Radio România Internațional

Tag: debt discharge

  • The Week in Review (2-8.05.2016)

    The Week in Review (2-8.05.2016)

    The local elections campaign has officially begun in Romania



    The campaign for the local elections due on 5th of June officially began in Romania on the 6th of May. This will be the first election test for political parties this year. The campaign ends on the 4th of June, and mayors will be elected in one round of voting. Competing are mainstream parties such as the Social Democratic Party, the National Liberal Party, the Democratic Union of Ethnic Hungarians, the Alliance of Liberals and Democrats for Europe, the National Union for the Progress of Romania and the People’s Movement Party, as well as newly created parties, given that under a new law regulating political parties, starting in 2015, a party may be created with only 3 members. This is the third time in Romania’s post-communist history that a technocratic government is organising the elections, after Theodor Stolojan’s government in 1991-1992 and Mugur Isarescu’s government in 1999-2000. The voting will be held at more than 18,000 polling stations. The country’s interior minister Petre Toba says preparations for the elections are on schedule.



    The healthcare sector again in the spotlight.



    Prime minister Dacian Ciolos has asked the health minister Patriciu Achimas Cadariu to find a solution as soon as possible to grant authorisation to a lab able to test the disinfectants used in hospitals, the government’s spokesman Dan Suciu has announced. He said it was the responsibility of the ministry and, implicitly, that of the government, to ensure the decent functioning of the Romanian healthcare system. Controls have been carried out in hospitals following revelations in the media that the disinfectants provided by the main supplier of disinfectants for Romanian hospitals have a significantly lower concentration than that indicated on the label. Checks conducted in 300 hospitals have shown, however, that in 95% of the cases the disinfectants used by doctors and nurses are efficient. The health minister has given assurances that patients are safe. In a report drawn up in 2014 by the European Centre for Disease Prevention and Control, Romania was in the top position in a ranking measuring the resistance to treatment of the bacteria found in hospitals.



    Romania has a new minister of culture.



    Finding a solution to the situation at the Bucharest Opera and protecting the national heritage are two of the priorities of the new minister of culture, Corina Suteu. She also said she would continue dialogue with the independent sector and civil society and focus on public cultural institutions and on improving the legislation. Attending Suteu’s swearing-in ceremony, president Klaus Iohannis told the new minister that she was taking over the ministry at a difficult time and amid high expectations. Corina Suteu replaces Vlad Alexandrescu, who stepped down at the prime minister’s request following criticism over his handling of the scandal at the Opera, where three directors were replaced within just one month. Corina Suteu previously worked as a secretary of state in the ministry of culture and as a director of the Romanian Cultural Institute in New York.



    Decisions within the Social Democratic Party.



    The revocation of Valeriu Zgonea as speaker of the Chamber of Deputies has been postponed and will be discussed at the next sitting. Zgonea says the move is illegal and accuses the Social Democrats of wanting the position for their own personal and group interests. Valeriu Zgonea was earlier excluded from the Social Democratic Party soon after he criticised the party’s leader, Liviu Dragnea. The latter refused to resign from the party despite receiving a 2-year suspended sentence for election fraud committed during the 2012 referendum on the impeachment of president Traian Basescu.



    The debt discharge law comes into effect on 13th of May.



    President Klaus Iohannis has signed the debt discharge law, after previously sending it back to Parliament to be re-discussed. People who have taken out mortgage loans below 250,000 euros and who can prove they can no longer afford to pay their rates may ask the bank to take over their homes and write off their debts. Tens of thousands of Romanians have collected overdue rates on their mortgages and many are facing foreclosure, as have people who have taken out personal loans using their homes as collateral. According to figures released by the National Bank, there are currently 300,000 families who have taken out a mortgage loan. The debt discharge law does not apply to persons who have bought their homes using the First Home government scheme. Several banks have already increased the amount of the required down-payment for mortgage loans.



    European commissioner Corina Cretu travels to Romania.



    On a visit to Romania, the European Commissioner for Regional Policy Corina Cretu has warned that Bucharest must step up its absorption of European funds, given that not a single euro of the money allocated for 2014-2020 period has been spent. The commissioner is also concerned about the absorption of cohesion funds allocated to Romanian cities, whose absorption deadline has been extended by June. This is the first time in the history of the European Union that some of its budget will be managed by the cities themselves, said Corina Cretu. According to the deputy Prime Minister Vasile Dancu, the government is working on the simplification of procedures for the absorption of European funds, saying Romania’s absorption rate may skyrocket in the coming years.

