Over the last ten years, not paying back one's debts has become a tradition in Romania. When somebody has obligations towards the budget, they are called fiscal arrears; when they are related to the energetic sector they are called simply arrears. However, the range of unfulfilled obligations is not confined to macroeconomics: from the trivial apartment maintenance to electoral promises, Romania lives on rescheduled debts, granted more or less willingly. The advantages of a developed and prolific industry of retrievers - either governmental agencies or private institutions - cannot make up for the real situation, which indicates financial arrears that outran the financial or economic level and became a life style.
When somebody came up with the initiative to face financial problems by cutting down expenses as far as state-controlled economic units were concerned, two major objections were raised. The first was theoretic and its authors feared the danger of slowing down economic engines in the absence of arrears' lubricant. The second one was more pragmatic and pointed to a predictable opposition from those sectors leaving on budget and on energy. If the latter can be eliminated by introducing a valid system of motivations at the level of employees and managers, the former, the theoretical one, deserves special treatment.
At first sight, there are enough arguments supporting the idea that eliminating arrears, which are in fact a source of financing for many companies, might generate serious troubles and have obvious consequences at the level of macroeconomic indicators (industrial output, gross domestic product). The argument against this idea is more general: arrears are not confined to unpaid obligations between two economic entities, they have become a life style, a way to deal with economy, a fundamental behaviour opposed to the principles of market economy.
Government's indulgent attitude towards budget receivables, state-owned companies, regies and national companies is very harmful not only by its accounting and budget implications, but also because proficiency criteria are destroyed, while economic units' behaviour is perverted. States from Central Europe, among which Hungary, Poland and the Czech Republic, are not very much ahead Romania as far as income per capita is concerned, but they are fundamentally different because they managed to implement value criteria according to competition and market economy.
First, we should notice that the refusal to pay debts is the natural behaviour of an economic unit. At a microeconomic level, any unit who wants to increase its profit and postpone paying debts will certainly go for it. From this respect, tackling the issue at a microeconomic level would be the most reasonable solution. As a matter of fact, this is what Ordinance 58 intends to accomplish but its success depends on the efficiency of the formula negotiated by Government and trade unions.
Secondly, regulating flows between economic units at a microeconomic level will solve macroeconomic problems that authorities have been facing for many years. For instance, financing will be more accessible for those companies that are able to prove that they have a creditworthy market and that they can count on predictable revenues to come. The confusion created by the insecure situation of many state-owned companies eliminates right from the start the possibility to obtain cheap financing.
The offensive against financial arrears has had so far a constitutive flaw: it was supposed to be done through direct and determined intervention of the officials. Criticism against this approach refers to the fact that it neglects the role of economic units, but also to the possibility that, if balance is maintained without eliminating the causes that led to arrears' accumulation, state intervention will be constantly needed.
This solution, somewhat paternalist, was however predictable after so many years of communism, and its tone is easily recognisable in most segments of social life. Without exception, any public entity wishes the "nation's welfare"- parties, the Government, the National Bank, Romania's football team. All these intentions would be wonderful if "national welfare" really existed and were not a construction of a totalitarian origin. We (we, the state) will solve the problem of arrears and everybody will lead a better life, was the sentence predicated by those who have so far been coping with the issue. The reality is that the problem of arrears would not attract absolutely everybody's welfare-some firms will enter bankruptcy (it is not certain how many, that is right), others will have to cut down salaries. On the other hand, profitable firms will gain more and on the overall, the economy might enter a slight state of convalescence.
Within the debatable terms of politics, a social democrat approach on the issue of arrears and by extension on public speech in any segment can only be harmful at a moment when the criteria of competition are the ones to be lacking from the economic, political and social scene. The defence of "large masses" not only abounded, though on a demagogic tone, but it is even better sustained by a rational attitude, meant to put each individual of the crowd in the position where he can secure his own welfare, as he finds it suitable and to the extent he is able to, and not through the imposition of a paternalist attitude. Continuous preaching of "collective welfare" can only lead to painful deceptions. Not even the "before living better we live on poorer means" is involved, because it refers to "us", to collective good or bad, eliminating competition from the start, or at least not putting it in the foreground.
Communism meant the annihilation of private life, says a subjective definition of the long-set regime and it seems not to have anything to do with arrears, energy consumers or state budget. Still, it is related to these since it can offer a recovery solution by revitalising the individual and to microeconomic entities- of the firm with its entire inside architecture. However, all these micro-entities can only regain their natural functional role within a healthy motivational environment.
The feasibility of such a programme is sustained by the instances of some neighbouring states, among which Poland comes to the front through the regeneration of the microeconomic tissue well ahead of mass privatisation. Privatisation, indeed, is the optimal solution for a competitive structure of motivations, but, beside the fact that it is not a guarantee (there are enough Romanian privatised firms, even foreign capital ones, which have perfectly integrated themselves within the Romanian economic landscape), it is not even compulsory. The reestablishment of a structure of interests is what made Polish companies handle things so well, at the beginning of the '90s. Attributing higher responsibility to companies wherein the state, through the Finance Ministry or the Treasury, was only a stakeholder, as well as getting employees involved in a formal way in decision making were two measures that, beside similar decisions inside banks, have led to a healthy economic behaviour. Banks financed profitable firms, arrears did not accrue, companies diminished their number of employees themselves. And all this happened while the heap of debts grew in Romania because the management of enterprises was not attributed responsibilities, workers were not involved in an informal way in decision making and the banking system has lacked restructuring until recently.
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