Romanian investment fund Fondul Proprietatea, managed by global investment manager Franklin Templeton says proposed government tax plan is “a ticking bomb for the Romanian economy.”

According to FP, the mandatory private pension scheme is at risk. “Private pension funds have steadily supported the growth of the Romanian capital market. If passed, the decree would indefinitely delay Romania’s upgrade to the emerging market status from frontier,” says FP.

Fondul Proprietatea also says proposed 3 percent tax of turnover for energy companies could trigger the insolvency of a number of these companies and subsequent layoffs, which would seriously endanger the security of the entire energy system in Romania.

“If adopted, the proposed measures will have significant negative effects that will cascade over the entire Romanian economy, will jeopardize future growth and will isolate Romania from the international business environment,” says Johan Meyer, Portfolio Manager of Fondul Proprietatea. “Moreover, many of the proposed measures will be borne by end consumers, due to increased energy prices and costs of credit. For measures that have so far-reaching effects, the predictability and transparency of the legislative process is vital, as well as considering very carefully their financial and economic impact.”