Radio România Internațional

Tag: deficit

  • March 13, 2025 UPDATE 1

    March 13, 2025 UPDATE 1

    Candidacy – The leader of the populist, ultranationalist opposition party S.O.S. Romania, Diana Şoşoacă, on Thursday submitted her candidacy for the May presidential election to the Central Electoral Bureau. Also on Thursday, the president of the pro-Western opposition party Save Romania Union (USR), Elena Lasconi, will also submit her candidacy. Şoşoacă also ran in last year’s presidential race, but the Constitutional Court (CCR) rejected her candidacy. Elena Lasconi qualified for the final round of the presidential race, along with the pro-Russian extremist Calin Georgescu, but the CCR cancelled the vote due to the flaws in the electoral process which favored Georgescu. The Court definitively rejected Georgescu’s candidacy for the upcoming election. Following this decision, the leader of the Alliance for the Union of Romanians (AUR), George Simion, and the leader of the Party of Young People (POT), Ana Maria Gavrilă, populist ultranationalists who supported Georgescu, announced that they would submit their candidacies, with one of them withdrawing after their validation. The former Social Democratic (PSD) leader and Prime Minister Victor Ponta also entered the competition. Following this move, the PSD leadership excluded him from the party. The government coalition (PSD – PNL – UDMR) has a common candidate, the former liberal leader Crin Antonescu. He and the current Bucharest mayor, Nicusor Dan, are the only political competitors accepted, so far, by the Central Electoral Bureau (BEC) and validated by the CCR. The deadline for registering candidacies at the Central Electoral Bureau is March 15.

    Deficit – Romania’s trade deficit increased by 38% in January, compared to the same period last year, data from the National Institute of Statistics shows. In 2024, Romania exported goods worth 6.5 billion Euros and imported goods worth 11.4 billion Euros. Romania continues to have a major deficit, especially in relations with China, Germany and Poland, while recording surpluses with the UK, the Republic of Moldova and the US, although at smaller volumes. A vulnerable sector remains trade in agricultural and food products, where Romania mainly exports raw materials and imports finished products. To reduce the trade deficit, of about 5 billion Euros, experts recommend a strategy focused on the export of value-added products and more efficient use of statistical data for better-founded economic decisions.

    Pensions – Pensioners in Romania whose pension incomes do not exceed 2,574 lei (517 Euros) will receive financial support of 800 lei (160 Euros). The decision, approved on Thursday by the Romanian Government, stipulates that the amount will be granted in two equal instalments of 400 lei (80 Euros) in April and December respectively. In the case of people whose pension rights are established after April 1, the financial aid will be granted in December and will amount to 400 lei (80 Euros). The support targets Romanian pensioners residing in the country or abroad. According to official data, almost 2.7 million pensioners have incomes lower than or equal to 2,574 lei (517 Euros), and of these, over 86,000 are in the diaspora. Also on Thursday, the executive amended, by emergency ordinance, the Statute of Forestry Personnel. Thus, the bonuses equivalent to at least 5 salaries for the last month of activity were eliminated, which, in the case of the heads of the National Forestry Agency, amounted to 10 salaries. Romsilva employees are contesting the changes adopted by the Government. Trade union representatives criticize a 25% reduction in foresters’ income and announce a protest in Bucharest next week. (LS)

  • February 27, 2025 UPDATE

    February 27, 2025 UPDATE

    ENERGY The Romanian government passed an emergency order to extend the cap on electricity prices beyond the 31st of March deadline, until 30th June this year, and the one on natural gas prices until the beginning of April next year. The latter move is intended to prevent a rise in natural gas prices when the stocks for next winter are refilled. The energy minister Sebastian Burduja said recently that the government wishes to protect Romanian households and support the competitiveness of Romanian businesses. After the energy market was deregulated in January 2021, Romania was one of the European countries the worst hit by soaring electricity and gas prices.

     

    DEFICIT Romania’s budget deficit reached 0.58% of GDP in January, as against 0.45% in the same month last year, according to data made public by the finance ministry on Thursday. The institution said total revenues amounted to almost RON 47 billion, down 1.4%, amid lower EU funding and some current returns, such as VAT and excise duties. Expenditure, on the other hand, which amounts to RON 58 billion, went up by 4.5% compared to the corresponding period last year. The finance ministry mentions that this year’s state budget is based on an economic growth rate of 2.5% and a budget deficit of 7% of GDP. In 2024, the deficit went up to 8.65% of GDP, from 5.61% in 2023.

     

    FARMERS Romanian farmers stand in solidarity with their counterparts in Czechia, Slovakia, Hungary and Austria, who are staging protests against EU agricultural policies, which they see as unfair, and against massive imports of agricultural products from third countries. The Alliance for Agriculture and Cooperation, which includes a number of Romanian organisations in the field, said in a statement that Romanian farmers are faced with market distortions caused by duty free imports from Ukraine, the negative impact of the EU-Mercosur trade agreement on the competitiveness of European agricultural production, and by a growing bureaucratic burden caused by EU regulations. All of these pose a threat to food security, destroy local supply chains and affect farmers’ incomes, the Alliance says. Its representatives view the protests as a strong signal that the current agricultural policies must be revised in order to ensure a sustainable future for farmers across the European Union.

