Romania’s Govt To Guarantee Loans Of Pvt Cos For Co-Financing EU-Funded Projects – PM

Boc told county prefects during a videoconference that the Government will grant loan guarantees to private companies which have been awarded projects by the EU.

The Prime Minister presented several measures for economic relaunch, which included granting guarantees worth EUR1.1 billion for cofinancing EU-funded projects in agriculture, rural development and the food industry, providing the National Fund For Credit Guarantees for Small and Medium Companies with capital worth EUR46 million, providing banking guarantee letters for auction bidders, stimulating Romanian exports, financing production and delivery for export goods, and others.

People close to the matter told MEDIAFAX two weeks ago that the Government wants to grant credit guarantees for private companies which have been awarded EU funding. At the time, the Cabinet was trying to avoid the legally labeling this procedure as state aid.

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In February, the Government decided to grant loan guarantees to local authorities for co-financing EU projects, within an overall cap of RON2.6 billion (EUR1=RON4.1623). At the time, Boc said that this measure was aimed at increasing the absorption rate of EU funds.

Early this year, Romanian authorities obtained a EUR1 billion increase of the Government guarantee cap for 2010, during negotiations with representatives of the International Monetary Fund.