Economic measures adopted by the government: technical unemployment – up to 75% of the average salary, credits for SMES, VATref

The Romanian government today came up with a package of measures to mitigate the negative effects of the crisis caused by the new coronavirus.

According to the announcement made by Prime Minister Ludovic Orban, those measures were taken that were considered absolutely necessary to support the employees and employers affected by the epidemic Coronavirus, such as: Government support for technical unemployment costs for employees, on the basis of specific conditions, increase in the budget allocated for the settlement of sick leave, and credit for SMEs, for investment and securing working capital.

The Romanian government today came up with a package of measures to mitigate the negative effects of the crisis caused by the new coronavirus.

According to the announcement made by Prime Minister Ludovic Orban, those measures were taken that were considered absolutely necessary to support the employees and employers affected by the epidemic Coronavirus, such as: Government support for technical unemployment costs for employees, on the basis of specific conditions, increase in the budget allocated for the settlement of sick leave, and credit for SMEs, for investment and securing working capital.

We are giving below the main measures announced in Prime Minister Orban’s press statement.

Measures to support companies

• It was decided to increase the SME credit guarantee ceiling by 5 billion in the first phase, But the government is ready to raise this ceiling by another 5 billion, up to a total amount of 15 billion;

• Loans to SMEs shall be guaranteed for investment and for the provision of working capital. Interest on these loans will be subsidized 100%. The guarantee will amount to 90% of the loans for up to one million lei and 80% for over one million lei;

• It was decided to refund VAT up to 9 billion, to ensure capital flows in such a way that companies receive working capital;

• in the budget correction the budget will be adjusted so as to ensure the settlement of sick leave.

• In case of technical unemployment, the payment of the technically unemployed employees from the Ministry of Labor, Through ANOFM, through the unemployment budget, under certain conditions related to the fall in turnover. 75% of the gross salary will be paid from the unemployment fund budget, as is the monthly benefit for technical unemployment, but not more than 75% of the average gross salary. More details about the conditions in which the technical unemployment facility can be used here.

• companies that have not been directly affected by government restrictive measures but have been affected by the effects of the epidemic will be able to benefit from state support, on the basis of a written request and criteria; details here.

• some medical products will be taken over by romanian companies and the companies that have the production capacity of these products will be supported;

• Working capital was provided for UNIFIARM, to be more efficient in carrying out all necessary acquisitions at hospital or structure level.

Other measures

• The government increased the budgets of the Ministry of Health and the Ministry of Internal Affairs;

• A government resolution was adopted to supplement the health budget by a sum of 42 million to support quarantine centers. Methodological rules have been laid down for the settlement of the expenditure of these centers;

• verification of compliance with home isolation has been requested, including gendarmes teams;

• work is being done to prepare hospitals to increase patient treatment capacity and purchases have been made to be able to intervene effectively;

• The decision was taken to increase the May budget by 100 million lei in order to support the ministry’s activity and to ensure the sums needed for the acquisitions protecting employees of different structures;

• A measure was taken to amend the Penal Code – to increase the penalties for false declarations, the offense will be punishable by imprisonment;

• the penalties for the prevention of the epidemic have increased – people who do not respect quarantine or isolation will be put up with criminal records;

• a new offense was introduced – the omission to provide data. Where a person does not provide complete data in the epidemiological inquiry, it shall be considered as an omission and may be made up of a criminal file.