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March 5, 2024 UPDATE

Treasure – The National Bank of Romania and MEP Eugen Tomac organized an exhibition at the European Parliament on Tuesday about the Romanian Treasure owned by Russia and which has not been returned to our country for over a hundred years. It is a unique case in history, and Bucharest wants to bring it to the attention of the European Union as another example of violation of international law by Moscow. Next week, the European Parliament is expected to demand the reparation of this injustice, through a resolution supported by all political groups. The treasure consists of 91 tons of gold, works, artifacts and archival documents, which were sent to Moscow in 1916 and 1917, during the First World War, when much of the country was occupied by the forces of the Central Powers. Later, after the Bolshevik Revolution of 1918, the Soviet Union and then the Russian Federation refused to return the treasure, except for works of art and other cultural values. The exhibition at the European Parliament presents legal evidence and historical documents regarding the sending of the Romanian Treasure to Moscow, as well as Russia’s commitments to return it at the request of our country.

Meeting – The President of Romania, Klaus Iohannis, had a meeting, on Tuesday, in Bucharest, with his counterpart from the neighboring Republic of Moldova, Maia Sandu. Earlier, Prime Minister Marcel Ciolacu also discussed with Maia Sandu. In the context he reconfirmed his “firm” support for Chisinau’s European path. The meetings took place a day before the Congress of the European People’s Party (EPP), scheduled in Bucharest on Wednesday and Thursday. Led by Iohannis before he became president, the National Liberal Party – PNL (today in the governing coalition with the Social Democratic Party – PSD) is affiliated with EPP. Present in Bucharest, the president of the European People’s Party, Manfred Weber, said that he supported the decision to have “someone from a Central or Eastern European country” at the head of the EU, in the next mandates of the community institutions. Over 1,500 representatives of the European People’s Party, including 13 heads of state and government, are in Romania to participate in the congress of this political group in the next two days.

Motion – The Chamber of Deputies on Tuesday dismissed the simple motion against Finance Minister Marcel Boloș, filed by Save Romania Union – USR and Force of the Right opposition parties. The motion was debated on Monday, opposition members criticizing the Minister for introducing a 10% tax on medical leave to cover the holes in the state budget. Minister Boloș is also accused of violating the law that stipulates that any tax must be enacted six months after its introduction. Marcel Boloș denied all accusations, slamming the opposition’s motion as a politicized initiative. The healthcare system is underfunded, and the government sought to discourage medical leave, which would bring less benefit to working employees, the Finance Minister said in response.

Tennis – The Court of Arbitration for Sport in Lausanne has shortened tennis player Simona Halep’s sentence for doping from 4 years to nine months. The Romanian, the former world number one, will be able to return to the court, as her provisional suspension began on October 7, 2022. The Court decision, published on the court’s website, is final. We remind you that the tennis player has always claimed that she took a contaminated supplement, and at the hearings in February, she sought the help of a French expert specialized in pharmacology, toxicology and biology. The International Tennis Integrity Agency stated in September 2023 that Simona intentionally violated the anti-doping rules and suspended her for 4 years.

Drugs – In Romania, high-risk drug traffickers will no longer be able to receive suspended sentences, and trading psychoactive substances will be punishable by 3 to 10 years in prison. A draft law in this regard was adopted on Tuesday by the Chamber of Deputies, which is a decision-making body. The MPs emphasized that the phenomenon of drug use has been ignored for a long time and that additional measures are needed to combat it: border scanners, rehabilitation and prevention centers. (LS)

5 March 2024
October 30, 2023 UPDATE

MOTION The
Chamber of Deputies in Bucharest on Monday debated a simple motion to censor
Finance Minister Marcel Bolos, part of the Social Democratic- National Liberal
coalition cabinet. The opposition parties USR and Force of the Right, which
introduced the motion, believe he is responsible for increased taxation, as an
effect of applying fiscal measures that the government took responsibility for
in Parliament recently. The signatories also say that the main reason for the
budget deficit is the explosion in state spending, and draw attention to the
fact that measures taken by the government would not resolve the situation. USR
MP Claudiu Nasui, former minister of the economy, said that the new taxes hurt
small businesses, which will be forced to reduce their workforce, and bring up
prices for goods and services, which will have an immediate impact on the
population. In reply, Marcel Bolos said that Romania is at a crossroads, and
that concrete and sustainable measures are needed to overcome this hurdle. The Finance
Minister said that, absent this, there is a risk of losing access to European
funds. The vote for this simple motion is set for Tuesday.

