6. Measures in other sectors
6.1 Measures in other sectors
Many MEASURES IN OTHER SECTORS beyond the immediate scope of the health system are being taken to prevent further spread of the virus. This section contains information on many of these areas, including border and travel restrictions and economic and fiscal measures, among others.
MEASURES INTRODUCED IN 2020
The Government has taken progressive regulatory measures to prevent the further spread of the COVID-19 infection.
The President declared a state of emergency on March 16 for 30 days and announced a 30-day extension on April 6. Starting on March 22, the borders have been closed through a military ordinance. Romanian citizens who return home from abroad must undergo a mandatory 14 days quarantine in spaces designated by the authorities and guarded by police. The city of Suceava and the town of Tandarei were locked down until May 13/May 11 to contain the spread of the infection (see Section 1.2).
Romania complies with the EU Single Market regulations during the COVID-19 crisis. For essential products, free circulation is still permitted. This includes medicines, medical equipment, essential food products, and livestock. Specially designated priority lanes for freight transport – so-called green lanes – have been introduced.
The Government took measures to strengthen the healthcare system, stimulate the economy and provide social protection to people affected by the crisis.
The state will guarantee 80% of investment loans and credit lines to improve liquidity and cashflow of businesses. This can range from one to several investment loans or credit lines per business entity. For small businesses, these guarantees can reach up to 90%. The maximum loan value is capped at ten million RON, whilst working capital loans have a ceiling of five million RON. Interest rates are fully subsidized by the Ministry of Finance. Other measures include faster reimbursement of VAT, discounts for paying corporate income taxes, and suspending foreclosures on overdue debtors.
Recently, the Romanian government announced that 2% of GDP will be allocated to stimulate the economy in the context of the COVID-19 outbreak (although according to the business environment, this allocation should be higher and amount to 15% of GDP). This allocation will be used for direct support, in the form of cash injections and credit guarantees, focusing on affected households/persons, as well as to fund a significant increase in public investments – above the initial budgeted level for 2020. On April 28, the Government issued implementation norms for the Governmental Ordinance that delineate support for small and middle-sized enterprises during the COVID-19 crisis. In relation to that, it launched a dedicated Internet platform (the IMM Invest platform), where companies may apply for government loans to cover activity and investments. About 1,000 companies submitted such applications within half an hour of the program going live.
The Government has issued measures for social protection and support for people financially affected by the restrictions imposed to prevent the spread of the COVID-19 epidemic. The Government Emergency Ordinance no. 30/2020, which entered into force on 21 March, foresaw several measures. This includes the provision of technical unemployment allowance supported by the state budget for up to 75% of the national average wage, and paid parental leave for child-care during the temporary closure of schools. The Government has also issued legislation that permits banks to defer loan repayment for households and businesses affected by the COVID-19 epidemic for up to nine months (without applying restrictive provisions on certain lending conditions).
By April 28, employers had suspended 1,031,152 working contracts and terminated 266,473 working contracts due to the COVID-19 epidemic. The Ministry of Labour and Social protection updates the data in real-time.
Emergency Ordinance no. 132/2020 on support measures for employees and employers in the context of the epidemiological situation caused by the spread of the SARS-CoV-2 coronavirus, as well as to stimulate employment growth
Government webpage with COVID-19 information: https://gov.ro/ro/info-coronavirus-covid-19
Ministry of Health: http://www.ms.ro/
The National Institute of Public Health / The Centre for the Surveillance and Control of Communicable Diseases: http://www.cnscbt.ro/
The Ministry of Internal Affairs: https://www.mai.gov.ro/
The Department for Emergency Situations: http://www.dsu.mai.gov.ro/
Other official webpages: https://stirioficiale.ro/informatii
The Parliament increased the state guarantee scheme to 30 billion RON (3 percent of GDP) for loan guarantees, and subsidized interest for working capital and investment for loans of small and medium enterprises (SMEs). SMEs can access loans of up to 10 million RON for investments, which can be granted once for a maximum of 120 months. Loans of up to 5 million RON can be issued for working capital, for a finite period of 24 months, at state-subsidized interest rates. The state can provide guarantees of up to 80% of the value of financing for enterprises (excluding interest rates, commissions, and bank charges). For micro or small enterprises, state guarantees are limited to 90% of credit values. SMEs from all sectors qualify for the state guarantee scheme, provided they meet some eligibility criteria. The state guarantee scheme does not apply to the industries of gambling, arms, tobacco, alcohol, forbidden addictive substances, or private security.
The Government passed new measures to aid the employers who reopen suspended working contracts, supporting 41.5% of the national average gross salary for the next three months for individuals who return to work.
The ending of the State of Emergency led to a gradual decrease of suspended working contracts, with an increase of the terminated ones. By May 28, the number of suspended working contracts decreased to 595,672, while the number of terminated contracts increased to 429,585, according to the Ministry of Labour and Social Protection data. On May 22, the Minister of Labour and Social Protection announced that the government has made during the State of Emergency, payments of 2 billion RON (around 0.4 billion EUR) for 1 million people who lost the jobs due to the COVID-19 epidemic. The State continues to provide unemployment benefits for households/persons from economic sectors and businesses facing restrictions under the State of Alert.
The National Bank of Romania asked for an extension until end-June 2021 of the repo line set up with the European Central Bank (counting for a maximum of 4.5 billion EURO); under the repo line, Romania can borrow liquidity in exchange for high-quality euro-denominated collateral.
On 1 July, the Government announced the continuation of the previously adopted measures (social security and support for SME) for three more months. On 10 August, the Government endorsed new measures for employees and employers and new measures to stimulate growth in employment.