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September 23, 2020

BNR’s Georgescu: We must strengthen commercial, tax and accounting legislation

Romania must strengthen the commercial, tax and accounting legislation in order to reduce tax evasion, while the economic governance seeks to limit the fluctuations of the cycle, according to Florin Georgescu, First Vice Governor of the National Bank of Romania (BNR). “This measure falls into a general policy calling for the domestic use of every country’s resources and here we mention the global call launched by the G20 member countries for rendering the banking sector more transparent and abolishing tax havens. Thus, the funds channeled from the national states into these tax havens will be used as personal resources in the country of origin, they will generate jobs, be used as budgetary resources aimed at developing the public infrastructure,” Florin Georgescu told the Bucharest Forum on Saturday.
With respect to the combination of the monetary policy and the macro-prudential policy, the First Vice Governor of BNR said that the country’s economic governance is reinforced through a host of mechanisms, decision instruments meant to limit the fluctuations of the cycle, in order not to witness “downfalls” from a 7 per cent economic growth to a recession of 4 per cent.
The BNR official also said that there is a change of paradigm in the cautious monetary policy from the objective of ensuring the system’s resilience amid exogenous shocks to dampening the amplitude of financial risk cycles. He reiterated the idea according to which new regulations as to solving the problems of those banks grappling with precarious financial situations are required, in order to make sure banks get out of the system with no problems. Up until now, they were supported by the state, relying on the taxpayers’ support, but the European regulatory framework will change things, shifting focus to the banks’ creditors. “We are switching from the bail-out method to the bail-in one, it is a new way to treat ailing banks, from too big to fail to too big to save,” Georgescu pointed out.
WB: Romania records 60 pc employment rate, unbelievably steady jobless rate
The employment rate in Romania stands at 60 per cent, one of the lowest in Europe, but at the same time the unemployment rate is unbelievably steady, both during the boom period and the economic crisis period, Alberto Leyton, task team manager with the World Bank (WB), said at the Bucharest Forum.
Alberto Leyton revealed the results of a study conducted by the WB, according to which Romania has two major problems: the low employment rate and the skills of the Romanian workers. “One of the problems is the fact that during the boom period, the labour-related costs have increased, but the productivity has not,” Leyton also said. “Distance education programmes in the private sector have recorded a dramatic increase. Less emphasis is placed on skill development. An approach based on facts is required. A solution must be found to turn to good account the unused labour pool,” Leyton stressed.

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