Romania’s Government adopted on Thursday, September 27, an emergency ordinance that changes the insolvency law, allowing the state to become a shareholder in insolvent companies that have debts to the state budget.

Finance minister Eugen Teodorovici said this ordinance will help companies in insolvency to recover more easily while the state will have higher chances to recover some of the debts these companies have to the state budget, local News.ro reported.

“More than 6,000 companies, with over 64,000 employees, are in insolvency,” Teodorovici said, adding that these companies have total debts of RON 63 billion (EUR 13.5 billion) to the state budget. However, the state only recovers a small amount of these debts, namely about 6%.

The minister also said that the tax agency ANAF will now have a clear procedure on how to handle insolvent companies and that the new measures will also reduce the abuses in the insolvency area, as many companies use this procedure to dodge paying their taxes.

Number of insolvencies increases by 12% y/y in Romania in Jan-May

editor@romania-insider.com