State companies targeted for restructuring

Prime Minister Emil Boc declared on Radio Romania Actualităţi that the restructuring of state companies would not start from a predetermined number, as it had happened when the budgetary unit had been restructured.

Prime Minister Emil Boc said during the radio programme "News in debate" that one of the main goals of IMF visit in Romania aimed at restructuring state companies.

Also, Emil Boc said that they would join a restructuring process under the conditions imposed by the new precautionary agreement.

Moreover, the Romanian Prime Minister said that each company would be restructured and that the minister concerned "must provide explanations based on cost-benefit analysis undertaken on each company in subordination".

Emil Boc stated that restructuring would not start as it had happened with the state employees, when the restructuring started from a predetermined number.

"We have to restructure state companies in order for them to be effective and not spend money from taxes paid by citizens", the Prime Minister said.

The Prime Minister stressed that "any state-owned company operating on loss, any state company that is ineffective is financially supported from public funds or public money, namely taxes paid by citizens".

Moreover, Emil Boc said that the objective was that "Romanians should no longer pay to support inefficient state companies in Romania".

Prime Minister Emil Boc said that the visit of the IMF would finish on 1 August.

Executives in the hands of private firms

The Romanian Government has signed a precautionary agreement with the IMF and the European Commission to restructure the state companies sector in order to reduce losses.

The Ministry of Economy intends to privatize the management of several state companies under its supervision.

More specifically, the management of these companies would be decided in an auction.

None of the names of the state companies whose management will be privatized has yet been made ​​public.

The Ministry of Economy has in his subordination companies such as the National Natural Gas Company Romgaz S.A., the National Power Grid Company Transelectrica S.A., the National Hydropower Company Hidroelectrica S.A. and the National Salt Company Salrom S.A.

In the last years, companies such as the Romanian Railways Company or the National Hard Coal Company have accumulated losses of around one billion euros each.

Another example is the public television. According to the activity report presented last week in the Parliament, the Romanian Television Corporation (TVR) registered a loss of nearly 40 million euros last year.

There are also state companies that record profits, but they are only exceptions according to the former Minister of Finance Ionuţ Popescu.

Audio: full interview granted by Prime Minister Emil Boc on Radio Romania Actualităţi

Translated by: Denisse-Meda Bucura
M Student, MTTLC, Bucharest University