State aid for companies affected by the war in Ukraine
The European Commission approves the reintroduction of a state aid scheme to support Romanian companies.
Mihai Pelin, 09.04.2024, 14:00
The European Commission has approved the reintroduction of a state aid scheme in Romania of approximately 2.5 billion Euros (12.5 billion RON) to support companies in the context of Russia’s war against Ukraine. The aid consists of loans as well as of non-reimbursable funds that will be granted to Romanian companies until June 30. The amount of support is divided into categories. Thus, companies in the agricultural field can receive up to 280,000 Euros, companies in the fishing and aquaculture field, up to 335,000 Euros, and companies operating in the rest of the sectors can benefit from aid worth up to 2.25 million Euros. According to the Commission’s analysis, the request made by Romania complies with the conditions provided for in the crisis and transition framework. The Romanian state requested such an agreement for the first time on September 9, 2022, which was approved in January 2023 for the entire year. Following the expiry of this deadline, the Commission once again approved the reintroduction of the state aid scheme to ensure sufficient liquidities for companies on the Romanian market.
The measure is seen as necessary and proportionate to remedy the irregularities in the national economy. Moreover, the Romanian Prime Minister Marcel Ciolacu had announced, a few days ago, that the government would extend this year the IMM INVEST PLUS state aid scheme, to overcome the economic difficulties created by Russia’s invasion of Ukraine. This is a government lending program for working capital and investments aimed at SMEs and large companies in Romania. Approximately 11,500 companies can receive such funds. The program was initiated to ensure, until June 30, access to financing by companies that do not have the necessary sums for investment projects and for the continuation of their activity, the Finance Ministry announced. We want to support vital sectors such as agriculture, constructions and production and to make sure that we offer innovative Romanian companies the opportunity to reach their potential, said the finance minister, Marcel Boloş.
The EU imposed unprecedented sanctions on Moscow and adopted a series of support programs and allowed member states to provide special subsidies to mitigate the economic and commercial effects of the Russian military invasion of Ukraine in February 2022. Europe was subsequently faced with an explosion of prices and turbulence in the financial markets. The war has had enormous economic costs so far. It was not just the economies of the two countries in conflict that suffered, but the entire planet. Already rated as one of the costliest wars in human history, the price of this conflict has so far been estimated at over two and a half trillion dollars, that is over two thousand five hundred billion. Comparatively, this sum is equivalent to Romania’s GDP for seven and a half years. And it represents, in just two years, more than half the estimated costs of World War II, which lasted six years and was the most devastating conflict in history. (LS)
