The Crisis of the national "anti-crisis" society

• It seems the government will only accept the creation of a national public works company if it pays taxes just like any other business entity

• Professional associations and unions seem to be willing to compromise on the number of taxes, but not on the anti-crisis society receiving preferential contracts

• Discussions are in a deadlock because of the law of the state budget and political instability

UGIR 1903"s proposal for the creation of a national public works company which would use laid-off workers exclusively (editor"s note: an initiative that is also supported by social partner CNS Cartel ALFA) seems to have received a preliminary approval from the Government, but it is delayed by political problems and "amendments", which are causing concern among the social partners.

The initial draft as formulated by Marius Opran, the executive chairman of UGIR 1903, for the creation of a "National Company for large construction works using laid-off workers" (CNMLC) provisioned that this company would not pay any taxes and would receive the contracts for public works without any auction.

CNMLC also wants loans with subsidized interest, in exchange for the commitment to have 75% of its workforce consist of workers laid off as a result of the economic crisis and with the obligation to reinvest earnings.

The representatives of UGIR 1903 claim that in order to overcome the crisis, the creation of the CNMLC is imperative, in order to stimulate investments in infrastructure, construction and public works, and to benefit from the wave of expected layoffs caused by the economic crisis.

The Government would have nothing against the CNMLC, but it does not feel like giving up on the tax revenue it could collect from the new company, especially as the CNMLC has even now in this incipient stage, great ambitions: the construction of a highway, of a port in Bucharest and of the subway line to Otopeni.

Sources from UGIR 1903 claim that the parties could reach a compromise if the Government would accept to cut the number of taxes, that most companies feel is "suffocating" them, regardless of the field they are operating in, and they would like to bring up the subject of an overall fiscal relaxation.

The authors of the project are even willing to "back off" on the matter of public works granted without tender offer, but they would still like to have the exclusivity when it comes to large projects.

The Government has been slow in coming forward with an answer because of the problems raised by the drafting of the state budget and of the political instability caused by the recent "Oprea" case, our sources claim.

• Corâci: "The economy is frozen by the crisis"

The chairman of UGIR 1903, Cezar Ioan Corâci, criticized yesterday, during a press conference, the Government"s lack of initiative when it comes to tackling the problems generated by the crisis and has claimed that right now, "Romania"s economy is in a deadlock".

Mr. Corâci feels that Romania is not just headed towards a substantial economic slowdown, but rather to a full blown recession.

"In case the members of the government are do not take some quick measures, the effects of the economic and financial crisis will be far worse than anyone could predict", said Corâci.

The UGIR leader warned that this "scenario" would dramatically affect the economy: "Because of the lack of capital, any companies that shut down in the upcoming periodit will find it impossible to relaunch their activity".

The head of UGIR 1903 considers that Romania urgently needs to take adequate action, including the cutting of expenses in public administration.

"The country is on the brink and the Government is not doing anything", Corâci said.

UGIR 1903 has forwarded to the Government its suggestions for a set of actions to be taken against the crisis, with the motto "Buying Romanian products, helps keep Romanian jobs".

Some of the fiscal steps suggested by UGIR 1903, include: the reduction of wage taxes, yearly payment of profit tax, the elimination of excessive taxation and the exemption of employers from paying aids for people with disabilities. UGIR 1903 also proposes the elimination of pollution taxes across the board and that companies create their own environmental protection fund, in order to solve their environmental issues.

• Păsculescu: "We must increase the capital of CEC and Eximbank"

In turn, Prime Vice-president of FEPAIUS, Mihai Păsculescu criticized the lack of cooperation between various ministries and claims that the Ministry of Finance doesn"t get any support from the other ministries and from politicians.

"Political parties want to show off the fact that they have their own solutions and strategies in time of crisis", Păsculescu stated.

The FEPAIUS leader has mentioned that at the moment, the business environment needs a stronger banking system able provide loans for current activities and companies investment programs.

"We support the increase of Eximbank and CEC"s capitalization", said Mihai Păsculescu.

Concerning CEC, the leader of FEPAIUS feels that the former, "the only Romanian banking institution left", should cofinance up to 70% of loans from European funds, and Eximbank should move from under the supervision of AVAS (The Authority for State Assets recovery), under that of the Ministry of Finance.

In order to help improve business conditions, the representatives of UGIR 1903 have suggested, among other things, that Eximbank offer SMEs loans for exports and investments at half the interest rate of commercial banks.

• Coupons for the acquisition of chemical fertilizers

As the inorganic fertilizer industry is "choking" as a result of a dramatic drop in orders associated with the economic and financial crisis, its representatives request the introduction of coupons to farmers" purchases of fertilizers.

The representatives of UGIR 1903 claim that this would thaw the inorganic fertilizer market, and they once again warned that a food crisis is looming, one that Romania is not at all ready to face, and said that Romania"s agriculture needs massive support.

The leaders of UGIR 1903 have also requested the support of the "industrialization" of gas produced domestically - with large volumes of gas to be directed towards the fertilizer industry as well, and not just domestic consumers.