     

    INVESTIGATION Călin Georgescu, the far-right front-runner in the cancelled presidential elections in Romania, is under criminal investigation for 60 days, after being questioned by the General Prosecutor’s Office on Wednesday. While inquiries are being conducted, he is not allowed to leave the country and must check in with the police regularly. Georgescu is accused of six offences, some in aggravated form, including instigation to actions against the rule of law and presenting false information and giving false statements in respect of his wealth declaration and the funding of his election campaign.

     

    TATE BROTHERS The Romanian body investigating organised crime and terrorism confirmed that the case prosecutor allowed Andrew and Tristan Tate to leave Romania, but emphasised that the brothers are still under criminal investigation and must return to Romania. The two, who are holding dual British-American citizenship, are believed to have left the country on Thursday morning on board a private plane, heading for Florida. They were first arrested three years ago and are charged with rape, kidnapping and money laundering. Last week, the Financial Times wrote that the current administration in Washington is putting pressure on Romania to cancel the restrictions against the Tate brothers, which the Romanian authorities have denied.

     

     

    TARIFFS The tariffs the US could introduce on trade with the European Union would have less impact on Romania, as the country’s main trade partners are EU member states, said the National Bank chief economist Valentin Lazea. He added that 72% of Romania’s foreign trade is with EU states and mentioned the example of tariffs applied in the past on steel and aluminium, which did not affect Romania much, given that exports of these metals to the US are negligible. Lazea warned however that there will be an inflationary effect of the global increase in tariffs, which will push prices up. The US President Donald Trump announced on Wednesday, in the first meeting of his cabinet at the White House, that he will soon levy 25% customs duties on European products imported into the United States. (AMP)

  • January 22, 2025

    January 22, 2025

    ECONOMY The Economic and Financial Affairs Council (ECOFIN) Tuesday approved Romania’s 7-year fiscal structural plan to reduce the country’s budget deficit. The plan is designed to stabilise public debt as Romania remains among the top EU member states in terms of public investment – over 7% of GDP, bringing the budget deficit below 3% in 2025-2031, the finance minister Tánczos Barna explained. The decision comes as several countries, including France, Spain, Italy and Finland, are facing similar challenges and have requested an extension of the fiscal adjustment period from 4 to 7 years, until 2031. Other topics on the ECOFIN meeting agenda include the current impact of Russia’s aggression against Ukraine, the priorities of the Polish presidency of the EU Council, the 2025 European Semester and the endorsement of the revised recovery and resilience plans for Greece, Cyprus and Spain.

     

    POLL  90% of Romanians reject the idea of ​​leaving NATO, a record level of approval for the North Atlantic Treaty Organisation, an INSCOP survey made public on Tuesday indicates. According to the poll, based on data collected at the end of last year, Romanians’ support for the West in terms of political and military alliances has increased by 10% over the past 3 years. The poll also shows that Romania’s European Union membership is seen by almost three-quarters of respondents as an advantage in terms of its effects on economic and social life, on family and personal life. Only 55% of Romanians believed this 3 years ago.

     

    PROTEST The Bucharest metro trade unionists today carry on their protest in front of the Government headquarters, demanding respect for the employees and the collective bargaining agreement. On Tuesday, they picketed the finance ministry, demanding pay raises and proper financing for the company. Metro employees also announced work-to-rule and token strikes, against the ordinance passed by the new government at the end of last year, which no longer allows hiring, promotions and the rights negotiated in the collective bargaining agreement registered in early December 2024.

     

    EARTHQUAKES Romania will have a seismic risk map for each locality, and the authorities in high-risk areas will have access to a governmental programme to consolidate public buildings, the development minister Cseke Attila announced. He added that the programme is fully funded from the state budget and that the priority is to consolidate healthcare units. According to the latest statistics, over 2,500 buildings in Bucharest alone are in danger of collapsing in intensity 7+ earthquakes similar to the one in 1977.

     

    POLLUTION Romanian authorities are closely monitoring the situation in the Black Sea, after 2 Russian oil tankers were badly damaged in the Kerch Strait at the end of last year, causing an environmental disaster in the area. The environment minister Mircea Fechet warned that everyone must be prepared, but stressed that the risks of the pollution wave reaching the Romanian coastline are minimal. Authorities are assessing the situation, after over 2,000 tons of highly toxic oil product spilled in the sea, causing the death of thousands of birds and leaving hundreds of dolphins stranded tens of kilometres from the shore.

     

    TRUMP The US president Donald Trump said new sanctions against Russia are “possible” if Moscow does not negotiate an end to the war in Ukraine, AFP reports. He added the United States would consider continuing military aid to Kyiv, which has amounted to tens of billions of dollars since Russia invaded Ukraine in February 2022. Trump had previously said that Russia was heading for disaster if it refused to negotiate and sign a ceasefire or peace agreement with Ukraine. As for the Ukrainian president, Trump expects Zelenskyy to be willing to sign an agreement. (AMP)

  • Budget deficit must be reduced

    Budget deficit must be reduced

    The 2025 draft budget will be built on a 7% deficit, without additional tax increases, says Finance Minister Tánczos Barna.

