Participarea premierului Marcel Ciolacu la Forumul Dezvoltăm România

Speech by Prime Minister Prime Minister Marcel Ciolacu at the Developing Romania Forum

Marcel Ciolacu: Good morning. I would like to first thank Alessandra Stoicescu and last but not least, you, for this opportunity especially since as you said, it was a year full of challenges, both internal and external, with first and foremost economic effects for the countries - especially as Romania is, the country with the longest border with Ukraine. First and foremost, we are living in a breaking news world. Every morning, we notice that dozens of measures have been taken that will deeply affect society, the living standards, and especially your businesses. However, we omitted to talk about the achievements of the Romanian economy, especially your achievements, of the entrepreneurs who sacrificed all to reach this business level, to be competitive with multinational corporations. I want to find the things that bring us together and that Romanian spirit. I tried a project - Buy Romanian, not necessarily a political slogan, or electoral one, but effectively a way of creating dependence or a way of living. From my point of view, we cannot compete - whether we speak about products or services if we do not know how to promote ourselves above all.
Everyone is talking about how the new taxes in 2024, the new law of general pensions came up, and we completed the one on special pensions. We need to be fair with Romanians. No Parliament and no government can come up with retroactive measures, but they create a perspective. I stated and I will further repeat: there will be no tax increases and there will be political stability as this time, irrespective of the talks inside the coalition, we have a duty first and foremost to you, regarding the efforts you made not only in 2023, but also in 2022, it was an energy crisis, a rising inflation, decreasing living standards and we tried to balance all these. Romania assumed in NRRP to enact a tax reform. From my point of view, tax reform observes two principles. We should all stay at the same table, politicians, the government, and the coalition, and decide not just for a short period, but for a medium-term one, what the best solution is.
We will maintain the flat tax as it creates a competitive environment for everybody, without exceptions. It should be the one at this moment: 16 percent. We should have a VAT that we will not raise, as it automatically brings a decline in economic growth, but especially a VAT increase brings inflation and all our struggles over the past months, we should decrease it to a single digit, and pursue an inflation under 5 percent for the next year, or progressive taxation. I do not refute any of the options. Each of the variants has pluses and minuses. We had the flat tax for a long period, it is no longer in place. There are more than 500 various legislative amendments made by the government or Parliament that simply fully amend the principles behind the Tax Code. Tax reform will not have effects, at least in a fiscal year, and we will have to gradually see how we introduce this new Tax Code. First and foremost, I announce that especially after I saw figures for the next budget, there will be no tax increases in 2024, and the fiscal measures we have taken, in addition to creating a competitive, fair environment and deterring exceptions, will have to be doubled, tripled, both by the budgetary system reform, and the fight against tax evasion. All support programs for the business sector will be maintained, we introduced them in the past two years, together with President of the Senate Nicolae Ciuca. I would like us to have an applied discussion as next month, in December, the new budget law will be passed by the Parliament. We will see how we will discuss new programs of support for the business sector in addition to existing ones. As you well know, they are not enforceable until we have the European Commission's agreement to consider them state aid. This year, we will close the fiscal financial exercise 2016 -2020, with a three-year prolongation. There were efforts, especially in these months for the state to come up with a 15 percent co-funding. If we close the financial exercise by 54 percent, this time, the direct financial aid for this year will have figure 9 in front, and by March, I think that we will close the financial exercise with more than 97 percent, 98 percent, which is a very important signal. We had to quickly find out some administrative measures. It is rejoicing to see that the local administration has a certain capacity to absorb European funds. The great challenge will be in 2024, 2025, and 2026 when the NRRP and the actual financial exercise overlap. Without a reform of the budget system, we will not succeed in having an absorption and it is a sum close to 70 billion euros.
I think that at the last coalition meeting, we decided together that we would have a meeting with the business environment, to discuss aid schemes, and with SMEs, to see the new programs. And also, next month, we will have to have a meeting with Mr. President of the Senate Nicolae Ciucă because we are facing a labor force crisis, to decide on the contingent of foreign workers for Romania in 2024, but above all lets see what administrative measures we take so that we can bring this contingent of foreign workers to Romania. I want to maintain that 7 percent on investment in the budget law, especially since there are so many investments from European funds as well. Not very many amounts were withdrawn from NRRP, the largest amounts in NRRP were allocated to the Transport Ministry, Moldova Motorway, as it was the only mature project, we hope to set things in motion for the M6 project as well. We also hope to make functional by March 1, the remaining projects, the call for projects, and the whole computer system to support the call for projects. We need to make things clear: your responsibility is to pay wages for hundreds of thousands of employees, my responsibility is to continue all reforms, those included in the NRRP, and those which we consider to be urgent, and to prepare a more robust budgetary system and more effective at this moment, to cope with the big challenge - an absorption of all European funds of nearly 70 billion euros. Thank you once again for the invitation!

Source: Gov