The Romanian Counterguarantee Fund is an institution subordinated to the Romanian Ministry of Finance which, according to the latest official data, has 38 employees. However, it is managed by 10 directors: 7 on the Supervisory Board and 3 on the Management Board.
The Romanian Counterguarantee Fund (RCF) is the institution that provides banks with an additional guarantee, in the name and on behalf of the state, for the loans they grant to individuals or legal entities within the framework of governmental programmes such as New Home or, more recently, Student Invest and Family Start.
More precisely, it guarantees the banks that they will get their money back, regardless of whether those to whom they have granted loans at preferential interest rates stop paying.
As with almost any state institution, not only are there many management positions, but they are also well-paid. For example, the head of the Supervisory Board earns 12,000 lei per month, and six other colleagues earn 8,000 lei each. In addition, the allowance for members of the board is 15,000 lei per month.
Therefore, the state spends about 21,000 euros per month just for the salaries and allowances of the 10 Romanian Counterguarantee Fund management members.
Moreover, the institution’s work is structured on no less than 5 Directorates and 3 Departments, which means at least 8 other heads. Such competence per square meter is rare to find in a public institution, so the question arises: what do these people produce?
10 administrators with ministers’ salaries for failed programmes
The main activity of the RCF is to issue counter-guarantees to complement guarantees issued by the National Credit Guarantee Fund for SMEs (FNGCIMM) and other guarantee funds for the benefit of borrowers who apply for bank loans.
Between 2017-2021, RCF had a cumulative turnover of less than €1 million for all years and almost zero today. The reason? Issuing counter-guarantees is not required by the market, according to PRESShub sources.
Thus, lately, the RCF’s activity has been limited to simply providing state guarantees in the framework of programs designed by the Ministry of Family: Family Start and Student Invest. As an intermediary in the granting of these government guarantees, the RCF earns a small commission, which helps it to report non-zero operating income each year, the specialists consulted explained.
The problem is that the Student Invest and Family Start programs, for example, under which young people could take state-subsidized interest-rate loans for school fees, rent, or housing down payments, ended in March with a failure.
Out of the 500 million lei limit, only 33 million lei – or not even 10%, according to PRO TV news – was granted. Only 475 young people have accessed loans.
Despite these low numbers, the RCF has announced that the two programs will continue, with the regulatory framework for 2023 „in the process of being updated and given legislative approval.”
And yet, where is the money for so many sinecures?
RCF has a fund capital of about 400 million lei, provided by the Romanian state when the company was established more than a decade ago, which is held in government securities and deposits with banks, in exchange for which the Fund collects interest.
In 2021, for example, the Fund had an interest income of almost 17 million lei.
„Public capital is used to borrow from the state itself, and the interest on the public debt is booked as profit at the RCF, which consequently increases its capital and allows it to borrow from the state again, earning more interest. And so on.
This perpetuum mobile with public money patented at the RCF is considered successful engineering, which is why the Fund has granted, with the approval of Minister Câciu, salary increases, and holiday bonuses even in the context of the crisis and budget austerity announced by the government”, an economist explained to PRESShub.
Supervisory Board, formed of political nominees
Although an institution with an economic profile, the Supervisory Board of the Romanian Counter-guarantee Fund is formed in majority by non-specialists.
The Council is led by Cristian Socol, author of the famous „wage-led growth” strategy in Liviu Dragnea’s economic program. He was introduced in 2014 as part of the extended „family” of Viorel Hrebenciuc, former PSD leader and convicted of obtaining embezzlement.
He was also the head of the FRC during the PSD governments from 2014 to 2019 and has been temporarily reappointed as president since the autumn of 2021. A provisional appointment that continues to this day.
Stefan Țintă, member of the Supervisory Board, is president of PSD Slobozia. Eduard Mike is actually an agricultural engineer and also a senior adviser at the Ministry of Agriculture.
Ionel Florian Lixandru is also Secretary of State in the Ministry of Education. Derzsi Akos is an occupational safety and health risk assessor.
Alexandru Dan Coșocariu is a graduate of the ”Alexandru Ioan Cuza” Police Academy, specialising in concrete.
Finally, the Chairman of the Board of Directors is Stere Farmache, former General Manager of the Bucharest Stock Exchange from 1995-2008, now retired.
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