Romania's government approved a plan to invest more than 10 billion euros ($12.6 billion) in the economy over the next four years to stimulate growth and create jobs, Bloomberg reported on Nov 19. The Romanian government will suspend a tax on new cars to protect jobs in the auto industry, which has been hit by the world economic crisis.

The package includes incentives to companies to hire unemployed people, boost loans to small business, and cut taxes for reinvested dividends and companies that pay taxes on time, Prime Minister Calin Popescu Tariceanu told a news conference in Bucharest today.

"These measures are meant to protect jobs or we risk facing a very difficult social situation,'' Tariceanu said after a Cabinet meeting. "There are risks of rising unemployment and layoffs. I want this plan to make Romania's economy less vulnerable.''

The global financial crisis is lowering international demand for Romanian products and some companies, including carmaker Dacia SA, Kraft Romania SA and chemicals maker Oltchim SA, have announced production cuts and layoffs. Unemployment rose to 4 percent in October from a 16-year low of 3.7 percent in July.

He said the government will have to cut spending next year in non-investment areas to keep the deficit "within macroeconomic parameters that won't deteriorate the economy.'' The government has said it targets a budget deficit of 2 percent of GDP next year, from a deficit of more than 2.4 percent of GDP this year.

Cutbacks

"I won't hide this from you,'' he said. "Part of spending will have to be cut back, but not in investment.''

Romania's economy grew an annual 9.3 percent in the second quarter on a consumption and lending boom, although the government has predicted growth will slow to about 4.5 percent next year.

The government faces general elections on Nov. 30 and a new government is to be formed by Jan. 1, with the power to change the economic stimulus package.

The stimulus package, to take effect in January, would exempt reinvest dividends from a 16 percent tax, give companies a bonus of 1,000 euros for each person they hire who has been unemployed for more than three months and grant 500 million euros in investments and aid for farmers, the government said.

It will also allocate 3 billion euros for job-creating investments, lower social insurance payments to the state and create a 250 million-euro line of financing for medium and small businesses through a cash injection into state-owned lender CEC Bank.

Investment Aid

The government will grant aid of as much as 50 million euros to companies planning to invest more than 100 million euros and create at least 500 jobs, according to the plan. Investments of less than 100 million euros that generate at least 300 jobs stand to receive aid of as much as 28 million euros.

It will also give companies a 5 percent reduction in their tax billion in exchange for paying taxes on time and exempt new car sales for a year from a "pollution tax'' that ranges from 150 euros to 700 euros per car.

The Romanian government will suspend a tax on new cars to protect jobs in the auto industry, which has been hit by the world economic crisis, Prime Minister Calin Popescu Tariceanu said Wednesday, AP reported yesterday.

Tariceanu said the government will ask the European Commission to allow the measure, which he wants to run until the end of 2009.

He made his announcement after meeting President Traian Basescu, who also said he wants to scrap the tax to protect jobs.

Dacia said last week it would halt production from Nov. 20 to Dec. 7 because of the financial crisis which has led to a 30 percent drop in cars sales in October compared to a year ago. Dacia's 14,400 workers will get 85 percent of their salaries during the production halt.

On Monday, Basescu visited Dacia and said he would support the suspension of the tax.

Dacia said its market shrank also because of "the invasion of imported secondhand cars" and warned that jobs in the car industry are in danger.

Wednesday, Subansamble Auto, a company that supplies parts to Dacia said it would send home 800 of its 3,500 workers.

Armenia, Romania FMs agree the Karabakh issue should be solved on the basis of norms and principles of international law

The Foreign Ministers of Armenia and Romania Edward Nalbdnian and Lazar Comanescu held constructive and promising negotiations. Armenia’s Foreign Minister Edward Nalbandian told a press conference today that they discussed bilateral relations, the opportunities of intensifying the bilateral cooperation in different spheres and the political dialogue. Reference was made to regional issues, particularly the settlement of the Nagorno Karabakh issue -- Armenia’s Public Radio reported on Nov 15.

According to Lazar Comanescu, constructive talks were held on issues of bilateral interest. “The bilateral cooperation between the two countries should be developed in different spheres. As a member of the European Union and NATO, Romania can develop its relations with Armenia within the framework of those structures, as well as within regional organizations. There are serious perspectives for economic cooperation,” the Foreign Minister of Romania stated. According to him, opportunities should be found for cooperation within the framework of the Black Sea Economic Cooperation Organization, which is currently chaired by Armenia. The Minister noted that Romania is ready to share its experience with Armenia in the context of multifaceted developments, particularly economic reforms. Having met with business circles of Armenia, Mr. Comanescu came to the conclusion that the Armenian-Romanian potential is greater, and it’s necessary to find ways of developing and utilizing it.

The two Ministers discussed issues connected with the settlement of frozen conflicts. “I congratulate and welcome the positive developments targeted at the resolution of the Nagorno Karabakh issue, i.e. the Moscow Declaration. The agreement between Armenia and Azerbaijan can lead to the resolution of the Karabakh conflict on the basis of international law and norms,” Comanescu said.

Which principle of international law should be primary in the Karabakh solution? The Minister said the best and most promising way is the political dialogue between the parties involved in the process. According to him, complex issues like the Karabakh conflict should be solved on the basis of full respect for norms and principles of international law. Territorial integrity is one of those principles, but if we look at the Charter of the United Nations and the Helsinki Final Act, there are other principles, which should be looked at together.”

Edward Nalbandian agreed with his Romanian counterpart and noted that all the principles are very important for resolution of the issue.

Source: Public Radio of Armenia