With less than half of the total number of employees in Romania, the private sector accounts for almost 70% of the Gross Domestic Product.
The APAPS portfolio is left with some companies that no one wants, also because no investors are willing to take on an oversized staff that they also have to keep for a while. Investors are also driven away by the big losses posted by these companies, which should have been restructured years ago. These losses are born by every Romanian taxpayer.
The International Monetary Fund has asked the authorities to stop postponing restructuring, which must start with downsizing in the loss-making state-owned enterprises.
The Privatisation Authority is working on a list including some 30 companies, which must let about 18,000 employees go, according to the understanding with the IMF. Moreover, the Industry Ministry is drafting a progamme stipulating the layoff of 6,000 employees from the mining sector. Contacted by Ziarul Financiar, APAPS officials had no comments by the time the story was ready for print.
The "30 list" must be endorsed by a Government decision, with the fired workers to benefit from the Emergency Ordinance passed by the Executive, on boosting the restructuring, reorganisation and privatisation of state-owned national and trade companies.
"The talks focus on drawing a concrete list of companies, mainly to see which ones are likely to be privatised more easily after the personnel cutbacks. Furthermore, we shall consider the arrears accumulated by the respective companies," Graeme Justice, IMF's resident representative to Romania told Ziarul Financiar.
In the past two weeks, officials from APAPS and the Industry Ministry have met several times at the Finance Ministry headquarters to approach the concrete ways of respecting the pledges included in the memorandum of understanding that will be discussed with the IMF.
The main candidates for personnel cutbacks are those companies that are generally mentioned in the IMF memorandums, on account of their thousands of billions of ROL in debts: Siderurgica Hunedoara, Tractorul Brasov, Roman Brasov, Nitramonia.
Companies such as Republica, Oltchim, Electroputere and Faur also need to downsize, to have a shot at privatisation. In many cases, although several investors had voiced interest, they were driven away by the oversized staff.
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