     

    Romania ends 2024 with a budget deficit of 8.6%, according to data from the Ministry of Finance. Experts point out that this is a huge deficit level and is among the highest in the EU. Economic growth is not robust, as it is based on large internal and external imbalances, and the Government must try to keep spending under strict control, experts also say. The deficit must decrease this year, which is a real challenge, says Finance Minister Tánczos Barna. He specified that the objective for 2025 is the wise management of public money, given that 2024 was a difficult year for Romania, from all points of view. Tánczos Barna: “It was a year with many elections, it was a year in which pensions were recalculated, salaries were increased in several areas and investments were supported with unprecedented amounts. I believe this is the most important element of the 2024 budget, even if the year ended with a deficit of 8.6%. The year 2025 will mean a 7% deficit and, indeed, this is a challenge given that we want to keep the amounts allocated for investments and pay salaries at the level of November and pensions at the level of November 2024. We have to support the education system, the health system, all public institutions, to fit into this deficit. At the same time this must also be the year in which we begin to create that flexible state, which does not collect taxes to become obese and to hire even more and provide the same services with a larger number of employees, with high, high costs.”

     

    Tánczos Barna recalled that, in 2024, Romania made a 7-year commitment to the European Commission, and at the end of this timeframe it must reach a 3% deficit. He also said that, in drafting the state budget for 2025, the authorities are not considering an increase in VAT or any changes to the payroll tax. The minister mentioned that the draft budget will be presented to the governing coalition by January 27, to be adopted by Parliament in the first week of February.

     

    We recall that the Government led by the Social Democrat Marcel Ciolacu recently approved an emergency ordinance regarding some fiscal-budgetary measures in the field of public spending, to substantiate the general budget for 2025. The measures have sparked dissatisfaction among the private sector, which complains about legislative unpredictability and the change of tax laws from one day to the next. In turn, the unions signal the fact that protests will be held in the upcoming period and have asked the Ombudsman to challenge the article that provides for the freezing of pension indexation at the Constitutional Court. Having taken effect on January 1, the ordinance also provides for a salary freeze, the elimination of some tax incentives and the restriction of certain benefits.

     

  • December 14, 2024 UPDATE

    December 14, 2024 UPDATE

     

    NEGOTIATIONS In Bucharest, negotiations on a future coalition of the pro-European parties in Parliament have made progress with respect to the structure of the new government. The Social Democratic Party will control 7 ministries, the National Liberal Party 4, Save Romania Union 3, and the Democratic Union of Ethnic Hungarians in Romania 2, said the Social Democrats’ senior vice-president Sorin Grindeanu. It has not yet been decided which ministries will go to each party and the names of the new ministers. On the other hand, the Social Democrats and and the Democratic Union of Ethnic Hungarians plead for a single presidential candidate of the coalition. After the Constitutional Court cancelled the election for president, the future executive will have to decide by the end of the year on a new presidential election calendar, the UDMR believes. The pro-European parties elected in Parliament hope to come up with a cabinet by Christmas.

     

    EU FUNDING Romania collected EUR 1.9 billion in EU structural and cohesion funds in 2021-2027, and the overall absorption rate, 6.11%, is close to the EU average of 6.19%, the minister of investments and European projects, Adrian Câciu announced. The absorption rate for the structural and cohesion funds under centrally managed programmes is higher, namely 7.3%, Caciu said in a Facebook post. He emphasised that Romania is yet to to catch up on Regional Programmes, where the absorption rate is 3.2%, but he voiced confidence that the example set by the current coalition comprising the Social Democrats and the Liberals in terms of management and implementation of European funds, including decentralisation, will be followed by the new government, and the pace of EU fund absorption will be sustained, so as to replicate the success of the 2014-2020 period.

    PARLIAMENT On Monday the last week of work for the current legislature begins, with many bills still unfinished for Romanian Senators and Deputies. Until the new Parliament is convened, the Chamber of Deputies should adopt the new Forestry Code, which has been on the agenda for several months. The code is a benchmark in the National Recovery and Resilience Plan and a priority for the Government, which says the document must be adopted by the end of the year. The bill provides, among other things, for the seizing of vehicles carrying stolen wood, for green belts around major cities, for preemptive rights and reasonably priced quality materials for local furniture manufacturers, for video monitoring of forest roads, and bans clear-cutting in all protected areas. Meanwhile, the Senate is expected to vote on a bill punishing holders of multiple positions financed from the state budget and on another one limiting to two the number of terms in office for the heads of the secret services. The current MPs remain in office until December 20, when the first session of the new Parliament is scheduled, following the December 1 general elections.

     

    ECONOMY Romania’s trade deficit was EUR 5.5 billion higher in the first 10 months of the year than in the same period in 2023, according to data made public by the National Bank. More than half of this deficit is the result of growing imports of goods. The central bank also says that the total foreign debt went up over EUR 18 billion and exceeded EUR 186 billion. According to analysts, along with the very high budget deficit, these are the main problems of the Romanian economy, and they must be solved concurrently, which is very difficult. They believe that through a correct budget adjustment, expenses would be cut, and revenues could be raised by eliminating corruption and through a fair tax system.

