​The state wants to establish companies that will definitely provide services needed to deal with the consequences caused by emergencies such as pandemics, war or energy/food crises, and to raise money from the PNRR, according to the GEO draft on the government’s agenda for Wednesday .

Currently, not all ministries can create companies

Currently, there is no legal provision to allow all ministries, when special circumstances require it, to establish companies, and the Government wants to change this situation.

More precisely, the executive branch wants to pass on Wednesday a draft emergency decree that will allow it to establish companies with state capital in Romania and abroad, on the proposal of the relevant ministries.

• VIEW THE DRAFT EXTRAORDINARY RESOLUTION HERE

Competent ministries will be able to participate in increasing the social capital of companies in which they exercise shareholder powers on behalf of the state.

At the same time, relevant ministries will be able to accept on behalf of the state assets and functional assets determined in accordance with Art. 3 of the government emergency order no. 88/1997, approved by Law No. 44/1998.

What motivates the urgency of creating these companies

One of the reasons for the urgency of taking these measures was cited by the Government as the crisis situations that have arisen in recent years.

• “Since the extraordinary events of 2020-2022 (the COVID-19 pandemic, the energy, food and transport crisis, as well as the war in Ukraine) have emphasized the need for investments in strategic sectors, as well as the obligation to own companies that definitely provide the necessary services in accordance with the requirements, agreed by Romania with the European Union and the North Atlantic Treaty Organization.
• Given that the respective ministries, which specialize in related fields, carry out the objectives defined by the government program, they are also responsible for dealing with any emergencies that arise in the coordinated sectors.
• The creation of state-owned companies by relevant ministries can lead to the achievement of objectives in specific sectors such as energy, transport, infrastructure or public services and ensure the sustainable development of their sector of activity.” it is shown in the GEO project.

The government states that in the context of the current energy crisis facing Romania and Europe, following the cessation of electricity supplies from Ukraine due to the war in the region, there is now an increase in demand for the transportation of power generators, fuel and heating equipment.

Thus, “the Romanian state must always be ready to serve strategic and geopolitical interests in areas affected by emergency situations that can intervene (epidemiological situation/pandemic, war, energy crisis, food), including the ownership of companies capable of unconditionally performing services, necessary to deal with the consequences of the above-mentioned situations”.

Other reasons, however, relate to the tight deadlines that ministries and risk of losing money.

• “Implementation of these goals (not from the PNRR) requires the implementation of measures with clear deadlines. As the proposed reforms fall under the competence of various ministries, the deadlines for implementation are tight.
• The creation of companies by the relevant ministries could speed up the process, in the context of which exceeding the deadlines may lead to the loss of European funds provided by Romania.
• Thus, these companies could invest in specific projects and programs, such as those related to increasing economic competitiveness, modernizing infrastructure, improving public services, developing renewable energy, contributing to the achievement of the PNRR goals.
• State companies could manage projects and programs financed through the PNRR, ensuring the effective implementation of these goals,” the regulatory act states.

How will it be decided which companies to create

The GEO project also states that the decision to create companies or increase social capital is based on economic-financial, technical, legal and opportunity analysis, according to the following principles:

a) promotion of competition between business entities;

b) guaranteeing them equal and non-discriminatory treatment;

c) ensuring transparency of allocated state funds and their effective use;

d) regional development based on social, economic and environmental considerations;

e) avoiding the occurrence of situations that may cause social conflicts or manifestations of unfair competition.