Romania’s Government plans to increase the budget for the working capital grants distributed to local SMEs affected by the COVID-19 pandemic.

The Economy Ministry and the EU Funds Ministry have drafted a new emergency ordinance to allot more money for this measure.

Thus, the budget for working capital grants (also known as Measure two of a set of three grants programs financed from EU funds) could increase to EUR 907 million.

The initial budget for this measure was EUR 350 million, but this sum didn’t cover the high demand for financial support from local SMEs.

Over 22,000 local companies applied for working capital grants in one week, and the Government now wants to serve all of them.

The value of these grants is between EUR 2,000 and EUR 150,000 and can’t be higher than 15% of the beneficiary’s turnover in 2019.

The Economy Ministry also announced that it would reopen the call for application for microgrants for companies with no employees, individual businesses and NGOs. Over 26,000 entities applied for such grants, worth EUR 2,000 each.

However, given that the EUR 100 million budget for this measure was not fully spent, the Government plans to organize a new call and also allow companies that didn’t qualify in the first stage (such as those that had a turnover of less than EUR 5,000 in 2019) to apply. The third program, which includes investment grants of EUR 50,000 to EUR 200,000 hasn’t been launched yet.

It remains to be seen if it will be launched this year, considering that, by increasing the budget for working capital grants to EUR 907 mln, the Government will have spent the entire budget of EUR 1 billion allotted for the three measures.

Moreover, the Parliament recently changed by law the criteria for granting the investment grants and the Government now has to notify the European Commission about the changes, which will delay the call. Economy minister Virgil Popescu said recently that the call for investment grants would be launched shortly, based on the previous criteria, but it’s unclear if such a move is possible.

(Photo: Octav Ganea/ Inquam Photos)

andrei@romania-insider.com