A 7-8% drop in the economy would mean bankruptcies and reorganising some economic sub-sectors, a "big catastrophe" for the business environment, according to president of Romanian Businessmen Association (AOAR) Florin Pogonaru, quoted by press agency NewsIn, after talks with Government representatives. During the meeting, Romanian minister of Finance Gheorghe Pogea told business environment representatives that the Government will request the IMF to accept a 7% budget deficit for 2009, according to Romanian press agency Mediafax.
"For businesses, a drop from + 7-8% to minus 7-8% means a big catastrophe, it means bankruptcies, reorganising some economic sub-sectors. We like it or not, this is the situation. We have to be prepared for it. The Government mustn’t misuse its ammunition made up by EU funds, money from international institutions, to save small and medium companies facing difficulties", AOAR president said.
AOAR secretary general Cristian Parvan stated that "the minister of Finance told us he would ask the IMF for a 7% budget deficit, due to the economic contraction, which proved to be bigger than expected, namely 7-8%. But it will employ investments as well, to help the economy to restart.
The PM and minister of Finance told business representatives they will try to preserve the actual level of the VAT and unique income tax, but the minimum tax will stay as well because of the lack of budget resources.
Romanian PM and the minister of Finance indicated, according to sources, that the Executive will be forced to cut public spending, attempting to bring favourable conditions to the business environment at the same time.
Romania's current budget deficit aim for 2009 is 4.6% of the GDP.