Radio România Internațional

Tag: European Bank for Reconstruction and Development

  • The Sovereign Fund for Development and Investment

    The Sovereign Fund for Development and Investment

    The Government in Bucharest wants to create new instruments for public investment, in line with the goals stipulated by the governing program for the 2017-2020 period. One such instrument is the Sovereign Fund for Development and Investment, for the setup of which the Government passed a memorandum on Thursday.




    The fund is aimed at boosting economic growth and supporting funding and investment in competitive, profitable and sustainable sectors, with a mass economic effect as a result of attracting capital and financing resources, Economy Minister Alexandru Petrescu has said.




    The Romanian official said the fund will be managing the assets of state-owned companies and use the revenues of profitable companies derived from dividends or by capitalizing on underperforming assets in order to list them on the stock market. Alexandru Petrescu.




    Alexandru Petrescu: “Many state-owned companies are being assigned to different ministries. Each company nominates representatives in the shareholders’ general assembly. With this new Fund, all companies will be managed by a single entity, compiling the expertise of various ministries, management expertise, from the shareholder’s point of view. Decision-making will be centralized and will become the task of a board of directors, made up of people who are recruited as part of a public and transparent process”.




    The Sovereign Fund for Development and Investment will contribute both to Romania’s efforts to gain the status of an emerging market for its domestic capital market by increasing liquidities on the Bucharest stock exchange, as well as to increasing the level of absorption of non-reimbursable EU funds, by means of ensuring the co-funding financial sources of investment projects, a Government press release shows.



    According to Minister Petrescu, the Fund will be a partner for institutional investors, the European Bank for Reconstruction and Development, the European Investment Bank, mutual funds and other private investors. In order for the launch process to be backed and sanctioned by the main stakeholders, a consultation was started with the main investors, Minister Alexandru Petrescu has added. The Minister went on to say that a draft law will be adopted regulating the functioning and structure of the fund. The Romanian state will be the sole shareholder of the fund. Similar funds are being run in Belgium, Norway, France or Poland.


  • Romania’s economic growth at an all-time high

    Romania’s economic growth at an all-time high

    Romania and Cyprus had the most substantial economic
    growth in the EU in the first quarter of the year, as compared to the previous
    three months, according to preliminary estimates released on Wednesday by the
    European Statistics Office. In figures, thanks to a 1.6% growth rate, the two
    countries are the EU leaders, followed by Spain and Bulgaria with 0.9% each,
    Slovakia – 0.8%, and France and Hungary – 0.6% each.




    At the opposite pole we find Lithuania, Estonia, Greece
    and Finland, which have reported decreases. The year-on-year rate Romania has
    reported, 4.2%, is also the largest in the EU.




    However, the geopolitical context requires special
    attention. The European Bank for Reconstruction and Development says East
    Europe should strengthen its capacity to withstand shocks, as the countries in
    the region risk being affected by the political and economic problems in
    Russia, Ukraine and Greece. Central European countries enjoy an economic
    recovery supported by domestic demand. However, bad loans are still a problem,
    while Russia and Ukraine remain in recession, which might affect growth in
    other countries, says the EBRD. In addition, it is impossible to estimate the
    impact of the Greek exit for its neighbouring countries, given that Greek banks
    are operating in countries like Bulgaria and Romania.




    Beyond political promises, Bucharest needs to take
    concrete social and economic measures to support underprivileged people.
    According to Eurostat, nearly half of them experience material deprivation,
    which the European Statistics Office defines based on nine criteria: the people
    in question have overdue installments and bill payments, cannot afford to buy a
    colour TV, a car, a telephone or a washing machine, cannot afford home heating,
    are unable to cope with unexpected expenses, cannot afford meat or fish at
    least every other day or cannot afford to spend a one-week holiday elsewhere
    than at home.




    Those who meet three out of the nine criteria experience
    material deprivation, while those who meet at least four criteria experience
    severe material deprivation. In Romania, nearly half of the people suffer from
    material deprivation, whereas those who experience severe material deprivation
    account for 30% of the total population.