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Business representatives agree in principle with CAS cuts
Raiffeisen Bank CEO Steven van Groningen, a member on the leading board of the Council of Foreign Investors, said Thursday, after consultations with President Traian Basescu, that business representatives agree in principles with cuts in the social security contributions (CAS), but he said there is a real risk of Romania's national budget exceeding the imposed limits.
He said his conversation with the president was open and presented opinions of representatives of the Association of Romania's Business People, chambers of commerce and the Council of Foreign Investors.
Van Groningen said the conversation focused mainly on principles, and business organisations agree in principle with the CAS cuts, but they are also sharing President Basescu's worries about a relatively high deficit in the national budget. He said it is clear that there will be a big deficit that has to be covered and the way to do so is by taxation, which is an existing worry. He added that cutting taxes today only to increase them again in the future is useless.
The conclusion, he said, is that there is a real risk that we fail to have a budget in line with international standards and regulations and the arrangement with the International Monetary Fund (IMF), and that there is a real risk of exceeding the imposed limits, which could lead to more taxes in the future, and that calls for prudence in implementing a measure such as CAS cuts.
Van Groningen mentioned that the opportune time for CAS cuts will be when there is an element of comfort that the measure could be implemented without the need for new taxes in the future.
He added that the main message of President Traian Basescu was that a short-term measure should not lead to a situation able to generate serious effects such as endangering the arrangement with the IMF, or a situation in which Romania would have to give up on any important principles, such as the flat income tax.
President Traian Basescu on Thursday held consultations at the Cotroceni Presidential Palace with business representatives over cuts in the CAS.
On Monday, he had similar consultation with Prime Minister Victor Ponta and Finance Minister Ioana Petrescu, after which he announced he was not very successful and the Government failed to give him reasons to promulgate the law on CAS cuts.