Gov't considering partial wage subsidies for rehired furloughed workers

Prime Minister Ludovic Orban said on Tuesday that the government intends to partially subsidise from the unemployment budget wages of people who were put on short-time working and rehired when the pandemic ends and businesses reopen.

"Regarding short-time working, I have to tell you once again that I chose this option to pay short-time working benefits for epidemiological reasons as well. (...) This support measure will be limited in time, I'd say two months, after which, as we pass the peak of the epidemic and start reopening the economy, our intention is to replace it with an active measure under which we partially subsidise from the unemployment budget the wages of the employees on short-time working rehired by their former employers, because our interest is to restart as many companies as possible, our interest is as large a number of employees keeping their jobs and, also, we will think of an instrument for the absorption of the additional workforce seeking for a job and in that sense we will move on to active measures in support of employment after returning to normality," Orban told Realitatea Plus private broadcaster.

He added that the government will provide the resources for the payment of the short-time working benefits, including through the national budget revision that will take place this week.

"We are ready to ensure the payment of the necessary amounts for the short time of the employees who due to the total or partial interruption of the businesses for which they work have got to a position to benefit from this form of payment. We will provide the financial resources. This week we will have on the government table an emergency budget revision ordinance that has some precise objectives: increasing public health spending health and also increasing public employment and social protection spending to secure the financial resources to make all the payments," he added.

Orban mentioned that the cap on state-guaranteed loans for small and medium-sized enterprises will be raised from five to 15 billion lei in the budget revision in order to provide the working capital or the capital needed for investment for as many SMEs as possible.

The prime minister said that the economic recovery plan foresees a significant increase in public investment, estimating that at least 200,000 new employees will be needed on the construction market. He also said that agriculture is a field with a great potential, which the government will support.

About the financial problems that local administrations may face, Orban said the government will increase the allocation of income tax receipts by 2% for localities and by 1% for counties, while increasing the credit and drawing caps on loans for investment by the local administrations.