Radio România Internațional

Tag: economy

August 6, 2022 UPDATE

INFLATION
The National Bank of Romania Friday raised the monetary policy interest rate
for the 6th time this year, in an effort to keep inflation in check.
The key interest went up 0.75%, to 5,5% per year, and takes effect on Monday. The
central bank also decided to raise the interest rates for loans and for
deposits. Keeping a firm control on cash flows in the monetary market and
maintaining the current levels of minimum compulsory reserves for banks’
domestic and foreign currency liabilities are also decisions made on Friday by
the National Bank. Experts expect a steady annual inflation rate in Q3 and a
gradual decrease later on. In June the inflation rate reached 15.1%.

DIASPORA
The Romanians in the diaspora who plan to return and invest in a business that
creates at least 2 new jobs may obtain funding of up to EUR 40,000 under the 3rd
edition of the Start-Up Nation programme, the Romanian tourism ministry
announced. Applicants whose start-ups create only one job may receive up to EUR
20,000. To benefit from the EUR 4 million programme, applicants must submit
proof of their residence abroad.

BUDGET
A state budget adjustment is scheduled for next week in Romania, according to
PM Nicolae Ciucă. Among other things, expenses with supplies and services will
be cut by 10% for each ministry. An analysis will also be conducted to ensure
the coherence of the forthcoming budget adjustment and of the funding programmes
for Romania.

ECONOMY
East-Europeans started to feel the effects of the war in Ukraine later than the
major Western economies, due to 2-digit salary increases and generous
subsidies. Now however, they have to reduce their expenses in order to make
ends meet, reads a Reuters analysis, according to which the 2-digit inflation,
the over 15% rise in foodstuff prices and the growing energy costs are affecting
the spending power of people in Eastern Europe. In Poland, people are
shortening their holidays, Czechs are saving by eating out less and looking for
a second job, while in Hungary people are buying less food and a lot fewer
durable goods. According to analysts, the risk of 2-digit inflation extending
into 2023, as well as the new revised estimates regarding the Eurozone point to
a risk of recession.

NATURAL
GAS An EU-wide 15% reduction of natural gas consumption will come into force
early next week, the Czech presidency of the EU Council announced. The
regulation was adopted officially, and the text will be published in the
Official Journal on Monday and will take effect the next day. The president of
the European Commission, Ursula von der Leyen, called on member states to
prepare for the worst-case scenario of Russia suspending gas supplies. Member
states must also secure 80% of their winter needs ahead of time.

COVID-19 Over 6,400 new COVID-19 cases were confirmed on Saturday in
Romania. More than 3,800 patients are hospitalised, nearly 260 of whom in ICUs,
and 28 Covid-related deaths were reported.Since
the start of the pandemic, nearly 66,200 people have died of COVID-19 in
România.

UNTOLD Cluj Napoca, north-western Romania, is hosting the most eagerly
awaited music festival this summer, Untold. The event takes place on several
stages, with over 200 Romanian and foreign artists, as well as the world’s best
DJs, performing until Sunday night. This year’s theme of the festival is Temple
of Luna, an artistic concept that highlights the mythological side of
Transylvania, seen as a land of the night and magic. Scores of stands sell
food, drinks, clothing and gadgets. The organisers expect over 400,000 people
to attend this year’s edition.

6 August 2022
June 10, 2022

Summit. Romania is today hosting a summit of the Bucharest Nine,
an organisation initiated by the presidents of Romania, Klaus Johannis, and of
Poland, Andrzej Duda. Attending the meeting are the heads of state of the member
states on the NATO eastern flank that are part of the organisation: Bulgaria,
the Czech Republic, Estonia, Latvia, Lithuania, Slovakia and Hungary. The
agenda of the talks includes the preparation of the most important decisions of
the upcoming NATO summit to be held in Madrid at the end of the month, with
emphasis on the consequences of Russia’s military aggression against Ukraine
and NATO’s response. President Iohannis is expected to highlight the need to
consolidate NATO’s deterrence and defence posture on the eastern flank in a
balanced and unitary manner, from the Baltic Sea to the Black Sea. NATO secretary
general Jens Stoltenberg, who was diagnosed with shingles, will attend the
summit remotely.

IMF.
The International Monetary Fund has improved Romania’s economic growth forecast
to 3.5%-4.5% for 2022 and 2023, said the head of the mission for Romania Jan Kees Martijn. He said the uncertainty associated with
this forecast is high, with risks of the war escalating and Russian gas
deliveries being cut leading to a further rise in energy costs and reducing trade
exchanges between European partners. The IMF official also said GDP reached the
level before the crisis in the first quarter of the year after last autumn’s
Covid wave. According to provisional data published on 7th June by
the National Institute of Statistics, Romania’s GDP rose by 6.5% in the first
quarter of the year compared with the same period last year.

Bridge. Criminal investigations were opened following the collapse of a
bridge on Siret river, in Neamţ county, in north-eastern Romania as it was being
crossed by a truck and a van. The two drivers were injured. The bridge was
reopened for road traffic last November after repair works and investigators are
looking into what caused the bridge to collapse only six months after
restoration. The president of the Neamţ county council Ionel Arsene, from the
Social Democratic Party, in government, said last autumn that the bridge was safe
for traffic. Official data show, however, that the reopening was not legally
possible. The development ministry said the investment objective had not been
finalised pending a final report and a team was sent at the site for an
independent inquiry. In April, Arsene was convicted to 8 years and 4 months in
prison for corruption, but he is still in office because the sentence was not final.

