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Government plans to create new state-owned bank

Romanian government plans to create a new state-owned bank with EU money aiming to support the absorption of European funds and to finance local SMEs.

It is not yet clear what is the sense of creating this new state-owned bank as the government already owns two local banks – CEC Bank and Eximbank.

The new bank, called National Development Bank, is still in an early stage as the government prepares the launch of the feasibility study.

The study “From Uneven Growth to Inclusive Development”, released last year by the World Bank, the large share of state-owned companies in Romania, compared to other countries, affects the development of the country.

Romania’s state-owned companies are less productive than private ones, and the fact that private firms are acquiring products and services from state-owned companies affects the efficiency in the private sector, according to the World Bank.