Shocking proposal: One-year debt respite for SMEs

PSD (Social-Democratic Party) chairman Mircea Geoana upped the ante in terms of anti-crisis proposal on Tuesday, suggesting to grant a one-year respite from the payment of principal of the loans taken out by SMEs.

Had Geoana done it alone, the proposal would have been dismissed as just campaign talk, but the PSD leader had NBR first vice-governor Florin Georgescu, chairman of the Banking Association Radu Gratian Ghetea and chairman of the Association of Businesspeople in Romania, Florin Pogonaru standing next to him.

Florin Georgescu is a former Finance minister during the Vacaroiu PSD Cabinet (1992-1996), and was backed by PSD for his position with the NBR. Radu Gratian Ghetea was “assigned” to PSD, according to the algorithm of the two ruling parties. One of Mircea Geoana’s advisors, a former Financial Times journalist, Andrei Postelnicu, is now a member of CEC’s board.

The twelve-month respite from the payment of the principal of medium or long-term loans is intended for those small and medium-sized enterprises that are not behind with their payments to banks, and lets them pay only the monthly interest. The idea was taken from an Italian measure enacted a few days ago and would entail extending the duration of the loan by one year. The agreement in Italy had been signed by almost all the 400 banks in the system, Geoana said on Tuesday.

PSD leader Mircea Geoana’s plan also includes the proposal to have payments on leasing loans suspended for six to twelve months, whereas short-term financing could be extended to 270 days at most, so as to allow companies to have capital for their day-to-day operations.

“We will have to work on adapting the Italian model to the conditions on the Romanian market. To that end we will discuss it with the members of the Board of Directors of the Romanian Banking Association,” said Radu Ghetea, chairman of CEC Bank and the Romanian Banking Association.

NBR first vice-governor Florin Georgescu in turn stated that all the details pertaining to the enforcement of this step in Romania would be possible to work out soon.