Border. Romanian prime minister Nicolae Ciucă and his Moldovan
counterpart Natalia Gavriliţa today had talks in Bucharest about ways to
improve border travel between Romania and the Republic of Moldova. According to
a statement from the government’s spokesman Dan Cărbunaru, the two officials shared
views on finding effective solutions, given the high pressure some border checkpoints,
such as that in Galaţi, in the south-east. The Romanian defence ministry is
deploying a new ferry to Isaccea, in the south-east, and will open two new
checkpoints on the northern border.

Sanctions. Companies in Romania controlled by
Russian entities targeted by international sanctions will only be able to carry
on their activity without their accounts being blocked if they are monitored by
the state. The Romanian government issued an emergency order to this effect on
Thursday. The aim is to protect Romanians’ jobs while complying with the
European sanctions against Russia.

Football.
Romania’s national football side are preparing for their Saturday match against
Finland in Bucharest, in Group 3 of League B of the UEFA Nations League.
Romania have lost their first two group matches, nil-2 to Montenegro and nil-1
to Bosnia and Herzegovina. Romania will next face Montenegro in Bucharest next
week and will play their final two matches in September, against Finland away
and against Bosnia and Herzegovina at
home. (CM)

10 June 2022
Between stagflation and economic growth

Romania’s economic status is growing ever more disquieting,
amid pessimistic forecasts by the central bank and the European Commission’s
economic report, which estimates that central and eastern European countries
will have higher inflation rates this year than the rest of the EU. According to
Brussels, after a strong, 5.9% growth rate in 2021, Romania’s economy is likely
to slow down to 2.6% this year, as inflation erodes people’s incomes and Russia’s
aggression in Ukraine affects economies, supply chains and investments.

For next year, the European Commission expects economic
growth to pick up slightly, to 3.6%, following a possible drop in inflation. Unemployment
is predicted to stay at around 5.5 %, with prices likely to reach a peak this
year and gradually go down in 2023. Meanwhile, the public deficit will reach 7.5%
of GDP this year, possibly dropping to 6.3 % in 2023.

According to EU officials, this year’s inflation will
get to a record-high 8.9% in Romania, almost double the 4.1% rate in 2021, and
will slow down to 5.1% in 2023.

In turn, the National Bank confirms the rise in
inflation and does not expect it to go below 10% until the second half of next
year. Meanwhile, the National Statistics Institute confirms that in the first
quarter of this year the economic growth rate stood at over 5% compared to the
previous quarter and 6.5% compared to the first quarter of last year. Nonetheless,
the central bank adviser Lucian Croitoru believes that in the forthcoming
period Romania might be facing stagflation. This is more dangerous than extended
inflation, in that it also involves stagnant economic output.

Lucian Croitoru: The first half of the word comes from stagnation.
Which is not necessarily the same as recession, it might only be a slow, 1.5-2.5%
growth, which is not something we are used to in Romania. So I think this is
very possible. On the one hand, short-term inflation encourages production, even
stimulates a rise in budget revenues, but mind you, this is fuelled by
inflation and is not going to last. On the other hand, the war may entail lots
of challenges, it is unpredictable, we have no forecasts on how a conflict like
this may end, with so many factors involved. But, as Hemingway put it, inflation
and war are always solutions to policies lacking principles.

If the Romanian economy
enters the predicted stagflation period, prices and unemployment will rise,
expenditure will be low, life will be ever more expensive and economic
difficulties will deepen. (AMP)

18 May 2022
May 10, 2022 UPDATE

Daesh/ISIS.
Romanian foreign minister Bogdan Aurescu is attending on Wednesday a
ministerial meeting of the Global Coalition to Defeat Daesh/ISIS held in Marrakesh, in Morocco. Chaired by
the US and Morocco, the meeting will be attended by 75 representatives of the
Coalition’s member states and international organisations, including the
majority of NATO and EU states, partner states in the Western Balkans, the
Middle East, Africa and Asia, as well as the European Union, NATO and Interpol.
Talks will look at the Coalition’s actions in the last year and will agree on
the main lines of action and priorities to continue to fight terrorist threats
at regional and global level, with a focus on the security situation in Iraq
and Syria and the evolution of the terrorist phenomenon on the African continent
and in Afghanistan.

Celebrations. On
10th May Romania celebrated National Independence Day, the day
Romania obtained its independence from the Ottoman Empire in 1877 at the end of
the Russian-Ottoman war. On this occasion, president Klaus Iohannis said
independence is one of the pillars of the Romanian modern state, while
celebrating National Independence Day is a suitable opportunity to commemorate
the milestones that helped create the Romanian nation. On 10th of
May Romania also celebrated Monarchy Day, which was the National Day of Romania
from 1866 to 1947. The date marks the start of the 48-year-long rule of Carol I
of Hohenzollern Sigmaringen, the first in a dynasty of four kings. The ethnic
Romanian communities in the Balkans were also celebrated on 10th
May.

Inflation. The
National Bank of Romania on Tuesday increased the monetary policy interest rate
from 3% to 3.75% per year, from 11th May. This is a substantial
increase amid the highest inflation rate in the last decade. The Bank thus
follows a wider regional trend, with the reference interest rate close to 6% in
Poland, the Czech Republic and Hungary. Commercial banks are now expected to
also increase their interest rates in line with the National Bank in order to
discourage loan-taking and reduce consumption.

