Radio România Internațional

Tag: state-aid

  • State aid for companies affected by the war in Ukraine

    State aid for companies affected by the war in Ukraine

    The European Commission has approved the reintroduction of a state aid scheme in Romania of approximately 2.5 billion Euros (12.5 billion RON) to support companies in the context of Russia’s war against Ukraine. The aid consists of loans as well as of non-reimbursable funds that will be granted to Romanian companies until June 30. The amount of support is divided into categories. Thus, companies in the agricultural field can receive up to 280,000 Euros, companies in the fishing and aquaculture field, up to 335,000 Euros, and companies operating in the rest of the sectors can benefit from aid worth up to 2.25 million Euros. According to the Commission’s analysis, the request made by Romania complies with the conditions provided for in the crisis and transition framework. The Romanian state requested such an agreement for the first time on September 9, 2022, which was approved in January 2023 for the entire year. Following the expiry of this deadline, the Commission once again approved the reintroduction of the state aid scheme to ensure sufficient liquidities for companies on the Romanian market.

     

    The measure is seen as necessary and proportionate to remedy the irregularities in the national economy. Moreover, the Romanian Prime Minister Marcel Ciolacu had announced, a few days ago, that the government would extend this year the IMM INVEST PLUS state aid scheme, to overcome the economic difficulties created by Russia’s invasion of Ukraine. This is a government lending program for working capital and investments aimed at SMEs and large companies in Romania. Approximately 11,500 companies can receive such funds. The program was initiated to ensure, until June 30, access to financing by companies that do not have the necessary sums for investment projects and for the continuation of their activity, the Finance Ministry announced. We want to support vital sectors such as agriculture, constructions and production and to make sure that we offer innovative Romanian companies the opportunity to reach their potential, said the finance minister, Marcel Boloş.

     

    The EU imposed unprecedented sanctions on Moscow and adopted a series of support programs and allowed member states to provide special subsidies to mitigate the economic and commercial effects of the Russian military invasion of Ukraine in February 2022. Europe was subsequently faced with an explosion of prices and turbulence in the financial markets. The war has had enormous economic costs so far. It was not just the economies of the two countries in conflict that suffered, but the entire planet. Already rated as one of the costliest wars in human history, the price of this conflict has so far been estimated at over two and a half trillion dollars, that is over two thousand five hundred billion. Comparatively, this sum is equivalent to Romania’s GDP for seven and a half years. And it represents, in just two years, more than half the estimated costs of World War II, which lasted six years and was the most devastating conflict in history. (LS)

  • Economic and social measures

    Economic and social measures

    The first measures in the Support for Romania Program, announced on Monday by the leaders of the ruling coalition made up of the PNL (National Liberal Party)-PSD (Social Democratic Party)-UDMR (Democratic Union of Ethnic Hungarians in Romania) have been adopted by the Romanian Parliament. One of the draft laws is aimed at increasing the minimum gross salary to 3,000 lei (600 Euros) in agriculture and the food industry. In these domains, the allowances and facilities are assimilated to the already-existing-ones in the constructions field, and employees will be exempted, until 2028, from the payment of income taxes and of the health insurance contribution.



    Under the second bill adopted by Parliament, the food allowance for hospital patients and for institutionalized elderly people is doubled to 22 lei (a little over 4 Euros). The application of the Support for Romania package of measures for the protection of the citizens and the economy is a priority for the Government, the Liberal Prime Minister Nicolae Ciucă wrote in a social media post. He pointed out that the state aid scheme for stimulating investments, with a major impact on the economy, met the very high expectations of the business environment.



    According to the PM, the benefits will also be significant for the sectors which will receive financing, such as: manufacturing industry, constructions, hospitality industry, information technology and communications, health and social assistance. Nicolae Ciucă announced that the value of the package stands at 17.3 billion lei (about 3.5 billion Euros), of which about half are European funds.



    The current coalition must come up with solutions to the problems of citizens and the economy, Nicolae Ciucă added: “The package has three main objectives: supporting the economy for a healthy economic growth, achieving social cohesion and, of course, solidarity between generations.



    300 million Euros from the package will be used to compensate for the prices increases. The SMEs will receive up to 400,000 Euros per company to stimulate investment, and transport companies will be disbursed a small part of one liter of fuel. Furthermore, farmers will receive money in the form of grants.



