First aid economic measures in Romania – over RON 30 billion budget effort, Gov’t says

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The package of measures announced by the Government to help companies and employees affected by the new coronavirus epidemic is exceeding RON 30 billion (over EUR 6 billion), which means over 2 percent of GDP, said the Head of the PM’s Chancellery, Ionel Danca.

He explained that, multiplied in the economy, the impact mounts to RON 100 billion. According to the government official, the budget allotment to pay the technical unemployment is around RON 4 billion and can cover up to 1 million employees.

“In the first package of measures we adopted solutions for those already affected by the emergency of state and we advanced solutions related to the technical unemployment, for the situation is critical already, we have over 200,000 suspended work contracts and we expect this number to grow”, Danca said.

“On the other hand, there are companies that have no more access to financing, to the working capital, to investments and we also adopted some measures for these companies to help them and to guarantee their credit lines up to 90% through aid schemes granted by the state, with the interest subsidized by the state”, the government official explained.

Danca added that more measures are in store to help other categories of employees, such as the ones whose incomes come from independent activities (freelancers) or the authorized physical persons.

Danca also revealed that the budgetary allotment for the technical unemployment is around RON 4 billion, covering for 1 million employees.

“We are in talks with the European Commission that part of this budget effort to be covered from EU funds”, Danca mentioned.

The Government official says solutions are sought not only for SMEs, which are a priority, but also for other affected sectors.

” We’ve addressed SMEs so far, as a priority, but there are also big companies that feel the effects of this crisis and we are currently negotiating with these industries to design aid schemes for them, too. The automotive industry is a strategic one for Romania and we’ll look for solutions for it as well“, the head of the PM’s Chancellery said.

300,000 companies affected by the crisis’ 2nd wave

According to a Frames analysis, there are over 300,000 companies currently affected by the second wave of the economic crisis in Romania.

Most of the affected companies are the SMEs with maximum 20 employees in such sectors as hospitality, tourism, events, beauty salons, game rooms, convenience stores, etc, which closed their activity lately following the enforcement of the state of emergency and amid decreasing profits.

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