On loans and social measures
The government in Bucharest has approved new measures to support people with financial problems.
Leyla Cheamil, 28.07.2022, 14:13
People in financial difficulty will be able to postpone the payment of their loan rates, as the Romanian government on Wednesday approved the details of an emergency order providing for this possibility. The measure only applies to private individuals with no outstanding payments and to legal entities who can prove their revenues dropped by 25% last year. The period during which payments may be suspended and postponed is established at the debtors choice, but may only last between one and nine months.
People who have contracted loans under government schemes to facilitate the purchase of a first or new home may benefit from this measure if they contracted these loans this year, but no later than 30th April. The suspension of payment is based on a declaration from the applicant submitted to the financial institutions in question, and no one who will access this instrument will be penalised. However, the postponement of loan payments approved by the government also has a negative side. The finance minister Adrian Câciu and economic analysts are all recommending people to pay their debts on time, but switch to a fixed interest rate. The minister said that in the end, people will still have to pay the amounts they have postponed, as well as the interest rate that has accumulated in the meantime.
The 3-month ROBOR index, which is used to calculate the cost of consumer credits in lei with a variable interest rate, has kept growing for some time now, much to the despair of those who have loans to pay back. It hit 7.71% a year on Wednesday, the highest level since may 2010, when it stood at 7.81%. The 6-month index, which is used to calculate interest rates on mortgages in lei with a variable interest rate, also grew to 7.83% a year.
In another move, to support the people most vulnerable to the galloping inflation rate, the government will hand out financial aid for the purchase of basic food products. The ministry for investments and European projects said that 2.5 million cards worth 250 lei (the equivalent of some 50 euros) will be distributed by the postal service by the end of the week. This amount will be granted once every two months until December as part of a government support programme. The cards are valid 12 months from when they were first charged. With pensioners one of the most vulnerable categories, finance minister Adrian Câciu said pensions will be increased at the beginning of next year. Marcel Ciolacu, the president of the Social Democratic Party, also in government, said it remains to be seen if all pensioners will benefit from the increase or only those with low and medium incomes. According to the labour ministry, Romania had 4,800,000 pensioners at the end of March. (CM)