VISIT The vice president of the European Commission for Values and
Transparency, Vera Jourova, held talks in Bucharest on Monday with the Romanian
president Klaus Iohannis. High on the agenda were the rule of law, the reforms
in justice, Romania’s accession to Schengen, the support for Ukraine and the
situation in the Middle East. She earlier met Justice Minister Alina Gorghiu
with whom she talked about the recommendations in the report on the rule of
law, the pension law, measures for the right way of assuring human resources,
proposed measures for digitization, AI and fighting online crime. In an
interview to the national radio station, Jourova said Romania is doing well
with the legal system, but there are new laws, which must be implemented so
that citizens may have access to a well prepared judicial system.

ISRAEL The Israeli army has
announced that it struck targets in Syria and Lebanon, in response to rocket
fire coming from these countries. In another development, new rocket attacks
launched from the Gaza Strip targeted, today, the south of Israel, the most affected
being the city of Netivot, where a residential block was hit, writes The Times
of Israel, noting that there were no victims. Palestinians in the north of Gaza
also said there had been intense air and artillery strikes as Israeli troops,
backed by tanks, launched a ground assault on the enclave. The Israeli military
say they have hit more than 600 targets in recent days, killing dozens of
terrorists and continuing to expand its ground operations in Gaza. After the
attacks of the Islamist group Hamas on October 7, more than 1,400 people have
been killed in Israel. On the other hand, Hamas authorities in Gaza say that
the toll of Palestinians killed in Israeli strikes has exceeded 8,300.

HANDBALL The Romanian women’s
handball champions, CSM Bucharest, secured a 29-24 away win against Buducnost
Podgorica of Montenegro in the Champions League’s Group A, on Sunday. The Romanians
obtained their third victory in this European season. After six stages, the
Romanian champions are in the 4th position with 6 points, in a group
dominated by Gyor Audi of Hungary. In the competition’s next stage, CSM, on
their home turf will be up against the Hungarian side Debrecen, on November 11.
On Saturday, in the competition’s Group B, vice-champions Rapid Bucharest outperformed
Krim Ljubljana from Slovenia, 27-22. In the next round, they will be playing at
home the Norwegian side Vipers Kristiansand, on November 12.

(bill)

30 October 2023
Trade balance deficit on a downward trend

Traditionally an importer, post-communist Romanias economy buys more than it sells, and the trade balance deficit is a chronic issue. The first seven months of 2023 promise, however, slight corrections. In this interval, the deficit stood at 15.6 billion Euros, 17% lower than the same period last year, show data published by the National Institute of Statistics. Romanias exports totaled 55 billion Euros, 4.6% higher than in the same period of the previous year. At the same time, between January 1 and July 31, 2023, Romania imported goods worth 70 billion Euros, down by 1.1% as compared to the similar period of 2022. Important shares in the structure of commercial exchanges are held by cars and transport equipment (44.8% for export and 36.3% for import) and by other manufactured products (30.3% for export and 29.2% for import).

The Romanian economy remains strongly anchored in the trade flows of the European Union. The value of intra-EU27 goods exchanges in the first seven months of 2023 was over 40 billion Euros for exports and 52 billion for imports, accounting for 72.8% of the total exports and 73.6% of the total imports. The value of extra-EU27 exchanges was almost 15 billion Euros for exports and over 18 billion for imports, accounting for 27.2% of the total exports and 26.4% of the total imports. A few days ago, the Fitch rating agency reconfirmed Romanias sovereign rating at BBB minus, with a stable outlook. The decision is supported by capital flows from the European Union, which support investments and the country’s macroeconomic stability, as well as by the positive evolution of the GDP per capita and indicators of governance and human development, which are at higher levels as compared with other countries from the same rating group. According to Fitch, the Romanian economy will register a 2.9% growth this year and 3.2% next year.

