Foreign Investors Council: Hazardous Changes To Affect Economy Deeply

The members of the Foreign Investors Council said they are disappointed by the political discourse which is trying to suggest that ”foreigners” are looking to harm Romania.

“Public and political discourse keeps coming back to the role played in the economy by Romanian companies with foreign capital. This only serves to antagonize large companies with small ones, Romanian companies with foreign ones and the private sector with the public one. A divided nation is not easier to govern. A divided nation is simply a poorer nation,” FIC said in a statement Thursday after the Romanian government announced plans to introduce new taxes through an emergency government decree.

Foreign companies in Romanian employ 1.3 million people, meaning a quarter of the total workforce, and they are responsible for half of the global turnover in Romania and more than 50% of exports. These companies have an important contribution to the state budget in terms of income tax, profit tax, social contributions, VAT, excises and other special or local taxes.

Although this information about foreign companies is public unfounded accusations abound, differ only in terms of tone and they all focus on the same thing: profits. If foreign companies record small profits they are suspected of underperformance. If they report large profits they are accused of realizing them on the back of their employees and by offering very low wages. Yet other voices accuse foreign companies of offering wages which are too high for the local market depriving the local companies of much needed talent, FIC said.

“This kind of political discourse quickly becomes public policy with hasty decisions taken with zero consultation. The latest example is this Emergency Ordinance which will amend and modify more than 40 legal acts (laws, other ordinances, government decisions) in the last Government meeting of the year,” the organization said.

These hazardous changes to organic laws, suspension of terms, freezing of payments, the introduction of new taxes, creation of state-aid schemes and investment funds with unclear purpose will have a profound impact on many areas of the economy and will test the patience of businesses and citizens.

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