RADIO ROMÂNIA ACTUALITATI (February 23, 13:10:57) – “Noon News” with Carmen Valica – Anchor: The yearly report of the Romanian Academic Society confirms the authorities’ estimates regarding the end of the economic crisis during the second half of this year. Attention would be drawn, however, to the social crisis, which, the organization’s specialists say, will continue for a long time from now on. The experts consulted by the Romanian Academic Society say that Romania must learn from the Greek experience, which is facing the most difficult situation out of all EU member states and underline the main actions the state must undertake during the upcoming period: disciplined and transparent spending in the public sector, cutting state-funded employment and the strict enforcement of measures agreed upon with the International Monetary Fund.
SAR : Pensions Budgets, Rescued by 22% VAT. Pension expenditure reached EUR30 billion last year, which is 8% of the GDP. In addition, the pension fund deficit has reached EUR1.5 billion, an amount covered by the State budget. Here is what the “Yearly Analysis and Forecast Report” by the Romanian Academic Society indicates. SAR executive manager, Sorin Ioniţă says that, in order to cover this unbalance, the Government could increase the VAT from 19% to 22 or elevate the flat tax from 16% to 25 percent.
Analysts say Romania could increase the VAT or the flat tax. This is the conclusion reached by Romanian Academic Society (SAR), upon the occasion of the presentation of the Yearly Analysis and Forecast Report, a paper that investigates several economic, social and political aspects of Romanian society.
Romania has been upholding its calendar of switching to the Euro currency, with the closest deadline set for January 1, 2015, estimates Central Bank Economist-in-Chief, Valentin Lazea, who shows that the ‘highways versus adopting the European currency’ dilemma is false, as both objectives can be attained through a better absorption rate of EU funds.
We’ll come out of recession in 2010 if the people in power do their job right. REFORM. Romanian Academic Society representatives maintain that it is very likely for our country to post a budgetary increase by the end of the year, should real reforms be applied. With a little luck, the GDP could see a positive increase of approximately 1.2% until the end of the year. And if all goes well in the economic sector, we could be paying no more than RON 4.1 for a Euro in December this year. With a bit of luck and a lot of work from those in power.
Analysts say that Romania could raise the VAT or the flat tax. Romania could find itself faced with the obligation to increase the value added tax, the flat income tax or the commercial company revenue tax, if it doesn’t act quickly toward a reform of the pension system. This is the conclusion reached by the experts of the Romanian Academic Society (SAR), upon the occasion of the release of its Yearly Forecast and Analysis Report, a paper that investigates sever economic, social and political aspects of Romanian society. The experts are talking about a 3-point VAT increase, up to 22%, or an increase of the flat tax from 16% to 25%, as solutions for covering the EUR1.5 billion deficit to the pension fund accrued between 2007 and 2008. Closing the ‘gap’ in the pension fund can also be achieved by raising the company revenue tax from 16% to 25%, according to SAR.
Sorin Ionita, SAR: The 2007-2008 pension fund deficit is the equivalent of a 22% VAT increase. The current pension fund deficit is the equivalent of raising the VAT to 19 to 22%. Frequent elections threaten Romania’s switch to the Euro, while energy reforms must be reprised and strengthened. In brief, these are the recommendations within the yearly research report released by the Romanian Academic Society and presented Tuesday by Sorin Ionita, the institution’s Research Executive.
Valentin Lazea, Central Bank: The authorities have proven they can perform well under constraints. In theory, we can enter the Eurozone in 2015, but the Government needs to make serious efforts toward it, Central Bank Economist-in-Chief Valentin Lazea warned Tuesday, during launch of the SAR report “Romania 2010. The Real Reform Agenda”. “We are on track with the Eurozone accession calendar. If we manage to enter the ERM II in 2012, then during the first half of 2014, the CEB and EC will appraise Romania’s performance and, thus, the closest Eurozone accession date could be January 1, 2015”, Lazea explained. According to the Central Bank Economist-in-Chief, two false dilemmas could cause delays in this timeline.
Thus far, Romania has attracted 14,7% of European funds. A Romanian Academic Society report indicates that our country will come out of the recession this year, but then stands to face the hardship it knew since before the beginning of the crisis.
Valentin Lazea, Central Bank: In order to switch to the Euro, the Government needs to be seriously committed to the task. In theory, we can enter the Eurozone in 2015, but the Government needs to be serious about it,” Central Bank Economist-in-Chief Valentin Lazea warned Tuesday, upon the launch of the “Romania 2010. The Real Reform Agenda” SAR report.