Fight over state guarantees set to start

Companies in the automotive, energy, petrochemical, agricultural, steel, and home building sectors could receive state guarantees of up to 6 billion RON (1.5 billion euros), with the Ministry of Finance to establish the criteria that need to be met. “We will prepare a set of criteria for companies operating in strategic sectors, those that can have a systemic, horizontal impact, and can create jobs,” says Gheorghe Pogea, Minister of Finance. He gave the auto industry as an example, with guarantees to be provided in support of the anti-crisis programme. The 400 million-euro loan, which will be granted by the European Investment Bank to Ford for investments targeting the plant in Craiova is backed by the largest state guarantee awarded in the last 20 years – 320 million euros, i.e. 80% of the loan value. State guarantees will be awarded for the financing of “priority projects” of the Romanian economy, conducted by non-financial, publicly-held companies. One of the conditions that have to be fulfilled is compliance with state aid legislation, as well as with track-record requirements, given that by awarding the guarantees, the state takes over the investment risk.