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August 15, 2022

Romania, still struggling with the inefficiency of the public sector

Without an economic growth of over 4 pc Romania will be unable to handle EU competition, Mircea Geoana, Chairman of the Senate’s Foreign Policy Commission and President of Aspen Institute Romania, stated at the Bucharest Forum 2012.

After joining NATO and the European Union Romania had not other plans, that is why it achieved close to nothing, Premier Victor Ponta stated on Thursday, underlining the need for a development plan and underlining the private sector’s role in developing the country, money.ro informs. In his opinion, the context for economic development “is more favorable than ever,” following a period of austerity. The Premier made the statements at the Bucharest Forum 2012, an event taking place at the Palace of Parliament. “In recent years Romania experienced maybe the harshest therapy, the harshest period of austerity compared to other European and non-European countries. It survived with wounds, with memories, with political responsibilities, however it was a period in which I like to believe that the most important lessons were learned. There is the need for budget discipline, for a different way of spending public funds,” the Head of Government added. Ponta expressed his belief that after this difficult period Romania will have to capitalize on its potential in order to register growth. “We have to understand that we will never have budget revenues, funds for health, for education, unless we will have a high-performing business sector, and this is coming from a Social Democrat Premier. Yes, I believe the private sector is the one that will build Romania’s development, the public sector only has to benefit from and to support this development. I also believe that in a democracy one cannot have economic development against the backdrop of unprecedented social discontent and frustration,” Victor Ponta concluded.
Likewise, the Premier also underlined some of the very important aspects that all foreign investors are asking for, namely a predictable legislation, a reformed public procurements system and the establishment of areas of interest for investments. PM Ponta also opined that the labour legislation should not necessarily revert to prior regulations, however social dialogue can only be to the advantage of investors and of any owner, whether private or public. In his turn, Mircea Geoana  (photo R), Chairman of the Senate’s Foreign Policy Commission and President of Aspen Institute Romania, underlined that Romania needs an economic growth of 4 per cent per year in order to make up for the lag separating her from other states and to be able to handle the competition from within the EU. “Romania’s economic growth potential went from 4 per cent several years ago to 2 per cent, an insufficient level for an emerging economy that wants to become competitive at European level,” Geoana stated. He pointed out that Romania needs a new development model, greater transparency when it comes to governance and a re-professionalization of the political environment with the help of the young generation. In the same context, Florin Pogonaru, President of the Businessmen’s Association of Romania, stated that the business sector has started to excessively depend on politics and not on market developments, and because of that businessmen are looking forward “with fear” to the decisions taken by political leaders. Pogonaru considers that a political pact is needed for the stabilization of the economic sector.
Gov’t: Hidroelectrica to come out of insolvency by year’s end
Ponta also talked about the Hidroelectrica energy company that is currently insolvent, stating that the battle for it was symbolic, Mediafax informs. He pointed out that a semi-private management took the Oltenia energy company from the red into profit in a matter of months. “I’m absolutely convinced that the talks we have on listing Transgaz and on Hidroelectrica are political decisions that, if taken in a consistent manner, will open a potential that Romania hasn’t used until now,” the Head of Government added. In this context, the premier stated that he pleaded for a change in mentality in Romania, claiming that if she stakes on foreign aid and small investments our country could be “a customs house at most.” Likewise, the Premier pointed out that Hidroelectrica will come out of insolvency by the end of this year, cleansed of the bilateral contracts that brought it to bankruptcy. The Premier referred to Oltchim too, expressing his optimism in what concerns the plant’s restructuring. He denied that the government is taking into consideration the option of shutting down the plant.

AmCham: Leaderless, Romania is buried in debts

Romania is still struggling with the inefficiency of what is left of the public sector, is postponing projects every year and is buried in debts that future generations will have to pay, in the absence of brave leaders that have a vision, AmCham President Sorin Mandrutescu stated during the same event. In his opinion, the solution would be “a single Romania” with politicians that are working jointly with the business sector and with social partners in order to identify modern solutions to boost competitiveness, a smart selection of priorities instead of wasting resources on electoral projects such as sport fields built in improper conditions, a focus on modern education, on industries that have high added value, investments in innovation, in agricultural potential, a friendly investment environment devoid of red tape, an administration and a legislation oriented towards the investors’ needs. All that starting off from a real leadership based on integrity, open towards the world and towards dialogue, one that would show compassion for those in need, the AmCham President pointed out. He added that the authorities are engaged in a “beauty contest” when it comes to lowering taxes, given the fact that a solution would consist of hiking the tax collection rate.


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