How Romania could get up to 7 billion euros per year for pensions and salaries. The hidden plan that blows away old political slogans
The listing of state-owned companies on the stock exchange could bring billions of euros to the budget, more transparency and pressure for performance, say the experts consulted by “Adevărul”, thus combating the idea that the listing would mean that “we are selling our country”, a theory considered “nonsense” and evidence of “economic illiteracy”.
The listing of state-owned companies would bring more money to the budget for pensions and salaries
The debate regarding the listing of state-owned companies on the stock exchange periodically returns to the foreground, especially in the context of budgetary pressures and the need to reform state-controlled enterprises. Supporters of this process say that the listing does not mean total privatization, but the introduction of stricter rules of governance, transparency and economic efficiency. In their opinion, listed companies are obliged to periodically publish financial results, comply with reporting standards and answer not only to the state, but also to investors and the market.
The experts consulted by “Adevărul” believe that Romania already has successful examples, such as Hidroelectrica or Romgaz, and a multi-year program of listings could annually bring between 4 and 7 billion euros to the state budget. On the other hand, the opposition to such measures is explained both by arguments related to the protection of the national interest, and by the political stake of control over some companies that manage huge budgets, functions and strategic decisions.
What changes in a state-owned company after listing on the stock exchange
Claudiu Cazacu, strategy consultant of XTB Romania, explained to “Adevărul” that listing on the stock exchange means, in addition to a process of changing the shareholding structure, and one that transforms the way a company operates.
“Although it comes with organizational and reporting costs, the benefits tend to be relevant through regulations that mandate transparency over major decisions and financial results. Access to capital is simplified and financing is often more affordable, contributing to long-term performance. Listed firms generally have a higher investment efficiency than unlisted firms“, explained Claudiu Cazacu for “Adevărul”.
Claudiu Cazacu: Listing has a lot of advantages
He added that the state loses, on the one hand, income from dividends, in proportion to the reduced participation, but gains from taxes on profit from transactions and dividends, and will also record income from the subsequent use of shareholders' capital by rolling it into the economy.
“The benefits appear especially where the profitability of listed firms increases. Listed firms provide visibility into their activity by publishing annual and quarterly reports and communications regarding contracts or key events. Public interest in their activity increases. Citizens and investment funds become shareholders, their attention being proportional to the size of the invested capital.
Financing can be accessed through specific capital market mechanisms, offering alternatives to bank financing.
Pension funds have more “space” in which to place the capital saved by employees. If the investments are performing, future retirees will enjoy higher incomes.
The shareholding structure, the listed portion, becomes variable. Over time, the shares of holdings between individuals and legal entities, residents and non-residents, fluctuate, sometimes significantly“, explained Claudiu Cazacu for “Adevărul”.
Negrescu: The listings can bring between 4 and 7 billion euros per year to the budget
“Listing companies on the stock exchange means a passport of good company behavior, through which strategic investors are attracted, who can create new opportunities for Romania and create new jobs”analyst Adrian Negrescu told “Adevărul”, stressing that the idea of listing is positive.
According to him, you need to carefully choose which companies can be listed, when you prepare the listing, how you choose the listing price of the shares.
“All this must be carefully prepared, and Romania has such specialists. It is possible to list a company and thus add value to it. On the other hand, the markets are turbulent, the moment of listing must be chosen carefully, as Fondul Proprietatea did with Hidroelectrica.
The major advantage of listing state-owned companies on the stock exchange is that they can bring money to the budget from the listing. The state should have a multiannual program, which could bring between 4 and 7 billion euros per year to the budget. Pensions and salaries can be paid with this money. The listing should be done with promotion and clear explanations, no more ideas like “we are selling our country”Negrescu declared.
Mona Bardos: The state remains the majority shareholder
For her part, the founder of a community of 67,000 entrepreneurs, Mona Bardos, told “Adevărul” that the listing of state-owned companies means, in short, that a part of the company can be bought by investors, and the company begins to operate according to much stricter and more transparent rules. “It does not necessarily mean that the state loses control, because most of the time only small blocks of shares are sold, and the state remains the majority shareholder“, she stated.
PSD does not want the privatization of Hidroelectrica in crisis: Speculators are everywhere, and prices are low
According to her, after the listing, the level of control and transparency changes in a state company.
“Management is more attentive to expenses, results and company image. There are stricter audits and more attention from the market and the media. It does not mean that problems disappear overnight, but it becomes harder to hide losses or questionable decisions.
In many countries, listed state-owned companies perform better precisely because they can no longer operate completely opaquely.
After the listing, the level of control and public exposure changes primarily in a state-owned company. Management can no longer make purely political decisions without explanation. Clearer performance indicators, stricter audits and greater pressure for efficiency are emerging. It also increases focus on spending, contracts and management appointments. It doesn't automatically mean that the problems disappear, but the space for arbitrary decisions becomes smaller.” Bardos explained to “The Truth”.
Silviu Gresoi: Companies will be required to report more clearly after the listing
For his part, the analyst Silviu Gresoi explained to “Adevărul” that the listing of state companies on the stock exchange has a lot of advantages.
“Listing state-owned companies does not automatically mean privatization, but can mean transparency, discipline and access to capital.
If the state retains control, the company remains strategic, but is required to report more clearly, explain results and operate under stricter governance rules.
After the listing, the company is no longer evaluated only politically or administratively, but also by the market, investors and the public”said Gresoi.
Why PSD would not agree with the listing of state companies on the stock exchange
Despite all these arguments, PSD voices oppose the listing of profitable state companies, there is even a draft law that prohibits the sale of shares until December 31, 2027, even if this is done through listing on the stock exchange.
The specialists consulted by “Adevărul” explained what could be the reasons behind this decision.
“As for the PSD opposition, I think it is related to the lack of a concrete calendar and a multi-year program of listings. The slogan “We are not selling the country” is nonsense, it shows economic illiteracy. The listing process must be clearly explained to the population so that such ideas no longer exist. We have concrete cases of success, such as those of Romgaz and Hidroelectrica. The listing can bring much and much-needed money to the state.
Iohannis promulgated the PSD law that prohibits the sale of state shares and privatizations for two years. What are the negative effects?
People need not fear the effects of listing a state-owned company on the stock exchange. There are certain interests related to state companies, but we have the Ministry of Economy, we have AMEPIP, we have Boards of Directors. Politicians can be held accountable if they are wrong”analyst Adrian Negrescu explained for “Adevărul”.
For his part, the business consultant Mona Bardos, stated that the discussion is rather a political and control one.
“In general, parties that have built up influence around state-owned companies over time are wary of listing because it reduces the freedom to exercise discretionary control over management, hiring or certain economic decisions. (…) There is also the argument that the state should not 'sell' strategic companies. It is a message that easily catches the public, especially when we talk about energy or infrastructure. But in reality, in most cases it is not about the complete sale of the company, but about listing a small percentage to attract money and force more transparency,” she explained.
The expert pointed out that, from the perspective of entrepreneurs, the real problem is not whether a company is state-owned or private, but whether it is efficient, predictable and responsibly managed. Romanian SMEs already operate in an extremely competitive and fiscally pressured economy. “When state-owned companies remain non-transparent and inefficient, the cost returns indirectly both to the economy and to the private sector“, concludes Bardos.
The fear of losing control over state companies was also advanced by the analyst Silviu Gresoi.
“Opposition usually comes from two areas: the legitimate fear of losing control over strategic assets and the political fear of losing influence over state-owned companies.
In the case of the PSD, the public argument is to protect the national interest. But the real stake can also be control over some companies that mean functionsbudgets and decision“, the analyst declared for “Adevărul”.
