Mrs. Ioana Muntean
The Executive has approved today an emergency ordinance to support persons with loans from banks. Mr. Prime Minister will approach this issue as well as others. Mr. Secretary of State, Mr. Constantin Cerbulescu, president of the National Authority for Consumer’s Protection will answer your questions in case you want further details about this issue.
PM Emil Boc
On today’s Executive meeting, we adopted an emergency ordinance on the credit agreements for consumers. I insisted that this legislative act be adopted as soon as possible. I hailed the effort made by the Ministry of Economy, Authority for Consumer’s Protection in cooperation with the Competition Council so that this draft legislative act takes effect as soon as possible with a view to protecting in these economic crisis conditions, the citizens’ credit agreements. I will refer to three important provisions of this emergency ordinance, on the credit agreements for consumers.
First, this emergency ordinance very clearly sets for the consumer’s right to pay the loan early. The difference with the situation now is that this fee for early repayment of the loan will stand at maximum 1%, while, at present, it varies between 4-5%. I refer up to 1% if the period is larger han a year. And I mean that this compensation is determined as a percentage and may not exceed 1% of loan amount repaid early if the period between repayment and the agreed date of contract termination is not greater than one year, respectively 0, 5% if the period is less than a year.
It is a measure for those who have loans today - this prepayment fee will be reduced. Within 90 days after publication in the Official Gazette of the emergency ordinance, banks will have by addenda to amend credit agreements and, therefore, to amend the early prepayment fee which will be up 1%, where the period specified in the contract - I repeat - is larger than a year, or 0.5%, if it is under a year. This will allow Romanian citizens to pay the interest cost of credit and in more favorable circumstances. They could obtain refinancing of loans to help pay rates at banks in more favorable conditions. In the period ahead, this will happen through direct involvement of banks under emergency ordinance to be published in the next period.
Secondly, it is very important that through this emergency ordinance, the notification to consumers of pre-contractual information is made via a standard form. In other words, those who wish to enter into a credit agreement, to take a loan; they will receive before signing the credit agreement, a standard form which will allow them to compare different offers before making a decision, the best decision on the credit they want to contract. That standard form will allow people to compare conditions offered by various banks in order for them to take the best decision, decision to be taken before signing the contract, by requiring banks to have a standard form on these conditions.
Thirdly, on the basis of this emergency ordinance, the consumer - ie who intend to take credit or if he took it, is already in the position of a credit agreement beneficiary - has the right to withdraw from the contract without explanation, within 14 calendar days. In other words, after the publication of this emergency ordinance, any citizen of Romania who concludes a credit agreement with a bank, may, within 14 days after the contract signing, withdraw from the credit agreement without giving any reasons, so if he found a cheaper formula, can opt for the latter.
There is yet another measure to support the consumer, so that in a market economy, we offer alternatives to citizens to find the best financial solutions for various credit agreements. Other technical details or answers on this emergency ordinance will be offered on the spot by my colleagues.
I also want to mention that today we endorsed the draft law approving the Loan Agreement between Romania and the Japan International Cooperation Agency, for loan for the Metro train station linking Gara de Nord to Otopeni International Airport. It is an important project of Romania, a project of 1.8 billion EUR, of which 300 million EUR is obtained under this loan. I asked Parliament to approve the draft law under emergency procedure.
Finally, today, we have approved an Executive Decision whereby we supplemented with 30,000 vouchers the Car scrap program, so that this program has continuity and all those who have cars that fit the program announced by the Government, can bring them to scrapping centers and benefit from the necessary vouchers to purchase a new car. So far, the Government allocated 714 million lei within Car scrap programme and a total of 190 000 of vouchers, 160 being approved so far, before today’s decision, Today, we supplemented with 30 000 the number of vouchers, so that we have currently 190,000 within Rabla(Car scrap) program. Questions, please.
Reporter: Mr. Prime Minister, if you made an account in the Government, how much do you lose each day as long as those measures to reduce pensions and salaries are not enforced, and from when do you recover this lost period, from July 1st and until the law comes into force?

PM Emil Boc: According to law, the measures will take effect immediately upon publication in the Official Gazette of the legislative act. Responsibility assumption procedure is started in May. It will be completed during the month of June and immediately after its entry into force, these measures will be enforceable. Obviously, we will cut additional material costs - I mean, costs with the goods and services, fuel and other expenses of this kind, which covered material costs - as we announced a 20% reduction on top of 15% considered initially, in order to compensate these differences too.

Reporter: Have you discussed with the IMF board, because you told them that you make these cuts including in June, in early June.
PM Emil Boc: With those from the European Commission and the IMF, we have agreed on a deficit target of 6.8%, which must be enforced and observed through wage reduction measures and measures to reduce pensions and other social benefits. And for the remainder of that difference, we will supplement it with cuts in spending on goods and services, as I mentioned, so that we fall into deficit by 6.8% agreed with the European Commission and IMF.
Reporter: Earlier you said that you are considering reducing the number of secretaries of state, have you taken a decision in this respect, have you called today on ministers to make... ?

PM Emil Boc: This will be announced by the Prime Minister after all analysis will be conducted.

Reporter: Do you think the situation at the Constitutional Court could lead to postponement of IMF tranche?

PM Emil Boc: Why?

Reporter: I want to know if you have made any decision on the salaries of the companies’ employees?

PM Emil Boc: As I said, these things will be performed gradually, by the Government, for those companies that have not been restructured yet. I mentioned again that with respect to the participation of state secretaries or advisers to Ministers in boards where the state has minority and majority stake, and allowances exceed the sum of 480 RON, those advisers, those secretaries of state, will donate the entire amount to the Solidarity Fund. In other words, as of this month, the state secretaries, Advisers to Ministers will not be granted, through legal participation, in some boards where state has majority or minority stake, benefits to go beyond what we currently had so far -1% from the salary of the director, and that amount will be donated to the Solidarity Fund.