Romanian government to stand by those with overdue loans and low income

Romanian government to stand by those with overdue loans and low income

 

Review Hari Stefanatos

According to the Romanian Prime Minister, Victor Ponta, the government is implementing a support scheme for those individuals with bank loans who have an income under the average wage in Romania of €360 (RON 1,610), involving the cutting by half of their monthly installments for a period of two years. The minimum installment will be set to about €110 (RON 500).

“It’s a measure we adopted through a government ordinance, but now, at this time, we finally have the consent of our international partners”, Ponta stated.

It must be noted however that the banks must give their voluntary consent in order for this measure to take effect.

This measure applies to all citizens be they employees or pensioners if their monthly income is under the average wage and their loan is more than 90 days overdue. About 907,000 Romanian citizens are expected to benefit from this measure.

“Those with a loan installment of about €179 (RON 800) will pay only €90 (RON 400), the other €90 (RON 400) will be delayed for two years, and the state will pay the difference, based on a fiscal credit, from the income tax, after the two years end”, said Ponta to add that this measure would lead to lowering rates by up to just under €1bn (RON 4bn) overall this year.

This measure according to the Romanian Prime Minister will trigger a “moderate, but significant increase in consuption”.

(Source romania-insider)