The Finance Minister, Marcel Boloş, wrote on his Facebook page that the Fitch Agencys decision to reconfirm Romanias sovereign rating is a strong signal that the country is on the right track and is regarded with confidence by international investors. Experts argue, however, that Romanias rating could be improved, if the authorities manage to reduce the budget deficit and the public debt in the medium term. The international economic press writes that Romania now wants to raise approximately three billion Euros from the international markets, through the third sale of bonds this year. The Romanian government exceeds its loan target, in the context in which, it will most likely need more funds to finance a larger budget deficit, the foreign experts conclude. (LS)

12 September 2023
April 19, 2023

VISIT The president of Romania
Klaus Iohannis is carrying on his visit to Brazil today. He travels to Rio
de Janeiro, where he has meetings scheduled with the deputy governor and the deputy
mayor of the city, and will pay tribute to the World War II heroes. On Monday, Mr.
Iohannis met with his counterpart Luiz Inácio Lula da Silva. The two officials
signed a joint statement on the development of bilateral relations. Klaus
Iohannis assured his counterpart, Luiz Inácio Lula da Silva, of Romania’s
support for advancing the EU – Brazil agenda through projects designed to
benefit citizens. This is the first stage of the Romanian president’s
south-American tour, which also includes Chile and Argentina. The goal is to rekindle
the top-level dialogue with these countries and to present Romania’s position,
as an EU and NATO member, with respect to the war launched by Russia in
neighbouring Ukraine.

AGRICULTURE A
simple motion tabled by the opposition against the agriculture minister Petre
Daea has been dismissed in the Chamber of Deputies today. The motion was
discussed in parliament on Tuesday. The initiators argued that
Daea
was directly responsible for the steep rise in the prices of basic foodstuffs, for
the poor handling of the swine fever and avian influenza crises, and also for
the failure to secure EU funding for the Romanian farmers affected by the grain
imports from Ukraine. The agriculture minister said none of the allegations
were based on actual figures. On the other hand, he is set to discuss with his
Ukrainian counterpart Mykola Solskyi today, about the situation created by the duty-free
Ukrainian grain imports to the EU. Last week, Poland and Hungary, followed by
Slovakia, announced a temporary ban on these imports. Poland also suspended
grain transit on its territory, but following talks between the two parties an
agreement was reached on Tuesday to resume transit, provided that the grains
are not sold in that country. Hungary also announced that Ukrainian grain
shipments would be sealed and monitored while on Hungarian territory. In
Bucharest, the Social Democratic Party intends to persuade the ruling coalition
to temporarily suspend these imports, in order to protect Romanian farmers, in
the absence of sufficient compensation from the European Commission. Brussels
on the other hand finds the measure unacceptable and has called for coordinated
decisions, while promising a new aid package for the affected farmers.

ART Since the
start of the Timisoara – 2023 European Capital of Culture programme this
February, over 12,000 Romanian and foreign art lovers have visited the National
Art Museum in Timişoara, western Romania, to see the first retrospective
exhibition devoted to Victor Brauner. Probably no other exhibition in the
history of the museum has attracted so many visitors as ‘Victor Brauner: Inventions
and magic did in only two months, the museum director Filip Petcu said on
Monday. Some 100 works, including paintings, drawings, sketches, etchings and
documents by the Romanian surrealist artist are on display in Timişoara. Of
these, 40 are on loan from the Pompidou Centre in Paris, while others have been
made available by Saint-Etienne Metropole, Musee Cantini Marseilles and other
museums or private collections in Romania and abroad.

