on the organization of the debate “Supporting business community: between economy and politics”. Developing Political Culture through Public Debates”. Public debates series held by the news agency IPN in its conference room with the support of the German Foundation “Hanns Seidel”
Held on 30 April 2020, Debate No.130 brought together: Democratic MP Ludmila Guzun; MP of the Action and Solidarity Party Radu Marian and IPN project’s standing expert Igor Boțan.
The IPN project’s standing expert Igor Boțan said that everybody expects the pandemic to pass so that they could return to the usual activities as the given period is rather long. The representatives of the business community suffer losses and it is normal for the authorities to come up with support measures. The Republic of Moldova has limited potential, but even if it’s limited, those from power should take measures so that things return to normality as swiftly as possible.
The expert said no country has the experience through which the Republic of Moldova goes now. Each state learns on the fly and a lot depends on the potential of the country, including for supporting the business community. As regards the adoption of such measures, international practice in exceptional situations shows that the governments or, as it is in the case of the Republic of Moldova, the Commission for Excisional Situations can adopt decisions with derogations from law. But it is important for Parliament to be later able to adopt these provisions through its mechanisms, if it’s possible.
The expert noted that society witnesses political controversies over the measures aimed at supporting the businesses as these should be debated from all viewpoints. Even if a state of emergency was declared, all the legal norms should be respected, parliamentary control should be exercised and the legal procedures should be obeyed.
Democratic MP Ludmila Guzun said that Parliament on April 23 adopted several laws in support of the business community, which are interdependent to a certain extent. The problems in the economic sector become more evident and all the actions should be aimed at supporting the business community, but without neglecting the health sector that is responsible for public health. Also, the needs satisfied with public budget funds should be examined in relation to the possibilities of the public budget.
According to the MP, the subsidization of interest on loans is one of the most discussed measures of those that were adopted. Various opinions existed about this. The refund of the VAT to business entities is another measure that generated reactions as it does not refer to all businesses. This support is yet intended for 16,000 businesses. The hospitality industry is one of the most seriously stricken sectors. By the adopted measures, the VAT for this industry as from May 1 is cut from 20% to 15%. This is a stimulating measure.
Ludmila Guzun said there are support measures that have been discussed less, like the fact that 50% of the airport charge of €9 will be transferred to the public budget. The sum estimated at 71 million lei will be directed to the Population Support Fund that supports the socially deprived groups. “I return to that question – is it sufficient or not? It is not as most of the given measures stimulate economic activities. I know very well that specialists of the Ministry of Economy are close to finishing another package of measures that will be submitted to the Government and, I hope, will be ultimately adopted by Parliament so as to supplement the support package intended for businesses,” said the MP.
MP of the Action and Solidarity Party Radu Marian said the idea of transferring half of the airport charge to the state budget is very good, but the question is, why didn’t they decide that the whole tax of €9 should be returned to the state? Also, the party supports the reduction of the VAT rate for the hospitality industry. Even so, there are more arguments against the adopted measures. First of all, this refers to the subsidization of interest rates on loans taken out by business entities. This measure does not help the SMEs as they didn’t work and cannot raise a bank loan. This way, this is an advantage for large companies with a very good situation that have current assets, etc.
The MP noted the PAS group proposed creating a guarantee fund of 2 billion lei for businesses in difficulty as an alternative. The proposal was included in a bill that wasn’t registered in Parliament, but was to be undertaken by the Government so as to be implemented faster. “This is our approach. We want to come up with ideas and the Government should take good decisions. This alternative as regards the creation of a guarantee fund will be much more suitable for helping business entities instead of simply subsidizing interest rates,” he stated.
As regards the refund of VAT on the payment of salaries, Radu Marian said the companies in a better situation that pay salaries will be again advantaged. The examples of the European states show a different approach. There, they partially subsidize the salaries of employees of companies that didn’t work. By such alternative measures, bankruptcy, layoffs and an explosion in unemployment can be avoided. As a result, the economic recovery will be swift.
The Agency published 7 news stories on the debate (see the English version of www.ipn.md): on 30.04.20, „ Supporting business community: between economy and politics. IPN debate” - https://www.ipn.md/en/supporting-business-community-between-economy-and-politics-ipn-debate-8004_1073213.html; „Radu Marian: Companies cannot secure loans as they do not perform economic activities” - https://www.ipn.md/en/radu-marian-companies-cannot-secure-loans-as-they-do-not-8004_1073215.html; „Igor Boțan: We must learn from crisis and debates on measures” - https://www.ipn.md/en/igor-botan-an-agreement-should-not-contain-provisions-that-suit-8004_1073218.html; „Igor Boțan: An agreement should not contain provisions that suit more powerful partner” - https://www.ipn.md/en/igor-botan-an-agreement-should-not-contain-provisions-that-suit-8004_1073220.html; „Ludmila Guzun: Economy Ministry works on new support measures intended for businesses” - https://www.ipn.md/en/ludmila-guzun-economy-ministry-works-on-new-support-measures-intended-8004_1073221.html; „Radu Marian: They waste money on companies that do not need it” - https://www.ipn.md/en/radu-marian-they-waste-money-on-companies-that-do-not-8004_1073222.html; „Ludmila Guzun: Businesses should be supported without neglecting healthcare” - https://www.ipn.md/en/ludmila-guzun-businesses-should-be-supported-without-neglecting-healthcare-8004_1073223.html.
IPN promoted the debate before and after the event, in particular the ensuing news stories, using all the available channels, including social networks. Confirmatory materials of deliverables, as well as a media coverage dossier are attached.
Valeriu Vasilica, director of IPN