Thursday, December 18, 2008

€100 Million for Romania Investment Projects

Romania's Prime Minister, Calin Popescu Tariceanu, says the government will grant state aid of over €100 million for five investment projects, most of them from the automobile industry. Tariceanu only nominated the Renault company, the majority owner of the largest car producer in Romania, Dacia Renault, but added that at least three of the five projects are connected to the car making industry.

The state aid follows the request of the two car constructors that hold production facilities in Romania – Renault and Ford – to receive loans guaranties from the European Investment Bank, EIB.

The prime minister mentioned that Renault, unlike Ford, can contract loans from EIB even without the state's guarantee.

Romania's outgoing government has already adopted some measures aimed to help its ailing car industry, including suspending a registration tax on new cars.

Furthermore, it tripled an environmental tax on newly-imported second-hand cars.

Romania's biggest car-maker, the Renault subsidiary Dacia with a plant in the southern city of Pitesti, has already closed down for a month until January 11 amid falling demand as a result of the global financial crisis. It plans further production cuts.

Romania is one of the main car producers in Eastern Europe with French Renault producing the Dacia model. Dacia sold more than 230,000 cars last year in Romania and abroad.

The outgoing government was defeated in a November 30 election, and a new government is expected to be formed by the end of the year.

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