Romanian Cos Need Optimism To Overcome Crisis – PM

"While everyone talks only about the crisis, about local and global economic disasters, Romania needs a note of optimism, people need to see there are still positive things like the European funds," Boc said at the contract signing for large investments within the Sectoral Operational Program on increasing economic competitiveness.

The total sum of the signed contracts is higher than EUR30 million, and beside that, Romania has for this year EUR80 million to support small- and medium-sized enterprises, Boc said. The total value of financing available to SMEs through this program amounts to EUR200 million.

The prime minister reminded that companies may also benefit in 2009 from a minimis state aid of up to EUR200,000, from a budget of EUR20 million for this support.

The government will negotiate with the European Commission and the International Monetary Fund the tax exemption of reinvested profit, an incentive that should have been introduced in April – May, Boc reiterated.

End June, Boc said the government will negotiate with the IMF and the EC tax exemption of reinvested profit, although being constrained by the budget deficit targets imposed by the two financial institutions.

The EC urged the Romanian government to bring the budget deficit below 3% of the GDP by 2011, from 5.4% of the GDP in 2008.

Romania negotiated with the IMF a budget deficit target of 4.6% of the GDP in 2009. Computed based on EU methodology, the budget deficit target is of 5.1% of the GDP.

According to the convergence program, Romania’s budget deficit has to be gradually reduced from 5.4% of the gross domestic product in 2008 to 2.9% of the GDP in 2011.

In May, Romania and the IMF signed a EUR12.95 billion two-year stand-by arrangement, as part of a EUR19.95 billion financial support package that also includes funds from the E.U., the World Bank, and the European Bank for Reconstruction and Development.