Senate chairman Mircea Geoana, who leads the Social Democratic Party (PSD, a ruling coalition partner) on Tuesday proposed an analysis of certain measures taken by the Italian authorities to support the small and medium-sized enterprises (SME), that are facing a serious liquidity shortage, so that such initiatives may be adjusted to the Romanian realities.
Geoana met first vice-governor of the National Bank of Romania Florin Georgescu, chairman of the Romanian Banks Association Radu Ghetea and chairman of the Romanian Businessmen’s Association Florin Pogonaru.
He invited the relevant institutions to examine the Italian example so as to take measures allowing the Romanian firms to weather the economic crisis.
Geoana said the measures meant to back the SMEs will be analysed by the experts next week to see how they could be adjusted to the Romanian economy.
He stressed that the measures were implemented in Italy following an agreement among the banks association, the businessmen’s association and government’s institutions.
A first measure cited by the Senate chairman was the 12-month suspension of the payment of the main loan to the banks, for the medium- and long-term loans.
Another move was to extend the short-term financing up to 270 days, so that there may be the required capital for the current operations of the firm.
‘It is quite clear to us that such a measure would be the answer to the main problem that the private sector has today: a lack of liquidity.
There are favourable circumstances now, given that as a result of the agreement we made with the IMF there is more liquidity in the market, but the banks have a certain difficulty, at this moment, in being able to make credits operational or to allow further loans to the economy’, Geoana said.
He stressed such measures have no impact on the payments to the budget, nor do they affect Romania’s obligations to the IMF and the European Commission.
Geoana argued that by enacting SME supporting measures, the relation between the firm and creditor and the firm and the bank might also be unblocked.
He explained that in the first six months, the Romanian firms survived by cutting personnel costs and eliminating the stocks they had. ‘Such moves are no longer possible for the Romanian firms in the second half of the year.
Therefore, we anticipate a more difficult time and this initiative would allow the rise in liquidity and a smoother relation between the banks and the enterprises that have taken loans from those banks’, Geoana said.