Banks toughen up lending conditions following Russia’s ban on wine imports

After Russia imposed a ban on the import of Moldovan wine products, the banks do not hurry to offer the winemakers appropriate conditions for rescheduling the debts. On the contrary, they toughened up the lending conditions, experts of the Institute for Development and Social Initiative “Viitorul” say in a study themed “Wine Industry on Mortgage Market”, Info-Prim Neo reports. According to the study, the number of cases when the banks resort to lawsuits in order to recover their money has increased. The bank’s websites contain a lot of “sale of mortgage” offers, where there are proposed for sale wine factories or parts of them, holdings in wine companies, apartments or houses, equipment, units of transport, agricultural machinery , alcoholic drinks and many others. This happens because the legislation on mortgage favors the banks, the wine companies and associations are not able to negotiate and because the state does not take measures to support the wine industry, the Institute’s experts say. “The wine sector is facing a deep crisis. During four years, since 2006 until 2009, about 40% of the wine companies were closed or are on the brink of closure. The situation of the working companies is not the best. They encounter serious problems related to the overdue loans, historical debts and large supplies of wine accumulated during the last four years,” said the head of the Functional Market Economy Department Viorel Chivriga. The author of the study, “Viitorul” associated expert Ion Tornea considers the failure of the companies in the insolvency procedure and of the banks that sequestrated the property pledged by the wine companies confirms that the investors do not find the wine sector attractive. The expert stresses the necessity of the state involving in the process of negotiating and rescheduling the wine sector’s debts. “No field or professional association has sufficient power to negotiate with the banks. The state should intervene as this sector has a strategic importance for the country’s economy,” said economist Ion Tornea. Among the measures that must be taken by the authorities, the expert enumerates holding of negotiations with Russia for eliminating the barriers hindering the export of products to this country, amendment of the insolvency law so that it clearly defines the powers of the court, and implementation of the principles of the Basel II Agreement on banking regulation and supervision.