     

    ANNIVERSARY Timişoara marks 35 years since the anti-communist Revolution of December 1989, which broke out in this city in western Romania. Under the motto “35 years of freedom”, events dedicated to the 1989 heroes and celebrating the three and a half decades since Timişoara became the first city free from communism in Romania will take place between December 15 and 20. The agenda includes, as every year, religious services, wreath-laying, exhibitions and film screenings. A concert entitled Requiem in Memoriam is scheduled on Sunday at the Banat Philharmonic, Monday will see the inauguration of the Freedom Portal, a light installation that reproduces sounds from the Revolution, followed by the traditional march “Heroes Never Die”. Tuesday will be a day of mourning, and the events on December 20 will end with a concert called “Rock for revolution”. (AMP)

  • Budget deficit like in pandemic times

    Budget deficit like in pandemic times

     

    Romania’s budget deficit in the first 11 months of this year reached 7.11% of its Gross Domestic Product (GDP), over EUR 25 bln, according to information obtained by the Romanian media. The government’s deficit target for 2024 is 8.58% of GDP, over EUR 30.5 bln, which means that substantial spending is planned for December as well. A higher budget deficit as a share of GDP was most recently recorded in 2020, the year of the COVID-19 pandemic, when the indicator stood at 9.6%.

     

    The deficit is the difference between the state’s lower revenues and the higher expenses it must cover. Since the government does not have this money, it has to borrow it. The higher and longer the deficits, the more alarming the public debt growth rate.

     

    Together with slower economic growth, as expected for Romania in the coming years, large budget deficits can lead to alarming situations, such as the one forecast for 2031. For that year, the fiscal plan stipulates that Romania will pay 3.5% of GDP (EUR 20 bln) in interest on government debt, as opposed to 2% today.

     

    Official data and data collected by the press show that the new government will take over a difficult economic situation: a huge budget deficit, interest on government loans that have broken the European Union record, and European funds partly suspended.

     

    At the moment, the incumbent government, comprising the Social Democratic Party and the National Liberal Party, cannot draft the budget law for next year. With the new parliament not yet convened, the future parliamentary majority, on which several budget chapters depend, is not clear. And without a national budget, city halls cannot prepare their own budgets, and citizens will immediately feel the effects.

     

    The Liberal finance minister Marcel Boloş acknowledged that “political instability is creating difficulties with regard to the strategy for borrowing on foreign markets to ensure the financing of the budget deficit and public debt, as the budget for 2025 cannot be finalised.”

     

    The Social Democratic PM Marcel Ciolacu said in recent months that the colossal loans taken out by his executive team were primarily intended for investment. He mentioned the example of Western European countries such as Portugal, Spain or Italy, which went into massive debt before creating their remarkable present-day infrastructure. Commentators say, however, that much of the deficit is due to electoral measures—e.g. substantial increases in pensions and salaries in the public sector—implemented by the government in 2024, which in Romania was a year with all types of elections: elections for the European Parliament, as well as local, legislative and presidential ballots. (AMP)

  • Downward forecast from the European Commission

    Downward forecast from the European Commission

    Romania’s economic growth estimate has been recalculated by the European Commission (EC), at a value well below the initially established figure. In the forecast published in the spring of 2024, the estimate was that the economy would register an advance of 3.3% this year, followed by one of 3.1% in 2025. In a recent document, however, the EC states that the growth rate of the Romanian economy will slow down to 1.4% this year, then accelerate slightly to 2.5% in 2025. During this year, industrial production, constructions, IT and transports have slowed down due to the decrease in external demand from Romania’s main trading partners, the rapid increase in wages and the high energy prices. At the same time, retail sales have grown strongly as available incomes have grown at a rapid pace. However, the dynamic private consumption was largely counteracted by the negative contribution of exports to the GDP growth, while the growth of private investments was moderated by the uncertainty surrounding the expected fiscal consolidation measures, the EC stated.

     

    On the other hand, according to the new forecasts, Romania’s budget deficit is forecast to reach 8% of the GDP in 2024 and to remain at a high level of 7.9% of the GDP in 2025. Comparatively, in the spring, Brussels estimated that the deficit was expected to reach 6.9% of the GDP in 2024 and 7% of the GDP in 2025. According to the EC, the deficit exceeding the expectations reflects a very rapid increase in government spending, mainly due to increases in public sector wages, to spending on goods and services, and social transfers, including pensions. It also reflects a slightly slower revenue growth due to weaker than expected economic activity. The good news is that inflation is expected to continue to decline in Romania, from an average of 10% in 2023, to around 5.5% in 2024. However, pressures on prices remain high, due to strong domestic demand, on the backdrop of increasing salaries and pensions, warns the EC.

     

    Despite the economic slowdown, the demand for jobs remains strong, and the unemployment rate will be 5.5% in 2024 and 2025 and 5.4% in 2026. At the same time, public debt is expected to increase from 48.9% of the GDP in 2023 to almost 60% by 2026. The forecast does not include any impact of the government’s potential budget deficit reduction measures on revenues or expenditures, measures included in the medium-term fiscal and structural plan that Romania presented to the EC in October. These measures are not sufficiently specified by the government at this stage, the report points out. However, they have the potential to significantly reduce the public deficit in relation to this forecast, if they are designed and implemented properly in the budget for 2025. In its latest report, the IMF also revised downwards to 1.9% the estimates regarding the advance of the Romanian economy this year, from 2.8% as forecast in April. (LS)

  • October 3, 2024 UPDATE

    October 3, 2024 UPDATE

    SUMMIT Romania’s development depends on investment and initiative and our country needs people with a western attitude towards work – Prime Minister Marcel Ciolacu said on Thursday during a summit for the Romanians the world over staged in Bucharest. The head of the Romanian Executive said that over 3 million Romanians migrated between the years 2008 and 2022. However, Ciolacu said that last year was for the first time when 190 thousand Romanians returned home. Also attending the event, the Senate president, Nicolae Ciuca, voiced his wish that the Romanians in the Diaspora come back home, adding the state’s involvement in easing their return is ‘absolutely necessary and important’.

