Race is on for general elections

One month before Parliamentary elections this December, Romania is set to play host to a fierce race to regain control of a country that is seeing its EU member state status under constant scrutiny.

November 2012 - From the Print Edition

Two main political alliances are battling for the top spot, USL and ARD, both of which have, over the past 23 years, been in power, in different political line-ups.
The USL (Social-Liberal Union) is the current ruling alliance in Romania, while the newly-formed ARD (the Right Romania Alliance) includes the Democratic Liberal Party (PDL), the National Peasant Christian-Democratic Party (PNTCD) and the Civic Force, a political movement stemming from the local business environment.
While both sides are in favour of Romania moving forward on the investment front, they disagree on how it can do so. The ARD's fiscal policies include the reduction of the flat tax from 16 per cent to 12 per cent starting January 1, 2013; raising the guaranteed minimum wage from 850 lei to 1,000 lei from January 2013; reducing employers' social contributions by five percentage points starting January 1, 2015; and setting up new institutions, such as a Public Bank for Investments (BPI) and a National Fund for Financial Stability (FNSP). The ARD government plan also includes research and development measures such as the provision of two per cent of GDP for scientific research, technological development and innovation by 2016; infrastructure measures such as the introduction of a Rabla-type program for the shipping fleet; the unification of the Danube ports administrations with the Maritime Ports Administration and the Danube-Black Sea Canal Administration; and agricultural measures such as tax incentives to stimulate the landowners association.
The USL, on the other hand, which includes the Social Democratic Party (PSD), the National Liberal Party (PNL) and the Conservative Party (PC), is in favour of the gradual reduction over the next four years of the overall rate of employer social contributions by five percentage points, while gradually increasing the minimum wage to 1,200 lei by 2016.
As for the flat tax, the USL wants the current 16 per cent flat tax to be kept as a ceiling, but would introduce a progressive income tax, with rates of eight per cent, 12 per cent and 16 per cent.
Agricultural policies included cutting VAT in this area from 24 per cent to nine per cent, with the 15 per cent returning to the manufacturer when they present the bill. In the field of research and development, the USL wants deductibility to increase from 20 per cent to 50 per cent. Its social policies include linking pensions to inflation, within the law and budget limits.