The Bulgarian Industrial Association (BIA) opposes the government's decision to transfer BGN 100 million in grants from the European Commission to the Fund of Funds.
In the fund, the money will be distributed as loans with market interest, and the initial purpose was to use the funds free of charge as working capital under the European initiative REACT-EU.
The transfer of business grants to a loan guarantee program is contrary to the objectives of REACT-EU, namely the desire to respond quickly to liquidity needs in the affected companies and help overcome the crisis's adverse effects, stated Deputy Chairman of the Bulgarian Industrial Association Stanislav Popdonchev.
He points out that only one-third of the resource for portfolio guarantees of the Bulgarian Development Bank and the Fund of Funds are utilized.
"It is not clear why it is necessary to transfer another hundred million of funds that are provided as a grant to businesses, that have to be transferred again for portfolio guarantees when there are enough resources there that are obviously not in use."
A blitz survey of the employers' organization conducted among the companies showed the economic inexpediency of the government's decisions. Half of the business claims that it would not benefit from the funds in the form of loans.
