PM Bolojan: Gov't to no longer approve budget of companies recording losses but having no restructuring plans

 Prime Minister Ilie Bolojan on Thursday said Romania spends around 150 billion lei more each year than it can afford, noting that this amount is roughly equivalent to the total public sector wage bill.'Think about it, because we have spent more than we could afford over these years, we have had to take out increasingly larger loans each year. And since those granting us these loans realised that Romania is not being managed properly and that there is a risk it might not repay the money, what happened every year? Our national credibility declined, our rating dropped, and as a result, our interest rates went up,' Bolojan told Antena 3 CNN.He mentioned that Romania is paying interest rates of 5.5% to 7% per year, in euros or US dollars, higher than other countries in the region, which happens 'when confidence in the way a country is managed is low.''We must reduce the loans we take. We will be forced, like other countries, to continue borrowing, because you can't stop from one day to the next. But what must Romanians understand? Each year, we spend around 150 billion lei more than we can afford, about 30 billion euros. Think about it: the total public sector wage bill in Romania is about 150 billion lei. So if Romania, let's say this year, had carried out its investment plans and behaved normally, without taking on those loans, we wouldn't have been able to pay a single public sector salary. People must understand this, it's no joke,' Bolojan explained.He added that this is a reality 'any prime minister or government will have to face,' explaining the measures taken by the government to increase certain taxes or to cut down public spending.The prime minister said he does not find it acceptable that, from 1 January, Romanians will pay higher property taxes and that this money should go not into investment but into unjustified salaries.   Bolojan alos underscored that he will no longer approve the budgets of companies that are recording losses but have no restructuring plans."In today's government meeting, I once again drew the attention of the ministers that I will not approve budgets of companies that are recording losses but do not have any restructuring plans, plans to reduce losses incorporated into the budget. Because these plans are included in the directors' management contracts. You are a director, very well, you get your salary, but how do you reduce losses? (...) The ministry, the supervisory authority must request this reduction plan, as the law provides. And the Ministry of Finance will not approve these budgets until it sees the plan. And the plan is included in the management contract," the Prime Minister told Antena 3 CNN private television broadcaster.He mentioned that there are companies or mayors who have not done their duty and have put the government in a "fait accompli", so that the Executive bears the excessive expenses or "negligence", but he stressed that he will not allow such situations anymore."We now have a situation at the Ministry of Transport, in the CFR (Romanian Railway Company) area, where every year - my more experienced colleagues tell me - the same thing happens. They don't have enough money in their budgets for subsidies to CFR Calatori (CFR Passengers branch), for example. CFR Calatori doesn't pay the infrastructure usage fee to CFR Infrastructura (CFR Infrastructure). And that's when the blockages and problems start. People don't get their salaries anymore and so on, generating pressure for the Government to give them some more money. Every year they used to receive a billion, in the fall, in subsidies, to solve these problems. But at the beginning of the year they didn't know what the situation was? We effectively no longer have the resources to grant money for these subsidies," said Bolojan.The Prime Minister also stated that it is "abnormal" to have stability and "performance bonuses" in the management of companies that are recording losses."This package, which caps these indemnities, has only just entered into force. It is true that it has effects, but for the future. Because all these managements, for the most part, are based on contracts that are concluded in a sealed envelope. It is not a problem that someone earns well in a company. The problem is whether they do something to justify those good earnings. If the company has losses, if the losses do not decrease year by year, but increase, it is abnormal to have stability in the management of those companies and performance bonuses," Ilie Bolojan also said.  (Photo:https://gov.ro/)