“Romania First”. Just like “America First”

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By Constantin Radut
Donald Trump’s election campaign slogan was “America First”. The slogan used in America’s history of Democratic and Republican presidents.
Donald Trump respected his word and amended all US trade and multilateral treaties to bring benefits to his country.
Donald Trump’s economic policy has good results: the unemployment rate is one of the smallest in history, economic growth is strong, bilateral and multilateral trade treaties revert to the slogan “America First”.
Are Romania (or other states) allowed to initiate a “Romania First” reform program? Not!!!
Say, for example, AmCham Romania. An opportunist and unfair organization for the Romanian state.
Yesterday evening, Finance Minister Eugen Teodorovici announced a set of measures for banking and energy companies. The goal is to make profits, but also to support the Romanians’ living standards and the economic development of the country.
The Government’s draft is that it will introduce from 1 January 2019 a tax on banks’ assets, which will be charged differently depending on the Robor level at 3 and 6 months. Robor is a benchmark for interest rates on ROL loans. The Robor level is based on the information provided by the top 10 banks in the market. Some banks sometimes have surplus money (cash) and others need money. Therefore, banks borrow each other according to their needs and apply interest on these loans.
The Ministry of Finance has found that commercial banks operating in Romania use this indicator to make loans to beneficiaries (small and medium-sized companies or households) more expensive. Instead of encouraging credit, and therefore the development of companies and the economy, commercial banks make a profit on the basis of the difference between interest rates on loans (very high) and interest on deposits. For example, a 5,000-euro deposit at a bank brings the recipient a loss and does not profit. Because the difference between the two operations is in favor of the banks and the detriment of the depositors.
In Romania, more than 80% of commercial banks are subsidiaries or representations of parent banks based outside Romania. The profit of commercial banks (in 2017 and 2018, the profit was at the two-digit level) is transferred to the countries of origin, although the profit was obtained in Romania.
The Finance Ministry says banks will be charged at 0 if the Robor average at 3 and 6 months remains at 1.5% or less (now Robor is 3.0-3.5). The fee will be 0.2% if the Robor average at 3 and 6 months is between 1.5 and 2% and increases to 0.4% if the Robor average is between 2 and 2.5% inclusive.
The fee increases to 0.6% if the Robor average is between 2.5 – 3% and 0.9%, if Robor is between 3 – 3.5%. If the quarterly average Robor exceeds the reference threshold by more than 2 percentage points, the 0.9% tax increases progressively by 0.3 percentage points each for 0.5 percentage points.
The measures announced by the Ministry of Finance triggered a huge wave of boycott from financial operators and organizations supporting the injustice of the Romanian state and the Romanians.
Today, some boosters from the American Chamber of Commerce in Romania (AmCham) call for the immediate withdrawal of the draft Emergency Ordinance on the new tax measures announced by the Minister of Finance on 18 December with the intention of being implemented as of 1 January 2019 .
“We consider that the proposed measures and the way of adopting them are without responsibility and thought and induce a generalized chaos in the Romanian economy, which is confirmed by the first reactions on the capital market, indicating a rapid erosion of investors’ confidence in only a few hours since the announcement of this GEO. We again call for compliance with the legal framework on decision-making transparency and public consultation, “US investor representatives said in a press release.
Hey, Amcham and American investors, do not forget that you are Americans.
The slogan “I am the first” must work not only in America, with and in Romania.
So “Romania First”.
If the Government surrenders to the pressures of foreign companies, it will do the greatest harm to Romania and the economy of the country.

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