Financial Press Review, January 31

The bet to increase budget cash influx, the need to transparency in budgetary execution and the grain crisis are just some of the main topics discussed by today’s financial press.

Under the headline ‘Will the Ministry of Finance win the bet to increase the cash influx by 7 percent this year?’ the Ziarul Financiar reads: ‘Last year the Ministry of Finance managed to come close to the budget plan mostly due to the VAT increase and the excises.’

Last year the budget increased by 7.2 percent over 2009, returning to positive values, while in 2009 it fell by 5.4 percent.

As for 2011, ‘though the VAT does increase cash influx, if the taxes remain high, the situation is uncertain for other taxes,’ the daily reads.

The Săptămâna Financiară quotes the opinion that ‘the VAT increase hasn’t produced the expected results.’

‘A closer look at the results of the increase in the tax with the biggest impact on the budget shows that the Government has broken even.

‘The cash from the VAT increase was balanced out by the reduction of other budget inflows, the economy and the rise in the state’s finance spending.

‘The new pollution tax is to come into force on the January 1 and the 24 percent value added tax might attract around 450 million euro to the budget, according to an analysis of the Ziarul Financiar.

This year’s pollution tax is about 50 percent higher than that in 2010, triple even for older cars.’

Under the headline ‘The grain crisis is hard on our pockets,’ the daily Bursa reads that ‘the grain price boom of 2010 is starting to creep into our country, producers are on the verge of raising prices.’

A kilo of wheat will cost 2 lei, Viorel Marin, president of the Romanian National Association of Flour Milling and Baking Industries stated.

Factories are already leaking money and are threatening to close down if the they keep the current prices.’

Today’s Săptămâna Financiară opens with an article entitled ‘The source of affluence for party financers’ which reads that ‘investment in politics has delivered above the expectations of any specialized fund.’

Even though their contribution was small, the sponsors got public acquisitions contracts of millions of lei. They were repaid by the big companies, run by politically named managers.

More often than not, public companies chose to hand out a contract without publicly announcing it, saying that ‘such services could only be offered by one company,’ the Săptămâna Financiară reads.

The Ziarul Financiar prints an opinion entitled ‘Who and when will account for budget spending and European fund absorption in 2010?’ signed by Sorin Pâslaru, which reads:

‘What is the use in yelling that you don’t want a social state, when you thrive on public acquisitions, strategic spending or nepotism?’

The Capital magazine opens with an article entitled ‘the price of red tape: 1 billion euro a year’ which reads that ‘millions of tax payers that keep public budgets alive are wasting money, nerves and time waiting in line. Fortunately, some recent changes might decrease the number of hours spent in line.

The trouble is that, though in some situations you can contact authorities online or by post, tax payers prefer traditional methods.

Translated by: Gabriela Lungu
MA Student, MTTLC, Bucharest University