Romanian Govt Lends RON1.5B To Mayoralties To Pay Overdue Debts To Suppliers

Suppliers, in turn, will use the money collected from mayoralties to pay overdue debts to the state budget.

The debt write-off mechanism was finalized by the Government and is pending approval through a recently amended emergency decree, people close to the matter told MEDIAFAX.

Thus, providers of public works and services will be able to cover their debts due until March 31, 2010 (not only until December 31, 2009, as initially forecast), and the default interest calculated until the debt is written off, for failure to pay interest rates in due time, will be set at 0.05% per day, not at 0.1% per day.

Of the total sum of RON1.5 billion, the overall fiscal obligations owed by economic operators with debts higher than RON250,000 amounts to RON847.4 million.

The grounding note of the emergency decree stipulates the high volume of overdue payments owed by administrative-territorial units to economic operators, providers of services and works of public interest, which triggers a series of debts owed by economic operators to the state budget.

Loans granted to mayoralties will have an interest of 6.25%, refund deadline of maximum five years and a one-year grace period. Loans will be paid back in monthly installments, starting with the first month upon the completion of the grace period.

Loans will not be included within thresholds set in 2010 for reimbursable financings that can be contracted and for withdrawals from reimbursable financings contracted or to be contracted by administrative-territorial units.

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