Romania Plans To Write Off Debts Of Defense Industry Cos

Romania plans to write off debts of 1 billion lei (EUR1=RON4.2649) of companies in the defense industry, citing a EU norm which allows the protection of the national military interest and arguing that foreclosing their assets would impact defense capabilities.

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Writing off debts of companies in the defense industry will be regarded as a measure to improve the respective companies' economic and financial situation, the Economy Ministry said in a document.

The list of defense industry companies subordinated to the Economy Ministry includes defense equipment and services provider Romarm and its subsidiaries, aeronautical companies Avioane Craiova, Romaero, Constructii Aeronautice and IAR Brasov, the Mangalia Shipyard, opto-mechanical equipment producer IOR Bucuresti and the Orastie mechanical plant.

According to Finance Ministry data, their 2009 debts to the state budget reach RON917.4 million.

Problems regarding defense industry companies' outstanding debts have not been solved and the respective companies do not have financial resources to pay off their debts, reads the document. Fiscal authorities will block their bank accounts by foreclosing their assets, which will impact defense capabilities, according to the document.

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