Paying back in full the properties seized by the communist regime in Romania would require a budget of EUR 16 billion, and more than half would go to the Romano-Catholic cult, which placed 88,000 requests for property restitution. The Romanian Government wants to apply a 15 percent ceiling for restitution payments and cancel the in kind compensation. Payments will also be made in stages, over 10 to 12 years.

“Besides the European Court of Human Rights (ECHR) acceptance, we also have a financial problem. The titles distributed by the National Authority for Property Restitution (ANRP) have an impact on the budget deficit, and the cash payments have an impact on the cash deficit. We found the solution with 15 percent of the properties' value because the state cannot afford more,” said Bogdan Dragoi, the Public Finance Minister, quoted by Mediafax.

If Romania doesn't apply this solution, the ECHR will immediately accept the applications submitted by Romanian citizens, and the lawsuits could last five years, which would strongly impact the country's budget deficit.

Romania also plans to cancel the in kind restitution as it would lead to discriminatory treatment, as those who receive in kind restitution get full compensation, while those with cash restitution receive only 15 percent of the value, Dragoi explained.

Paying in full the owners of houses seized by the communist regime would require a budget of EUR 2.6 billion, and some EUR 2.5 billion would go for the compensation of seized agricultural lands. The state would also have to pay in compensation for the shares owned at nationalized companies.

“Fiscal adjustment, structural deficit and in the end, the sustainability of these payments were the reasons for limiting compensation,” the Finance Minister further explained.

Romania initially created the investment fund Fondul Proprietatea, with an aim to compensate those whose properties had been seized by the communist regime. However, many former owners either sold their property titles at low prices before the fund was listed on the Bucharest Stock Exchange last year, or did not submit files in due time. Meanwhile, foreign owners gained control of the fund, with foreign investment funds controlling 48 percent in Fondul Proprietatea, and the Romanian state left with less than 1 percent.

editor@romania-insider.com