Active measures to support the economy
The Romanian PM presented an analysis of the Romanian economy on the same day when the Romanian President announced that the state of emergency in Romania would not be extended.
Corina Cristea, 05.05.2020, 13:50
The economic downturn has not been as serious as the government had expected for the duration of the state of emergency in Romania, the Romanian PM Ludovic Orban told a press conference. Budget receipts were not as small as predicted by pessimists and this was due, according to the PM, to the good measures taken to support the economy, such as the VAT return with subsequent control actions and the continuation of activity in constructions.
PM Orban also talked about new measures to re-launch the economy. According to him, Romania could take advantage of an international economic context in which it could be a pole of attraction for substantial relocations of production facilities from certain countries. Romania is ready to provide very good conditions to attract those companies willing to relocate their production facilities, and received signals in this respect, the PM said, adding that relocations could be an engine for growth.
The PM Ludovic Orban also believes that investments are critical to economic recovery, and announced that a mechanism would bet set up in the coming period, to guarantee the working capital and investments of big companies, after the model of SMEs Invest program, which allows SMEs to take out loans to ensure their liquidities.
The prime minister also announced that the EBRD would support projects of economic recovery in the private and public sectors by a maximum amount of 4 billion Euros, and that a state-aid scheme would soon be made available by the Romanian government, for which it received the support of the European Commission. The measure targets mainly the big electricity consumers, and helps companies to access natural gas and electric energy, at least, at the average European price.
Another instrument the Romanian government is going to use to support investments is the ‘greenfield’ state aid for investments, which, according to PM Orban, are either made by new companies on the Romanian market, or are development projects of new industrial facilities of certain companies that are active on the Romanian market. The government is equally working on a state-aid scheme to guarantee and ensure commercial credits, a mechanism that is already operational in Germany and Italy.
The Romanian government is also trying to channel substantial European funds to support small and medium sized enterprises, especially their investment projects. The government’s target is to exceed the amount of 6% of the GDP allotted to public investments for a maximum period of 2 years. The PM also said that the government is considering massive growth for all types of infrastructure — transport, energy, health, communications and agriculture. (translation by L. Simion)
