Although Australia has escaped reasonably unscathed from the Global Financial Crisis, Eastern Europe has born the brunt. Cristina Ranca from MWB Romania recently shared about the current problems crippling Romania, highlighting why our help is needed more than ever.
“While in other countries we see signs that the recession gets ‘tamed’, Romania’s recent measures taken against recession, seem to dismay the European Union. After ten years of relative economic growth, politicians realized that they must take drastic measures meant to improve finances, but the measures taken by Romania are severe. International press calls Romania “the victim” of its own wicked austerity plan.Within a matter of three days, the Executives decided upon the increase of the VAT level from 19 to 24% (similar to Australia GST). “The best solution at the moment” (Emil Boc, Romania’s Prime Minister) was taken after the Constitutional Court decreed that the pensions’ 15% reduction was not constitutional. The change in the VAT percent was maybe the only solution for Romania to get the new loan from the International Monetary Fund.
On July 2nd this year, the executive Board of the IMF completed the 4th review of Romania’s economic performance under a program supported by a 24 months Stand-By Agreement and approved a new disbursement.The VAT 5% increase, the public employee’s reduction and the 25% cut from public salaries are the main measures meant to diminish the budgetary deficit by 2 percent.
Major protests were held all over the country. At the end of June, protesters gathered in front of the Parliament, asking the President and Prime Minister’s resignations. They set on fire the portraits of different ministers, after previously impaling them. “They can just as well kill us”, they [the protesters] shouted.
However, on July 1st, the VAT was increased as announced three days before. Among the effects of the VAT increase, we can count the decrease of consumption, increase of tax evasion, growth of inflation rate, bankruptcy, etc.
The so-called “social genocide” strikes the population in all aspects:-
- All medical services that used to be free of charge will be paid for: first from the monthly contribution to the state, and secondly from one’s pockets: family doctor visits, hospitalization, recovery, tests, etc.-
- Although the tax for medicines remains at 9%, the subsidies given by the state only apply to the cheapest (and usually ineffective) medicine in the respective therapeutic class. Patients with severe, clinical illnesses united to send a plea to the European Parliament, stating that the new compensation system is “an attempt to their health”. Pharmacies have great debts to the medicinal providers, which are the creditors of the health system.-
- 200,000 people in the state sector were let go, and should an economic stability not occur, thousands of others are to become unemployed. -
- Day by day, the national currency depreciates in report with the US Dollar and EURO $.
- Romania’s population still registers a negative growth, continuing the demographic decline started at the beginning of 1990’s.
- With 11 deaths per 1000 children under 5, Romania is on a shameful first place in Europe. The death rate for children under 1 is 13/1000, while the average in EU is 5.7.
These facts mirror Romania’s instability of all kinds. The new disbursement given by International Monetary Fund is actually meant for social insurance payments: retirement and handicapped pensions, unemployment and maternity benefits and children’s allowances. Combined with the 25% salary reduction, the new VAT deepens Romanians in dire poverty. In short, the repercussion on the population will be higher than 5%: the income gets smaller and the expenses go through the roof.
The beneficiaries enrolled in our programs are not spared from hardships. In times like these, they constantly call for our help, which is their only hope. On every delivery we make, our beneficiaries extend their gratitude while so many families pray and hope for our support.”
Why do we share this detail with you? So you can understand the magnitude of the problem and pray for wisdom for our field staff, volunteers, church partners and international leadership. We face challenging times, but we serve an Almighty God who can ahcieve miracles, but also calls us to be good stewards of all He has given us.
If you would like to support our ministries to children, families, the elderly and disabled, we would love your support! Click on the link to Donate Now to make a difference or contact our office (02 9647 2022) to make a donation over the phone - every dollar counts!
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