     

    DRONES The construction of Europe’s first drone carrier kicked off at the Damen Shipyard in Galati, eastern Romania, on Thursday. This multi-role ship, which is being built for the Portuguese navy and will be used in rescue and research missions, has been designed to launch underwater, surface and aerial drones. Other three military vessels are being built for European states at the Damen Shipyard.

     

    DEFICIT The Romanian minister for investments and European projects, Adrian Câciu, said a 7-year plan to reduce the budget deficit would be presented by the October 15 deadline set by the EC. According to Câciu, the plan is accompanied by reforms included in the National Recovery and Resilience Plan. The measures mainly consist in cutting unnecessary expenditure by public institutions and improved collection of government revenues.

     

    YOUTH European youth born in 2006, including in Romania, may enroll in the 2024 DiscoverEU programme, which provides free travel across the Union. A dedicated European Commission webpage is available for young people to enroll in order to win one of the 35,000 free travel permits and discount accommodation and meal cards. Each permit allows for one trip between March 2025 and May 2026. Winners may choose certain destinations in Europe, including ones on the DiscoverEU cultural route that connects EU capital cities, UNESCO sites and European heritage sites. Applications may be submitted until October 16. More than 300,000 youth have benefitted from this programme since its launch in 2018.

     

    WB The country partnership framework between the World Bank and Romania for 2025-2029 was launched in Bucharest. PM Marcel Ciolacu says that in the next 3 years the estimated funding for Romania from the WB group will be over USD 6 bln, in favourable financial terms. The money is intended to help bridge the gap between the more developed and integrated urban communities and the poorer and more isolated rural environment. A USD 500 mln loan agreement has also been signed, for the funding of disaster risk management policies.

     

    (bill)

  • Budget deficit reduction plan

    Budget deficit reduction plan

    By October 15, Romania should present the European Commission with a plan to reduce budget deficit, by October 15.

     

    Rating agencies, economists and analysts alike are signaling the excessive budget deficit, which could reach 8% of Romania’s GDP this year. European Union member states have to submit a deficit reduction plan to the Commission, by October 15 . Romania is among the countries that have not done so yet, but the Social-Liberal Government in Bucharest has promised to observe the deadline and present the 7-year plan to bring the deficit back within the limits accepted by the Union. The Romanian Minister of European Investments and Projects, Adrian Câciu: “This 7-year plan comes with a series of reforms which should not surprise anyone. They are included in the National Recovery and Resilience Plan. It is just an active calendar for those reforms to be conducted. From what I know and from what will happen – I hope it will happen, because I think we are a coalition of responsible people – by October 15 this plan will be submitted to the Coalition, approved and sent to the Commission. It is, after all, a general plan. It is the first assessment that we are sending, after which there will obviously be technical negotiations with the Commission, which may last until April 2025, when the Commission makes the last adjustment in the case of all member states. Romania is not the only country that is in an Excessive Deficit Procedure.”

     

    The most important fiscal-budgetary consolidation measures are those of reducing expenditure and, at the same time, further improving  collection to the state budget, following digitization,  Minister Câciu said. According to him, the reduction of unnecessary expenses in the area of ​​large public services must be continued, where the institutions need reform and quality increase. On the other hand, the digitization of the National Agency for Fiscal Administration (ANAF), must bring not only 0.5% of the GDP in recovered revenues , but  2% or 3% next year, Adrian Câciu said. Romania, the Minister explained, needs a 7-year deficit reduction plan, agreed on with the European Commission, given that it has very high investment-related expenses, which, in his opinion, nobody wants to postpone or cancel.

     

    The Bucharest Government has recently carried out the first budget revision this year, a positive one. It was based on a budget deficit of 6.9% of the GDP and a revised economic growth, from 3.4% previously estimated, to 2.8%. The Minister of Finance, Marcel Boloş, said on that occasion that additional funds had been allocated to the large investment projects, a leitmotif in the authorities’ speech. Boloş too, supported by his boss, Prime Minister Marcel Ciolacu, gave assurances that the deficit was sustainable.

  • October 3, 2024

    October 3, 2024

     

    DEFICIT The Romanian minister for investments and European projects, Adrian Câciu, said a 7-year plan to reduce the budget deficit would be presented by the October 15 deadline set by the EC. According to Câciu, the plan is accompanied by reforms included in the National Recovery and Resilience Plan. The measures mainly consist in cutting unnecessary expenditure by public institutions and improved collection of government revenues.

     

    EUROPEAN COMMISSION The commissioners nominated by member states and by the EC president Ursula von der Leyen will be interviewed by the European Parliament’s specialized standing committees next month. According to France Presse, the new College of Commissioners might therefore take office in early December. Romania’s representative Roxana Mînzatu was nominated for executive vice-president for skills, education and culture, quality jobs and social rights.

     

    YOUTH European youth born in 2006, including in Romania, may enroll in the 2024 DiscoverEU programme, which provides free travel across the Union. A dedicated European Commission webpage is available for young people to enroll in order to win one of the 35,000 free travel permits and discount accommodation and meal cards. Each permit allows for one trip between March 2025 and May 2026. Winners may choose certain destinations in Europe, including ones on the DiscoverEU cultural route that connects EU capital cities, UNESCO sites and European heritage sites. Applications may be submitted until October 16. More than 300,000 youth have benefitted from this programme since its launch in 2018.

