Top 10 measures of economic impact to be taken if PSD keeps its promises

de Adrian N Ionescu | 14.12.2016 .

dragnea-10-stati-asa-300x199Many of the economic promises from the government program that PSD launched during the election campaign repeat older themes from the collection of economic policies of the party that won the 2016 parliamentary elections.

Given that most of the promised measures would be difficult to budget even with a maximum deficit considered and, on the other hand, these promises would clearly involve a generous budget, below is a short and simple list comprising both the tax reduction and the increases of salaries and expenses in the areas where the party decided that people has expectations.

PSD’s economic program provides:

  • Setting up of a Sovereign Fund for Development and Investment (FSDI) to finance large energy and road infrastructure projects, railways and projects from other economic sectors. FSDI should get financing in turn by issuing bonds (25 bn. lei), dividends from state companies (10 bn. lei) and “attracting other sources” (25 bn. lei)
  • Reaching a rate of absorption of 72.5% (127.3 billion lei) of the EU funds in the next four years
  • (Re) establishing the Ministry of SMEs, Entrepreneurship and Tourism, because “99% of companies are SMEs, which generate 60% of GDP and employ 60% of the workforce,” according to the PSD’s economic program.
  • By 1 December 2018, relationship between the state and business environment shall be fully computerized, “all tax obligations will be paid via the Internet. Companies will submit all the required forms online. Systems from all public institutions will be inter-connected.”
  • Grouping the legislative standards into an Economic Code and an Administrative Code.

Many of the PSD’s promises involve salary increases and tax decreases at the individual level, whose impact on the economy have not been yet fully clarified:

  • Salary and pension increases between 40 and 60%, as follows: – minimum gross wage to 1,750 in 2020; – pension point to 1,400 in 2020; – minimum pension of 640 lei as of next year;

psd-program-guv-salarii-si-pensii

*

  • Minimum gross wage (lei)
  • Average gross wage (lei)
  • Full time employees (million people)
  • Pension point (lei)

*

  • Decreasing employee contributions to pension and health systems, cancelling the unemployment contributions, cancelling contributions for the liberal professions. In total, the decrease of contributions will be from 39.25% now to 35% by 2018.

psd-prg-guv-costuri-totale-cu-forta-munca

*

  • Total employer’s costs for a net salary of 100 euros in the EU states
  • 2016 (21st position of 28 countries)
  • 2018 – applying the PSD’s program (6th of 28 countries)

*

  • Income tax would decrease to 0% from 16% (2016), as of 1 January 2018 for the employees with a maximum monthly gross salary of 2,000 lei and from 16% to 10% (2018) for those with a monthly gross salary exceeding 2,000 lei.
  • Doctors and IT specialists will no longer pay income tax, regardless of their income
  • To the self-employed, PSD promises zero income tax (0)%, for incomes below or equal to 24,000 lei a year and a decrease from 16%, the current level, to 10%, for those with annual incomes above 24,000 lei
  • Agricultural income tax will be repealed as of 1 January 2018. Tax on agricultural land (46 lei / ha, now) will be 0 (zero)% for the land worked and 100 lei / ha for fallow land (as of January 1, 2018)

GDP is expected to grow from 758 billion lei in 2016, to 1,014 billion lei in 2020 while the deficit would decrease from 2.9% to 2% in the same time frame.

psd-pib-deficit

*

  • GDP (bn. lei)
  • Revenues of BGC – general consolidated budget (bl. lei)
  • Public debt (% GDP)
  • Budget deficit (% GDP)

*

Publicat la data de 14.12.2016 .

Lasa un comentariu


SIMILAR ARTICLES

Adrian N Ionescu

Ministry of Finance has sold euro bonds worth one billion euros on foreign market

The Ministry of Finance (MFP) placed euro bonds worth EUR 1 billion on the foreign market by reopening the issue with the maturity of 10 years launched in April this year The issue has been placed with a 2375% coupon at a yield of 2,114%, lower than the one of the initial issue in April (2411%), following "the decrease of the related margin of Romania’s credit risk to the lowest level for ...
Read more »

Adrian N Ionescu

European Commission’s announcement to Government and Parliament: Gas transactions market cannot be monopolized by OPCOM

Romania risks the infringement procedure if the Parliament adopts definitive amendments to the Emergency Ordinance 64/2017 on the natural gas market, which provides for the trading of 70% of its volume only on the state-controlled OPCOM market The punishable amendments, recently approved by the Chamber of Deputies' Committee for Industries, could violate the fundamental freedoms laid down in ...
Read more »

Adrian N Ionescu

Ford launches production of EcoSport in Craiova. Total investment in Romania reaches over EUR 1.2 billion

Ford officially launched the production of the EcoSport SUV at the plant in Craiova, raising total investments in Romania to about EUR 12 billion, since the takeover of the factory in 2008 The number of employees will increase by nearly 1,700 to 4,300 people by the end of the year, exceeding for the first time the number of employees in the moment of the takeover Ford plant in Craiova will ...
Read more »

Adrian N Ionescu

ANAF has repealed procedure for cancellation of VAT code for inactive companies

An order by the ANAF President amends the regulations for cancelling the registration for VAT purposes, respectively repeals the procedure for the cancellation of the VAT code for the inactive companies The provisions in question are included in OpANAF 2899/2017 on approving the procedure for the ex-officio change of the VAT related tax vector, as well as the template and content of some ...
Read more »

Adrian N Ionescu

Investment of the poor: MFP sells one-lei treasury bonds to population and money will be blocked until maturity

The Ministry of Public Finance (MFP) wants to raise money to the budget, leu by leu and says that treasury bills, whose issues have already been announced, will have a nominal value of 1 RON The amount is a real premiere The financial instruments will be issued quarterly, on short terms, through the State Treasury's operating units, and will not be listed on the stock exchange, which means ...
Read more »

MAINS

Prime Minister Grindeanu about 2017 budget: 5.2% economic growth, 815 billion lei GDP, 253 billion revenues

Prime Minister Sorin Grindeanu said on Sunday evening on Romania TV that the budget deficit in 2017 will fall within the set target of 3%, ... Read more

Back to the lesson of 2008-2014! Essential viewpoints about the type of growth we choose

The National Institute of Statistics announced the final value of GDP for 2014 at 668,143.6 million lei, in current prices, representing a growth rate of ... Read more

Trade deficit in 2016 is close to 10 billion euros, driven by imports of chemicals, fuel and food

The trade deficit in the first eight months of this year was EUR 6,133.8 million, about 28% higher than the same period of the last ... Read more

”Digital-Schweitzer” Romania: IT specialists explain why citizen is stuck between super computerized institutions

Ciolos government promised a revolution in reducing state bureaucracy, official emphasis being put on digitization and electronic communication, institutions being required to be transparent. This ... Read more