Forecast. The
European Bank for Reconstruction and Development (EBRD) has lowered Romania’s
economic growth forecast for 2022 and 2023, after a 5.9% recovery in 2021
mainly driven by strong private consumption, says an EBRD report. Romania’s
economy is expected to grow by 2.5% this year, down from a previous March forecast
of 2.8%, and by 3% next year, compared to a previous estimate of 4.1%. The EBRD
notes that the Romanian economy entered 2022
on a weak footing, as GDP declined by 0.1% in the last quarter of 2021.

Refugees.
The members of the human rights committee in the Romanian Senate and a delegation
from the Ukrainian Parliament on a trip to Bucharest on Tuesday highlighted the
help provided by the Romanian people to the almost 1 million persons who
crossed the border into Romania to flee war. The priorities are healthcare,
education, and, especially, children’s needs, said Anca Dragu, the president of
the Senate’s human rights committee at a meeting with the Ukrainian MPs. She
said Romania received over 4,400 asylum applications. The head of the Ukrainian
delegation Liudmyla Marchenko thanked the Romanian people for the help given
and expressed hope that Romania would also contribute to Ukraine’s
reconstruction.

Exercise. Cincu,
in central Romania on Tuesday hosted the opening ceremony of Resolute Castle
22, a multinational exercise involving military engineers with Romanian Land
Forces and structures of the US Land Forces Command for Europe and Africa and
the British Ministry of Defence, says the Romanian Ministry of Defence. The
purpose of Resolute Castle 22 is to increase the level of interoperability through
constant training and implementing innovative solutions to joint engineering
problems. Also on Tuesday, a multinational military exercise got under way in the
village of Comăneşti, in Bacău County, lasting five days and involving military
personnel and equipment of the Romanian Defence Ministry and NATO. (CM)

10 May 2022
April 27, 2022 UPDATE

UKRAINE Romania condemns in the strongest terms Russia’s blatant violation
of the sovereignty and territorial integrity of Ukraine and of its obligations
under international law, the PM of Romania Nicolae Ciucă said after Tuesday’s
meeting in Kyiv with his Ukrainian counterpart Denys Shmyhal. Mr. Ciucă announced
on Wednesday that Romania is considering opening new checkpoints on the Ukrainian
border. He emphasised the importance of the opening of the Isaccea-Orlivka
checkpoint in the south-east in 2020, and of deregulating freight transport for
Ukrainian operators on April 5. The number of Ukrainian nationals to enter
Romania was 50% higher on Tuesday than on the previous day, the Border Police
announced on Wednesday.

CONSTITUTIONAL COURT The
legal committees in the Senate and Chamber of Deputies Wednesday passed a
favourable opinion on all candidacies for judge posts with the Constitutional
Court of Romania. Parliament is due to vote on the candidacies next week. This
June, the terms in office of 3 judges come to an end: Valer Dorneanu, nominated
by the Chamber of Deputies, Mona Pivniceru, nominated by the Senate, and Daniel
Morar, nominated by the Presidency. The Constitutional Court comprises 9 judges
appointed for non-renewable 9-year terms in office, with one-third of the
members replaced every 3 years.

GOVERNMENT The
finance minister Adrian Câciu stated at the Government Hour debates that the
measures included in the Support for Romania package pave the way for
preserving the country’s economic growth trend. Invited to the talks by USR
party in opposition, Mr. Câciu emphasized that in order to have a high economic
growth rate this year, Romania must primarily encourage the agriculture and
constructions sectors. Adrian Câciu also mentioned that Romania, which relies on imports in many sectors, needs to
increase its domestic output and invest in processing.

NATURAL GAS Russia’s decision to discontinue natural gas supplies to Poland and
Bulgaria is an aggressive and unacceptable move, seen by the EU as a form of
blackmail, said the European Commission president Ursula von der Leyen. We
will make sure that Gazprom’s decision has the smallest possible impact on
European consumers, she told a press conference on Wednesday. The
European Commission chief advised European energy providers not to give in to
Russia’s request to have natural gas supplies paid for in rubles, and
emphasised that this would most likely be a violation of the EU sanctions
against Russia. After they refused to pay for natural gas in the Russian
currency, Poland and Bulgaria are the first EU member states targeted by a
suspension of Russian gas supplies. In this context, Greece announced it would
assist Bulgaria, while Poland announced current gas supplies cover the
country’s domestic demand.

RECOVERY
Romania has fulfilled all the goals set out in the National Recovery and
Resilience Plan approved by the European Commission, the economy minister
Florin Spătaru said in Bucharest. He emphasised that certain benchmarks related
to the reforms undertaken as part of the plan will have to be revised in the
forthcoming period, and along with the investment element they will contribute
to a major progress of the Romanian economy, which has the potential of growing
up to four-fold by 2030, provided that the principles in the Recovery Plan are
observed and funding is used wisely. According to the economy minister, the
opportunities offered by the Recovery Plan are not only the money, but also the
economic and administrative reform principles, which will lead to reshaping
Romania’s economy in line with the principles of digitisation and green economy.

