Romanian stocks plunge after new tax package

BUCHAREST, Romania (AP) — Romanian stocks slumped at a decade-high rate Wednesday after the government unveiled a surprise package to slash the country's budget deficit by raising 10 billion lei ($2.5 billion) of extra revenue, including through a tax on banks.

The stock slide came a day after Finance Minister Eugen Teodorovici presented measures 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.

Bucharest exchange's BET Index closed down 11.2 percent, its biggest retreat since the financial crisis of 2008.

Among the worst-hit shares were Romania's Transylvania Bank which ended 19.9 percent down, while the BRD bank, owned by French Groupe Societe Generale ended the day 16.6 percent lower. Austria's OMV Petrom gas company was about 13 percent lower.

The Coalition for the Development of Romania, which groups the country's most important business associations, said the government measures would harm important sectors in the economy. And Romanian President Klaus Iohannis, who has been a consistent critic of the Social Democratic government, has urged the government to reconsider.

He said the measures "weren't discussed with business leaders.... they'll throw the economy into chaos."