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What the newspapers say: October 29, 2009

de C.B.     HotNews.ro
Joi, 29 octombrie 2009, 8:27 English | Press Review

President Basescu promised to redraw in the case the economic crisis accentuates and creates further unemployment: the current official rate reads 6.9%, with numerous redundancies announced for the next two months. Elsewhere in the news, the Romanian Government decided to respect the budgetary deficit targets and not request the IMF for postponing the deadlines. The press also reads that Romania might need to borrow even more money to cover budget deficit.

President Basescu promised to redraw in the case the economic crisis accentuates and creates further unemployment, Cotidianul reads. Company managers from four sectors - constructions, retail, manufacturing and services - say the economic activity will continue to shrink and an increasing unemployment is to be expected. The official unemployment rate, recorded by the Romanian National Employment Agency, is 6.9%, meaning 600,000 people, but analysts claim over 1 million people are currently unemployed.

According to a study performed by the Romanian National Statistics Institute (INS), the companies employing over 500 persons will experience redundancies in the near future. A study conducted by employment agency Manpower, published in Financial Times, shows that companies from half of the developed and emerging economies worldwide will start to hire staff, backed by an improving economic situation. The only EU countries to experience further redundancies are Romania, Ireland and Spain.

In the similar period of 2008, the Romanian unemployment rate read 3.9%. But analysts say that the 6.9% rate presently recorded is not accurate, since many people do not register with employment agencies, plenty work in the underground economy and much more work abroad. Specialists say 10% would be a more accurate figure, but estimates do not make official records. Romanian incumbent president Traian Basescu declared previously that he will not candidate for a second mandate if the unemployment reaches 10%.

This year, the French group Gantois will sack 170 Romanian staff; the National Society Coal Oltenia announces 470 redundancies; according to the National Employment Agency, October will bring 9,445 redundancies, adding 2,500 more to the last two months of the year. E.On Gaz will dismiss 247 staff. Several mass-media institutions are expected to fire staff massively after the presidential electoral campaign and 100 staff working with the Child Protection Authority in Vaslui (East) will be sacked.

The Romanian Government decided to respect the budgetary deficits targets, i.e. 7.3% of the GDP, and not request the IMF for postponing the deadlines for the unique income scheme and for the fiscal responsibility law, Romania Libera informs. The decision lays pressure on the state staff expenditure, which cannot be solved now through an unpaid and forced 10-day holiday, since a) it is too late and b) the decision is blocked by a complaint at the Constitutional Court.

The decision comes after Romanian Finance minister Gheorghe Pogea met with IMF, World Bank and the European Commission representatives. According to Pogea, the fiscal responsibility law is finalised and there will be further consultations on it with the IMF, EC and WB.

Gandul cites Gheorghe Pogea to have said that Romania's luck is that it can borrow even more to cover the budget deficit. The condition is that all money is used for public investments. In August, Romania's public deficit amounted to 140 billion lei and during the first nine months, Romania paid interests over one billion euros to the banks lending the country. Romania needs now to cut 1.6 billion lei from the public sector. If Romania does not respect the IMF agreement, not only will it send a negative message to investors, but the financing will become costlier.  


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