Businesspeople believe that unemployment, black market jobs, and low investor morale will be the effects of a stricter fiscal policy adopted recently by the government. At the end of last week, the government decided to increase social security (CAS) to 31.3 percent for normal working conditions, of which 10.5 percent is to be paid by employees and 20.8 percent by employers. The previous Emergency Ordinance 226 of 30 December 2008 set a CAS value of 28 percent for normal working conditions, of which 9.5 percent paid by employees and 18.5 percent by employers. Thus, employers bear a greater brunt than their employees, as CAS raised their contributions 2.3 percentage points against one percentage point for employees. Employers are pessimistic about this decision. “The state demands a higher tax, so we will demand a higher price. There will be many bankruptcies. In the end, the only important investor will be the state,” said Adriana Iftime, CEO of the Construction Employers Association. “This is the opposite of what others are doing in times of crisis. Hungary is cutting taxes, so is Germany. At a time when there are problems on the job market, the government is burdening companies. This will lead to a rise in unemployment, or jobs will be transferred to the black market. In the end, everybody loses. This is a decision which disregards reality,” said Cristian Parvan, Secretary of the Association of Romanian Businespeople (AOAR). Representatives of trade unions and of employers associations said they were disappointed by the budget presented by the government, adding that the document does not include the anti-crisis measures discussed in the past few weeks, and they are expecting explanations at a meeting scheduled today at the Ministry of Public Finance. (B.A., S.C.)
