The consolidated results of the CCIFER Economic Conjuncture Barometer for 2018 indicate that 34% of the companies appreciate that today, the general conditions to conduct a business in Romania are unfavorable, 46% of them have a neutral perception, and only 20% appreciate these conditions as favorable.
Trust in the political factor reaches the lowest level in the history, 1.8 of 5, in an accelerated regression of 0.33 points compared to 2017, and much more compared to 2016.
This pessimism is also reflected in the perception on Romania’s attractiveness, which loses the trust of the general managers by 0.53 points.
The perception of a negative evolution of the factors from outside the company (the political, economic, social factors, as well as attractiveness) leads to a reduction of the perspectives for the companies: profitability loses 0.26 points compared to 2017, the evolution of the number of employees and the short-term investments is also reduced.
The general barometer, aggregating all the indicators, is 2.9, decreasing by 0.23 points compared to 2017 and 0.63 points compared to 2016.
The main concerns expressed by the participants in this annual survey are the lack of labor force, the too fast increase in the costs with the labor force in order to be compensated through increases in production, the lack of public investments to unblock the projects in the transport and health fields, the lack of regulatory and tax predictability, combined with the political instability.
The French Chamber of Commerce, Industry and Agriculture in Romania (CCIFER) has recently underlined the need to increase the minimum wage, by correlating it with the increase in the companies’ profit and the performance of the employees. This increase, which is necessary to support the convergence of the social indicators with the European average, must remain predictable and sustainable, in order to mainly avoid destabilizing the small and medium-sized enterprises, which are the most vulnerable to these changes.
CCIFER gathers 550 member companies with a cumulated turnover of more than EUR 18 million and over 125,000 direct jobs. Being the coordinator of the steering committee of the Coalition for Romania’s Development, between July and December, 2018, CCIFER, together with its partners, aims at implementing the public policies supporting Romania’s competitiveness in line with the European values and principles.
CCIFER President Coste: Perception of economic environment, worsening, no predictability for investments in Romania
The economic environment is deteriorating in Romania, and the perceptions are worsening because there is no predictability for investments, Francois Coste, President of the French Chamber of Commerce and Industry of Romania (CCIFER) on Monday told the annual conference on “Economic Perspectives of Romania”
“CCIFER carries out two surveys each year, one barometer in June and another one in November. Your answers [of the French companies in Romania – ed.n.] are related to the nine criteria. We have four external criteria regarding the perception you have of the economic, political, social, and attractiveness for your companies. We also have other internal criteria – what the prospects for the development of the turnover, profitability, staff and investment are. Finally, we have a summary note and the average of the previous criteria. On the scale the responses range from 1 – very negative to 5 – very good impression. Thus, on the criterion of the economic environment in Romania, we have a rate of 2.91 on a scale from 1 to 5 in 2018, as compared to 3.12 in 2016. Although the GDP has grown, the perception of the economic environment in your country is worsening, as there is not enough public investment, which leads to an economic environment that is not sustainable, durable. We now have an exchange rate of 4.66 lei for one euro, the highest one so far,” Coste said, according to Agerpres.
According to the CCIFER representative, the political criterion analyzed by those surveyed in the new Barometer is “earthward”.
“The political criterion is earthward: as compared to 3.31 in 2015, we have 1.80 at present. What we see is a feeling of lack of predictability and instability stemming from the increased number of changes in Romanian legislation introduced through emergency ordinances. The social criterion drops from 3.71 to 2.76 this year, and this indicates the difficulty of retaining and finding quality collaborators, while social dialogue risks departing from the specific reality of each society. As for external factors, we lose a point of the rate and, compared to 3.44, we reach 2.98. Here Romania’s attractiveness as a privileged area of competitiveness is affected by the increase in the cost of the human factor due to the shortage of the workforce. Labour force represents a long-term challenge. For turnover we have a rate of 3.43 and we are reasonably optimistic in terms of the economic growth. The well-being of French companies depends heavily on the health of the economic environment in South East Europe. As far as tax changes are concerned, the rate is decreasing from 3.61 in 2013 to 3.16 in 2018, a decrease that stands for the difficulties of our companies to hire and maintain our employees in the long term,” Francois Coste maintained.
The president of CCIFER also pointed out that “given these results of the Economic Barometer, the economic environment is deteriorating in Romania, but the strategic strengths of the country can represent a long-term competitiveness element.”
French Ambassador Ramis: Romania, to take over presidency of EU Council at important, special moment
Romania will take over the presidency of the Council of the European Union at an important and special moment, when it is a must to negotiate the multiannual financial framework and organize the European Parliament elections campaign, so things already look exciting, on Monday asserted the French Ambassador to Romania, Michele Ramis.
‘Your country has a huge economic potential and a very strong potential for developing bilateral relations. The year 2019 will be intense. Things already look exciting along with the presidency of the Council of the European Union. Romania will take over the presidency in an important and special moment. Romania has to complete legislative projects, has to endorse 210 pieces of legislation on the legislative agenda. It will be a short mandate that will intervene exactly before the European Parliament elections. Romania will have to negotiate the multiannual financial framework and organize the campaign for the European Parliament, too. Romania’s presidency will enjoy the entire support of France. I had a meeting with Mr. President Iohannis, in Sibiu, on 9 May so as to map the lines for Romania’s presidency at the helm of Europe and I believe that exactly in these moments of doubt we must tighten the bilateral relations and place more the emphasis on what unites us rather than on what divides us. We will also have the ‘French-Romanian Season’ to be opened on 27 November 2018, a multi-disciplinary season, with economic, cultural activities a.s.o.. France and Romania do make an important team. We are drafting a lot of projects we are to unveil at the opportune moment,’ Ramis said.
The French diplomat also pointed out that Romania has recorded significant progress since its joining the European Union, in 2007, and yet the confidence of the business milieu is sometimes shaken by the sudden legislative changes that are affecting the stability climate.