GARANTAREA / FLORIN POGONARU, AOAR: We need to have a European banking system

• The state can no longer guarantee the branches of the foreign banks

The banking system, which also comprises the guarantee segment, needs to be amended, in order to create a European banking system, considers Florin Pogonaru, the president of the The Businesspeople Association of Romania (AOAR), who said: "The banks have their own business. Right now, what predominates is the fear to take chances and to lend easily. Hence, we once again see the reason behind having some guarantee funds. The banking system, and this means the guarantee system, must also be changed. The guarantee system can no longer be national. The state can not guarantee the branches of Greek or Austrian banks. The state needs to work on this, and there are even steps being taken in that direction, on a European level. If the Germans do not accept unified bonds, they are about to accept this unfragmented European banking system".

According to him, we have every interest in avoiding the Greek contagion and the fragmentation of the system. A European guarantee scheme is the only structure that will ensure cross-border financing for Romania without disruptions, Florin Pogonaru considers.

• The disruption of the value creation chain - the biggest problem of the economy

The biggest problem facing our economy and SMEs, in particular, is the disruption of the value-creation chain, the AOAR president said: "At the end of these chains, which were made up of several links, including sub-suppliers, were exporters. When domestic consumption fell, exports remained the only engine for growth and everyone started exporting. We have been exporting and we still are, without creating value, just for the sake of selling. Exports are a good thing, but if we export just for the sake of it, we run the risk of des-troying value.

Florin Pogonaru considers that we should reinvent Romanian sub-suppliers, including those working with international companies. In his opinion, in order to do that, there are things which need to be changed related to policies, an example of this being the reconsideration of the state aid for SMEs policy: "We've been focusing heavily on the state aids granted to large companies like < Ford > or < Bosch >, but we do not have state aid schemes small and medium enterprises."

• Bankrupt companies used for acts of corruption

The only thing with which we can be proud of, after all this time, is that it takes less time to set up new companies, said Florin Pogonaru. According to him, it is hard for a company to leave business, there is no bank-ruptcy law, the bureaucracy for winding up a company is huge: "This creates a market where there are thou-sands of zombie companies that don go away. The unused firms begin being used for various scams such as avoiding the payment of VAT. These are mechanisms for corruption".

No measures to boost the economy were taken in this period of crisis, he claims, pointing out that our country has had a series of measures which actually hindered the growth of companies, such as the VAT increase or the preservation of the Social Security contributions (CAS).

• We need a new taxation system

On the fiscal side, there is an imbalance between the excessive taxation of labor and the capital taxation level, Mr Pogonaru also said. "As long as this happens, the tax system of the country is not well calibrated and, thus, we need a different system of taxation. The authorities should take into account that we need jobs and must take into account how labor is taxed.

In addition to other issues, at the moment, the business environment is also facing the chaos related to the absorption of European funds.