TENNIS Three Romanian athletes play in the WTA Madrid tournament’s main
draw. Romania’s Irina Begu (62 WTA) Wednesday qualified into the tournament
after defeating Kamila Rakhimova (96 WTA) of Russia, 6-1, 6-0. In the first
round, Simona Halep will play against Shuai Zhang of China, and Sorana Cîrstea
against Nuria Parrizas Diaz of Spain. WTA Madrid Open takes place between April
28 and May 7. Simona Halep won the 2016 and 2017 tournaments. (AMP)

27 April 2022
Romania – stable economic outlook

International rating agency Standard & Poors reconfirmed Romanias sovereign rating at BBB- for the long and short term debts in local and hard currency, as well as its stable outlook. Romanias rating is underpinned by its status as a member of the European Union and robust access to funding from international capital markets. Also, the risks generated by the conflict in Ukraine are attenuated by the prospect of absorbing a significant amount of EU funds under the EU Multiannual Financial Framework and the Recovery and Resilience Facility and the countrys low energy dependence on imports of natural gas and oil from Russia. The report of Standard & Poors comes one week after another major rating agency, Fitch Ratings, affirmed Romanias sovereign rating to BBB- with negative outlook, the lowest investment grade rating.

The government in Bucharest is taking efficient measures to counteract the effects of the energy crisis and the war in Ukraine, said the finance minister Adrian Câciu in response to the assessment of rating agencies. He added that according to Standard & Poors, sustainable economic growth together with a reduction in the governments fiscal deficit may lead to a consolidation of the productive capacity of the Romanian economy and, implicitly, to an improvement of the countrys sovereign rating. The sign of trust sent by the government to investors is reconfirmed by the recent evaluations of Standard & Poors and Fitch Ratings, the government said in a statement on Saturday. Romania is safe for investment and it provides stability and opportunities – this is the message the government says it has constantly conveyed to the business community throughout this complicated period, a message now confirmed by international financial institutions.

The prospect of growth is underpinned by the unprecedented access to national and European funds pumped into the countrys economy in all strategic areas, industry, agriculture, energy, the environment and digitalisation, as well as by the governments development policies, the government also said in its statement. It also notes that its economic and social package entitled “Support for Romania” and worth some 3.4 billion euros, 60% of which for investments, adds to the tens of billions of euros of national and European funds aimed at the Romanian economy. The government says it has begun to implement this combination of economic and social measures and will continue to work at the same pace, emphasising that a dynamic economy is the safest path to development, new and better paid jobs and quality public services for the people. (CM)

18 April 2022
Support for Romanian economy

Part of global economy, Romanias economy is going through a difficult time, generated, among others, by the Russian-Ukrainian conflict. The Bucharest Government adopted on Thursday the first measures to support economy, the constructions sector in particular. 1.77 billion lei will be earmarked to ease the impact of the rise in the price of construction materials and of the labour force. According to statistical data for the month of January, the constructions sector contributes 6.6% to Romanias GDP. PM Nicolae Ciuca said that financing lines have already been identified. Nicolae Ciuca: ˮThis sector needs to complete its projects and take on new ones, in the upcoming period, because we have many projects to unfold under the National Recovery and Resilience Plan. Among these measures are two essential components, both leading to the same thing: investing in economy, keeping jobs and doing our best to reach the objective of developing Romania ˮ.

In turn, Development Minister Cseke Attila said there is the risk of certain contracts being blocked and entrepreneurs going bankrupt. He gave some examples of price rises in the constructions sector. ˮ The price of metal went up by 70% over January-March 2022 and that of concrete by 20%. The price of labour has also gone up these months, just like the price of electricity, fuel, iron, wood and brick,ˮ the minister said.

He presented the situations in which support measures in the construction sector apply: ˮThe measures apply to contracts which were still in the acquisition phase when the Government Order No. 15 was adopted, last August. Also, contracts whose public acquisition is under way and offers have not been submitted yet, will be revised. The measures will also apply to contracts under way that do not have a revision clause and to contracts that have a revision clause based on Order 15, in the case of which this new clause regulated under the Emergency Order adopted today cover market realities betterˮ.

On the other hand, the Government green lighted on Thursday the upgrading of the rail infrastructure in Contanta Port, south East of Romania, aimed to ease the managements of additional flows of goods and the development of multimodal transport. Some 200 million lei from the governments Reserve Fund will be allocated to rail infrastructure. According to Transport Minister, Sorin Grindeanu, this measure will also ensure the pace and capacity of all transport activities in the Port of Constanta. (EE)

15 April 2022
Warnings from the World Bank and the IMF

The World Bank, the International Monetary Fund, the United Nations Food Programme and the World Trade Organisation have this week called on all countries to take urgent and coordinated measures to ensure food security. In a joint statement, the leaders of the four institutions have warned that the war in Ukraine adds to pre-existent pressure generated by the Covid-19 pandemic and climate change, endangering millions of people from all over the world.

The much higher prices for basic food products and the disruptions in the supply chain have put a lot of pressure on consumers. Poor countries are the most vulnerable, but average-income countries are also exposed. The war in Ukraine made the IMF revise downwards global economy for 2022 and 2023, in the context of higher prices for food and energy that put high pressure on fragile economies, the IMF chief said Thursday.

Kristalina Georgieva said the Russian invasion of Ukraine sends shock waves across the entire world and puts countries still struggling to recover from the pandemic in an even more difficult situation. ”To put it simply, we are facing a crisis on top of a crisis. This is a massive setback for the global recovery. In economic terms, growth is down and inflation is up. In human terms, people’s incomes are down and hardship is up,” she explained.