FINANCE One of
the indicators taken into account by Fitch Agency when improving Bucharest’s
long-term issuer default rating was the adjustment of expenditure to revenues, the
mayor Nicuşor Dan announced on Wednesday. In a Facebook post, he says that the
municipality’s efforts to achieve financial stability are beginning to yield
fruit, given that Fitch has improved Bucharest’s standalone credit profile from
‘BBB+’ to ‘A’, a class higher than the national rating, which means a good
capacity to meet financial obligations. On April 15, Fitch Ratings reconfirmed
Bucharest’s ‘BBB-‘ ratings for long-term foreign and local currency debt and
upgraded the outlook from negative to stable. Last month Fitch had also
reconfirmed Romania’s BBB-/F3 rating for long and short-term foreign currency
debt and upgraded the outlook from negative to stable. With a population of approx.
2.16 million, Bucharest accounts for over 30% of
Romania’s economy, and its local wealth level is more than four times the
national average.

USA
Fox News, the TV channel of choice of US Conservatives, has agreed to pay USD
787.5 million to the voting technology company Dominion, after a last-minute
settlement to avoid a lawsuit concerning its coverage of the 2020 presidential
elections, France Presse reports. Dominion had originally claimed USD 1.6 bln.
The settlement saves the pearl of Rupert Murdoch’s media empire from what the New
York Times described as the defamation trial of the century. The lawsuit was generally
viewed in the US as a test for the limits of the freedom of expression
guaranteed by the First Amendment of the US Constitution, and of the fight
against misinformation. (AMP)

19 April 2023
Slight decrease in the budget deficit

Romania’s general consolidated budget deficit was 4.2% of the GDP in the first 11 months of this year, compared to approximately 3.4% at the end of October. As compared to the similar period of 2021, when it stood at 4.7% of the GDP, the budget deficit decreased by 0.5% in the January-November period, the Finance Ministry officials say. Figures show that the deficit was 58.70 billion lei, i.e. almost 12 billion Euros. The deficit target for the current year is 5.8% of the GDP. The evolution of revenues, the Finance Ministry shows, was mainly influenced by the growth of non-tax revenues, revenues from VAT, of insurance contributions, of additional receipts from energy and European funds.

The expenses of the general consolidated budget amounted to approximately 475 billion lei, increasing by more than 19% as compared to the same period of the previous year. Expressed as a percentage of the Gross Domestic Product, expenses for the 11 months of 2022 registered an increase by 0.5% compared to the same period of 2021, reaching 34% of the GDP. Personnel expenses dominate the expenses chapter, which exceeded 100 billion lei.

On the other hand, inflation and the uncertainties generated by the armed conflict in Ukraine led to an increase in interest payments related to the public debt portfolio. Social assistance expenses also increased, by around 18%, an evolution influenced mainly by the increase, from January 1, 2022, of the pension point by 10% and of the minimum pension, as well as by the granting of financial aid for the pensioners of the public pension system that had pensions smaller than or equal to 1,600 lei. Expenditures on projects financed from non-reimbursable external funds, including subsidies from the European Union related to agriculture, were 31% higher compared to the 11 months of the previous year.

Expenditures for investments, which include capital expenditures, as well as those related to development programs financed from internal and external sources, exceeded 56 billion lei, up by 27% compared to the same period of the previous year. For next year, Romania has a budget based on a 2.8% economic growth rate and a deficit of 4.4% of the gross domestic product. The budget construction is not based on new taxes and is structured on an inflation rate of 9.6%. Money for the protection of the vulnerable categories was also included. Pensioners’ incomes will increase at the beginning of the year due to the increase in the pension point by 12.5% and the granting of various types of support. (LS)

28 December 2022
January 2, 2022

Covid — 958 new cases of SARS-CoV-2 infection have been registered in the last 24 hours in Romania, alongside 17 deaths – the Strategic Communication Group announced on Sunday. Health experts say that the 5th pandemic wave will reach Romania in the first weeks of 2022 and estimate that a threshold of 25,000 infections per day could be reached. The PM Nicolae Ciuca said that the law on the introduction of the so-called COVID green certificate could be adopted either in a special session of parliament or by government decree. Since the onset of the pandemic, over 1.8 million cases of COVID-19 have been registered in Romania, and almost 60,000 people diagnosed with the novel coronavirus have died. The country has the second lowest vaccination rate among the 27 EU members, after Bulgaria. Less than 7.9 million Romanians have been fully vaccinated, that is a little over 40% of the eligible population. About two million of them have been vaccinated with the so-called booster dose.

