The Romanian government’s planned support scheme for Romanian individuals with overdue loans is a first step towards implementing a progressive taxation, according to Romanian Central Bank BNR governor Mugur Isarescu.

“Ultimately, if those addressed by this measure are limited to RON 1,600, it’s a first step towards a progressive taxation,” said Isarescu, quoted by local news agency Mediafax.

The Romanian Prime Minister Victor Ponta recently announced the government’s plant to support Romanians with debts to banks.

According to the state’s plan, Romanian individuals with bank loans and a monthly income under the average wage of RON 1,610 (some EUR 360) may have their monthly rate installments cut by half for a period of two years, but with the limit of RON 500 (over EUR 110).

The facility can be granted to all individuals, employees or pensioners, only if they have a monthly income under the average wage and debts more than 90 days overdue to banks.

Banks would however need to give their voluntary consent for this measure.

According to the PM, this measure would trigger a “moderate but significant increase in consumption.”

Irina Popescu, irina.popescu@romania-insider.com