The IMF, which on Tuesday will make public its new economic forecast, will revise downwards 143 economies, that together account for 86% of the world s GDP, but, for most countries, it counts on a positive economic growth. Although a clear figure regarding the advance of world economy has not been made public, Kristalina Georgieva said it will be smaller than the 4.4% forecast made by the IMF in January, a forecast already reduced by half percentage point due to disruptions in the supply chain. According to the IMF, for the first time in many years, inflation has become a clear and present danger for many countries around the world and will stay high for a longer period than expected. According to the IMF, there is another growing risk, namely, ”fragmentation of the world economy into geopolitical blocs—with different trade and technology standards, payment systems, and reserve currencies.”

In Romania, authorities are trying to support the population seriously affected by an inflation rate of over 10%, the biggest level in 18 years. PM Nicolae Ciuca has presented the head of the World Bank, David Malpass, who paid a visit to Bucharest, the ”Support for Romania” programme, worth around 3.5 billion euro, of which more than 60% will go to investment. The Romanian Government also supports the transit of goods, to ease exports from Ukraine, and has plans to develop capacities for electricity production and to expand natural gas exploitation, including off-shore, and capitalise more on its agricultural potential. (EE)

15 April 2022
Economic and social measures

The first measures in the Support for Romania Program, announced on Monday by the leaders of the ruling coalition made up of the PNL (National Liberal Party)-PSD (Social Democratic Party)-UDMR (Democratic Union of Ethnic Hungarians in Romania) have been adopted by the Romanian Parliament. One of the draft laws is aimed at increasing the minimum gross salary to 3,000 lei (600 Euros) in agriculture and the food industry. In these domains, the allowances and facilities are assimilated to the already-existing-ones in the constructions field, and employees will be exempted, until 2028, from the payment of income taxes and of the health insurance contribution.

Under the second bill adopted by Parliament, the food allowance for hospital patients and for institutionalized elderly people is doubled to 22 lei (a little over 4 Euros). The application of the Support for Romania package of measures for the protection of the citizens and the economy is a priority for the Government, the Liberal Prime Minister Nicolae Ciucă wrote in a social media post. He pointed out that the state aid scheme for stimulating investments, with a major impact on the economy, met the very high expectations of the business environment.

According to the PM, the benefits will also be significant for the sectors which will receive financing, such as: manufacturing industry, constructions, hospitality industry, information technology and communications, health and social assistance. Nicolae Ciucă announced that the value of the package stands at 17.3 billion lei (about 3.5 billion Euros), of which about half are European funds.

The current coalition must come up with solutions to the problems of citizens and the economy, Nicolae Ciucă added: “The package has three main objectives: supporting the economy for a healthy economic growth, achieving social cohesion and, of course, solidarity between generations.

300 million Euros from the package will be used to compensate for the prices increases. The SMEs will receive up to 400,000 Euros per company to stimulate investment, and transport companies will be disbursed a small part of one liter of fuel. Furthermore, farmers will receive money in the form of grants.

In turn, the PSD leader, Marcel Ciolacu, says that the current coalition has come up with these economic and social measures so as to keep inflation in check and pointed out that the current inflation rate of 10% is an influence from Europe. According to him, the measures will respond to the citizens problems. Another voice from the coalition, the former Liberal leader, Florin Cîţu, expressed his dissatisfaction that the package does not include certain measures which he has repeatedly promoted, including reducing the social insurance contribution by 5 % and postponing the payment of monthly instalments to banks. The opposition also criticizes the measures which they consider populist and claims that there are other forms of support too. Moreover, Save Romania Union – USR advocates a reduction in VAT for energy from 19% to 5%. (LS)

14 April 2022
Economic and social measures

The first measures in the Support for Romania Program, announced on Monday by the leaders of the ruling coalition made up of the PNL (National Liberal Party)-PSD (Social Democratic Party)-UDMR (Democratic Union of Ethnic Hungarians in Romania) have been adopted by the Romanian Parliament. One of the draft laws is aimed at increasing the minimum gross salary to 3,000 lei (600 Euros) in agriculture and the food industry. In these domains, the allowances and facilities are assimilated to the already-existing-ones in the constructions field, and employees will be exempted, until 2028, from the payment of income taxes and of the health insurance contribution.

Under the second bill adopted by Parliament, the food allowance for hospital patients and for institutionalized elderly people is doubled to 22 lei (a little over 4 Euros). The application of the Support for Romania package of measures for the protection of the citizens and the economy is a priority for the Government, the Liberal Prime Minister Nicolae Ciucă wrote in a social media post. He pointed out that the state aid scheme for stimulating investments, with a major impact on the economy, met the very high expectations of the business environment.

According to the PM, the benefits will also be significant for the sectors which will receive financing, such as: manufacturing industry, constructions, hospitality industry, information technology and communications, health and social assistance. Nicolae Ciucă announced that the value of the package stands at 17.3 billion lei (about 3.5 billion Euros), of which about half are European funds.

The current coalition must come up with solutions to the problems of citizens and the economy, Nicolae Ciucă added: “The package has three main objectives: supporting the economy for a healthy economic growth, achieving social cohesion and, of course, solidarity between generations.

300 million Euros from the package will be used to compensate for the prices increases. The SMEs will receive up to 400,000 Euros per company to stimulate investment, and transport companies will be disbursed a small part of one liter of fuel. Furthermore, farmers will receive money in the form of grants.