Finance — For January 2022 the Romanian Finance Ministry planned loans from commercial banks worth 4.4 billion lei, of which 300 million lei through the issuance of discounted treasury bonds and 4.1 billion lei through ten government bond issues. Adding to these could be the amount of 615 million lei, through additional sessions of non-competitive offers, related to bond auctions. The total amount of 5.015 billion lei (the equivalent of over one billion Euros) will be used to refinance the public debt and to finance the state budget deficit.

Handball — Romanias national mens handball team starts training for the preliminary qualifying tournament for the World Championship, to be held in Cluj-Napoca (northwest). Between January 7-9, 2022, the Romanian handballers will meet the national teams of Israel, Cyprus and the Republic of Moldova, opponents considered accessible by the specialized press. Last week, Romania played, also in Cluj, two training matches with the Turkish national team, which it won 26-24 and 35-25, respectively. The friendly matches replaced, in the schedule of the two teams, a new edition of the traditional Carpathian Trophy, which was canceled, after numerous players contaminated with COVID-19 were identified in the groups of the other two participants, Switzerland and Iran. Romanias coach is the famous Spanish coach Xavi Pasqual, who won the Champions League with Barcelona three times.

Pay rise — Since January 1, the minimum gross salary in Romania has increased to 2,550 lei (the equivalent of about 510 Euros), the pension point to 1,586 lei (320 Euros), and the minimum social allowance increased to 1,000 lei (200 Euros). Allowances for children aged 2 to 18 also increased to 243 lei (about 49 Euros), and to 600 lei (about 120 Euros) for children up to two years or up to three years in the case of disabled children. However, the level of excise duties for almost all product categories – petrol, diesel oil, beer, wine and spirits – is also increasing, the only exception being for cigarettes. For the approximately 3.7 million consumers who have not yet concluded a free-market contract, electricity tariffs increase by 50 up to 90%, depending on the supplier, but people will not pay increased bills now, because they have been capped and will be compensated from the state budget until March 31, 2022. Analysts warn that increases in pensions and salaries will not be felt by the population, tough, as these increases come in the context of price rises, which will continue in the next period.

Energy – Romanian energy experts expect the Romgaz National Natural Gas Company to sign, this spring, the contract to take over the shares of the American operator ExxonMobil in the Neptune Deep perimeter of the Black Sea, which would ensure Romanias energy independence for many years. The Neptune Deep perimeter in the Black Sea has the largest gas reserve discovered so far off the Romanian coast, which is estimated at over 80 billion cubic meters and having an uncertain potential of up to 200 billion. Given that today Romanias consumption is up to 12 billion cubic meters per year, this perimeter is the equivalent of the national consumption for at least eight years. According to initial plans, with the start of operations, Neptun Deep could provide two billion cubic meters of gas in the first year, just enough for Romania to become independent of imports. Production is going to increase annually to six billion, after which it will decrease with the gradual depletion of the gas amount in the depths. The shareholders of Romgaz, a company owned by the Romanian state, have already approved this takeover and thus the company will become an equal partner, within the Neptun Deep project, with another company partly owned by the Romanian state, Petrom. Following the expected change in the offshore law, gas exploration in the Neptune Deep perimeter could begin in 2026-2027. (LS)

2 January 2022
Highlights of the 2022 budget

The draft state budget for 2022 is likely to reach Parliament and be voted on fast, before Christmas. It was launched for public debate on Sunday and aims to protect vulnerable groups, to reduce tax dodging and increase investment funds up to 7% of the GDP. According to the draft budget, in 2022 Romania will have revenues of 216 billion lei (43.8 billion Euros) and will spend 301 billion lei (61.4 billion Euros). The Finance Ministry expects sustained economic growth next year and hopes to meet the deficit target agreed upon with the European Commission. In the “Budget Allocations” chapter, the Transport Ministry will receive 20% more funds in 2022 than in 2021. The Ministry of European Investment and Projects will also have a substantially increased budget, alongside the Defense, Education and Culture ministries.

