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Romania plans loan moratorium for vulnerable people, firms; to freeze state employment

Romania plans loan moratorium for vulnerable people, firms; to freeze state employment Romanian PM Nicolae Ciuca source: gov.ro

BUCHAREST (Romania), May 24 (SeeNews) - Romania's government said it plans to introduce a temporary moratorium on bank loan repayment by people and companies in financial distress as of July 1 as part of a 1.1 billion euro ($1.17 billion) package of social and economic measures, and aims to freeze employment in administration and state institutions.

The repayment of loan installments will be postponed for nine months for those who "were impacted by the recent multiple crises", the government said in a social media post on Monday, announcing new measures within its "Support for Romania" programme.

Also, a financial support of 700 lei ($151/142 euro) will be granted to the retirees whose pensions are lower than 2,000 lei.

The third measure in the package refers to the allocation of a quarter of the existing salary difference to some categories of public employees, in accordance with the Law on Unitary Remuneration.

The government also said it plans to take measures for fiscal consolidation and compliance with public deficit commitments, without providing a specific timeline.

Thus, it aims to cut budget expenditures by at least 10%, except for those related to investments, salaries, pensions, social assistance, and to suspend new employment by the state.

According to finance ministry data published in January, some 1.262 million people work in the public administration and institutions.

Also, the government plans to increase the collection of revenues to the general consolidated state budget by 10 billion lei, and accelerate the absorption of EU funds within the operational programmes and the national resilience and recovery plan. In this regard, the coalition will conduct a monthly assessment of the degree of absorption of funds. Meanwhile, the government decided to expand the staff of the the European investments and projects ministry by approximately 30% to 1,943 people, in order to improve absorption of EU funds.

In April, the Romanian government announced the 17.3 billion lei "Support for Romania" package of social and economic measures aimed to keep consumer prices at bay, which is to be implemented between May 1 and June 30. About half of the total funding, or 1.8 billion, is covered by European Union funds and the rest is provided by the state budget.

(1 euro=4.9472)

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