     

    WB The country partnership framework between the World Bank and Romania for 2025-2029 was launched in Bucharest. PM Marcel Ciolacu says that in the next 3 years the estimated funding for Romania from the WB group will be over USD 6 bln, in favourable financial terms. The money is intended to help bridge the gap between the more developed and integrated urban communities and the poorer and more isolated rural environment. A USD 500 mln loan agreement has also been signed, for the funding of disaster risk management policies.

     

    FOOTBALL Romania’s football champions, FCSB, play tonight away from home against PAOK Thessaloniki in the Europa League group stage. In the first round, the Greek champions coached by the Romanian Răzvan Lucescu were defeated by Galatasaray Istanbul, 3-1 in Turkey, while FCSB won against RFS (Latvia) 4-1 in Bucharest. (AMP)

  • September 23, 2024 UPDATE

    September 23, 2024 UPDATE

    BUDGET The government in Bucharest on Monday endorsed the first budget adjustment this year. The new positive adjustment will be bringing the GDP deficit up to 6.9%, even though the Finance Ministry also forecasts income raises. The money will be mainly used for co-funding investment projects and also for pay rises approved amid a series of protests this year. According to Prime Minister Ciolacu, Europe’s developed countries, Germany and France, supported investment concurrently with the rising budget deficit. Ciolacu described this raise as sustainable, given that 8.5 lei out of 10 will be used for funding motorways, hospitals, schools, gas and water distribution networks and other objectives of local interest. Ciolacu went on to say that the invested sums would be returned eightfold to the budget as it happened in the case of the motorways built.

     

    FUNDS Romania is to receive 21.6 million Euros from the European Commission for the farmers who incurred losses from the bad weather this summer. The decision was made at the AgriFish Council, which takes place in Brussels and where Romania is being represented by the Minister of Agriculture and Rural Development, Florin Barbu. The European Executive has proposed the allotment of 120 million Euros out of its agriculture reserve in order to directly support farmers from Romania, Bulgaria, Germany, Estonia and Italy. According to Barbu, it’s for the first time when farmers get compensations in the same year with the calamities. Data released by the Agriculture Ministry in Bucharest says that over 16 thousand farmers have applied for investigations and the assessment of their destroyed crops. Minister Barbu says that roughly 2 million hectares of corn and sunflower crops have been affected by the extreme weather in Romania plus 100 thousand hectares of autumn crops like wheat and rape.

     

    UN President Klaus Iohannis will be heading Romania’s delegation at the 79th session of the United Nations General Assembly taking place in New York on the 24th and 25th September. The main theme is “Unity in diversity, for the advancement of peace, sustainable development and human dignity for everyone everywhere”. According to a statement from the Romanian president’s office, Klaus Iohannis will give an address on Wednesday, in which he will call for maintaining multilateral dialogue, especially in a UN format, as an essential element of regional and global security. He is also expected to highlight his country’s efforts and contribution, at all levels, to finding solutions to current global challenges, from security crises like the war in Ukraine or the conflict in the Middle East, to major challenges facing the world, including the climate emergency and cyber threats.

     

    HANDBALL The Romanian women’s handball vice-champions CS Rapid Bucharest lost 37-29 to the German side HB Ludwigsburg at home on Sunday evening, in a Champions League Group B match. Rapid will next play Team Esbjerg away on 6th October. The Romanian side are in 4th place in their group, with 3 points in 3 matches. Previously, the Romanian champions CSM Bucharest defeated the Croatian side RK Podravka Vegeta Koprivnica 29-28 away, while CS Gloria Bistriţa-Năsăud lost at home to the Slovenian side Krim Mercator Ljubljana 30-35. CSM have four points in three matches played, and Gloria two points. The latter will play their next match away against FTC-Rail Cargo Hungaria on 5th October, while CSM will face the Danish side Nykobing Falster Handbold at home on 6th October.

     

    ELECTIONS The Romanian foreign ministry has published a guide for postal voting ahead of the presidential and parliamentary elections this year. The voter registration deadline for Romanian citizens with their domicile or residence abroad is 10th October for the presidential elections and 17th October for the parliamentary elections. Registration is made by filling in an online form available at votstrăinătate.ro, a website managed by the Permanent Electoral Authority.

    (bill)

     

     

     

  • September 4, 2024 – UPDATE

    September 4, 2024 – UPDATE

     

    VISIT PM Marcel Ciolacu makes a one-day visit to Israel on Thursday, to express solidarity with the authorities of that country in the current context in the Middle East. He is accompanied by the foreign minister Luminiţa Odobescu, and by the economy minister, Radu Oprea. The Romanian PM will have a meeting with his Israeli counterpart, Benjamin Netanyahu, and will be received by the Israeli president, Itzhak Herzog, and the Parliament speaker. The Romanian delegation travels to Israel on a military aircraft.

     

    DEFENCE A meeting of the B.9 defence ministers will be hosted by Bucharest this September, under a resolution passed by the Government on Wednesday. B.9 meetings are held regularly at head of state, foreign minister and defence minister level, as “opportunities to harmonise” member states’ national positions on topics to be included on the agenda of NATO summits and assemblies. Launched at the initiative of Romania and Poland in 2015, the Bucharest 9 format is a platform to strengthen dialogue and cooperation between the Allies on NATO’s eastern flank: Bulgaria, Czechia, Estonia, Latvia, Lithuania, Poland, Romania, Slovakia and Hungary.