  • May 3, 2016 UPDATE

    May 3, 2016 UPDATE

    State secretary Corina Şuteu, former director of the Romanian Cultural Institute in New York, was nominated on Tuesday by PM Dacian Cioloş as the new culture minister, after Vlad Alexandrescu was discharged, reads a news release issued by the Government of Romania. The dismissal comes against the backdrop of a scandal at the Romanian Opera House in Bucharest, triggered by discontent with the successive appointments for the director post as well as with the substantial imbalances between the salaries paid to the Romanian and the foreign dancers. Protests led to the cancellation of three shows, and PM Ciolos asked for Vlad Alexandrescus resignation. In messages posted on Facebook or published in the media, Vlad Alexandrescu says he was forced out because he upset various interest groups. The head of government said he had not been informed of the problems Vlad Alexandrescu claimed to have been facing and added that the nomination of Corina Suteu is intended to help carry on the reform process.




    Romania will see an economic growth peak this year, before a moderate growth rate next year, the European Commission estimates. According to its spring forecast, the high growth rate is due to the increase in revenues and to the tax relaxation. The European Commission warns Romania, however, that new legislative initiatives in the financial sector pose macroeconomic risks. According to Brussels, the domestic macroeconomic risk has deepened, as a result of the uncertainty induced by the debt discharge law, which may have a negative impact on investor confidence. This year, Romania is expected to have an economic growth rate of 4.2%, and next year 3.7%. In March the inflation rate dropped substantially, after the VAT was cut down, and it will likely remain negative midway through the year, with an expected increase afterwards triggered by planned salary raises.




    The European Commission has warned Turkey that the prospective lift of visa requirements for Turkish citizens may be quickly suspended in case Ankara fails to meet the criteria set by the European bloc. Turkey, which wants its citizens to be able to travel freely in the EU in exchange for enforcing the migrant deal, must meet 72 criteria set by Brussels. Early this week, Turkey agreed to cancel the travel visas for all EU citizens, including citizens of Cyprus, which is one of the requirements, but, as a Turkish official stated, this is not an official recognition of Cyprus by Turkey. The European Commission will decide on Wednesday whether these criteria are complied with, and should the report be positive, it will draft a legislative proposal to be endorsed by the European Parliament and the EU member states.




    On World Press Freedom Day, celebrated on May 3, the Council of Europe Secretary General, Thorbjorn Jagland, called on the 47 member countries to make sure that their national legislation on defamation does not silence the media and does not weaken public debate. The Council of Europe says it is critical for democracy that the media carry on its monitoring and criticising of those in power. In Romania, some people continue to abuse the journalist profession in order to intimidate, blackmail or trade influence, and some public authorities have attempted to block the access to information on major topics in the recent history of Romania – the 1989 Revolution, the miners riots of June ’90 or the Colectiv tragedy, reads the latest FreeEx report released by ActiveWatch. The document also reveals that the global Press Freedom Index worked out by Reporters without Borders puts Romania in the 49th place in the world, up three positions since the previous year.




    The Romanian Simona Halep (no. 7 WTA) Tuesday qualified to the eighth-finals of the Premier WTA tournament in Madrid, with 4.7 million USD in total prizes, after defeating Karina Knapp (Italy) (6-1, 6-1). Halep is the third Romanian to reach the third stage of the tournament in Madrid this year, after Patricia Ţig (134 WTA) and Irina Begu (34 WTA). Halep played the final of this tournament in 2014, when she lost to Russias Maria Sharapova.

  • A controversial law

    A controversial law

    Under the new debt discharge law that has been passed by the decision-making Chamber of Deputies in Bucharest, insolvable mortgage owners can have their debt paid in full by ceding the house to the bank that granted the loans. The law will benefit only those who applied for a loan in order to buy or build a house, as well as those who took a loan using houses as collateral.



    After having reassessed the law, upon request from President Klaus Iohannis, Parliament has introduced a fresh provision under which the law can be applied only for credits not exceeding 250 thousand euros. The main amendment to the first draft was an exemption to the “First House programme, a project aimed at easing peoples access to mortgage loans.



    This controversial law is expected to do away with the bankers inflexibility forcing them to come to terms with clients. The debtors representatives, however, dont expect the banks to be quick in complying with the law. According to an initiator of the project, Liberal MP Daniel Zamfir, the law hasnt been conceived against the banking system but aimed to strike a balance between banks and clients. He argues that those struggling with the loans arent only needy people but hard-working individuals with several jobs who are unable to pay their installments due to abusive loan clauses. The act also clearly defines the beneficiaries of the new law.



    Daniel Zamfir: “Only natural persons who are consumers can benefit from the law, and not those who took credits to open a business. The law also provides for those whose properties have been foreclosed.



    Those who have been indicted through a definitive sentence for offences related to the loan will not benefit from the new provisions. The new law has been endorsed by all Parliamentary parties, which underlined that most mortgage owners would benefit from its provisions.



    Bankers, however, said the law is retroactive and unconstitutional and its enforcement violates the constitutional principle of non-retroactivity, which might lower Romanias ratings and raise funding costs. Central Banks estimates show the new law could cause 626 million euros in losses, as 97,500 mortgages that might benefit the law, have been sharply depreciated during the present crisis.