March 19 (SeeNews) - Romania's government has decided to raise the ceiling for credit guarantees for small and medium-sized enterprises (SMEs) affected by the coronavirus crisis by 5 billion lei ($1.13 million/1.03 million euro), prime minister Ludovic Orban said.
Depending on the financing needs of SMEs, the ceiling can be increased even further, to 15 billion lei, Orban said in a televised statement on Tuesday evening after a government meeting.
"Basically, we are guaranteeing loans for investments and for working capital. Interest is 100% subsidized. Also, the guarantee will cover 90% of loan amounts of up to one million lei and 50% for credits of over 1 million lei," Orban added.
In comparison, the credit guarantees ceiling for SMEs was set at 700 million lei last year, finance ministry data shows.
The government has also decided to cover 75% of the salary of employees sent into technical unemployment by companies affected by the coronavirus crisis.
Finance minister Florin Citu said in a televised statement on Tuesday that he expects up to 1 million people to be sent into technological unemployment by companies no longer able to support their operations.
The government is also granting a 1.15 billion lei loan to the state-owned company Unifarm for the urgent purchase of necessary sanitary materials and equipment to quell the coronavirus epidemic.
On Tuesday, the government said it plans to allocate almost 2% of GDP to support sectors affected by the coronavirus epidemic.
Romania's 2019 GDP is estimated at 1.05 trillion lei ($244 billion/213 billion euro), according to the latest data from the National Prognosis Commission (CNP), an analyst unit within the finance ministry.
On Wednesday, Pirelli Tyres Romania, a subsidiary of Italy's Pirelli Group, said it has decided to suspend production at its plant in Romania due to the spread on the COVID-19 disease and poor demand.
Also on Wednesday, Romanian car maker Automobile Dacia, a unit of France's Renault, announced it will temporarily halt production at its Mioveni manufacturing plant in Arges county because of the coronavirus epidemic.
For the same reason on Tuesday the Romanian unit of U.S. car maker Ford Motor Company said that it will temporarily halt production at its plant in Craiova starting March 19 and its employees will be sent in technological unemployment.
The three companies employ over 24,000 people at their plants in Romania.
On Tuesday evening, the interior ministry announced that the activity of all public places such as restaurants and bars will be suspended, with the possibility of some of them to continue home delivery to clients. Other places such as gyms or beauty saloons also need to close.
Romania has so far confirmed 277 cases of the coronavirus infection.
The Romanian authorities on Monday declared a 30-day state of emergency in order to be able to tackle the coronavirus disease outbreak more efficiently.
(1 euro=4.8440 lei)