Employers' associations believe that Romanian economic growth rating will drop below 0.8 percent in 2010

Publish date: 04-05-2010
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The Romanian economic growth rating for 2010 will drop even below 0.8 percent as results from the conclusions of the discussions between the representatives of the major employers' associations in Romania and the International Monetary Fund (IMF) delegation.

President of the General Union of Romanian Industrialists (UGIR) 1903 Cezar Coraci said after the discussions with the IMF delegation members that the employers' associations requested the cut of taxes, but the IMF considered such a possibility to be 'improbable' given the fact that Romania's economic growth in 2010 will be even lower than 0.8 percent as estimated previously.

'Romania's economic growth in 2010 will slightly exceed the zero level,' Coraci said, quoted by Agerpres. In his discussion with head of IMF delegation Jeffrey Franks, he underlined the need to revise the public procurement law.

'Currently, there are situations in which the contract value is up to three times higher than the initially established amount, while, prior to this moment, the law provided that the contract value can only be higher by up to 30 percent at most,' said the president of UGIR 1903.

Employers also requested the IMF to analyse the possibility to finance the budget deficit from 'unpainful' sources, such as diminishing tax evasion, accessing structural funds and using some indirect measures.

According to the president of UGIR 1903, such indirect measures include VAT and social security compensation with the state's debts to the private sector, even by creating state loans from citizens based on treasury bills.'Likewise, we must increase the taxation rate by taxing the areas of evasion,' added Cezar Coraci.

In his turn, president of the National Council of Small and Medium-Sized Enterprises in Romania Ovidiu Nicolescu said that employers requested that a certain amount of the IMF funds should be allocated to some major investment projects. In order to speed up the access to structural funds, the employers participating in the discussions with the IMF representatives requested the stimulation of employees that operate within the structures specialized in drawing structural funds.

According to the request of the employers' associations, an incentive of 10 percent could be granted for a large number of evaluated files, 15 percent for the number of concluded contracts and 75 percent of the amounts that entered economy should go to the companies that received grants.

The IMF representatives promised to analyse the requests of the employers' associations and to intervene with the Government so as to have the holdings law completed. Jeffrey Franks underlined that, currently, taxation cannot be cut because the budget neede revenues.

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