Financial expert Adrian Codirlașu has a quick solution for increasing budgetary resources – selling minority stakes in profitable state-owned companies.
“This means that the state retains control, the state decides what happens. However, the Bucharest Stock Exchange already has governance codes that are fully compatible with those of the OECD. Those companies would be subject to those codes. It would be a listing condition on the stock exchange,” Codirlașu stated in an interview with spotmedia.ro.
Codirlașu emphasized that listing state-owned companies could increase their profitability and, consequently, the state's revenues from dividends: “We see that those state-majority companies listed so far give almost all their profit as dividends.”
According to Codirlașu, the amount the Government could obtain from the sale of shares ranges between 10 and 20 billion euros. “Being a one-off sale (meaning it happens only once, not recurrent), it does not factor into the deficit calculation, going directly into the Government's reserves,” he explained.
Advantages for public debt
The financial expert specified that such a maneuver would quickly reduce borrowing costs: “It would quickly lead to a decrease in loan interest rates because it would be enough for the Executive to show that it has financial reserves to be able to expect lower interest rates. The Government would have a very wide margin of action. This would reduce the burden of external debt. We already see that what we pay on public debt is very high.”
Thus, selling minority stakes in public companies is presented by Codirlașu as a quick and efficient solution for strengthening the budget and reducing the burden of the state's debt.
Read the full interview conducted by Emilian Isailă with financial expert Adrian Codirlașu, which will soon be published on Spotmedia.ro.