Social contributions 5 pc cut bill in Parliament this week

IMF talks will continue in Washington.

The Government will send tothe Parliament next week the draftlaw on 5 percent cuts to the socialinsurance contributions (CAS) fromOctober 1, Prime Minister VictorPonta announced on Thursday. Asour newspaper announced on itssite, PM Ponta announced last weekthe social contirbutions will be cutby 5 percent starting October 1.‘The 5 percent cut to the CASmust be applied this year, and wecan afford it. In order to have a sustainablefiscal and budget policy,and following the talks we had withour international partners (…) wecan sustainable and reasonably sendto the Parliament next week the lawproject on the 5 percent cuts tosocial insurance contributions forthe last quarter, starting on October1. This way we don’t have to raiseany taxes; being good managers ofthe budget and having extra revenuesand lower expenditures, wehave the capacity of covering thenegative impact of these cuts, animpact estimated by the FinanceMinistry to roughly 850 million leiover the last quarter,’ said Ponta.He added that the budget deficitwill not grow, and the measure willhave full legitimacy once voted bythe Parliament.Asked whether the announcedstep has IMF’s approval, the PManswered, ‘No, because the internationalinstitutions have said onlyone thing. Firstly, we stay within thebudget deficit targets for 2014, andcover through the budget amendmentthe negative impact for the lastthree months; the approval of internationalinstitutions for the nextyears will be granted based on talkswe will hold at the end of Novemberon the 2015 and 2016 budgets.’Prime Minister Victor Pontasaid on Thursday that Romania willno longer need a fresh deal with theInternational Monetary Fund(IMF), after the ‘successful’ completionof the current agreement withthe international lender.‘When we successfully completethis agreement, we’ll no longer needa fresh deal with the IMF, but no lessimportant is that the EuropeanCommission by then will have morepowers relating the budget controland the tax policies and we’ll struggle,in the same way as the other EUmembers, to attain the targetsimposed by the EuropeanCommission and the EuropeanCouncil’, Ponta said in an interviewwith Bloomberg.On the other hand, the talkswith the Romanian authorities willcontinue at the IMF headquarters inWashington, announced the internationalinstitution on Thursdaynight, noting that there are someunsolved issued left, without sayingwhen an IMF mission might returnto Bucharest. “Economy continuedto recover and it is expected to growby 2.8 percent this year. The fiscalimbalances were reduced and thecurrent account deficit remainedlow. The IMF and EuropeanCommission teams held constructivetalks with the Romanianauthorities about how they shouldmake sure that the progress continuesand they agreed upon somemajor policies in this matter.However, certain matters remainunsolved. The discussions with theRomanian authorities will continueat the headquarters,” reads a releaseof the IMF.


The Romanian Businessmen’sAssociation is surprised at the decisionmade by the InternationalMonetary Fund (IMF), the WorldBank and the European Commission‘to address in sternness’ theRomanian Government’s decisionto cut the social security contributionsfor employers by 5 percent,the Association said in a release toAgerpres on Friday.The Romanian businessmen saythe measure can create new jobs andit ‘expects that both the Romanianspecialists and the IMF, World Bankand Commission experts should havea broader approach to this measure’.‘The Association keeps firmlybacking the Government’s taking thismeasure, even if differing with thethree international lenders’ views, themore so since the EuropeanParliament itself has, in 2014, foundthere are several differences betweenthe IMF policies and the EU objectives.The Association believesRomania should set an ambitiouspolicy of stimulating the economicgrowth factors, among which labourand the number of jobs, which aretwo areas where taxation is burdensome’,the release says.

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