Ghetea: First house programme is a first step toward the recovery of crediting

Publish date: 28-05-2009
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The "First house" program represents a first step for the recovery of crediting and will support the construction of houses, also allowing hundreds of real-estate firms to resume their activity, the president of the Romanian Banking Association, Radu Ghetea told yesterday the Chamber of Deputies Commission on budget and finances, Mediafax reports.

"First house" is an interesting project, which will bring what everybody is waiting, i.e. the resumption of crediting. Ghetea said on Tuesday that the National Bank of Romania (BNR) should modify the norms on crediting population, so that financing can resume on this segment, especially in the context of "First house."

BNR Chief Economist Valentin Lazea yesterday told a debate in Parliament that now is a delicate moment in terms of resuming the crediting process, and a policy of small steps is the best choice.

"We are into an accord with the IMF, which has very strict targets, its provisions are restrictive for policies and banks favor a rebalancing process. Prudence should be the main word now," Lazea explained. He told the legislators that the "First house" program is a good thing, but one must see in what parameters he evolves, so that not to infringe the accord with the Fund. "Not all banks are in a position to resume crediting fast," the central bank official pointed out.

Real-estate agents, developers and construction firms consider guaranteeing the credits for the purchase of the first house might stimulate the real-estate market as well as the building sector, but they warn the results depend on the way the program will be enacted and on the banks' reaction.

Commercial banks cannot ignore the "First house" program, Ghetea added. "If they will be absent from it, it's like closing doors themselves. You cannot operate only on state bonds, Treasury bills. You can work on the Treasury only for a few months," he explained. The fact that there are supplementary guarantees represents the first step toward a recovery of crediting, the ARB president emphasized. Ghetea declared that commercial banks want to get a better coverage and have better guarantees, as the market for buildings, factories and plants has disappeared.

The Minister of Public Finance, Gheorghe Pogea said the state can guarantee this year the purchase of 16,000-17,000 dwellings through this program. Last week, the Executive passed the "First house" program through memorandum and announced the state will guarantee 80 pc of the loan taken for the purchase of the first dwelling by individuals, through the National Fund for Guaranteeing Credits to SMEs, which will see its activity object extended so that it can also provide guarantees for the mortgage credits given by banks.

Furthermore, the Public Finance Ministry will present, at the middle of June, a number of proposals for modifying the Fiscal Code, which will be debated by the Parliament in extraordinary session, the president of the Chamber of Deputies' Commission for Budget and Finance, Viorel Stefan announced also on yesterday.

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