Frozen, erased or refinanced with money from the state budget, the arrears accumulated and generated by the state-owned companies must be solved by the Government this summer, for Romania to receive the much-coveted functional market economy status from the European Commission.
Finance minister Mihai Tanasescu claims that all the solutions that are being drafted now converge towards “freezing” the debts accumulated on December 31, 2002 by 91 public companies selected together with the Economy Ministry, the Privatisation Ministry, the Transports and Communications Ministry.
However, Tanasescu says this solution should not be likened to the fiscal amnesty. But the Finance minister does not say that, eventually, probably on January 1, 2007, the respective historical debts will be erased, provided the companies benefiting from this measure pay their current debts.
Still, for the budget to retrieve at least part of the money, the plan also stipulates the establishment of a new institution – the Budget Receivables Resolution Agency. According to the AVAB (Banking Assets Resolution Agency) model, the new institution should take over the receivables of the state budget and the social security budget and then try to sell them.
But how will this “debt freezing” solution work? Starting with January 1, 2003, the 91 selected companies will no longer suffer any delay penalties in the account of their historical debts to the general consolidated budget, which now amount to 74,495 billion ROL, according to the Finance Ministry.
Moreover, these enterprises will receive money from the budget to pay their debts to their commercial partners, which will serve to eliminate the debt chains between 3-4 companies and will also help the budget get part of its money back.
However, for this mechanism to work, the companies need to apply restructuring programmes, namely downsizing.