Romania's main problem at the moment is the low number of legally-employed workers, and the approach taken both by the private and the public sector, of making cost cuts by means of redundancies has been the wrong approach, believes economist Liviu Voinea, 35, chief executive director of the Group of Applied Economics (GEA).
"The biggest tax burden for company owners is to hire based on an employment record book because of the high level of social contributions they are required to pay. If these contributions were down by 3%, 100,000 jobs could be created. The overall economy cannot recover if we have fewer jobs, fewer people paying high taxes. The economy can only be revived if there is a large number of employees paying moderate taxes," says Voinea, who also teaches at the Academy of Economic Studies and at the National School for Political and Administrative Studies. At present, there are around 4.3 million employees working in Romania, over 1.3 million of whom are employed in the public sector, while the active population amounts to 9.7 million people, according to data from the National Statistics Institute.
The rise in the number of employees could cover a portion of the pension fund deficit, which currently amounts to 3.6 billion euros.
Presently the level of social contributions (health, unemployment, and pensions) is 16.5% for the employee and 26.5% for the employer.
Romania's main problem at the moment is the low number of legally-employed workers, and the approach taken both by the private and the public sector, of making cost cuts by means of redundancies has been the wrong approach, believes economist Liviu Voinea, 35, chief executive director of the Group of Applied Economics (GEA).
"The biggest tax burden for company owners is to hire based on an employment record book because of the high level of social contribution
