Gov't approves raise of public debt ceiling to 53 pct of GDP as of end-2024

The government approved on Wednesday an emergency ordinance that raises the public debt ceiling, calculated by the EU methodology, to 53 percent of GDP for the end of 2024, the Executive said in a release.This amendment is intended to ensure flexibility in attracting the necessary financial resources for covering the 2024 financing plan, but also to pre-finance the needs for 2025, and maintain the State Treasury's foreign exchange reserve at a comfortable level.Through the same emergency ordinance, the government amended and supplemented Law No. 96/2000 on the organization and operation of the Romanian Export-Import Bank EXIMBANK - S.A., including in the institution's scope certain activities carried out in the portfolio of the Investment and Development Bank, whereby both public and private resources will be mobilized for the purpose of financing investment projects that support the country's sustainable development.The respective activities include: supporting the development of infrastructure, utilities of public interest, regional development, research and development, environmental protection, etc. As part of the activity carried out on behalf of the state, Exim will strengthen its ability to support Romanian exports, international transactions and Romanian investments abroad, through all types of financial instruments specific to an export credit agency - ECA - (financing, guarantees and insurance) in accordance with the practice of other EU export agencies," the release states.Also, starting from September 30, 2025, Exim will no longer grant new guarantee products and financing in the name and on behalf of the state, other than those related to its activity as ECA, but will continue to ensure the administration of existing commitments throughout their duration."The portfolio management methodology shall be referred to the approval of the Interministerial Committee on Financing, Guarantees and Insurance until 31.12.2024 and subsequently subjected to the government's approval by Memorandum. Following the amendment of the Exim scope of activity, the current funds under Exim's management are consolidated as follows: the fund for supporting export credits, international transactions and Romanian investments abroad (ECA activity), and the fund for the administration of financing and guarantee commitments that are ongoing as of September 30, 2025," the release shows.Taking into account the role of the BID as a national development institution, this regulatory act proposes its participation and representation, based on a mandate granted by the Government of Romania, to initiatives and new investment funds that are promoted at regional level, such as the Innovation Fund currently proposed by the FEI, or the successor fund to the 3SIIF, with the contribution covered from the state budget or other legally constituted sources.Given that the European funds received as pre-financing from the European Commission for the 2021 - 2027 programs have been used up, and considering the current budgetary context, the emergency ordinance renders the current legal framework more flexible to allow either the use of non-reimbursable European funds available under the NRRP (representing installments received from the EC based on the expenses incurred to meet the targets and milestones), or of the funds allocated from the state budget according to OUG No. 133/2021.The same mechanism shall be applied to ensure the necessary funding for the reimbursement of eligible expenses for the closing of the 2014 - 2020 programming period.