Radio România Internațional

Tag: assessment mission

  • March 15, 2018 UPDATE

    March 15, 2018 UPDATE

    CVM — EU officials on Thursday met in Bucharest with representatives of the Romanian judiciary, the Parliament and Government as part of the assessment mission within the Mechanism for Cooperation and Verification. The assessment mission will come to an end on Friday. The Justice Ministry officials have pointed out that talks are focusing on the analysis of recommendations, on the criminal and criminal procedure codes, the civil and civil procedure codes, and on the development strategy of the judiciary. The MCV was introduced in January 2007 upon Romania’s and Bulgaria’s EU accession, to support the two countries in order to overcome shortcomings in the reform of the judiciary and the anti-corruption fight. The Romanian authorities would like the MCV to be removed in 2019.



    Book fair — Romania is a guest of honor at the 2018 International Book Fair in Leipzig, Germany. ‘Zoom in Romania’ is the motto for the more than 70 events to take place at the fair at the Romanian pavilion and in other locations, meant to promote the Romanian contemporary writers. In his inaugural speech, Romania’s foreign minister reminded that Romania was also a guest of honor at the Leipzig book fair 20 years ago.



    Berlin — The Romanian Foreign Minister, Teodor Melescanu, ended his two-day visit to Germany. His agenda, on Friday, included meetings with the president of the Committee for European affairs in the Bundestag and with the president of the foreign affairs committee in the federal parliament. The talks focused on bilateral cooperation, EU enlargement and challenges facing the EU.



    Poisoning — Great Britain, Germany, France and the US on Thursday made a joint declaration in which they claim that Russia’s responsibility is the only plausible explanation in the case of the nerve agent attack against a Russian double agent and his daughter in the English city of Salisbury last week. The leaders of the 4 countries called on Moscow to provide all information related to its chemical weapons program Novichok, given that this is the first time when a nerve agent of military use is used in Europe, after WWII. The Russian Foreign Minister, Sergey Lavrov, labeled the accusations as rude and ungrounded. Moscow announced it was preparing to reply after London’s decision to expel 23 Russian diplomats. NATO considers the incident a clear violation of international norms and agreements on chemical weapons and the EU leaders will discuss next week the poisoning of the former Russian spy. The Romanian Foreign Ministry announced Romania’s solidarity with Great Britain.



    Slovakia — The EU called on Slovakia to shed light on the assassination of the investigative journalist Jan Kuciak and to cooperate with the European Antifraud Office. The journalist was shot dead in February together with his girlfriend while he was conducting an investigation into a case of high-level corruption. In his last, unfinished article, Jan Kuciak wrote about alleged relations between Slovak politicians and Italian businesspeople suspected of links with the Calabria mafia. On Thursday the president of Slovakia accepted the resignation of PM Robert Fico, which he had handed in one day before, and announced early parliamentary elections for the second half of May. Previously, tens of thousands of people went out in the streets to protest against corruption and to ask for Fico’s resignation.



    Flu — In Romania 101 people have died of flu, shows the National Center for Monitoring and Controlling Transmissible Diseases. As many as 1,200 cases of flu have been confirmed so far. The total number of acute respiratory infections registered last week exceed 140 thousand, 67% more than that reported in the same week of the past year.



    Tennis — The Romanian tennis player, Simona Halep, world’s no. 1, will play on Friday against Japanese Naomi Osaka (20 WTA) in the semifinals of the Indian Wells tournament in California, USA. The tournament has total prizes worth 8 million dollars. In the quarterfinals, Halep defeated Croat Petra Martic (51 WTA) 2-1 in the sets, while Osaka defeated in two sets Karolina Pliskova of the Czech Republic (5 WTA). Halep won the Indian Wells tournament in 2015. (news translated by Lacramioara Simion)

  • With or without the IMF?

    With or without the IMF?

    To a large extent, Romanian economy has managed to correct some of its internal and external imbalances, through a mix of solid macro-economic policies, but it is still vulnerable to external shocks. This is the conclusion of the international assessment mission to Bucharest, which ended on February 10th. The IMF, EC and WB experts came to Romania’s capital to assess the implementation of the 2 billion Euro precautionary stand-by agreement, valid until this autumn. So far, the Romanian authorities have not resorted to any of the funds provided for in the agreement, and that is why there are many voices saying that an extension of the accord would be pointless. The issue could be settled in April, when the lenders’ delegation plans to come back to Bucharest and when, according to the Romanian Prime Minister Victor Ponta, the parties will resume talks on the two issues that they have not managed to reach an agreement on: the increase in the price of natural gas and the restructuring of coal-based energy sectors. Victor Ponta:



    “Our international partners have appreciated the many accomplishments on Romania’s part. In 2014, the GDP went back to the level it had before the crisis, and growth is now steady. Private consumption and exports have supported this economic re-launch. It is very important for the measures that are to be taken from now on to be in the same direction, both with regard to the fiscal code, absorbing European funds, and removing red tape barriers. We have an international agreement and I want to see it carried through successfully. Yesterday we did not sign the letter of intent for two things that we first had to think through and negotiate properly, bearing in mind the interests of those who elected us to represent them. On the one hand, with regard to the price of gas for domestic consumers, we want to make sure that the increase is really necessary, given that at world level energy prices have dropped, and secondly that such an increase is bearable enough, because otherwise we will be faced with the situation in which people and companies would no longer be able to pay their bills in the winter months. Secondly, I believe that Romania needs coal-based energy. This thing about closing down coalmines and plants is an old story. We’ve been talking about closing them down since 1996. However, I don’t believe this would be a good thing. I see we need all types of energy, be it hydro, nuclear, coal or renewable, but we also need restructuring, investment in the environment and measures aimed at rendering these companies more effective.”



    Among the economic entities on the lender blacklist is Oltenia Energy Compound, which digs up low quality coal and runs thermal plants able to supply 40% of the national energy consumption. An adviser to the PM and a former minister in Social Democratic governments, Ionel Blanculescu insists on the obligation of the Social Democratic government to protect its citizens:



    “There are very clear arguments. The IMF must understand that the 26,000 employees on the horizontal of the economy, which ensure 40 to 50,000 more in the state sector, cannot just be sent home overnight, you cannot shut down these entities overnight. You have to provide what the premier suggested, a rational program of restructuring and efficiency boosting, with a better management of those institutions, which may be a solution in time. At the same time, the second element in this dissent is the price of natural gas, especially for home users and gas heating plants. In this area I think that rushing things will do more harm than good, and I don’t think it should be that way, especially as world prices have fallen severely. Romania should not rush and totally change its trends in terms of the rise in these prices. After all, Romania’s population should enjoy for a time, as long as it lasts, this trend of drop in prices for gas, crude and oil products.”



    Economic analyst Radu Soviani believes that we should expect two months of insecurity before the parties sort out the dilemma of prolonging or not the IMF accord for Romania.



    “From my point of view, the fact that there is no IMF letter stating that Romania has lived by the obligations it took upon itself is a form of uncertainty for the upcoming period. What does that uncertainty mean? It means that at this point the IMF does not have the certainty of negative facts, which is why the de facto agreement is not declared failed, even though it has failed, and at the same time, for the Government of Romania, it means that it does not have the certainty of positive facts. Hence, we will have to wait until April, and in April we will see where the unknowns lie.”



    The head of the Tax Council, Ionut Dumitru, says that the opinions expressed by the IMF experts on energy compounds reveal a wider problem, which has been affecting for a long time the economic development of the country: the inefficiency of state capital companies. In the name of the Liberal opposition, former finance minister Gheorghe Ialomitianu said he was convinced that the lack of a letter of intent is proof that ‘the present government did none of the things it committed to doing.”


  • The IMF, again in Bucharest

    The IMF, again in Bucharest

    One of the focal points on the agenda of the talks is the government’s intention to introduce a 5% reduction in employer social security contributions.



    A mission of the International Monetary Fund, the European Commission and the World Bank is assessing in Bucharest in the next couple of weeks the latest stand-by loan agreement with Romania. Last September, the IMF board approved a letter of intent submitted by the Romanian authorities for the conclusion of this precautionary agreement worth some two billion euros for the next two years. Another two billions are to be added by the European Commission.



    This agreement, which is the tenth Romania has concluded with the International Monetary Fund in the past 23 years, is due to expire in mid-2015. According to Liviu Voinea, minister delegate for budget, this stability contract, which is an anchor, will undoubtedly be the last with the aforementioned financial institutions.



    The evolution of macro-economic indicators, particularly the budget balance is to be discussed, as budget collection hasn’t met the envisaged level and the government intends to put in place a series of measures, which will chiefly affect revenues to the state budget. Among these there is the intention of the Finance Minister Ioana Petrescu to implement a 5% reduction in employer social security contributions.



    According to economic analyst Aurelian Dochia, the government should convince the representatives of international lenders that Romania has the necessary resources to take this measure as of July 1st: “Although macro-economic indicators are very good, particularly in terms of economic growth, that surprisingly hasn’t been visibly reflected in revenues to the budget and probably this will be a major topic of discussion with the IMF team. In relation to this, the government’s proposals to operate tax changes and reduce social security contributions (SSC) could be brought into discussion, but they must come up with good arguments in order to convince the IMF that such a cut doesn’t pose any risks to the budget and will not lead to a budget deficit, way beyond the envisaged target at the end of the year.”



    According to minister Petrescu, the SSC cut for employers will be a shot in the arm for the business environment, curbing the fiscal burden facing honest employers. Another positive result is the creation of new jobs, as the measure is also aimed at curbing black market labor. Budget losses upon the implementation of this measure are estimated at over two billion and a half Romanian lei in the second quarter of the year, but the government expects to collect almost one billion in revenues to the budget, both thanks to the economic growth and from taxing the new legal jobs resulting from curbing black market labor.