BUCHAREST, Romania (AP) – Romanian stocks on Wednesday 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 12.3 percent by Wednesday afternoon, the biggest slump since the financial crisis of 2008.
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Among the worst hit were Romania’s Transylvania Bank which Wednesday afternoon was trading 18.3 percent down, while the BRD bank , owned by French Groupe Societe Generale which trading over 15 percent down. Austria’s OMV Petrom gas company was 13.38 percent lower.
The Coalition for the Development of Romania, which groups the country’s most important business associations, on Wednesday said the measures would harm important sectors such as the energy, telecommunications and private pensions.
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.”