In turn, the PSD leader, Marcel Ciolacu, says that the current coalition has come up with these economic and social measures so as to keep inflation in check and pointed out that the current inflation rate of 10% is an influence from Europe. According to him, the measures will respond to the citizens problems. Another voice from the coalition, the former Liberal leader, Florin Cîţu, expressed his dissatisfaction that the package does not include certain measures which he has repeatedly promoted, including reducing the social insurance contribution by 5 % and postponing the payment of monthly instalments to banks. The opposition also criticizes the measures which they consider populist and claims that there are other forms of support too. Moreover, Save Romania Union – USR advocates a reduction in VAT for energy from 19% to 5%. (LS)

14 April 2022
April 12, 2022

Measures — The Romanian finance minister, Adrian Câciu, has said that the package of social and economic measures “Support for Romania”, announced on Monday evening by the ruling coalition leaders, mainly targets the economy, maintaining jobs, and supporting vulnerable people. The package agreed upon by the Social Democratic Party – PSD, the National Liberal Party – PNL and the Democratic Union of Ethnic Hungarians in Romania – UDMR is worth over 17 billion lei (about 3.5 billion Euros). The measures include the granting of 50-Euro vouchers every two months for the purchase of basic foodstuffs for low-income families and 30 – Euro vouchers for the more than 150,000 students who receive social scholarships. This amount will be used for food, school supplies and clothing. Other measures proposed are a minimum gross salary of 3,000 lei in agriculture and the food industry as well as money for investments.

Visit — The European Commissioner for Transport, Adina Vălean, continues today her visit to Bucharest, where she participates in a video conference with the transport ministers from Romania, the Republic of Moldova and Ukraine. The commissioner announced her intention to discuss with the Romanian officials the ways for a better absorption of EU funds for infrastructure and to find solutions for rail, road, river and sea freight transport from Ukraine and Moldova, Romania’s neighbors. On Monday, the PM Nicolae Ciuca and the European Commissioner for Transport agreed to work closely with Ukraine and the Republic of Moldova to facilitate the transport of goods. The agenda of talks also includes the development of the transport infrastructure in Romania, and the impact of the crisis in Ukraine, respectively.

Statistics — In Romania, the annual inflation rate rose to 10.15% in March, from 8.53% in February, against the backdrop of higher prices for non-food products, foods and services, according to data published today by National Institute of Statistics (INS). Consumer prices augmented by 1.9% in March compared to February. The inflation rate at the beginning of the year (March 2022 compared to December 2021) stands at 4%. At the same time, the annual inflation rate in March 2022 compared to March 2021 is 10.2%. The central bank forecasts an inflation rate of 11.2% at the end of the second quarter of this year, 10.2% at the end of the third quarter of this year and 9.6% at the end of the fourth quarter of 2022.

Accession — After Ukraine, the Republic of Moldova, Romanias neighbor, also received the European Commissions questionnaire for EU accession discussions. The document marks a starting point for a membership decision, being a first step in a long process that should bring Moldova the official status of a candidate country for EU accession. Romania insists on the community bloc receiving its two neighboring countries as soon as possible, following Russias invasion of Ukraine.

Ukraine – The next period is crucial for Ukraine, Western officials say, as the Russian forces are getting re-equipped and redistributed. President Volodymyr Zelensky believes that Russia is concentrating tens of thousands of soldiers for the next offensive in eastern Ukraine. About 1,700 Ukrainian soldiers and civilians were made prisoner by the Russian troops, according to Kyiv Independent. On the other hand, the White House expects even greater atrocities in Ukraine committed by the Russian troops under the command of General Aleksandr Dvornikov, recently appointed commander. He is nicknamed the “Syrian butcher” after being at the command of the Russian forces involved in the Syrian civil war, during which they brutally bombed numerous civilian targets. The US and the UK are looking into reports according to which chemical weapons have been used by Russian forces in attacks on Mariupol, a strategic port city under siege for more than a month. The Ukrainian Azov Battalion, barricaded in Mariupol, claims that a Russian drone dropped a toxic substance on the soldiers and civilians in the area, saying that several people were suffering from respiratory and neurological problems. More than 10,000 civilians have been killed in Mariupol since the invasion began, Mayor Vadim Boicenko announced.

Refugees — More than 72,000 people, including 8,350 Ukrainian citizens, entered Romania on Monday, according to the Border Police. 4,924 Ukrainian citizens entered Romania (slightly increase by 0.9%) through the border crossing with Ukraine, and 1,505 (increase by 8.1%) through the border with the Republic of Moldova. Since the start of the crisis, until Monday, more than 685,000 Ukrainian citizens have entered Romania. (LS)

12 April 2022
April 9, 2022

REFUGEES – More than 76 thousand people entered Romania on Friday, through the border checkpoints, of whom 8,623 Ukrainian citizens, down by 5.9% as against the previous day, the Border Police General Inspectorate has announced today. Since the Russian invasion of Ukraine, almost 660 thousand refugees have entered Romania. Most of them only transited the country on their way to Western Europe.

ELECTIONS — France holds presidential elections on Sunday. The 49 million eligible voters will pick their favourite from among 12 candidates, four women and eight men. The most likely scenario for the runoff is incumbent president Emmanuel Macron running against Marine Le Pen, a representative of the far right. Opinion polls have recently shown Macron only 3-4 points ahead of Le Pen, from 12 points in mid-February, which means that some 26%-27% of the people would vote for Macron and 23% for his contender. Coming out third in opinion polls, with 16%, is the far left leader Jean-Luc Melenchon.

