The economic stimulus plan: "nothing to write home about"

• Pambuccian: "Don"t expect anything spectacular. There is a major fear of < taking the bull by the horns >"

• Professional associations: "We are not aware of the contents of this plan. No one consulted us. We are finding out from other sources what this is all about"

Much ado about nothing.

These four words are very accurate to express what happened to the stimulus plan launched by the Government just a few months after its announcement.

"Do not expect anything spectacular, there is an extraordinary fear to take the bull by the horns", Varujan Pambuccian, one of the deputies who worked on the plan, said disappointedly.

"I do not like it", said Varujan Pambuccian, who claimed that the economic stimulus plan "does not feature any radical stimulus measures, just a few minor adjustments".

"Some of these measures will become applicable right away, whereas others will be implemented after a certain delay, considering the Tax Code. Do not expect anything spectacular. There is an extraordinary fear of taking the bull by the horns".

Varujan Pambuccian, who is the leader of the deputies of other national minorities aside from the Hungarian minority, said that one of the issues that were discussed in the working group was the reduction of the flat rate tax: "I have always been a supporter of cutting the flat rate tax to 8%. The talks on this matter swung and back forth. Just as a little progress was made, something would come up and stop everything dead in its tracks".

Varujan Pambuccian said he could not offer any details on the contents of the plan: "This plan could be announced on Monday or Tuesday. However, I hope it will be discussed again on Monday morning. I can"t be more specific because details can still change".

Judging from the statements of Varujan Pambuccian we can draw the conclusion that we are talking about a stimulus package that would come into effect gradually, and would not contain any daring steps to tackle the crisis.

The plan looks more like a compromise between its authors - PDL, UDMR, UNPR, the group of minorities, other than Hungarians - with each side having a different view on what should be done for the future of the country, and who are also very careful not to upset each other, since the Government will soon go through a vote of no-confidence initiated by the opposition in the autumn parliamentary session.

If we take into account the fact that the Hungarian Union (UDMR), UNPR and the minorities had threatened to withdraw their support of the government if their plans for economic recovery were not taken into consideration, it remains to be seen how they will behave from now on: like a conglomerate that is only interested in clinging to power or with dignity, and giving more thought to the real issues of the country.

The professional associations are disappointed: "We don"t know anything, no one has consulted us"

BURSA has spoken to the biggest Romanian professional associations about the economic stimulus plan. The leaders of the professional unions all had the same thing to say: they are not aware of the contents of the stimulus plan and they are extremely disappointed in the fact that they were not consulted by the government in the drafting of the plan and they had to find about it from their sources, just like journalists, even though the Government had initially promised it would cooperate with them, to ensure the success of the plan. See below the statements on the matter made by leaders of the various professional associations.

Dan Matei Agathon, spokesperson for the Alliance of the Professional Associations of Romania: "We don"t know anything. We are going to meet with PM Emil Boc to discuss the minimum wage, and perhaps then we are going to find out more about this. We were not asked to participate in the drafting of these measures. We are still waiting for them to see what they look like".

Cristian Pârvan, the secretary general of the Romanian Association of Businessmen: "What plan? Today it"s August 27th, (ed. note: Friday) and it"s supposed to be presented on September 1st. Who knows, maybe they"ll ask us over to consult with us on August 31st, at night. Let"s be serious, this plan seems to have been devised just so they have something to talk about. They"ll just pass some rushed measures, without any norms for their implementation and without any impact assessment. The people in the government are more concerned with who would be reshuffled than with the issues of the economy. When their seats are threatened, do you think any of the ministers in the government cares about the recovery of the economy? They"ve got their hands full going to lunches and talking to people...".

Ovidiu Nicolescu, the chairman of the Romanian Council of Small and Medium Private Enterprises: "I have no information about this plan. I"ll be meeting some people on Tuesday in order to try and find out more about it. This set of measures was devised without consulting with the professional associations, which is abnormal. They said that they would ask for our input when they had something more elaborate to show us".

Constantin Vasilescu, the prime vice-president of the "UGIR 1903" General Uni on of Romanian Industrialists: "We haven"t seen it. We were not asked to participate in any discussions. UGIR 1903 has proposed 72 stimulus measures, but that fell on deaf ears. We"ll let you know when we get more details. What is certain is that this kind of behavior from the Government is unacceptable. Just look at how they have humiliated journalists and artists, bymaking them wait in line to pay their social security contributions. If they treat society"s cream of the crop like that, how can anyone expect them to show any respect to anyone?!"

Costel Olteanu, the chairman of the Romanian National Union of Privately Owned Professional Associations: "We did not see these stimulus measures and I"m quire certain that I am not the only one involved in the professional association field that is in this situation. No one talked to us, we don"t know what this plan looks like. We proposed 28-30 measures, but the Boc government is only interested in politics, not in economic recovery policies!"

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What stimulus measures may be included in the plan

Since the provisions of the stimulus plans have not yet been made public, we hereinafter present some of the ideas that were hinted the most frequently by ministers and members of the parliament.

- A more flexible Labor Code

- A change of the minimum wage

- The elimination of the minimum tax and the introduction of the lump sum tax

- The listing of state companies on the Bucharest Stock Exchange

- The sale of minority stakes in several state owned companies

- The issue of a financial stimulus for fiscal receipts

- The keeping of the current rate of VAT and of the flat rate tax at the current levels until the end of the year

- A law on holding companies

- The modification of the VAT payment procedures and the simplification of the procedures for the payment of the state"s debts towards public companies

- The exemption of newly created companies that create at least 25 jobs from the payment of taxes on reinvested profit

- Public-private partnership investment projects

- Increasing the capitalization of the funds for guaranteeing SME loans

- Less strict criteria for state aids

- Tax breaks for construction materials