"I want Romania to start to matter at the European level, to be a promoter of public policies and not just a beneficiary"

English Section / 1 decembrie 2023

"I want Romania to start to matter at the European level, to be a promoter of public policies and not just a beneficiary"

Versiunea în limba română

(Interview with Florin Jianu, president of CNIPMMR)

The small and medium-sized enterprises in our country have also contributed this year to the growth of the national economy, even if we had a weaker growth compared to 2022. However, due to the increase in the budget deficit mainly determined by the increase in public spending, Romanian entrepreneurs they had to face new tax changes, some of which came into force from November 1, 2023, and others will come into force from January 1, 2024, but also with two increases in the minimum wage for the economy, measures that they messed up the business plans and investments scheduled a year ago.

So December 1, Romania's National Day, finds the private business environment in anticipation, with the hope that at least next year, when four rounds of elections are scheduled, it will have fiscal stability and predictability.

About the challenges faced by SMEs in our country and about the expectations for the year 2024, we conducted the following interview with Florin Jianu, the president of the National Council of Small and Medium Private Enterprises in Romania (CNIPMMR).

Reporter:What is the situation of SMEs as we approach the end of 2023? What challenges have entrepreneurs encountered this year?

Florin Jianu: Regarding the challenges, I would start from the analysis we carried out, namely the SME White Paper. The three main problems revealed by SMEs in 2023 are inflation (recognized as a problem by 60% of the entrepreneurs participating in the analysis), the decrease in domestic demand - 42% and high credit costs - 33%. Of course, in the top 10 of entrepreneurs' concerns remain the training and maintenance of staff, the uncertainty of the future evolution given the context of the pandemic and the war on Romania's border, as well as unfair competition or tax increases and salary increases. Compared to the previous year, when inflation was in first place, followed by the uncertainty of future developments and bureaucracy, in 2023 the main concern of the business environment is represented by the decrease in domestic demand, which is a result of the reduction in economic growth also noted in official reports .

Reporter:How will the tax measures and salary increase impact the future financial year of SMEs in our country?

Florin Jianu: We have a very clear position regarding the minimum wage for the economy, which has already been increased twice this year. From January 1, 2023, the minimum wage increased from 2,550 lei to 3,000 lei, and from October 1, it became 3,300 lei, with differences in the agricultural and construction sectors. We believe that 2024 must be a year of stability and, if we don't have any more changes of a fiscal nature, we will have a stable economy that will slowly recover. Too much was discussed in 2023, especially in the second half of the year, starting in July, only about fiscal reforms, about the Fiscal Code and about changes in taxes and fees, and these things are not good for the business environment. I would like to change this type of discussion to one focused on supporting the business environment, because the more we manage to support the business environment, the more efficient it will be. This support can only mean stability and predictability, not necessarily measures. In the perspective of the minimum wage for the economy, employers have clearly expressed, in unison, that they can no longer be increased from January 1, 2024, that discussions regarding the possibility of increasing wages should be in the second half of next year. As far as tax reform is concerned, there must be no tax and no tax increase in the year 2024, because this year must be one of stability.

Only 54% of SMEs intend to access European funds

Reporter:Are SMEs still interested in accessing European funds? What are the main areas in which entrepreneurs would be willing to access European funding?

Florin Jianu: If we look at the fact that we are already close to 2024, just one month from now, and at the fact that the multi-annual European financial year covers the period 2021-2027, we find that we have reached the middle of the financial year and not a single euro has reached the economy real. This is a problem that has as a consequence the fact that SMEs no longer believe or rather lose their trust in European funds. The 2023 edition of the SME White Paper shows that only 54% of SMEs intended to access European funds compared to 2022 when the percentage was 72%. This difference of 20 percent against the intention to access European funds is due not to the fact that there is no need, but to the lack of available funds. Applications opened very late, the focus of the public authorities was on closing the old financial year 2014-2020(+3) and on the National Recovery and Resilience Plan, which still lacks adequate resources for the business environment. From all the discussions related to the PNRR, most of the money ended up in the form of loans to banks, without creating the investment funds that the government originally intended to create. Related to the nature of investments, SMEs want to invest first in technology, in equipment, second in digitization and third in education, i.e. managerial approaches, marketing and training of human resources. I would also add internationalization for certain categories of SMEs, and this does not necessarily emerge from our analysis, but more from our desire to support more companies that succeed in internationalizing.

Reporter:The application regarding the advanced digitalization of the business environment was recently launched. Are the 150 million euros allocated for this purpose enough?

Florin Jianu: It is a beginning and like any beginning it must be welcomed, supported, but the efforts to support the digitization of SMEs must be on a large scale. I would rather see a digitization voucher program reaching hundreds of thousands of SMEs. Depending on the needs there are various types of programs, but if we think about the critical mass in digitalization, we need programs that reach hundreds of thousands, if not up to a million SMEs, PFAs and micro-enterprises.

"In a year with four rows of elections, no one assumes tax changes"

Reporter:What hopes do you have for the year 2024, which promises to be one full of convulsions in light of the four rounds of elections?

Florin Jianu: Next year can be an opportunity for the business environment in terms of the stability of fiscal policies. In a year with four rows of elections, no one undertakes tax changes. This ends up being a boon for the business environment in the absence of reforms or changes. I would like the authorities to focus - independently of the elections - on some construction programs for the business environment in 2024, to focus again on the area of start-ups, on the area of enterprises that scale , for the area of enterprises to internationalize, to support companies affected by the war in Ukraine. There are some construction tools that do not link economic life to the elections in 2024. From the perspective of public policies and challenges, I would like Romania to slowly start to matter at the European level, to play the role of a big country that is not not only a beneficiary of European policies, but one of the promoters of these policies. Having appropriate policies for SMEs that mean wider simplification and models of good practice,

Reporter:What message do you have for entrepreneurs on the occasion of Romania's National Day?

Florin Jianu: On the occasion of National Day, I think we should all... I hesitate to say that we should be proud to be Romanians, because entrepreneurs are proud to be Romanians every day. I wish health and strength to the entrepreneurs, their employees and thank them for what they do every day for the entire Romanian society. If Romania has been progressing continuously for over 30 years - it has the highest growth at European level and the most solid evolution in the last 30 years - this is entirely due to the private business environment and this must be mentioned and celebrated on National Day as well.

Reporter:Thank you.

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