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Romanian stocks plunge as government unveils new taxes

December 19, 2018

BUCHAREST, Romania (AP) — Romanian stocks have dived after the government unveiled a surprise package to slash the budget deficit by raising 10 billion lei ($2.45 billion) of extra revenue, including through a tax on banks.

Finance Minister Eugen Teodorovici late Tuesday presented measures to boost revenue to remedy a fiscal shortfall that risked exceeding the European Union’s limit of 3 percent of GDP.

The plan includes taxing energy and telecommunications companies, capping natural gas prices until 2022 and a proposal to overhaul the pension system.

The proposals sent the Bucharest exchange’s BET Index down 8.1 percent Wednesday, the biggest slump in seven years.

Romanian President Klaus Iohannis on Wednesday appealed for the government to reconsider its proposals.

These measures “weren’t discussed with business leaders.... they’ll throw the economy into chaos.”

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