Romania’s Government will extend state guarantees for the bank loans contracted by small and medium sized enterprises (SMEs) that need working capital amid the economic crisis caused by the Covid-19 epidemic, finance minister Florin Citu announced in a Facebook post quoted by G4media.ro.

He was commenting on the economic measures that the executive might include in the 1%-of-GDP economic stimulus package.

However, much of the plan including the guarantees announced by minister Citu remain a basic sketch with very few details.

Citu speaks of RON 10 bln (EUR 2 bln) of bank loans extended “at zero interest rate” by banks to SMEs. It is unclear whether the executive is ready to subside the interest rate, which can’t drop to as low as 0%, even if Romania’s National Bank cuts the refinancing rate as expected.

It remains equally unclear how minster Citu estimated at RON 70 bln (EUR 14.5 bln) the economic benefits generated by this measure.

Finally, the technical details related to the disbursement of the loans (first come first served versus selection procedures).

(Photo: Octav Ganea/ Inquam Photos)

editor@romania-insider.com