No vie en rose in Romania anymore, but investors await government measures

The first institutions to react to the recession in Romania were companies, and not the government. Those companies which managed to cut costs even before the recession hit are in a better position now. The government should have taken similar measures in advance, said Gatej. Structural cost-cutting measures were needed last year and even the year before, she added. Henri Paul, the French ambassador to Romania, said that investments in infrastructure were the focus in France and that Romania should do something similar. “The relaunch of the economy was brought about by investments, not by consumption,” said Paul. Moreover, Romania should do much more to boost the auto sector, which could turn the country in a core area for the industry. But it is important to see how the country will position itself while focusing on a single industry, said Cristian Ionescu, managing director of Coface Romania. He added that Romania was unlikely to emerge from recession through the measures the country took, but would need external support. The main four candidates in the presidential elections coming up later this month have each made proposals of fiscal and anti-crisis measures, including keeping the flat tax and possibly increasing VAT, as opposed to a progressive tax and differentiated VAT on products and services, commented Dana Gruia Dufaut, lawyer at law firm Gruia Dufaut. Dan Bedros, president of the French chamber of commerce and industry in Romania, also emphasized the importance of infrastructure, saying the state could find multiple solutions, including concessioning its highways. Some of the economic increase in Romania was fueled by the introduction of the flat tax, which has also decreased the black market, said Gatej. But there are still large companies, making profits on the market, that pay their employees cash in hand, said Jean-Pierre Vigroux, managing partner of Mazars Romania and moderator of the event. This makes tax collection more difficult and decreases the level of taxes collected by the government, leaving less money for state investments. “Let's pay our dues! Let's accept a slight drop in profit in the present so that the country wins on the long term,” concluded Vigroux.