The Romanian State is neck deep in debt towards developers

• The crisis has caused far less problems than the amounts that entrepreneurs have yet to receive from the state for public construction works delivered

Many construction companies have financial troubles and resort to staff layoffs because of the amounts they are owed by bodies of the central and local authorities. Laurenţiu Plosceanu, the chairman of the Romanian Association of Construction Entrepreneurs (ARACO), has stated: "As yet, we do not know the exact amount of the unpaid receivables that entrepreneurs have yet to receive for the public works they executed. In the last three months, a lot of payments have not been made, and presently a lot of companies are beginning to experience serious financial problems. This is the main factor which lead to the difficult situation that the construction sector is now in and to the massive layoffs".

The state and the local authorities have carried out large infrastructure investment programs during 2006 and 2007. Many of the investments tendered in 2007 (which from this point of view, was a record year, which saw a 35% growth in the construction sector) have been started and the effective payment of the works will take place in 2008. Laurenţiu Plosceanu has told us that the situation for 2009 is even more alarming as the State authorities are now showing signs that they no longer have sufficient funds for infrastructure and they wish to cut down the scheduled investment budgets by 20-30%.

The construction sector is also suffering from the lack of liquidity needed for carrying out the day-to-day activities for the private beneficiaries, who no longer had resources to continue or to begin all the planned projects. The cold season only ranks third in the list of factors affecting the constructions sector, as, usually, winter causes a drop in temporary employment.

According to Mr. Plosceanu, The Constructors" Social Security House expects a 10-15% increase in entrepreneur requests for social security funds, starting January 1st 2009.