Among measures considered by Cabinet members are a doubling of funds for housing through the National Housing Agency (ANL), a value added tax deduction for thermal building insulation, or cancelling the new car registration fee.
Furthermore, government sources have indicated that subsidies for banking interest rates for construction companies could be considered, especially for those building affordable housing for young people.
Sources told Business Standard that ministers also discussed fiscal measures, such as the cancelling of the tax on reinvested dividends, a 5 percent discount for those who pay their taxes on time, the allocating of €500 million to boost investments in the agricultural sector, and an increase in total state aid of some €1 billion. However, economic analysts questioned by Business Standard criticized the proposals on the grounds that they are discriminatory or unsustainable. “The measures are destined to stimulate the economy by way of budget spending, and I do not know if these have been included in next year’s budget. It they were not, they will put added pressures on the budget deficit,” Analyst Dragos Cabat said. “In this global crisis, these have a certain logic, because they are aimed at stimulating the market, although it remains to be seen how viable the plan is. These could be just words, because the road to their application is long,” Cabat added. Furthermore, he said, the government admits that Romania is in the midst of a crisis, and that the impact will be more visible next year, including in the banking system.
For Analyst Matei Paun, Managing Partner at BAC Investment Bank, the measures discussed by the government are not appropriate. “The government should not lower tax levels, but focus on infrastructure investments that could provide short-term yields. The only measure that I see fit is the one regarding a VAT deduction for thermal building insulation,” he added. Bankers met yesterday with Prime Minister Calin Popescu Tariceanu to discuss the impact of the crisis on lenders. According to the President of the Romanian Banking Association (ARB), Radu Gratian Ghetea, Tariceanu and Finance Minister Varujan Vosganian have asked lenders with at least 1 percent in market share to come up with a proposal regarding the way in which Romania can overcome the financial crisis.
