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Southeast Europe
July 28, 2017 www.intellinews.com I Page 15
In a similarly strongly worded statement, the Roma- nian-German Chamber of Commerce and Industry (AHK Romania) said they posed “a real threat to the stability and predictability of economic policies”.
Having not taken the business reaction into ac- count, the government’s reversals and U-turns started immediately. Indeed, Romania's new Finance Minister Ionut Misa announced plans to scrap the second pension pillar on June 29, only to contradict himself a few hours later. Another rapidly reversed policy announcement came from prime ministerial adviser Eugen Teodorovici who was sacked after just five days in the job after rec- ommending a tax on the Orthodox Church.
Four weeks on, the turnover tax is also on the cut- ting room floor, with Tudose telling EU officials on July 11 that Bucharest was no longer planning to introduce the tax. At the same time he sought to reassure them that, “We are predictable in terms of financial-fiscal system” — wishful thinking un- der the circumstances.
The previous day, Dragnea had announced that the minimum wage would be raised to just RON1,550 (€339.2) as of next year and not the RON2,000
Bulgaria prepares for battle over land sales to foreigners
Dimitar Koychev in Sofia
Bulgaria’s main political parties have agreed to postpone a vote on legislative amendments that will allow foreign citizens to purchase Bulgarian agricultural land without any restrictions.
The European Commission (EC) has launched an infringement procedure against Bulgaria because
as envisaged in the recently updated governing programme. More recently, another senior PSD official, Marian Neacsu, told journalists that the solidarity tax would not be introduced because the damage to the government’s public image would outweigh any financial benefits.
While it looks like many of the measures that initially dismayed investors are now off the government’s agenda, it remains unclear what – if anything – will be proposed to take their place, leaving businesses in Romania in a state of ongoing confusion.
“Fiscal volatility is the hottest topic in Romania, along with the strong growth dynamic. The addi- tional measures were a surprise and now there is some backtracking because steps like the turno- ver tax, for example, didn’t make much economic sense,” Andreas Schwabe, senior economist CEE at Raiffeisen Research, told bne IntelliNews.
This also leaves investors in the dark as to what Romania’s budget deficit is going to look like. The rising deficit as a result of the expansionary fiscal policies – both before and after the December 2016 general election – is a source of concern since it is taking place at a time of rapid economic growth.
of the current limitation. The Balkan country must achieve compliance by September. If this does not happen, the EC will refer the case to the Court of Justice of the EU.
In response, the country’s ministry of agriculture initiated amendments that will enable free access.