     

    BUDGET The Romanian government Wednesday passed measures to improve the collection of budget claims, to better utilise the funds earmarked for public services and to support investments implemented by local and central authorities from foreign financing sources. Bonuses are stipulated for those who pay their taxes on time. Another set of measures concerns taxpayers with debts at the end of August 2024. In their case, interests and late filing and late payment penalties are written off, provided that the principal debt is paid by November 25, 2024. The budget deficit target for this year could be reached, the finance ministry says, if measures are implemented to improve the collection of debts to the state budget, which were over EUR 14 bln at the end of August. Economists expect the budget deficit to be over 7% of GDP this year.

     

    UKRAINE Ukraine needs “fresh energy” after two and a half years of war against Russia, president Volodymyr Zelenskyy said on Wednesday, to explain an on-going government reshuffle that includes the country’s foreign minister, AFP and Reuters report. The reshuffle is the largest in Ukraine since the start of the Russian invasion in February 2022. The Ukrainian foreign minister Dmytro Kuleba, 5 other ministers and deputy PMs, as well as the official in charge of the privatization of state assets, have submitted their resignations to Parliament. Dmytro Kuleba has been one of the most vocal Ukrainian officials since the start of the war against Russia. He has constantly requested stronger Western assistance for Ukraine, and has tried to win over the countries wooed by Moscow, especially in Africa and Asia.

     

    FOOTBALL Romania’s national football team Friday begin their new season in the UEFA Nations’ League. The Romanian footballers will play their first match away from home against Kosovo, and on Monday, September 9, they will face Lithuania at home. Cyprus is also part of Romania’s group, C2. First place in the group means direct promotion to League B in the next edition of the League, while second place leads to play-offs for promotion. On the other hand, the 4th place leads to direct relegation to League D, while the 3rd place keeps the national team in League C for the next edition as well. Being ranked in the League of Nations groups also has a direct influence on the European qualifiers for the 2026 World Championship. The new coach of the national team is Mircea Lucescu, who returns to this post after almost 4 decades. Edward Iordanescu left the post after Euro 2024, in which Romania qualified for the round of 16. (AMP)

  • August 28, 2024 UPDATE

    August 28, 2024 UPDATE

    ELECTION The Government in Bucharest has set the calendar of the upcoming election in detail, including the technical measures and expenses for the preparation, organization and unfolding of the presidential election in Romania. So, November 24th 2024 will be seeing the first round of voting and, if needed, a second round will take place on December 8. October 5th is the deadline for submitting candidatures and election signs to the Central Election Office, while the election campaign kicks off on October 25th. In another development, the government has extended the National Programme for Local Development for another two years in order to support the over 3 thousand projects currently underway. Also on Wednesday, the Executive approved “The National Plan for a Safe School Environment” completing the measures focusing on fighting violence in the country’s education system. Discounts will be made available for therapy sessions for children victims of violence, or who were involved in such acts. The programme also includes training courses for teachers as well as an online library devoted to combating violence in schools. Under another bill endorsed in the education sector, students will be granted scholarships through state-funded cultural projects.

     

    OECD Romania on Wednesday received a positive review in the competition sector as part of its OECD accession process. According to Romania’s Competition Council, the review was issued after an assessment that took place between 2018 and 2022. During the review, the Council must demonstrate that its work meets the requirements of the Organisation for Economic Cooperation and Development. Recommendations have also been made, and the stage of their implementation will be presented next year. Accession to the OECD is a priority for Romania, and is the country’s 3rd strategic goal after the NATO and EU accession.

     

    DEFICIT Romania’s budget deficit exceeds 4% of GDP after the first 7 months of the year, according to finance ministry data. In January – July, the government had total revenues of over EUR 66 bln, up 15% compared to the first 7 months of 2023. Budget expenditure however increased by over 23%, to more than EUR 80 bln. This year’s budget law is based on a 5% deficit level. Meanwhile, the minister for EU investments and projects Adrian Câciu has announced that Romania has so far received EUR23.84 bln under the cohesion policy in 2014-2020, reaching a 99.1% absorption rate.

     

    INDEPENDENCE The Republic of Moldova Tuesday celebrated 33 years since the proclamation of its independence from the former Soviet Union. Attending the ceremonies, the presidents of Lithuania, Estonia and Latvia signed a joint statement of support for the country’s EU accession. In his message on this occasion, president Klaus Iohannis promised Romania will continue to provide strategic support to Moldova in all areas. In turn, PM Marcel Ciolacu reassured his Moldovan counterpart, Dorin Recean, that Romania will remain in the front line of the efforts to consolidate Moldova’s EU accession efforts, its stability and democratic development.

     

    WEATHER Thunderstorms were reported on Tuesday night in several parts of the country. Weather experts have issued scores of extreme weather warnings. In Iaşi, in the north-east, the wind brought several trees down and damaged vehicles, while entire streets in the city were flooded. Also in the north-east, in Botoşani County, firefighters were called to put out a fire after lightning struck a tree. Tens of streets and basements were also flooded in Cluj-Napoca (north-west).

