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The Financial Times is lying or he was lied

By Constantin Radut

At the first hour of the morning, the press agencies and the daily newspapers in Bucharest had a text published yesterday in the online edition of the Financial Times. Under the title "Romania cuts pension contributions from 5.1% to 3.75%", FT criticized in aggressive terms the Bucharest Government for reducing its contribution to what calls the second pension pillar. I do not know who wrote the article in FT and nor did I have the curiosity to give 1 Euro to read the text in the original.
It is essential that the Romanian Press Agency, Agerpres, opened today, November 20, its edition with this text from the FT.
The text with the above-mentioned title says that "about 7 million Romanian employees will suffer a significant reduction in future pensions following Government reforms".
There is sorrow and a lot of lies in the whole text of the FT. Firstly, it does not specify exactly what kind of private pension is concerned. We say: about mandatory private pensions. This is what Romania is called the second pension pillar. It consists of the social insurance contribution of 10.5% of the gross salary of each employee. From 10.5%, respectively, the state automatically dislocade, not the employee, 5.1% to the Pillar 2 pension account. Therefore, the Pillar 2 of the pension is constituted by the state's willingness to pass almost half the volume of social contributions to the account of a private administrator who is called the Private Pension Administrator. The administrator is elected by each person according to the information at his disposal. Among the first private funds in Romania was ING Bank. Now, ING Bank's pension fund is called NN pensions. In fact, the most private fund managers are foreign entities, or foreign-owned companies.
If tomorrow a bankruptcy is going on with these institutions that administer private pension funds, the amounts accumulated there would disappear without a trace.
That is why countries such as Poland and Hungary have decided that the pension pillar 2 will be nationalized / abolished. And the money from this funds returns to the state.
It should be noted that private pension funds in the formula we described above only appeared in former communist countries, where the big Western European financial companies managed to influence (mislead) the governments in power now 1 -2 decades. In Romania, the pension pillar 2 was set up in 2008, when the economic boom was obvious, and the social security budget had a surplus. In the pension pillar 2 more than 6 million people are active.
In Romania there is also an optional private pension fund (pension pillar 3). He is little frequented. There are only 500-600,000 people enrolled in Pillar 3, proof that Romanians do not trust such private institutions.
What has the current government done in Bucharest?
By changing the Fiscal Code, the amount of money transferred to the Pillar 2 (privately managed pensions) is reduced to just 3.7% of the total of 10.5%, which is the social contributions of the employees. That's the percentage of the total. In absolute amounts, money to Pillar 2 will be the same as last year. The Labor Minister of the Government has shown that this measure is taken in the context in which, due to the transfer of social contributions from the employer to the employee, all gross salaries will increase and thus the contribution to the pension will increase. The Minister explained very clearly: "These measures come with the reduction of the percentage of payment to Pension Pillar 2, from 5.1 to 3.7%, but (attention!) without affecting the current nominal value. More exactly, the amount paid today to Pillar 2 administrators will be at least the same for the year, but the drop (in percentage) is required as a result of rising gross salaries by 20%. "
You understand, there at FT? Did the service editor understand? We also add that the finance minister in Bucharest spoke very clearly about the fact that the administrators of the facultative private funds in Romania take advantage of the Romanians money either through excessively high wages or through unjustified commissions.
So, the money for the Pension Pillar 2 will not be less, but the tap through which the state flows from the private pension administrators will shrink.
The conclusion: The FT text wanted to lie to the reader or the FT was lied by the person who wrote that text. (20.11.2017)

Austrians from OMV Petrom, accused of damaging the state over 1.2 billion euros, by failing to pay VAT and other taxes

