Covid in 2021 Budget: Fighting pandemic will cost about EUR 3 billion, plus state guarantees of almost EUR 6 billion

The Government estimated at almost 1.29% of GDP (RON 14.38 billion) the impact of measures for preventing and combatting COVID-19 pandemic on 2021 general consolidated budget, according to the Ministry of Finance’s forecast report on the macroeconomic situation in 2021.

Programs worth RON 28.1 billion are added to the measures leading to clear expenditures of over RON 14 billion, programs aimed at supporting through state guarantees the activity of SMEs (including those with a turnover of more than RON 20 million), as well as the activity of large companies.

The costs related to the measures with an impact on budgetary expenditures are lower by 1.75 billion lei compared to those taken in 2020, in accordance with the general policy of reducing expenditures.

The measure with the most significant impact (RON 4.46 billion) on consolidated budget expenditures is the one related to the investment grants program, which “consists of granting financial support from non-reimbursable foreign funds, related to the Competitiveness Operational Program 2014-2020, in the context of COVID-19 crisis, whose activity was affected by the spread of SARS-CoV-2 virus „, according to the report mentioned.

The other measures with a budgetary expenditure impact refer to:

• ·         financial support for travel companies (accommodation, food, agencies) – RON 2.5 billion;
• ·         indemnities granted to employees during the temporary interruption of the employment contract or to professionals with individual agreements, as well as the settlement of 41.5% of the gross salary for employees whose contracts maintained and other indemnities – RON 1.9 billion;
• ·         program for the acquisition of COVID-19 vaccine and for operating vaccination centres – RON 1.4 billion;
• ·         costs for medicines, sanitary materials, reagents and other products needed for the diagnosis and treatment of patients infected with SARS-CoV-2 coronavirus – RON 1.35 billion;
• ·         salary increases granted to public administration during the pandemic – RON 1.05 billion;
• ·         state aid scheme (grant) through state guarantee facilities for loans granted to SMEs by credit institutions – RON 0.63 billion;
• ·         acquisition of medical equipment, mobile hospitals and other capital expenditures besides medical emergency stocks – RON 0.50 billion;
• ·         acquisition of medical emergency stocks – 0.35 billion lei;
• ·         acquisition of mobile IT equipment, respectively tablets with internet access for students – RON 0.14 billion;
• ·         risk incentive – RON 0.10 billion.

The Ministry of Finance’s report says that support measures related to COVID-19 taken in 2020 amounted to a total cost of 4.85% of GDP, which means almost RON 50.5 billion.

„Some of these measures will continue in 2021 in addition to other new measures approved, which generates an estimated (total) cost of 3.81% of GDP”, namely RON 42.55 billion, according to the document.