The territorial-administrative units will take out foreign loan with a greater concessional degree than in the case of foreign resources granted by commercial creditors. Such changes to the Law on the Public Debt and State Guarantees were approved by the Government. The repayment of the debt will be more important than the repayment of other financial obligations of the budgets of territorial-administrative units. All the related payments will be made in the terms and conditions of the assumed commitments, regardless of the sum budgeted for the purpose. The territorial-administrative units will also keep the Debts Register and the Register of Guarantees given by them to companies in which they own holdings or to other legal entities, IPN reports.
Deputy Minister of Finance Victor Barbaneagra said the changes are aimed at strengthening the debt management capacities of the territorial-administrative units. An audit report by the Audit Office, concerning the management of the public debt in 2012, says that seven of the 17 executive authorities of territorial-administrative units examined took out internal and foreign loans by not respecting the reporting procedures and method.
Under the amendments, there will be designed a medium-term state debt management program that will be reviewed and updated annually. The terminology used in the field will be also modified. The public debt will be named the public sector debt that includes the state debt, the debt of the territorial-administrative units, the debt of the central bank, and the debts of state-run (municipal) companies resulting from internal and external loans.
“We are adjusting our framework to the terminology and statistics presentation methods used in a guide worked out concertedly by nine international organizations led by the IMF,” said the deputy minister.
The public debt on December 31, 2012 totaled 29 billion lei, up 4.1 billion lei on 2011. The state debt accounted for 73% of this debt, while the debt of the public sector accounted for 33% of the Gross Domestic Product.
The state debt at the end of this June was 22 billion lei, 15 billion lei of which represented the foreign debt.