By Constantin Radut

The Austrian company OMV Petrom is accused by the president of a trade union Confederation that it damaged the Romanian state by 7 billion lei (over 1.2 billion euros). The statements on this issue were made at hearings at the Parliamentary Commission on the state of energy of Romania
The ways in which OMV Petrom has circumvented the debts to the Romanian state were non-payment of VAT, taxes on salaries, buildings, land, non-payment of royalties, as well as the recording of over-estimated expenses on soil decontamination presented to the Ministry of Environment. The union leader claims that documents highlighting this state of affairs exist at the Court of Accounts of Romania. The institution would have evidence that OMV Petrom's debts have not been recovered since 2015 to date. OMV Petrom rejects the allegations of non-payment of obligations to the state, the accusations made at the November 9 meeting of the Parliamentary Commission, according to a press release.
In this context, it is noteworthy that the CEO of the company was asked twice by the Parliamentary Commission to explain its unfair behavior on the Romanian energy market. Every time, OMV Petrom CEO refused to appear before the Parliamentary Commission.
This gives even more speculation that both OMV Petrom and other large foreign-owned companies in Romania are among the largest tax evaders in Romania.
In the following period, CEO of OMV Petrom was invited for the third time to the Parliamentary Commission. Other members of the Board of Directors and former Minister of Energy were invited.
The OMV Austria is the main shareholder of OMV Petrom, the former Petrom state-owned company being bought over 15 years ago at a derisory price.
The statements of the trade union leader come as the Government has adopted a package of fiscal measures regarding the increase of revenues to the state budget by each taxpayer observing the tax and parafiscal debts, including VAT.
Also, some parliamentarians and economic analysts show that the biggest damages to the state budget of Romania are brought by the subsidiaries of the foreign banks operating in Romania. In particular, the techniques of some banks to ask for loans at the mother banks with very high interest rates, thus remaining with a very small profit or losses in Romania, are brought to the spotlight. In this way, they do not pay corporation tax, but they enrich their mother banks.
It is worth mentioning that, out of the over 40 banks in Romania, more than 90% are units representing reputable banks in France, Austria, the Netherlands.(rbj/10.11.2017)

The extreme right build the Great Wall in the European Union

By Constantin Radut

The winning of parliamentary elections in Austria by the conservative Sebastian Kurz, president of the Christian Democratic Party (OVP), opens the door to a strong and hostile coalition of European Union policies.
Already, analysts and observers of the future of the EU believe that Brussels needs an urgent debate on its internal policies, especially as regards redefining the role of national states in the EU's austerity, austerity and migration policies in Europe.
Sebastian Kurz fulfills all the criteria to become the leader of a tough and disrespectful alliance with the projects of the two great powers, Germany and France.
Even before the elections, Kurz was made remarked by criticism of Angela Merkel's policy of "refreshing" European blood with immigrants from the Middle East or North Africa.
The coming to power of Sebastian Kurz, as Austrian Chancellor, will create an ultra conservative and revanchist in Central and Eastern Europe. Together with Viktor Orban and Jaroslaw Kaczynski, Sebastian Kurz assumes the quality of barring many of Bruxellex's projects, along with the other two members of the Visegrad Group.
A five-sided Visegrad gives the possibility of the extreme conservative in this part of Europe to impose a Great Wall in the European Union. A Wall of the arrogance, of the claims, and ultimately of the destabilizing the precarious order of the European Union.
In Budapest we hear the humps about Great Hungary, Warsaw does not cease to say that he is entitled to war reparations from Germany.
These are the signs of the beginning ...(rbj/17.10.2017)

The gap between East and West of Europe
By Constantin Radut
Between the East and the West of Europe, unity is only one of the world's eyes. Many Western states, such as the Netherlands, but also the Germany and the France, consider themselves superior and often defy most of the Eastern countries.
The Eastern European states feel frustrated and depressed by the arrogance with which, for example, the Dutch Prime Minister says non-consciously that Romania and Bulgaria have nothing to look for in the Schenhen area. And this, after nearly ten years,the two countries has spent billions of euros on sophisticated equipment purchased from the West to protect the eastern border of the Union.
Hungary demonstrates a fierce stubbornness in not accepting the established refugee quotas, says Budapest, arbitrarily by the bureaucracy in Brussels. Poland feels offended in its dignity because EC Vice-President Frans Timmermans treats Warsaw as imperialists from the colonial era. The opening, also by Warsaw, of the problem of potential war reparations from Germany is a real Pandora’s box.
The gap between the East and the Western European is cracking more and more.(rbj/06.10.2017)

The Romanian Business Journal
Constantin Radut
Editor in Chief
031726 Bucharest, Romania

+40 725 511 887