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The Buzz in Romania: Interview with Sebastian Gutiu of Schoenherr

The Buzz in Romania: Interview with Sebastian Gutiu of Schoenherr

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“The Corona Bubble is taking up most of our life in Romania these days,“ begins Sebastian Gutiu, Managing Partner of Schoenherr’s Bucharest office. “Everything is more or less related to it.“

Romania has been in a state of emergency since March 16, and, though it was initially announced for 30 days, the state of emergency has since been extended until mid-May. Gutiu reports that strict social distancing measures have been taken, including “lockdowns and movement restrictions, except for professional reasons and specific personal reasons.“ He states that “mostly everything is happening remotely these days in Romania: working from home, liaising with authorities, signing transactions, and making payments.” 

In an effort to combat the crisis, Gutiu reports, the Romanian parliament and government have been very busy. “Since the state of emergency started, the number of normative acts published in the Official Gazette has been one third higher than in the same period of 2019,” he says, noting that "the government was fairly good in terms of its reaction time and in taking preventive measures to limit the impact of the outbreak.”

Gutiu believes that the time is right to start evaluating the economic impact of the crisis. “I am sure we cannot be too early in taking balancing measures to this end, otherwise it’s likely that we’re going to be hit very hard.” According to him, Romania, as an emerging economy, does not have the strength and the critical mass of some western EU countries to cope with the crisis as well, and needs to prepare its strategy carefully.

In the meantime, Romania has taken many measures to do what it can to support the business community. Gutiu says that companies can now apply for a “so-called ‘state of emergency certificate’ if they see a drop in their revenues or need to shut down their business.” He reports that a draft law regarding rent payment exemptions is currently being processed by the parliament, and he says that a “EUR 3.3 billion state aid scheme for SMEs was recently approved by the European Commission, consisting mostly of direct grants and state guarantees for investment and working capital loans,” which should help Romania too.

Nonetheless, of course, Romanian’s workforce has been hard hit. Gutiu says that “nearly one million people are facing a temporary lay-off," and that the number of employment agreements terminated since the beginning of this crisis is “estimated at over 200,000.” He reports that “various measures have been taken to protect employers and employees, including temporary lay-off compensations paid from the state budget, or paid days off for parents that need to take care of their children during the temporary shut-down of education units.”

“Court hearings and procedural law deadlines have been suspended during the state of emergency, as has the statute of limitation,” Gutiu says. “These measures apply to both civil and administrative courts, as well as insolvency proceedings, and even criminal trials, with only urgent cases being continued.” Similarly, most authorities have “postponed hearings and controls until the end of the state of emergency." 

In the banking sector, Gutiu says, "a moratorium of up to nine months is available to borrowers, both companies and individuals, that have been directly or indirectly impacted by the pandemic.” However, he reports that “some uncertainties exist as the moratorium was already approved by a Government emergency ordinance, while the Parliament passed a separate law on it.” That law is facing a challenge in the country’s Constitutional Court. 

Finally, Gutiu says that “law firms are more flexible these days; they are much more capable of adapting now.” He states that the legal sector has had the opportunity to see other countries’ examples in dealing with the pandemic and its fallout, “so we were able to adjust.” He says that this crisis will most certainly change the “structure of the demand for legal advice” and that it can be used as an “opportunity to evolve.”

Schoenherr at a Glance

Schoenherr is a leading full-service law firm providing local and international companies stellar advice that is straight to the point. With 15 offices and 4 country desks Schoenherr has a firm footprint in Central and Eastern Europe. Our lawyers are recognised leaders in their specialised areas and have a track record of getting deals done with a can-do, solution-oriented approach. Quality, flexibility, innovation and practical problem-solving in complex commercial mandates are at the core of our philosophy.

Firm's website: www.schoenherr.eu