Important economist interview, author of 50 books: “A disaster for Romania. Do I work and 65% I give to the state?” / Give an example of a state-owned company “which politicians have put on the logs”

The director of the Institute of Economic Forecast of the Romanian Academy, Lucian Albu, a reputed right and teacher economist, discussed for the public Hotnews about the measures necessary for Romania in debating the budget balance. Albu pointed out that one of the measures can have the most bad effects for the population: progressive taxation. “How would I stimulate the workforce to work?” He says.

• In the field of taxation of companies, Professor Lucian Albu agrees with left economists such as Corneliu Ban, who pointed out that Romania is much more permissive than economically comparable European countries, such as Czech Republic or Hungary.
• Professor Albu attacks the disaster in state companies, but also gives the example of an excellent man from the state “who knows the job”.

Lucian Albu is amused when he is told that he is a representative of the right school. “To me, right views means respect what economic science teaches us.”

He was Minister of Labor in Isarescu Cabinet, and throughout his career he has published over 50 books and over 300 articles and studies. He runs the Institute of Economic Forecast of the Romanian Academy in 1998, and since 2001 he is a doctoral coordinator at the School of Advanced Studies of the Romanian Academy (Scosar).

Asked, in the dialogue with Hotnews, what are the topics that require more attention in the discussion about the budget of Romania, Lucian Albu spoke about long, medium and short -term measures.

In the short term, the economist draws attention to an aspect that is already in the center of attention: the problem of collecting to the state budget.

“It has been shown that the organisms that have to collect from us fail to do this. Either from incompetence, or from complicity – here it is the worst,” he says.

What does VAT growth say

He considers that in the short term the increase of VAT for the other categories that are not currently at the 19% quota can be a “very safe source to increase the degree of collection and to reduce the deficit”.

“The problem is that a very fast VAT growth, in the very short term, affects the activity of companies, the activity of serious players in the economy. However, it could be studied to see what impact the VAT increase to 19% in the other categories that have a lower VAT,” says Lucian Albu.

The teacher does not reject as a solution, the additional taxation of the housing, reminding that it is currently lower compared to the European average. “But calculations need to be made. Those from Finance, from our specialized organisms can do these calculations,” he points out.

“No 41 counties. It spends a lot and useless”

In the long term, he claims that the administrative reform is absolutely mandatory. “Because there is a lot of spent and it is unnecessary. It is like a ballast the expense in the administration, due to the inadequate system of territorial organization of Romania.”

“This reform will be longer, because it requires more time. As a proof, it was registered in the first PNAR, Romania's National Accession Program at the EU, when it was studied and established that there will be only eight regions, not 41 counties.”

Agree to observations on small taxes of companies

At the same time, asked about the statement of Professor Cornel Ban, who claims that, in Romania, companies are privileged, compared to other countries, such as Poland and Czech Republic, Professor Albu gives him right, at this point. “Everyone knows that the state favors certain companies and certain party companies at collection and all the others,” said Albu.

“And it would be, although the discussion has ceased, the states of state, those autonomous kings who have proven to be lost for many years and are still tolerated. Reforms, all kinds of reforms have been tried, but it has not succeeded …”, the economist pointed out. Among the examples given by him are the coal society and the salt society.

“Only then can we think of progressive tax”

Lucian Albu also reminded the measures that led to the development of Romania, at least a period.

Referred to the only 16%share, “which resulted from a macroeconomic model” and which was introduced in 2005.

“Now I see that some would want to be removed and replaced with the progressive tax, which would be a disaster in the current situation of Romania. Let's reach the average income per inhabitant at the level of the European average and then we can think about progressive tax,” he says.

“How would we stimulate the labor force?”

The economist reminded the period when Romania had a progressive tax, during the Nastase administration. Romania had various forms of progressive taxation between 1990-2004.

“This is how we all had, those who had a certain average monthly income, taxation reached with all the duties, with all the obligations to the state at 65%. How would I stimulate the workforce to work? No one will want.

Prayed to give a positive example, by the state man who knows how to work on a budget, Albu said: “Gherghina (no Gheorghe Gherghina, former Secretary of State in the Ministry of Finance between 2001-2005 and 2009-2014, coordinator of the Budget Directorate. job and balance the budget ”.

Tarom case

Albu says that in the case of state -owned companies “the ones that went well, our wonderful political class managed to put them on the logs. For example, Tarom. Recently a former case, it was discussed that they were losing and said that there had become a family company. They were all sisters, relatives, brothers, sisters and so on.”

“Where did Tarom be a very serious and internationally respected company, it was put in the deficit area, so it does not produce profit,” says Albu.

“Tarom was parasitized by those low cost companies. The best example is Blue Air, which you remember, that paradoxically, the Romanian state gave them help. And then we wonder that we have unsustainable deficit,” he continues.

Press conference at Tarom. Photo: Inquam Photos / Octav Ganea

He points out that for efficient measures “must be political”. “Some politicians have already promised that they will reduce the number of ministries. The functional device is inefficient, and some of it is really useless.”

“And I add something else: to give up the appointments on political criteria. That's what I said for a long time, even at Hotnews I said in 2009, in an interview with Mr. Tăpălagă, when the effects of world crises were. The disaster produced by these appointments is quite important,” concludes Professor Albu.

Selling from state portfolio

Regarding the publicly advanced idea of ​​several voices, among which that of Andrei Caramitru, who drew attention to the use of state assets, asked the economist Lucian Albu who says about the sale of buildings or land of the state that do not bring income.

“It could be a good idea, but a study must be done, at what prices they are sold. There will be no debt there, that profiteers will appear there. A very correct price must be set and an analysis can be done. They can be sold quite well and how many funds would come to the state, to diminish that deficit,” said Professor Albu.