GAS — The ruling coalition in Bucharest has sped up talks on modifying the offshore law that regulates the exploitation of the natural gas reserves that Romania has in the Black Sea. The National Liberal Party, The Social Democratic Party and the Democratic Union of Ethnic Hungarians in Romania have agreed on a final version of the law. The document will be debated by Parliament next week and is to be adopted through emergency procedure. Thus, the Romanian state should receive at least 60% of the profit obtained after the extraction of natural gas, while private companies would get 40%. Energy Minister Virgil Popescu has recently said that as of this year, Romania will benefit an additional 1 billion cubic meters of natural gas by exploiting the deposits in the Black Sea.

RATING – Fitch Ratings has put Romania’s long-term foreign currency issue default rating (IDR) at BBB- with a negative outlook, the agency said in a statement. The negative outlook reflects “continued uncertainty regarding the implementation of policies to address structural fiscal imbalances” over the medium term and the impact of the Ukraine war and energy crisis on Romanias economic, fiscal and external performance, the agency said. Fitch Ratings expects Romania’s GDP growth to slow down to 2.1% in 2022 (from 5.9% in 2021), primarily reflecting a slowdown in private consumption and exports. Investment dynamics is expected to accelerate in 2023, which combined with the assumption of a normalisation of external trade and supply chains, will lift economic growth to 4.8%, the agency also said.

ARREST – Former Romanian Transport Minister, Elena Udrea, is in the custody of the Bulgarian Police and may be extradited to Romania next week. On Friday, Bulgarian judges postponed ruling on the extradition request because the European extradition warrant was not translated into Bulgarian. Udrea left Romania on Thursday, hours before the ruling of the High Court of Cassation and Justice, which maintained the initial 6-year prison sentence for bribe-taking and abuse of office. Udrea has also been sentenced by a court of first instance to 8 years in prison for the election campaign of 2009, and she is a defendant in a third case as well. The former minister first rose to power as an advocate of the fight against corruption and the chief aide to ex-president Traian Băsescu, himself recently confirmed by a Court as a former collaborator of the Securitate, the communist political police. (EE)

9 April 2022
April 8, 2022 UPDATE

Visit — On a visit to Kyiv on Friday the European Commission President Ursula von der Leyen and the EU foreign policy head Josep Borrell strongly condemned the Russian armys “horrible” and “indiscriminate” attack on civilians at the Kramatorsk train station. The European dignitaries have also announced a new 500 million Euro military aid for Ukraine. At the same time, they announced the return of the EU mission to Kyiv. The European delegation also included the Slovak Prime Minister Eduard Heger. Two Russian missiles hit a train station in Kramatorsk, eastern Ukraine, killing at least 50 people among whom children, and injuring about 100. The station, which housed thousands, was used to evacuate areas bombed by the Russian forces. At the same time, President Volodymyr Zelensky says that the destruction of Borodianka (a city northwest of Kyiv and recently taken back by Ukrainians) is “much more terrible” than that in Bucha, where massacres were perpetrated. Moscow denies that its forces have killed civilians. Also on Friday, the EU approved a fifth package of sanctions against Moscow, which provides for a coal embargo and the closure of European ports for Russian ships. This package further expands the blacklist, affecting the incomes of hundreds of oligarchs and political leaders in Russia, Belarus and the pro-Russian separatist areas of Luhansk and Donetsk in Ukraine.

Refugees — The Romanian government has adopted a decision that establishes how the Romanian citizens hosting refugees from Ukraine will receive money. In the first three working days of each month, for the previous month, they must submit to the local public authorities a request stating the number of persons hosted, their names, the localities which they declare they come from and the time frame for which the disbursement of expenses is requested. The money is transferred within 10 working days since reception of centralized statements. Those who host refugees from Ukraine can receive 70 lei per day (about 14 Euros) for one person. Since the beginning of Russias invasion of neighboring Ukraine, more than 650,000 Ukrainian citizens have entered Romania.

Economy – Last year, Romania registered an economic growth rate of 5.9%, compared to 2020 – according to the latest provisional data published by the National Institute of Statistics – INS. The data show a lower contribution of investments to last years economic growth, from 0.9% to 0.6%. The figures announced by the INS also indicate a decrease of 0.1% in the last quarter of 2021 compared to the previous 3 months.

Roma — The civic, social and economic emancipation of the Roma citizens from Romania is a common goal, of great importance, said President Klaus Iohannis in a message conveyed on Friday on the occasion of the International Roma Day. The head of state also hailed the efforts made by this community to make known its past and customs, to make their voice heard and their contribution to the development of society appreciated. A similar message was sent by Prime Minister Nicolae Ciuca. Mr. Ciuca highlighted the fact that the Roma in our country have brought cultural and economic value over time in the communities in which they lived. International Roma Day is an opportunity to ponder on the persistence, worldwide, of racist and discriminatory attitudes, stereotypes, hate speech and instigation to hostile acts or ethnically motivated violence, which disproportionately affects the Roma community, the Romanian Foreign Ministry said. Romania has taken important steps to condemn and eliminate all forms of discrimination against Roma, including through the adoption of comprehensive legislation in the field, the Foreign Ministry officials emphasize.

