Gov't to roll out support program for large companies

Prime Minister Ludovic Orban said that as part of the economic relaunch measures, the government will roll out a program to support large companies through a trade credit insurance guarantee system.

"One of the major problems here in Romania is the insufficient support for companies. The stock market isn't fully fledged yet. (...) The financial-banking system is a relatively prudent system. Intermediation is at 25 - 27 pct. This is not normal. The financial-banking system must support the economy. They were fine with lending to the state, which is a guaranteed payer (...) We will launch the program for the support of large companies in order to incentivize the financial-banking system to finance investments or working capital loans the companies so badly need. If a company gets into a financial bottleneck, it affects several other businesses, it poisons an entire economic chain. This is where the commercial credit insurance system comes in. We are preparing this instrument to guarantee the commercial credit insurance, to keep economic relations flowing," Orban told private TV broadcaster Digi 24 on Monday.

The Prime Minister announced that the government will use "all the possible instruments to support investments", including by creating an investment fund capitalized from budget resources or European funds, "to the extent we will be allowed to".

"There are 100 million identified for capitalization. We still have about 200 million euros. (...) The idea is to proceed to stock market listing, to issue fund securities. To issue bonds in time. But first the fund needs to prove its capabilities, to prove that it has the capacity to generate profit from the investment we make," Orban added.

The PM also said that "for many years now, the wrong economic growth model has been applied in Romania," one that "artificially stimulated consumption by increasing incomes without economic coverage in government-controlled areas".

"There has been no support for investment, for the development of production capacity, there was no support for research, innovation, development, economic transfer - for everything that ensures competitiveness. Catastrophic decisions have been made from an economic point of view, which have destroyed the competitiveness of Romanian companies - just see Ordinance No. 114," Orban added.