Ooni Koda
  1. Home
  2. /
  3. Newsfeed
  4. /
  5. AmCham: The prolongation of political tensions has unfavorable...

AmCham: The prolongation of political tensions has unfavorable consequences for the investment climate

December 14, 2021

  The prolonged political crisis has unfavorable consequences for the investment climate, and the beginning of 2022 is announced to be a period characterized by overlapping shocks in the supply and production chains, already felt in industry, reads a press release by the American Chamber of Commerce in Romania – AmCham Romania.   “As the opportunity to start consolidation processes and deep reforms in 2021 was lost, shortening the window of opportunity that Romania could have benefited from between two electoral cycles, it is all the more important that in the next two years there is political will, commitment and capacity to respond adequately to the current crises but also to recover the gaps that continue to affect Romania’s potential for development and growth of its economic relevance at regional and European level,” the American investors argued.   In the context of deepening crises affecting Romania in recent months, AmCham Romania reiterates its call for accountability and reprioritization of the public agenda around the solutions Romania needs to overcome current challenges, reduce human losses and optimize its budgetary and macroeconomic situation.   Macroeconomic risks that are likely to create major imbalances in the absence of a coherent and long-term sustainable approach, are, according to AmCham members, ascending inflation, and the danger of an inflationary spiral, rising sovereign debt, high dependence on energy imports, maintaining a budget deficit, already very high, negative demographic changes, all amplified by the impact of the pandemic and the efficiency of its management.   On top of this, there is an intensification of the risk perception on the international financial markets, which would penalize the Romanian economy faced with the persistence of twin deficits.   The construction of the state budget for 2022 is in AmCham’s vision one of the priorities on the economic agenda that has been delayed due to tensions and negotiations in the political arena.   Moreover, the current political moment intensifies the risk of populist measures that will be reflected in a deepening of the structural budget deficit, already one of the highest in the region, perpetuated even in periods of very high economic growth such as the case in 2021.   Possible increases in public spending are currently unsustainable and impossible to cover from budget revenues and will end up in an increased level of public debt, more need for loans from the financial markets and the risk of ad hoc fiscal measures, with unpredictable effects. Mitigating the impact of ascending inflation, of rising energy prices and of other products and services, cannot be done through measures that transfer, even for a limited period, the burden from one category of taxpayers to another.   The complicated context that Romania is going through makes even more necessary a rigorous process of cross-party analysis and consultation on the construction of the budget for 2022 and leaving behind the practice of negotiating the budget on purely political criteria.   In AmCham’s view, the imperatives for the budget planning and the 2022 reform schedule include: Continuation of fiscal budgetary consolidation, especially as this is a conditionality assumed via PNRR and through the excessive deficit procedure in which Romania finds itself. Maintaining productive public investment allocations, at least at the level of allocations for 2021. Stabilizing public spending and limiting the commitment of additional spending. Increasing the degree of budget revenue collection by modernizing and digitizing the tax administration. Improving the financing of the very high current account deficit by attracting foreign investment and absorbing European funding. Ensuring a competitive fiscal framework by maintaining the single quota system and applying it equitably, a system already proven to be adequate for the Romanian economy and attractive for investors. At the same time, measures are needed to encourage the attraction of high value-added investments. Reducing the trade deficit through priority investments to increase production capacity in the industries responsible for the largest volumes of imports. Maintaining a favorable macroeconomic outlook, crucial for maintaining the ratings of sovereign rating agencies, and implicitly for attracting capital.

Read in full - click here
Junot Díaz, Tracy Chevalier, Michel Bussi: Iași literature festival announces first guests at 2025 edition

Pulitzer Prize winner Junot Díaz, Tracy Chevalier, the author of the international best seller Girl with a Pearl Earring, and French author Michel Bussi, known for his widely translated thriller novels, are among the authors set to attend this year’s Iași International Literature and Translation Festival (FILIT), the largest literary festival in the country. They […]

A Taste of Nature: Michelin-Starred Chef Theodor Falser brings his culinary artistry to JW Marriott Bucharest

Bucharest is about to welcome a culinary moment like no other. This September, the JW Marriott Bucharest Grand Hotel will host Michelin-starred Chef Theodor Falser - a name synonymous with nature-inspired haute cuisine - for three exclusive evenings that promise to delight the senses and tell stories through food. The Chef Who Cooks Nature Theodor […]

Government: IMF backs Romania’s fiscal measures, sees 1% GDP growth in 2025

The International Monetary Fund (IMF) has endorsed Romania’s latest fiscal measures, forecasting that the economy will grow by 1% in 2025 and 1.4% in 2026, the government said Friday, September 12, after talks with a visiting IMF delegation. The delegation, led by Joong Shik Kang, met prime minister Ilie Bolojan in Bucharest to discuss the […]

Romanian theater stages robot-only performance exploring technology and e-waste

The George Ciprian Theater in Buzău has unveiled “E-Waste E-Motion,” the first performance in Romania in which all characters are played by small autonomous robots, blending art, technology, and sustainability in an experimental theatrical project. “E-Waste E-Motion” is part of a broader artistic research initiative supported by the National University of Theatre and Film (UNATC) […]

Emmy Stoel appointed as the new General Manager of InterContinental Athénée Palace Bucharest

With extensive experience in the luxury hospitality sector, gained as General Manager of Sofitel Legend The Grand Amsterdam and Hotel Okura Amsterdam (LHW), as well as in various Director of Operations and Business Development roles, Ms. Emmy Stoel is a seasoned professional whose career reflects a deep passion for excellence in guest service, having successfully […]

Update: Six knives found on woman trying to enter Romanian Parliament

Update: The woman made her first statements on Friday afternoon after being questioned. According to Digi24, she told journalists outside a police station in Bucharest that the items were family heirlooms from the Soviet era, and that she...