Ordinance – Freight transport in Romania will be monitored electronically through a new digital system, designed to reduce both the risk of tax evasion and red tape for operators in the field. The government has approved an emergency ordinance introducing the integrated electronic system RO e-Transport, also known as the Radar of Goods. IT management modules will generate unique registration codes for each transport, and the platform will be interconnected with specific road traffic monitoring devices, such as cameras, and the data will be analyzed in an integrated way. The system covers the transport of goods with a high tax risk, such as alcoholic beverages or food. (LS)

8 April 2022
The economic effects of the Ukraine crisis

The
economic consequences of the war in Ukraine are already being felt in
Romania, which, like other countries, is struggling with high
inflation, a rise in fuels costs, higher prices for products, and the
situation of thousands of Romanian employees of businesses affected
by the sanctions against Russia. In an attempt to counteract the
effects of the war on the Romanian economy, prime minister Nicolae
Ciucă on Thursday had talks with representatives of the private
sector, including representatives of the Concordia employers’
association, which accounts for over a quarter of the country’s
GDP. The purpose of the talks was to find new solutions to support
the business community.

We
want to support the entire economic ensemble because it is important
for the budget and especially for jobs, said Ciucă, adding we
have large sums allocated for investments and there are European
funding programmes available to support the economic sector. We are
approaching in an integrated way the resources of tens of billions of
euros that are available to us. The support given to the business
sector is for the Romanian citizens and this is our priority.

In
the context of the war in Ukraine and given Romania’s intention to
become independent from gas imports from Russia, Ciucă reminded
business people that there
are
modernisation funds available
that give
them the possibility to develop the technology for renewable energy.
He also presented the government’s efforts to finalise the gas
interconnector between Greece and Bulgaria, which can contribute to
supplementing Romania’s access to natural gas. Another direction
pursued by the government is to come up with legislation to increase
Romania’s processing capacity in all economic sectors, said Ciucă.

The
representatives of big supermarket chains said their stocks are
sufficient to ensure supply down to the end-consumer, but asked that
the purchasing power be maintained. Also on Thursday, the prime
minister received assurances from farmers and producers of
seeds and sun-flower oil in Romania that there are enough stocks for
the population, including in the event of growing demand. Romania can
play an important role within the European Union to compensate for
the loss of imports from Ukraine, and thus contribute to the food
safety of the Union and of third countries struggling with the
consequences of the Russian aggression against Ukraine, the prime
minister emphasised. (CM)

8 April 2022
March 29, 2022

ECONOMY PM Nicolae Ciucă has a meeting in Bucharest today with the EU
Commissioner for Economy, Paolo Gentiloni. The Romanian official said the
topics approached will include the temporary emergency measures taken recently
by the European Commission and used by the Romanian authorities since the start
of the conflict in Ukraine. Yesterday Paolo Gentiloni discussed with the
finance minister Adrian Câciu the refugee issue as well as the economic
decisions to be made in the event of shocks in supply chains. The EU
Commissioner said the Union is discussing ways to curb inflation and address the
economic consequences of the conflict in Ukraine. There are currently no risks
to food safety in Europe, Paolo Gentiloni also said yesterday. On Monday he was
also received by president Klaus Iohannis, who pleaded for flexibility with
respect to the financial resources earmarked for 2014-2020 and not yet spent, allowing
the money to be used for handling the Ukrainian refugee situation.

UKRAINE A new round of peace talks takes place today and tomorrow in Istanbul,
after several rounds held in Belarus and online. Kyiv says its goals in the
negotiations include the pullout of Russian troops from Ukraine and security
guarantees. In turn, Moscow wants Ukraine to give up its NATO accession plan,
to recognise the breakaway regions of Donetsk and Luhansk in the east and the
incorporation of Crimea by Russia. In the field, Russian troops continue to
shell the areas around the capital Kyiv, but Ukrainian forces withstand the
attacks. The heaviest bombings were reported near Irpin, north-west of the
capital, where Ukrainians say they have full control. The port city of
Mariupol, in the south, is on the verge of a humanitarian disaster and must be
fully evacuated, said mayor Vadym Boychenko. According to him, nearly 160,000 civilians are stranded
in the city without water, food, medicines and electricity. The Red Cross has
already requested Russia and Ukraine to secure a
humanitarian corridor.

REFUGEES EU interior ministers Monday approved a plan for better coordination with respect to
Ukrainian war refugees. The EU Commissioner for home
affairs, Ylva Johansson, has announced that so far 3.8 million people,
especially women, children and elderly people, have fled Ukraine. Member states
requested additional funding from the Commission to manage the inflows, with
the Commission announcing additional aid is already being prepared. EU interior
ministers also agreed to launch a EU-wide platform for the registration of
refugees arriving in the Union and applying for temporary protection. They also
put together unified rules for receiving and supporting children, including
unaccompanied minors, and a plan against human trafficking. In this context,
Romania continues to support Ukrainian refugees and the authorities in that
country. Since the start of the war, over 570,000 Ukrainian nationals have
entered Romania. Most of them only transited the country, while around 4,300 applied for asylum in Romania.

COVID-19 Over 4,000 new COVID-19 cases were confirmed for
the past 24 hours in Romania, the authorities announced on Tuesday, almost
double the previous day’s figure. Little over 2,700 patients are being treated
in hospitals for Covid, of whom 400 in intensive care. The authorities also
announced 45 fatalities, one of which from a previous date. The health minister
Alexandru Rafila said COVID-19 hospitals will gradually resume their regular
operations by the end of September.

FOOTBALL
Romania’s national football team plays against Israel today, away from home, in
a friendly match. This is the second test match played by the national squad
under the management of Edward Iordanescu. In his first game as a coach, the
team lost against Greece, 1-0 in Bucharest on Friday. (A.M.P.)

29 March 2022