Romanian NGOs Want To Benefit From State Guarantees On Loans For EU-Funded Projects

NGO representatives on Thursday met with Prime Minister Emil Boc for talks on the absorption of European Union funds and stressed that, unlike public institutions, not all NGOs can guarantee loan refunds using their own premises, adding they can only guarantee with financing contracts.

Ionut Sibian, executive manager of the Foundation for Civil Society Development, called on Boc to extend the system whereby public institutions and universities may contract state-guaranteed loans to co-finance projects backed by European Union funds, in order to allow NGOs to also benefit from this system.

"NGOs currently bring over EUR500 million to Romania, with 95% of the amount coming from EU funds and 5% from public financing," Sibian said.

Boc said the government is open to meeting their demand if NGOs come up with a viable system to guarantee loan refunds in case they cannot pay back loans.

NGO representatives also said they want the government to reassure them that it will keep legal provisions whereby 2% of the income tax can be transferred to NGOs, considering the draft education law sets that 2% of the income tax can also be transferred to an account opened by the state for students.

In February, the government adopted a decree which allows local authorities to receive state guarantees on loans taken out as pre-financing or co-financing of projects backed by European Union funds.

In September last year, the IMF agreed to increase the ceiling on public guarantees to RON7.7 billion in 2009 and to RON8.6 billion in 2010, from RON6 billion initially allowed.

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