Mircea Coşea: "The government's proposed fiscal package is dust in the eyes of citizens”

Economic expert, university professor Dr. Mircea Coşea, told us that the package of fiscal measures presented yesterday by Finance Minister Alexandru Nazare is toxic for the country's economy.

Mircea Coşea stated: "This fiscal package is a blind spot, with the most serious effect possible. The blind spot thrown into the eyes of citizens will lead to the illness of Romanian society because we must see that the most important thing is not the increase in prices, but the decrease in income at an accelerated, brutal, immediate pace. This will cause us to have a radical change in consumer behavior, in the population's consumption. People will change their priorities. They will allocate more money for food, although it is possible that we will have smaller quantities and lower qualities, and they will no longer allocate money for other expenses that until now classified us among European countries, namely expenses for personality development - for culture, for education, for health, for travel -, that is, everything that means the development of the human personality in the spirit of European values. These expenses will disappear and we will reduce expenses only for food, clothing, shoes and, possibly, aspirin. We are already in crisis, and everything that is being done will not solve crisis, but will intensify it. I, as an economist with a lifetime of activity, am very worried at the moment for the future of this country and I tell you honestly that this is the first time in the last 35 years that I am afraid of the future”.

Mr. Coşea also referred to the statements of government representatives regarding the risk of Romania being demoted to junk status, in the event that this fiscal package is not approved.

Mircea Coşea told us: "This gentleman who is now deputy prime minister, who is a businessman and who is against the declaration of assets (ed. - Dragoş Anastasiu) made a demonstration on television in which he presented junk as an apocalypse, a national tragedy. It is not good to be in junk, that is clear, because then you are not accessible to foreign capital. But, at the moment when Romania is no longer competitive in terms of attractiveness for foreign capital because you raise the tax on the business environment, on profit, on dividends - that is, you put the business environment in a situation where it loses a lot -, can we still talk about Romania's attractiveness? With junk or without junk, it is still no longer attractive. These fiscal measures only maintain the lack of attractiveness of the Romanian economy and the lack of competitiveness towards our neighbors. You will see that in the future many companies will relocate abroad, especially those in the main industries, such as the armaments industry which is currently a mine of gold. The armament factories supported by the European Union will relocate around us, not in Romania. It is not junk that is the great danger, but this thinking in which, instead of stimulating activity, you burden the business environment with more duties, to which you add an unbearable energy price that will lead to the lack of competitiveness of companies in our country internationally. In these conditions, you are the brake on your own development. These measures actually represent cannibalization: they eat away at the essence of the Romanian state, its substance. Where can we develop when the economy is falling, when it is not supported by consumption? There is no positive element to these measures, apart from the fact that they can go to Brussels with a piece of paper showing that they have done something and receive some European funds that we do not even know if they will use correctly and if they will be able to absorb them in full”.

The economic expert continued by saying that everything that is happening these days is a manipulation, so that the population has the impression that they are to blame for the current financial situation of the country, that the European Union is to blame for demanding I don't know what from us, that the war in Ukraine is to blame, that climate change is becoming the cause, etc.

Mircea Coşea also said: "This entire package of fiscal measures is wrong and inefficient. If we add up all the amounts resulting from tax increases, from pension cuts, from salaries, from all this gross and arbitrary austerity that will be introduced, we will not get the necessary money to solve the problem of the budget deficit. All these measures have a toxic, boomerang-like effect. They lead to negative effects, not positive ones. The VAT increase will lead to a greater accumulation in the budget, but will attract an increase in inflation and the black economy. Taxing banks' turnover by 4% will lead to an increase in interest rates and a reduction in lending granted by the banking system. These are short-term measures, without perspective, which aim to make it clear to the European Union that something is happening at Victoria Palace. At the same time, we are also talking about measures that destabilize the political situation, because the question arises of what is the credibility of the president of the country? He stated and declared during the electoral campaign that he would not increase VAT, he repeated this later until a few days ago, after which it seems that he gave in to the political class. This means that there are strong contradictions within the political power and some pressure on the president of the country”.

He concluded by drawing attention to the fact that the degree of trust in these measures is very low, because the political decision-makers who must implement them are the same as those who led the country to the current situation, and he also showed that the implementation of the measures will be done with the victims of the administrative reform, that is, by the employees of the Ministry of Finance and other civil servants who will face a reduction in income and who have already given signs that it is possible to block the fiscal package.