Romania's main problem at the moment is the low number oflegally-employed workers, and the approach taken both by theprivate and the public sector, of making cost cuts by means ofredundancies has been the wrong approach, believes economist LiviuVoinea, 35, chief executive director of the Group of AppliedEconomics (GEA).
"The biggest tax burden for company owners is to hire based on anemployment record book because of the high level of socialcontributions they are required to pay. If these contributions weredown by 3%, 100,000 jobs could be created. The overall economycannot recover if we have fewer jobs, fewer people paying hightaxes. The economy can only be revived if there is a large numberof employees paying moderate taxes," says Voinea, who also teachesat the Academy of Economic Studies and at the National School forPolitical and Administrative Studies. At present, there are around4.3 million employees working in Romania, over 1.3 million of whomare employed in the public sector, while the active populationamounts to 9.7 million people, according to data from the NationalStatistics Institute.
The rise in the number of employees could cover a portion of thepension fund deficit, which currently amounts to 3.6 billioneuros.
Presently the level of social contributions (health, unemployment,and pensions) is 16.5% for the employee and 26.5% for theemployer.
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