UGIR: Romania’s sliding into payment incapacity, quite plausible

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Romania might get into payment incapacity if worrying signs keep coming from economy, and therefore wages and social benefits might no longer be honored, president of the Association of Romanian Industrialists – UGIR, Ioan Cezar Coraci said on Thursday.
„If the current Government continues this way, without a concrete anti-crisis plan, with no real incentives for the economy, at a certain moment we might be unable to pay salaries to public servants and neither the unemployment benefits or other social allowances,” said the UGIR president.
Coraci stated that in April the industry fell 15 percent, as to 13 percent over the first three months of the year, which means that „we are just at the beginning of the crisis.”
„Under these circumstances, none of the plans agreed upon with the Government to stimulate the economy has been applied, and even more than that, we have a budget that was approved before the anti-crisis plan, and not even this latter plan is put into practice,’ said Coraci.
He pointed out that banks are forced to take money out of the country for investments in other economies, at a time when Romanian economy is characterized by a „total lack of predictability”.
„Banks prefer to send a part of their money to their home countries because investment projects there are clear. In Romania, the Government transferred the money to the local administrations, but it did not reach into real economy,” explained the UGIR official.
According to data of employers’ organizations, the Romanian economy did not stabilize in the first four months of the year, despite the smoothening of the decline slope, and the measures promised by the Government were either tardy or not applied at all. Also, state budget revenues fell by 6.6 percent over January – April and VAT collections fell by 14.2 percent. Also, spending grew by 11.7 percent, and staff expenditures advanced by more than 16.2 percent.
„These signs are particularly worrying, and if the Government fails to implement an efficient crisis management plan that should also be implemented, the repercussions will be severe,” concluded Coraci.
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