The BNS National Trade Union Bloc is drawing attention to the major risks generated by the delay in approving the budgets of companies in the national defence industry, saying that "the lack of immediate action may lead to the collapse of companies essential to the national security."
According to a BNS press release on Thursday, the Romanian government, the Ministry of Public Finance and the Ministry of Economy, Digitalisation, Entrepreneurship and Tourism are asked to speed up the approval of the income and expenditure budgets of the defence business operators, agerpres reports.
The trade unionists are of the opinion that, otherwise, they will generate serious effects, such as: delayed pay, non-payment of social security contributions and the risk of triggering labour conflicts within strategic companies, as well as an exodus of engineers and specialised operators; suspension of payments for utilities, with the risk of interruption of production and massive additional costs for the restart of installations; freezing the multiannual program on the acquisition of machinery, technological modernisation and new capacity projects require commitment appropriations included in the budget.
"Without these, framework contracts with foreign suppliers cannot be signed, commercial quotations lose their validity after 60-90 days, and new offers are already indexed for European industrial inflation, which raises the price per project by 8-12% and erodes economic sustainability," according to BNS.
There is also a risk of blocking essential investments for refurbishment, modernisation and expansion of production facilities, loss of access to European funding, including grants under the Act in Support of Ammunition Production and the European Defence Fund programmes, where the minimum national co-funding requirement of twenty percent must be proven by a budget approved on the date of application.
In addition, the right to make current and capital payments may be suspended, which will cause a severe liquidity shortage. Thus, companies are forced to resort to expensive bank bridge loans, and banks increase risk margins or ask for additional guarantees, says BNS.
There will be negative effects on Romania's image in relation to NATO and EU partners, by compromising its ability to honour international contracts.
"In the absence of an approved budget, defence companies are forced to resort to expensive bank loans, with major risks of default and chain impact on the entire supply chain, especially small and medium-sized enterprises. Under Government Ordinance 26 of 2013, the income and expenditure budgets of business operators that are approved by government decision shall be submitted to the Ministry of Finance for approval/signature, as the case may be, within 120 days of the entry into force of the annual law on the national budget. And their approval is made within 150 days from the date of entry into force of the annual state budget law, that is February 13, 2025. This deadline would expire in three days, i.e. Tuesday, July 15, 2025."
BNS also pointed out that, given that the lack of immediate action can lead to the collapse of some companies essential to the national security and to the loss of strategic funding and development opportunities, it is necessary to urgently complete the budget approval process.
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