EU re-allocates EUR 1.5 bln of funds for Romania, but Recovery Fund remains in limbo

Romania's president Klaus Iohannis said that the country "has already been allocated" more than EUR 1.5 billion from the European Union (EU) to mitigate the effects of the coronavirus (COVID-19) pandemic.

However, the money was earmarked from the current multiannual budget of the EU (specifically, by re-assigning funds from other programs), Iohannis explained. He implied that a separate financial instrument aimed at addressing the effects of the coronavirus pandemic, which has turned into a hot topic in the debates among the Member States, remains in limbo.

"I will support the creation of an Economic Recovery Fund that can benefit all Member States as an additional tool to the support measures previously taken at European level," president Iohannis stated on Thursday, April 23.

This instrument must be complementary to funding from the future EU budget and must cover the real sectorial needs of the Member States, Iohannis explained.

Several Member States have been advocating for such a fund with the Spanish government drawing attention to the main problem: the European Union needs a fund to provide subsidies, not loans, to protect the European bloc's internal market, Ziarul Financiar daily commented.

As regards the EUR 1.5 bln "already allotted" by the EU to Romania, president Iohannis summarised the reallocation of funds already announced previously as potential by prime minister Ludovic Orban.

"The money is already available and will be used by the Orban Government," Iohannis said.

Of the EUR 1.5 bln, EUR 750 million are funds to support SMEs affected by the crisis (fees and interest related to EUR 3 bln worth of loans, plus grants unspecified yet), EUR 350 mln for the purchase of medical equipment, EUR 300 mln for technical unemployment, EUR 120 mln for risk incentives paid to healthcare professionals, and EUR 30 mln for support those enrolled in support groups for vulnerable people.

(Photo source: Presidency.ro)