<\/p>\n
\n
<\/p>\n
The Romanian government has issued
\nan emergency decree to modify the insolvency law. According to Prime Minister
\nViorica Dancila, the changes are meant to put an end to abusive practices such
\nas repeated insolvency seeking to evade the payment of obligations to partners
\nand the state budget. More than 6,000 companies employing over 64,000 people
\nare in insolvency at the moment. The government’s decree provides for the
\nconversion of debts into shares to be taken over by the state. The finance
\nminister Eugen Teodorovici says the tax authority will put in place a clear
\nprocedure in this regard. The business community has criticised the measure
\nsaying there’s no place for the state in a private company, while experts on
\ninsolvency speak about masked nationalisation. Eugen Teodorovici has explained
\nthat the changes to the insolvency law were meant to address the dysfunctions
\ntriggered by the application of previous versions of the law:<\/p>\n
<\/p>\n
\n
<\/p>\n
These dysfunctions have caused budget arrears of more than 63 billion
\nlei (13.5 billion euros) from the companies in insolvency, while only 6% of the
\nsums owed to the body of creditors have been recovered. We can also add here
\nthe arrears to the lending companies in the private sector. We must allow for
\nthe conversion, reduction or transfer of the debts to the budget, under certain
\ncircumstances, of course, in order to prevent the bankruptcy of many companies
\nwith a real potential of recovery and other serious social and economic
\nconsequences.<\/p>\n
<\/p>\n
\n
<\/p>\n
The finance minister has also said
\nthat the regulations proposed aim to ensure the necessary conditions to allow
\nfor the recovery of companies so that they continue to operate and thus protect
\npublic funds through the recovery of the money owed to the state budget. The
\nmain changes to the insolvency law also include greater responsibility for
\ninsolvency administrators and more accountability for debtors in the management
\nof their companies. Other changes refer to the fact that the request to start
\nthe procedure will be rejected if the National Agency for Fiscal Administration
\nhas not been notified in this regard. According to data published on the
\nwebsite of the National Trade Register Office, the number of commercial
\ncompanies and authorized natural persons in insolvency dropped by almost 2.5%
\nin the first 8 months of the year compared with the same time last year. Most
\nof them are in Bucharest, while the areas most affected by insolvency are
\nretail and wholesale trade and car and motorcycle repair services. <\/p>\n
(Translated by C. Mateescu) <\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
The state will from now on be able to take over shares in exchange for company debts<\/p>\n","protected":false},"author":46,"featured_media":74116,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[37738],"tags":[34062,29668,38057,39443],"coauthors":[],"class_list":["post-78979","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-today-in-the-news","tag-eugen-teodorovici","tag-insolvency-law","tag-public-debt","tag-state-owned-companies"],"acf":[],"yoast_head":"\n