PM Boc: The private sector, most affected during the crisis

The private sector is that which supports the national economy and is the most affected in time of crisis in Romania and around the world, therefore in this period of six months the Government tried to find measures to help the private sector and the national economy through a massive investment of public money in infrastructure, that would compensate for the lack of orders in the private sector or the decrease of the orders," Emil Boc said, quoted by Agerpres. PM participated yesterday, at the Ministry for the Small and Medium sized Enterprises, in the signing of some contracts for big investments under the Sectorial Operational Programme (POS) "Growth of economic competitiveness." According to Premier, the Executive tried to take advantage of the European funds, planning to allot this year, on the priority axis 1 of POS another EUR 80 M, the total value intended for the SME programmes being EUR 200 M. In 2009, the SMEs can receive aid worth EUR 20 M, EUR 200,000 at most for each company, Boc recalled. He reiterated that the Government has two major objectives at the level of the governmental policy: to maintain the flat tax of 16 per cent and the VAT of 19 per cent. "The Government will support the companies which are in difficulty, but in order to overcome the noxious effects of the crisis it is necessary also to have a dose of optimism, because the permanent discussions regarding the existing problems have an impact on the behaviour of the people and deepen the crisis," Premier added.

Contradictions between the members of the ruling coalition

"Hopefully, at the end of the discussions with the International Monetary Fund and the European Commission (scheduled for the end of July - editor's note), we can enforce the non-taxation of the reinvested profit," PM Emil Boc declared. These assertions are contradicted by the minister for SMEs, Constantin Nita, vice president of PSD, the party which governs together with PDL, according to whom the non-taxation of the reinvested profit could be deferred most probably until next year, because it is necessary to modify the Fiscal Code. "The non-taxation of the reinvested profit must be announced six months prior to being enforced, therefore I don't believe that the measure will be adopted this year. Most probably, as of January 1, 2010," Nita said, present at the same event as PM Boc, dedicated to the signing of the contracts with European funding.

The minister for SMEs also estimates a contraction of the economy of 6 per cent this year and says that in this context it is necessary to curtail some budgetary expenditures, to increase the state investments and to adopt some fiscal measures.

39 investment contracts worth eur 31 M

In the presence or Premier and SME minister were signed in Bucharest 14 of the 39 contracts for major investments under POS. The 39 contracts, finalized and signed, have a total value of EUR 31.6 M, the domains covered by them being numerous, from textiles to the production of concrete and to constructions.

The funding share of the firms interested in these projects varies between 30 and 50 per cent. Some of the representatives of the firms, which managed to sign contracts for major investments intended for the growth of competitiveness, complained that their co-funding percentage is much bigger because of the banking interest rates, while the accessed amounts are eroded by around 20 per cent vs. those mentioned in the contract because of inflation and the fluctuation of the exchange rate.

Nine o'Clock