Emil Boc versus the list of arrears makers

As the Romanian state is going increasingly into debt, state owned and private companies are accruing major debts to the state budget. In the first six months of the year, the arrears of the major debtors to the state budget have increased by about 1 billion lei, from approximately 5 billion lei, at the end of last year, to 6 billion lei at the end of H1 2011. The major debtors owed about 5.5 billion lei to the state budget at the end of March 2011.

The National Coal Company (CNH) is "clinging" to its top spot among the largest debtors, with over 1.86 billion lei owed to the state budget, according to the list of major debtors, published a few days ago by the National Tax Administration Agency (ANAF). The arrears of the CNH have increased over the last three months, from about 182 million at the end of March 2011.

The National Railway Company "CFR" SA is making "progress" as well, being the second largest major debtor, with approximately 998 million lei in arrears, up from 922 million lei at the end of Q1 2010.

The next two spots in the chart are held by two other companies which are part of the Romanian Railway Company: "Electrificare CFR" SA and Societatea Naţională de Transport Feroviar de Marfă "CFR - Marfă" SA. The former has accrued in just three months 261 million in debt, because it didn"t appear on the list published by the ANAF three months ago. The debts of "CFR Marfă" have increased from 221 million lei in March, to 249 million.

The fifth largest debtor is the National Lignite Company Oltenia SA, whose debts have increased from 142 million lei in March 2011 to almost 190 million lei, at the end of June.

"Telecomunicaţii CFR" (139 million lei), "European Food" (134 million lei), the Romanian Post Office (104 million lei), "Silo Impex 2007" (91 million lei), Societatea Naţională "Îmbunătăţiri Funciare" (76 million lei), "Labormed-Pharma" (66 million lei) and "Galaxy Tobacco" (62 million lei) are the following seven companies that appear on the list of major debtors to the state budget.

Daniel Ionescu, ph. D. in economics, said that the main reason behind this constant growth of the arrears, "which drags the major taxpayers into its saraband", is the fact that salaries continue to account for just a small part of the revenues generated by the Romanian economy, "due to the raise of the VAT rate by 26.3% (ed. note: from 19% to 24%), which has obstructed the efficiency of businesses in the Romanian economy".

In his opinion, the increase in the number of large debtors also reveals the deep decline of the Romanian economy: "The phenomenon isn"t only confined to major taxpayers, as it is also discernable in the case of other taxpayers who, having exhausted their cash reserves or having major trouble in making their payments, are generating fiscal and quasi-fiscal arrears, thus leading to an increase in the public debt. The quick increase in the number of companies that are generating arrears should be one of the strong signals that the government should revise its economic and fiscal policies, especially when it comes to streamlining the capital flows in the real economy".

Daniel Ionescu considers that "the natural solution for escaping the doldrums of arrears and public indebtedness is readily available and consists of two factors: the acceleration of the creation of jobs in the real economy and the development of an efficient policy when it comes to absorbing European funds".

The outstanding amounts owed the general consolidated budget, on March 31st, 2011, by major, medium and small companies, have reached 24.74 billion lei, of which almost 15 billion lei were debts towards the state budget, as stated by the representatives of the National Fiscal Administration Agency.

At the end of 2010, these arrears amounted to approximately 22.33 billion lei, of which arrears to the state budget accounted for over 13 billion.