Prime Minister Ludovic Orban said that the Government is currently drafting several state aid schemes aimed at guaranteeing factoring, leasing for the purchase of equipment and guaranteeing the discount of payment instruments.
“We are in the process of drafting several state aid schemes. We have a state aid scheme to be unfolded through the Guarantee Fund, which aims to guarantee factoring, leasing for the purchase of equipment and to guarantee the discount of payment instruments – bills of exchange, promissory notes, precisely to increase, let’s say, liquidity and to support companies, through various forms of support, practically involving the state as guarantor in many of the contracts run through these instruments. So, I repeat: factoring, discounting promissory notes and leasing of equipment, machinery,” the Prime Minister said at the videoconference called “Measures for Romania ‘s economic recovery,” organised by the National Council of SMEs in Romania.
He mentioned that another aid scheme which the Gov’t is preparing aims to guarantee commercial credit insurance.
“One of the big problems which we have in the economy – precisely because of the fact that access to capital is pretty restrictive, we cannot fund ourselves from the stock exchange, we cannot finance ourselves from the banking financial system, as we would like – a lot of financing is based on commercial credit, and here if one of the companies in the economic chain gets into payment problems, risks affecting many other companies. There are companies that insure, we want to develop this mechanism of securing supplier credit, commercial credit, credit between companies, by practically guaranteeing and taking over a part of the possible losses, precisely to develop on a larger scale this tool that works in the relations between companies,” the Prime Minister said.
Orban mentioned that these aid schemes should be notified to the European Commission and they can become operational only after approval in this regard is received. On the other hand, the PM showed that, in the context of the economic crisis generated by the pandemic, “the openness of the European Commission to approve state aid schemes is much greater than before,” and this type of schemes “already work in certain countries” and produced beneficial effects.
The PM voiced his belief that the IMM Invest aid scheme will be a success. On the other hand, he showed that one of the issues is the fact many Romanian companies have negative capital.
“We are in a constant dialogue with the financial-banking system, which had a fairly low availability to support companies through credit. Here, let me make a parenthesis: one of the big problems we have is the fact that many Romanian companies have negative capital, because there was no interest in capitalizing those companies. And because of this, many Romanian SMEs are in a situation where they become bankable very hard, especially since there are administrative conditions, plus – let’s say – a complexity of the procedures for granting loans in which the situation we have determined a very low level of intermediation, compared to other European countries. No to mention the stock exchange. Listing companies on the stock exchange must be a fundamental goal. For any company that wants to validate itself, which really wants to enter the category of competitive companies at regional level, maybe even European, it must have as objective the listing on the stock exchange,” PM Orban said, according to Agerpres.