    In turn, the PSD leader, Marcel Ciolacu, says that the current coalition has come up with these economic and social measures so as to keep inflation in check and pointed out that the current inflation rate of 10% is an influence from Europe. According to him, the measures will respond to the citizens problems. Another voice from the coalition, the former Liberal leader, Florin Cîţu, expressed his dissatisfaction that the package does not include certain measures which he has repeatedly promoted, including reducing the social insurance contribution by 5 % and postponing the payment of monthly instalments to banks. The opposition also criticizes the measures which they consider populist and claims that there are other forms of support too. Moreover, Save Romania Union – USR advocates a reduction in VAT for energy from 19% to 5%. (LS)

  • Economic and social measures

    Economic and social measures

    The first measures in the Support for Romania Program, announced on Monday by the leaders of the ruling coalition made up of the PNL (National Liberal Party)-PSD (Social Democratic Party)-UDMR (Democratic Union of Ethnic Hungarians in Romania) have been adopted by the Romanian Parliament. One of the draft laws is aimed at increasing the minimum gross salary to 3,000 lei (600 Euros) in agriculture and the food industry. In these domains, the allowances and facilities are assimilated to the already-existing-ones in the constructions field, and employees will be exempted, until 2028, from the payment of income taxes and of the health insurance contribution.



    Under the second bill adopted by Parliament, the food allowance for hospital patients and for institutionalized elderly people is doubled to 22 lei (a little over 4 Euros). The application of the Support for Romania package of measures for the protection of the citizens and the economy is a priority for the Government, the Liberal Prime Minister Nicolae Ciucă wrote in a social media post. He pointed out that the state aid scheme for stimulating investments, with a major impact on the economy, met the very high expectations of the business environment.



    According to the PM, the benefits will also be significant for the sectors which will receive financing, such as: manufacturing industry, constructions, hospitality industry, information technology and communications, health and social assistance. Nicolae Ciucă announced that the value of the package stands at 17.3 billion lei (about 3.5 billion Euros), of which about half are European funds.



    The current coalition must come up with solutions to the problems of citizens and the economy, Nicolae Ciucă added: “The package has three main objectives: supporting the economy for a healthy economic growth, achieving social cohesion and, of course, solidarity between generations.



    300 million Euros from the package will be used to compensate for the prices increases. The SMEs will receive up to 400,000 Euros per company to stimulate investment, and transport companies will be disbursed a small part of one liter of fuel. Furthermore, farmers will receive money in the form of grants.



    In turn, the PSD leader, Marcel Ciolacu, says that the current coalition has come up with these economic and social measures so as to keep inflation in check and pointed out that the current inflation rate of 10% is an influence from Europe. According to him, the measures will respond to the citizens problems. Another voice from the coalition, the former Liberal leader, Florin Cîţu, expressed his dissatisfaction that the package does not include certain measures which he has repeatedly promoted, including reducing the social insurance contribution by 5 % and postponing the payment of monthly instalments to banks. The opposition also criticizes the measures which they consider populist and claims that there are other forms of support too. Moreover, Save Romania Union – USR advocates a reduction in VAT for energy from 19% to 5%. (LS)

  • State aid for energy

    State aid for energy

    On Thursday, the Romanian Government approved two aid schemes for energy producers and municipalities or inter-community development associations that produce or modernise gas installations. Dozens of millions of Euros will be earmarked for those investors who will use renewable sources of energy. Here is the Government spokesperson

    Dan Carbunaru:

    The two schemes are worth, together, some 82 million Euro. The potential beneficiaries are the companies that produce energy and the local administration units or inter-community development associations that produce or modernise equipment that produce power.

    The Government is looking for solutions to keep supporting the big consumers of energy as well, such as the ALRO aluminium producer in Slatina, or Azomures, the largest producer of fertilisers used in the Romanian agriculture and industry.

    Against the background of a big rise in energy prices, the big consumers are considering cutting down or even shutting down production. Through a memorandum, the Government has made concrete steps to extend the aid scheme for them. The Ministry of Energy has been authorised to discuss with EC representatives about carrying on with the aid scheme for the big consumers, in order to maintain both those companies competitiveness, and employees’ jobs.

    Here is Dan Carbunaru again:

    These state-aid schemes were implemented in Romania in the 2019-2021 period and were successful, as these companies have an annual contribution to the GDP of approximately 6%. However, an important element that we must consider are the jobs that such big companies benefiting from the aid must keep.

    Managing the effects of the energy crisis remains among the main concerns of the Executive, Dan Carbunaru pointed out. The decision adopted by the Government is meant to support investments aimed at promoting the production of energy from less exploited renewable sources, namely biomass, biogas, geothermal energy, and the state aid scheme to support investments in high efficiency cogeneration. The two state aid schemes apply until December 31, 2023, and the amounts are allocated from European non-reimbursable funds provided by the European Regional Development Fund in proportion of 85%, and 15% public co-financing funds from the state budget. (MI)