What expects the private environment from the government during the crisis?

Few months ago, the economic crisis was still, in the opinion of many, an excuse for companies to reduce costs, an “over-fed” issue by the press, a pretext for the Government not to increase the salaries in the budgetary sector, etc. Even among those who accepted the existence of a crisis, it dominated the view that it will be like a wave, which will last 5-6 months, will sweep some companies in the way, will sway some imbalances that were obvious to everybody, after which things will return “to normal” just as they were before.

Today no one doubts the reality and the depth of this crisis, that in fact affects all countries and all branches of economy at the same time, that it will be a lasting crisis and will take years for the things to return as they were in the summer of 2008. And in some fields maybe it will not ever return to those peaks.

Few months ago, the economic crisis was still, in the opinion of many, an excuse for companies to reduce costs, an “over-fed” issue by the press, a pretext for the Government not to increase the salaries in the budgetary sector, etc. Even among those who accepted the existence of a crisis, it dominated the view that it will be like a wave, which will last 5-6 months, will sweep some companies in the way, will sway some imbalances that were obvious to everybody, after which things will return “to normal” just as they were before.

Today no one doubts the reality and the depth of this crisis, that in fact affects all countries and all branches of economy at the same time, that it will be a lasting crisis and will take years for the things to return as they were in the summer of 2008. And in some fields maybe it will not ever return to those peaks.

It also becomes obvious to everyone (except for some of our politicians) that the only way to exit the crisis is to stimulate and launch the private environment. The reduction of budgetary expenses is very important during the crisis, but ultimately it will have as a result also the reduction of consumption. So, the budget deficit will deepen further on. In conclusion, the only left solution is to relaunch the private environment, the only one that, by its paid duties and taxes, sustains the whole state public system.

The question is: how to do this? Respectively, what are the needs of the private environment at this moment, or in other words, what we expect from our politicians?

I will mention only a few very simple measures which, in my opinion, would represent bubbles of oxygen for the whole private environment at this moment:

• The reduction of the taxes paid on salaries, in order to encourage the maintaining of as many employees as possible; this measure would not negatively affect the budget, contrary, if it is not applied, many current employees will become unemployed very soon, which would cause an additional budget expense. Such a measure, applied even temporarily (for 1 year) would have immediate effect in maintaining both employment and consumption growth.
• The reduction of parafiscal taxes, of bureaucracy and costs corresponding to the state fiscal system; such measures would reduce the indirect costs of companies due to excessive bureaucracy and also reduce the governmental costs corresponding to the administration and collection of taxes and duties
• The drastic reduction of the number of monthly/ quarterly statements mandatoy for the companies, which indirectly would represent a reduction of expenses of the companies’ management
• The introduction of financial incentives for companies that hire personnel during the crisis
• The increase of deductibilities, in order to stimulate consumption
• The cease of forcible execution for late payment of taxes, since this brings the taxpayers in the situation of being unable to continue their activity and on the other hand, for these late payments, taxpayers are already penalized by calculating delay penalties
• The awarding of taxpayers who pay taxes on time through a reduction granted to payment in advance
• Fast reimbursement of VAT and automatic compensation of any debts to the state budget or special funds with the amounts to be reimbursed from the budget or special funds
• The stimulation of the measures for the growth of enterprises’ competitiveness and of the expansion of their businesses abroad.
• Provide tax incentives for companies that during the crisis carry out investments that generate jobs
• Elimination of compulsory re-evaluation of property held by the company within 3 years, given that in the current context there is not foreseen a new increase in property value, so this measure only charges the taxpayers with an additional cost corresponding to re-evaluations
• The regulation of the situation of „free trade areas”, which have lost now all the fiscal facilities, but where investors are still required to pay various taxes (access taxes, etc..), which determines a number of investors in these areas to leave, which causes the loss of many jobs.

On local administrations level it would also be necessary a reduction of local taxes associated to industrial buildings, in order to preserve these investors in the local communities. It is known that many of these buildings are over-evaluated because of the real estate boom of the recent years, which on the one hand makes a higher charge to the real value of the current buildings, but on the other hand, many local administrations apply a level of taxation very high correspondent to these buildings, which nowadays has become unrealistic.

These are just some of the expectations that the private environment has from those who govern. But the biggest expectation of the private environment is the speed of the government’s response and the quick implementation of anti-crisis measures. Whatever these may be. If we think of them in 2009 and we begin to apply them from 2010 onwards, for many it will be too late. It is known that rapid intervention and prevention is always less costly than the treatment of effects. So let’s don’t forget that we are already in July 2009. The crisis began in the fall of 2008…