Revised 2010 budget in deficit

On Monday evening the Conseil National met for the first of 3 public sessions to discuss the Government's 2010 budget revision.

The budget outlines Government policy, which is currently in favour of large scale construction works and culture. Members of the National Council will vote on the budget after a debate in which they will express their opinions on Government policy and the Government will defend its position.

Minister of State Michel Roger has described the budget as reasonable and easy to execute if the economy picks up. However President of the Conseil National Jean-Francois Robillon in an interview with Nice Matin advised caution. No-one knows how the crisis will evolve and spending should be contained.

Expenditure in the revised budget is less than originally anticipated in the provisional budget, except for a few increases, such as in the civil service, which is one of 3 main areas of spending:

  • civil service
  • investments in major works
  • public expenditure to meet the hospital deficit and to finance major events

Civil service expenditure is primarily linked to salaries and pensions, hence Robillon expressed the need to put a freeze on the number of civil servants. In 2009, 20 new posts were created on top of the 3500 already employed, and it looks like the trend is to continue in 2011.

Major works are Monaco's future and a key economic driver, so spending will continue in this area, preferably on projects able to raise a profit.

Spending on culture has increased by 26% in line with the Government's desire to develop the Principality as a cultural centre. The New National Museum of Monaco's budget has increased by 33% due in part to the opening of Villa Paloma and its associated costs. Grand Prix expenses have also grown, although the million euros set aside to satisfy Bernie Ecclestone's demands was not used, as the fees were limited to 600,000 euros. In general tho', the amount of spending on culture and events is not as high as in other areas.

However, as Roger noted, the Principality is spending more than it's earning, even if the 105 m euro deficit in the preliminary 2010 budget has been reduced to 95.7 m in the revision, which will be covered by the constitutional reserve fund. Income has decreased by 4.3%, caused by a shortfall in legal transactions, especially in relation to offshore companies' property transactions. Some blame is also being laid on concessions, which benefit from reduced license fees. Unfortunately the economic crisis has led to poor results for such companies, and consequently less benefits for the State.

There should be no major disagreements between Parliament and Government this year, such as the one about the Tour Odeon in 2009. The issue of employment priority for Monegasques may be raised again, and there are always some differences of opinion. Opposition party Rassemblement et Enjeux has already announced it has no intention to vote in a budget in deficit. However, on the whole, most figures for 2010 are better than the previous year's budget.

Debates are transmitted on the Conseil National website.

J-F Robillon: "we must limit the number of civil servants"

Michel Roger: "we're spending more than we earn"

Conseil National : budget revision to get Autumn under way

Conseil National : first debates about the budget