“I believe this amendment is an error. CEC Bank would still need capitalization,” Ghetea told MEDIAFAX.
The government issued an emergency ordinance in September, amending the statute of Eximbank. The document abolishes the legal provision whereby CEC Bank was allowed to boost its share capital from the profits of previous years.
Through the ordinance, the government decided that Eximbank, the other state-owned bank, will be transfered from privatization authority AVAS to the Finance Ministry, and the unused profit achieved over the past three years will be transferred, as dividend, to the state budget.
The ordinance is explained by authorities through the need to boost budget revenue, amid the ongoing international financial crisis.
The same normative act abolishes a previous government decision allowing state-owned banks, including CEC Bank, to increase their share capital from previous years’ earnings.
CEC Bank has a share capital of more than 1 billion lei (some EUR230 million), where more than half came from increases operated from the earnings achieved starting with 2008.
Over the past several years, Ghetea has called on authorities and public opinion, on countless occasions, to allow the capitalization of CEC Bank at least from profits, since the majority shareholder’s contribution, namely funding from the state budget, is seen as state aid and banned by the European Commission. (EUR1=RON4.3409)