Boc: Government met first-half deficit target agreed with IMF

Romania has stayed within the first-half budget deficit target of 2009 agreed with the International Monetary Fund (IMF), of 2.7 per cent GDP, according to Finance Ministry data, Agerpres quoted Prime Minister Emil Boc as saying.

'The 2.7 per cent deficit target negotiated with the EC and the IMF has been met and domestic and international pledges are according to schedule,' Boc said, summing-up the anti-crisis measures taken by government during the first six months of its tenure. It is likely to also discuss about a new budget rectification, yet not in the upcoming time interval. Once we have made the six-month governing analyses, we will also be able to look into the opportunity for such measure,' the prime minister said during a programme on national television.

In his turn, minister of labour and social protection Marian Sarbu declared yesterday at Bistrita, in a press conference, that a budgetary rectification is possible in August, but its value will be established subject to the receipts registered by the Finance Ministry, Agerpres informs. He also mentioned that the unitary salary law from the state system, which should be passed until October 30, will be enforced during several years, subject to the financial resources of the state.

The agreement with the International Monetary Fund (IMF) also stipulates, structural and performance indicators aside, quantitative targets on quarterly and first-half budgets, with the latter not allowed going beyond RON 14.5 bln. The first quarter deficit this year stood at RON 8.3 bln, or 1.56 per cent of the rectified GDP of RON 531 bln. The premier mentioned that, of a total of 32 anti-crisis measures government had in mind during this interval, 28 have been achieved, and four more are in various stages of implementation. Referring to the arrears measures, the premier showed that they refer to tax-free reinvested profit, CEC capitalisation, the public-private partnership and more money to the research budget.

Crisis negative effects limited

Emil Boc held that government anti-crisis measures limited the negative effects of the economic crisis in Romania.

'As a result, we managed to maintain the flat tax rate, VAT at 19 per cent, a balanced RON-EUR rate of exchange by correlating government fiscal policies with BNR monetary policies. Accordingly, we have been able to pay the salaries, pensions and social allocations,' Boc said.

PM warns ministers they are accountable for exceeding the employees' expenditures

The ministers who exceed until the end of the year the costs incurred with the employees, cut by 20 per cent through decision of the Government, will be held politically and legally accountable, PM Emil Boc declared yesterday, showing also that the level of the employee expenditures until July were bigger than in 2008. He recalled that, through the law regarding budget and the budgetary rectification, the personnel expenditures were cut by 20 per cent, Mediafax informs. "But I want to inform you that until July the employee expenditures for this year have been bigger than in 2008, because the salaries were increased several times last year, and we are obliged to apply from January 1 to December 1 all the salary rises that took place in the previous year," Boc said on the public radio channel.

Unemployment level, 'satisfactory'

At the end of the first six months of its mandate, government was able to keep a 'satisfactory' level of unemployment, below the European average in April. 'We have succeeded in maintaining a satisfactory level of unemployment. We are obviously not glad when we have any rise in unemployment. I can say that compared with what happens around us, in the other EU countries,, we have been able to keep unemployment under control,' Boc said, adding that April saw an unemployment rate of 5.7 per cent, much lower than the European average of 8.6 per cent.

'The data show Romanian authorities keep unemployment under control,' the PM said. Referring to support measures for SMEs and business environment, he said the state assistance fund has been increased five-fold over this period. As to pensions, Premier Boc reminded that his government managed to raise them by 3 per cent as of April 1, and a further 2 per cent from October 1.

Over 50,000 firms to have their tax debts deferred

More than 50,000 companies will benefit from a six-month deferral of crisis-induced tax debts, although the number of those in difficulty is a great deal higher, Finance Minister Gheorghe Pogea said. While the finance minister put the number of enterprises to benefit from the Tuesday-passed government measure at 52,000, PM Boc gave a different figure, 56,000 namely.

'This is no fiscal amnesty or rescheduling. We don't freeze the debts. They continue to produce penalties. The advantage however is that debt-owing companies will not be closed,' Emil Boc explained.

Earlier in the week, government passed an emergency ordinance on a six-month deferral of past due taxes as a result of the effects created by the economic-financial crisis, provided the companies will start paying taxes henceforth.

Business environment decry not being called to consultations

The measure makes unhappy the companies that paid their taxes in due time. Moreover, they say the measure was taken without any analysis being made on the impact it has on the state budget.

Business people however say the emergency ordinance (OUG) is but an invitation to correct firms not to pay the due taxes anymore. About 622,000 companies are doing business in Romania, of which roughly 140,000 owe tax debts to the state budget, with the remaining 480,000 paying their taxes in time. The data however are approximate, as the exact situation of indebted companies in September of last year is yet to be known.

'The emergency ordinance has neither a beginning nor an end, its implementation is confusing. Aside from the measure being announced without the private environment too being consulted, the OUG stipulations create great disturbances in society, on the market,' Conservative Vice-president Maria Grapini told 'Financiarul'.

She sees it normal for all companies, including those that owe no debts to the state, to benefit from tax deferrals. Grapini holds that the OUG will not yield the kind of long-term results needed, such as maintaining or developing jobs.

The Conservative official said the Finance Ministry drafted the ordinance without even consulting coalition partners. Iulian Urban, a businessman and Democrat-Liberal Senator, shared her opinion. 'It is a good measure, and I say it as a businessman. What however upsets me deeply is that for us, the ox that draw the yoke and pay our dues to the state and VAT, and the tax on profit, and salaries in time, they don't find solutions, so they throw us in the mixer of the liquidity crunch and financial crisis,' Urban said.

Nine o`clock