Gov’t to support people unable to pay bank instalments

Analysts consider it contradictory, say the executive offers a poisoned pill.

Premier Victor Ponta announced Monday that the 7 eurocent excise on petrol and diesel will be enforced as of April and President Traian Basescu will sign the documents, in order to render operational the accord with the IMF, because the memorandum will not include this measure.
Also, the Government will issue an ordinance by means of which people who have bank loans and an income amounting to RON 1,610 a month at most can pay half of the instalments for two years after an agreement with the bank. This measure will come into force on April 1.”This is a measure which is obviously optional, it is not compulsory for individuals, but from which any of the current 907,000 individual debtors can benefit,’ said Premier Victor Ponta at the end of the talks with the representatives of the International Monetary Fund. Referring to the consumption stimulating programme prepared by the government, which provides tax reductions for the people with restructured loans, but only after the end of the rescheduling interval, the governor Mugur Isarescu said that banks should not have prudential or business motives to reschedule credits that are not overdue, but might choose to ease the burden of their clients that “pant” and are close to having bad loans.
The International Monetary Fund considers that the government’s decision to support the people with loans for a 2-year interval will lead to an increase of crediting and consumption, PM Victor Ponta added yesterday. The scheme enacted by the government on tax reductions for the population with incomes under the average and restructured bank loans was also used in Spain and in other countries, Premier Victor Ponta mentioned, Mediafax reports.
The Prime Minister added that this cutting to half would apply to all loans, but it would not exceed RON 500 (about EUR 111). According to the Premier, ‘the measure has been discussed and worked on for more than one month with the National Bank of Romania too.’ As for the tax credit from the state, Minister Delegate for Budget Liviu Voinea made it clear that it was opened for two years and could amount up to RON 200  a month (about EUR 44.5).
“One of the unpleasant effects of this measure: you hit in people’s responsibility. You open the Pandora’s Box and, from now on, when a problem will appear in the economy or during the next elections, people will have one extra reason to demand something from the state, to give them something more,” economist Bogdan Glavan commented. “With this measure, the government offers a poisoned pill by purchasing votes,” also believes Cristian Paun, economist with the Bucharest Academy of Economic Studies. He considers that the economic measures taken by the Executive are “ambiguous and contradictory,” as they lack an economic basis and do not stimulate consumption, according to “This money comes from the state budget, it is not Mr. Ponta’s money. It is our money, which the government gifts to various people, already taken from me, from you, and sent to the government. We cannot consume this money anymore. We refrained from consumption because we paid this money to the Romanian state,” Cristian Paun explained. The professor added that a better measure for stimulating consumption would have been lowering the VAT.
State will support half of salary expenses for companies creating 20 jobs
Also, Prime Minister Victor Ponta after the meeting with the IMF representatives announced that the state would support starting July 1 half of the salary expenses of the companies creating at least 20 jobs, Agerpres reports. According to Minister Delegate for Budget Liviu Voinea, the measure will come into force on July 1 and will be valid seven years.

Leave a Reply