New economic measures during the pandemic
The Romanian government announces new economic measures and the continuation of the ones already taken in the context of the pandemic.
Daniela Budu, 22.10.2020, 13:50
At a conference held in Bucharest, the Romanian finance minister Florin Citu has announced a series of economic measures aimed at supporting the Romanian business environment and economy in the coming period. The finance minister has reminded that, since the start of the crisis caused by the new coronavirus pandemic, the government has adopted a stimulus package for those who pay their taxes in due time, while suspending penalties for those who don’t. The period of penalties suspension is going to end on October 25. Also, the government admitted that the VAT return should be done under subsequent control.
Now, minister Citu announces that these deadlines will be prorogated and the payment of furlough by the state will also be extended. The finance minister has given assurances that “We are experiencing a difficult period, nobody has ever experienced that, nobody has found the solution and nobody knows what to do next, therefore we need dialogue. I am the first person to admit that the measures we have taken have not been perfect, but the government has subsequently improved them. We will continue to be flexible in the coming period as well.”
As to the pensions’ increase by 40%, a proposal of the opposition Social Democratic Party which holds the majority in Parliament and which voted this measure last month, the government argues that the Romanian economy is unable to support such a growth. Moreover, in an open letter, several Romanian economists, among whom the president of the Fiscal Council — Daniel Daianu, says that a 40% increase in the pension point at this moment should be avoided. The letter signatories say that the fight against the pandemic is not over yet, and that they need to manage an unprecedented economic crisis which severely affects the economy and puts people on the dole. The big challenge, they say, is to find a way for the economy to recover, to have economic growth with fiscal and budget consolidation in the coming years.
Economists show that in 2020 Romania will have a budget deficit of around 9% of the GDP which includes the 14% growth of the pension point. The document signatories also say that next year Romania will have to carry on with the fight against the COVID-19 pandemic while trying to protect the economic recovery process. According to the document, the economy of the future will be different from the one existing prior to the pandemic, and economists need to be ready for the changes already occurring that have been accelerated by the health crisis, the new technologies and the states’ policies regarding climate change. (tr. L. Simion)
