advance from the 2007 budget and with the GDP growth, this an inefficient measure. In addition, very ambitious macroeconomic indicators have been used to elaborate the draft budget law for 2008, in particular, a budgetary deficit of 0.5 percent of the GDP, a 7-percent economic growth compared with last year, budgetary revenues estimated at approximately 41 percent of the GDP, etc.

Of course, these are very optimistic and promising figures, but we fear that each of them could be contested soon, since the country faces a not very good economic conjuncture. Before the budget is finally approved the Government shall consult all interested sides and establish the basic economic indicators very carefully. The economic growth could be unrealistic, if negative trends of industry and agriculture do not change. In addition, given the ongoing "fiscal revolution" (the 0 tax on incomes of economic agents), these circumstances altogether could affect both the expenditures and incomes of the budget.

Indeed, the state budget is built on basis of data for last year and governmental forecasts. The experience of the past years shows that adjustments during the implementation of the budget, that means throughout the economic year (the so-called rectifications) are more important than the budget itself. In reality, the budget is a sketch while the rectifications are actually the cruel reality. Therefore, at least from this point of view, the draft budget law is more or less real at the initial stage. Rectifications to the state budget law during the year, as for example, parliamentarians operated at least three changes this year, are also a proof in this respect.

We mean capital investments, etc., while studying the quality direction of the budget. There are many talks to give an impulse to the mortgage housing building, but unfortunately, the law on mortgage was not approved so far. In addition, a mechanism via which the state could directly influence the mortgage market is absent, because mortgage credit activities of banks and other financing companies are far from being mortgage. Or for example, large funds are used to rebuild economically inefficient governmental headquarters, so that it is hard for us to tell whether these amounts are productive investments or not.

In spite of positive indicators such as the 8-percent economic growth in the 1^st quarter or the higher budgetary revenues than expected, following negative effects combat them: the inflation rate has exceeded 7 percent and the annual rate is already estimated at 13 percent; an alarming trade deficit, a very high deficit of current account, an unreal ratio between the leu and the euro or the dollar, which affect the exporters the most, a decline of direct investments, etc. We have reached an economy fuelled by imports only and this is a good situation for the budget, but also a very risky long-term trend which blocks the productive sector that should be the key motor of the growth and budgetary collections.