The interest of the Romanian business environment regarding the SURE initiative – Mazars analysis

Tue | 04.08.2020

Accounting/audit/tax

The interest of the Romanian business environment regarding the SURE initiative – Mazars analysis

 

At the beginning of July, the Romanian Government announced the National Plan for Investments and Economic Recovery, created to support the entire business environment. The Government’s support has been structured around three financing sources, namely: non-reimbursable European funds (POCU), SURE program of the European Commission, and the State budget/ Unemployment insurance budget.

 

Two weeks ago, Mazars launched a market study with the scope of identifying the efforts and challenges of the Romanian business environment in managing the critical period we are going through, and the results can be of help in shaping the response of the Government. (Consult the picture attached) 

 

One of the measures included in the National Plan for Investments and Economic Recovery refers to the implementation of a flexible work system. Based on this, the partial compensation of monthly income for the employees who will have reduced working hours in companies affected by the crisis would be made from funds made available by the State. In this context, Mazars have also investigated scenarios with a negative impact on the employees in the absence of governmental measures. Thus, for 18% of the participating companies which have modelled various financial scenarios for the current year, restructuring of employees is not included in the agenda for 2020. Also, for 34% of the companies, no decision has been made yet, the financial situation would be re-examined each month until the end of the year. Finally, 48% of the companies ran various scenarios for reduction of their workforce by 10%, 15%, 20%, or even 50%.

 

An alarm signal raised from the response of the participating companies is related to their reluctance in accessing the funds which will be available, because of the bureaucracy they foresee, taking into account their experience from the usual interaction with the public administration. This concerns 20% of the participants who consider from the beginning that accessing such funds will involve bureaucracy and 68% which have not provided an answer yet, but which are waiting to see the conditions for the application of the program. Only 12% of companies declared that they would like to access the program, even if they will have to request support from consultants for this.

 

Starting July 15th, the Government of Romania extended the state of alert by 30 days. The current restrictions are kept, and the companies have to go once again through the following months with a lot of uncertainties. The first steps towards the reconstruction of the economy were made and the path will be challenging.

Read more info HERE.

 

Enterprise reshaping: the path towards resilience – Mazars insights on businesses

 

After several years of growth, at an annual rate of around 4% driven by private consumption, the Real GDP of Romania is projected to contract by 6% during 2020, according to the forecasts of the European Commission published in May 2020. From a people management perspective in the same month, half a million employees had their contracts suspended, and almost another half terminated.

 

Mazars’ experience across a wide range of industries allows them to quickly assemble a multi-functional team best suited to meet your business needs:

 

Mazars supports your organization to identify operational inefficiencies, saving costs, and reducing overheads. They will look at unprofitable business segments, divisions or affiliates, and any weaknesses in systems, procedures, and controls.

 

By repositioning your business, refining operations, managing costs, and improving margins, your organization will be able to achieve greater profitability and growth, whether you are a Romanian or international firm active on the local market.

 

Read more info HERE.

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