    (bill)

     

  • August 28, 2024

    August 28, 2024

     

    ELECTIONS In its meeting today, the government of Romania is to set the calendar for the presidential election scheduled this autumn, on November 24 and December 8. The ballot will be held in parallel with the parliamentary election, which will be organized on December 1. The campaign for the parliamentary election begins on November 1 and ends on November 30, in the morning. In the country, polling stations will be open between 7 am and 9 pm, while Romanians living abroad will be able to vote between 7 am on November 30 and 9 pm on December 1. This is the first time that all the 4 types of elections (local, parliamentary, presidential, and the election for the European Parliament) are held in Romania in the same year.

     

    OECD Romania has today received a positive review in the competition sector as part of its OECD accession process. According to Romania’s Competition Council, the review was issued after an assessment that took place between 2018 and 2022. During the review, the Council had to demonstrate that its work meets the requirements of the Organisation for Economic Cooperation and Development. Recommendations have also been made, and the stage of their implementation will be presented next year. Accession to the OECD is a priority for Romania, and is the country’s 3rd strategic goal after the NATO and EU accession.

     

    DEFICIT Romania’s budget deficit exceeds 4% of GDP after the first 7 months of the year, according to finance ministry data. In January – July, the government had total revenues of over EUR 66 bln, up 15% compared to the first 7 months of 2023. Budget expenditure however increased by over 23%, to more than EUR 80 bln. This year’s budget law is based on a 5% deficit level. Meanwhile, the minister for EU investments and projects Adrian Câciu announced that Romania has so far received EUR 23.84 bln under the cohesion policy in 2014-2020, reaching a 99.1% absorption rate.

     

    INDEPENDENCE The Republic of Moldova Tuesday celebrated 33 years since the proclamation of its independence from the former Soviet Union. Attending the ceremonies, the presidents of Lithuania, Estonia and Latvia signed a joint statement of support for the country’s EU accession. In his message on this occasion, president Klaus Iohannis promised Romania will continue to provide strategic support to Moldova in all areas. In turn, PM Marcel Ciolacu reassured his Moldovan counterpart, Dorin Recean, that Romania will remain in the front line of the efforts to consolidate Moldova’s EU accession efforts, its stability and democratic development.

     

    WEATHER Thunderstorms were reported last night in several parts of the country. Weather experts have issued scores of extreme weather warnings. In Iaşi, in the north-east, the wind brought several trees down and damaged vehicles, while entire streets in the city were flooded. Also in the north-east, in Botoşani County, firefighters were called to put out a fire after lightning struck a tree. Tens of streets and basements were also flooded in Cluj-Napoca (north-west).

     

    PARALYMPICS Paris is hosting tonight the opening ceremony for the Summer Paralympic Games, which will end on September 8. From Champs-Elysées to the world-famed Place de la Concorde, hundreds of dancers and performers will stage a show called “Paradox”, which according to the organisers is designed to make people think about their uniqueness. Romania is represented by 6 athletes at this year’s Paralympic Games, in 3 events: para judo (Alexandru Bologa and Daniel Vargoczki), para cycling (Eduard Novak and Theodor Matican) şi para table tennis (Camelia Ciripan and Bobi Simion). The first to compete are Camelia Ciripan and Bobi Simion, on Thursday afternoon, in the mixed doubles event, against the Japanese pair Yuri Tomono and Koyo Iwabuchi. (AMP)

  • The Annual Report of the Fiscal Council

    The Annual Report of the Fiscal Council

    According to the Fiscal Council, Romania may this year register a lower economic growth than the government’s previous forecast of 3.4 %. In its annual report, the Council also warns that the budget deficit will exceed 7% of the GDP in the absence of a series of measures of fiscal-budgetary consolidation. The Fiscal Council recalls that the deficit, caused by higher expenses than returns, has exceeded in the first six months of this year 3.6% of the GDP, being 1.3% higher than in the same period last year. Calculations have revealed the risk that the budget deficit may even account for 8% of the GDP, as the new pension law and the recent pay rises in the public sector will generate additional costs in the second half of the year.

    Against this background, the Council representatives have pointed out that in the absence of concrete and credible policies aimed at supporting the fiscal-budgetary consolidation on medium term as well as an improved tax collection system, the deficit stands chances to exceed the figures initially forecast by the national and European authorities for the period 2025-2027.

    The Fiscal Council is made up of representatives of the Central Bank, the Romanian Association of Banks, the Romanian Academy, the Academy of Economic Sciences and the Romanian Banking Institute, being appointed by Parliament for a period of 9 years.

    Romania, which already has an excessive deficit procedure launched by Brussels in its name, has, under the fresh European fiscal rules, seven years to go back to a budget deficit of 3% of the GDP. Pundits believe that in order to gradually curb this deficit one needs to implement a realistic programme.

    The latest report Romania – Euro Zone Monitor made by a team of Central Bank experts coordinated by Academician Daniel Daianu, points to the fact that a rise in budget incomes is absolutely necessary and cannot be limited to only an improved tax collection system, but calls for amendments to the present fiscal regime, and a budgetary correction for a period of over four years.

    In essence, the budget deficit is caused by excessive spending in a context of higher nominal incomes and rapidly growing expenditures, according to the report.

    The pressure on the public budget is going to rise if we take into account Romania’s pledge to also spend 2.5% of the GDP for military purposes as a NATO member, the authors of the report say.

    The extremely lower level of fiscal returns is the exclusive result of a fiscal regime which favored tax evasion and the inclusion of personal spending in the budget of various companies as well as illegal working contracts, the report also says.

    (bill)