Party expert explains Romanian Govt. 's EUR 50 bln plan: it's not public investment, but state guarantees

The Social Democratic Party (PSD) leader Marcel Ciolacu, likely to take over the prime minister seat this week, announced as part of his party's ruling strategy a EUR 50 bln "public government investments" scheme to boost local industry.

It's not investments carried out by the state, but an investment loan guarantee scheme similar to those carried out in the past (Invest IMM) only at a much larger scale, party's experts explained. The money would be invested over his term (2023-2024) before the general elections expected towards the end of 2024.

The EUR 50 bln scheme relies on European funds and state grants, but it would mainly include state guarantees, Tanase Stamule, professor of economics and one of the experts behind the PSD's economic program, explained for Ziarul Financiar.

"We are talking about state guarantees, not cash. The loans [contracted by private companies] are supposed to be extended by the banks following an analysis of the investment projects. The state pays only if the loans are not paid back by the private companies. It is not an infusion of cash coming from the state but coming from the banking system and only supported by the state. For this, we must get European Commission's approval," said Tanase Stamule.

(Photo source: Inquam Photos/Sabin Cirstoveanu)