Romanian economy and sanctions against Russia
Bucharest supports the EU sanctions against Russia
Daniela Budu, 25.03.2022, 13:50
Romania supports and applies the sanctions packages adopted by the European Union against the background of the Russia-Ukraine tensions, and the Government of Bucharest is taking measures regarding the access of Russian-owned companies to public money and European funds. At the same time, the Executive has announced that it is preparing a set of measures to support vulnerable people and companies, having spent 3.4% of the GDP on similar projects since the beginning of the year.
According to the Minister of Finance, Adrian Caciu, the aim is to mitigate the increased costs generated by the disruptions in the fuel and food supply chains. Moreover, companies affected by the war in Ukraine can receive state aid, after the European Commission approved the temporary crisis framework supporting the economies and citizens of the Member States. These will offset the additional costs of the energy, fuel or food price crisis, as well as the effects of international sanctions on Russian companies.
Adrian Caciu:”Grants can be awarded ranging from 35,000 euros to 400,000 euros per company, depending on the specifics and the sector in which they operate, which will support the companies working capital and liquidities, as they will bear the cost of overcoming this complicated economic situation, as well as the inflation pressure that comes on top of the uncertainties generated by the conflict in Ukraine.”
Also, the Romanian authorities announced that the employees of the companies affected by the international sanctions imposed on Russia whose accounts have been blocked or of those who are unable to make transactions with companies from Ukraine, Belarus and Russia will benefit from furlough measures, the costs of which will be covered by the state. The beneficiaries will be the employees of companies whose revenues are affected.
The Secretary of State in the Ministry of Labor, Cristian Vasilcoiu, explains:
“Actually, the support is not just for companies, is for employees. (…), the ones that will receive these amounts of money. Obviously its going to be a breath of fresh air for the company as well. The state intervenes in order to keep jobs safe.”
As regards the banking sector, officials in the field give assurances that the Romanian banks are not directly exposed to the risks associated with the conflict in Ukraine. The vice-president of the National Bank, Leonardo Badea, has stated that the deposits attracted by Romania from Russia and Ukraine amount to very low values. He added that the 300 companies with Russian capital in Romania have a small role in all non-financial companies. Referring to the impact on the energy sector, Leonardo Badea has said that, between January and November 2021, 70 percent of the gas consumed in Romania was from local production and only 10 percent was supplied by Russia. (MI)
