Some 2% of the Grey Economy Is Likely to Become Legit

Some 2% of the GDP will move from the grey economy to the legitimate and taxable one, said Adriean Videanu, deputy PM in charge with coordination of economic activities.

Adriean Videanu, deputy PM, puts his money on the grey economy surfacing into the legitimate business operations.

Videanu said that this will take place as a result of new facilities opened to companies by the new Fiscal Code and relaxed taxation measures. One other issue Videanu brought up was the one of costs unknown to the public that integration into the European Union will bring about.

The extra costs come mainly in the environment and in the transportation fields. They are huge and unknown to the business community,_ said Videanu at a seminar on the economy organized yesterday by FIN Media.

This is due to poor communication on the part of the former government, because the facts were well known to officials, but not fully explained to the general public and to the business community,_ said Videanu. He could not, however, state the exact figure of the huge costs he was referring to.

One other topic on the minister_s mind was the role of the Bucharest Stock Exchange in the privatization process. _The state will list on BSE some 10% of the shares of the SNP Petrom oil company; the company_s new majority stakeholder, OMV, approved the move. The state wants to also float on the stock market significant number of shares in RomTelecom, the Romanian Commercial Bank and the Romanian Savings Bank,_ said Videanu.
The Romanian state holds some 46% of the RomTelecom stock, 38% of the RCB stock and is the sole stockholder of the RSB. Other energy and utilities_ providing companies will also be listed for the public to buy them.
Another medium and long term target of the Executive is to use as active fiscal policy measures the deduction of expenses on education and health from the taxable income, Videanu said.

The Romanian National Bank will have its very important role this year in macroeconomic policies, said Marian Lazea, chief economist of the RNB. Bringing inflation lower will be best served by a more powerful national currency. On the other hand, a weaker leu will serve to lower the trade imbalance. Also important would be to control the liberalization of capital movements, since non-resident citizens will be allowed starting this year to make deposits in leu.