The Presidential Administration, the Senate, the Chamber of Deputies and the Government’s General Secretariat, as well as the secret services, will have additional funds. Among the institutions that receive less money are the Ministries of Finance, Development, Energy, Entrepreneurship and Tourism and the Public Ministry. The Health Ministry will have about the same budget as this year. According to data published by the Finance Ministry, the draft budget is based on an economic growth rate of 4.6% and a budget deficit of 5.8% of the GDP which has been estimated for 2022 at about 1.300 billion lei (265 billion Euros). At the same time, the average inflation rate has been forecast at 6.5%.

According to the budget strategy, the estimates for the next three years show an economic growth peak in 2023 of 5.3% and an average annual rate of 4.9% over the entire period 2023-2025. This is higher than the rate estimated in the EU and the Eurozone, of 4.3%, given that the economic shock caused by the pandemic is one of the most significant in recent history. Romania, however, has the advantage of a relatively rapid return of the GDP to the pre-pandemic level. The draft budget also stipulates that the worst moment of the crisis has been overcome by fiscal and monetary measures that boosted economic activity.

However, economic developments are dependent on the evolution of the vaccination campaign, on potential future pandemic waves, the specificities of the economic structure and the external influences caused by the degree of integration into the European and world value-added and production chains. At the same time, the measures adopted by the authorities in the context of the manifest twin imbalances — of the current account and fiscal account — will also have an influence. The support measures will be gradually withdrawn to reach the assumed 3% budget deficit target by 2024. (LS)

20 December 2021
October 6, 2021

Covid-19. Romania today recorded
almost 15,000 new Covid infections and 331 related fatalities, while more than
1,500 Covid patients are in intensive care. The incidence rate hit a new record
high in the capital Bucharest, nearing 11 per 1,000 inhabitants from 6.33 last
week. In incidence rate is over 10 in 10 cities around the country. The
healthcare system is under unprecedented pressure, with hospitals struggling to
find beds for new admissions.

Economy. The World
Bank improved its estimate on the evolution of the Romanian economy this year
to 7.3%, 1.3% higher than previously estimated in June, according to its latest
forecast for Europe and Central Asia. For next year, the World Bank is
expecting a 4.8% growth rate, 4.3% more than previous estimates. In 2023, the
World Bank is expecting Romania to grow by 3.9%. As for Europe and Central
Asia, it says a surprisingly strong recovery in the first half of the year
boosted economic activity on emerging markets and developing countries, with
regional economy expected to grow more than estimated to reach 5.5% this year.

Finance. The decision of the National Bank of
Romania to increase the key interest rate to 1.5% per year, up from 1.25%, came
into force today. The central bank is thus trying to keep in check the recent
steep growth of the inflation rate, which has exceeded estimates. According to
the National Bank, the situation is the result of price hikes, especially
electricity and natural gas, and, while it cannot influence these developments,
it can intervene in areas that it can control. The Bank forecasts that the
price of energy products will continue to grow, with the inflation rate hitting
significantly higher values than expected. Official data show that the annual
inflation rate passed 5.2% in August.

Politics. Romania’s minority government formed
by the National Liberal Party and the Democratic Union of Ethnic Hungarians in
Romania and led by the Liberal Florin Cîţu fell yesterday after a vote of
no-confidence. 281 out of Parliament’s 318 MPs voted against the government.
The motion was initiated by the Social Democrats in opposition and also got the
votes of the Save Romania Union, until recently in the coalition government,
and the Alliance for the Union of Romanians. In his first public reaction after
the vote, president Klaus Iohannis said Romania was facing a health as well as
a political crisis and invited political parties for consultations next week
to nominate a new prime minister.

Summit. Romanian president Klaus Iohannis is
attending the informal autumn summit of the European Council and the EU-Western
Balkans summit hosted by Slovenia. EU leaders together with the six partners in
the Western Balkans are discussing the reaffirmation of the European prospects
of this region. Officials are discussing developing cooperation and social and economic
recovery in the context of the pandemic and the implementation of an economic
and investment plan that will generate more sustainable,
environmentally-friendlier and more digital growth. They are also looking at
ways to boost regional cooperation and collaboration on political and security
matters.

Anniversary. Last night in Paris, Romania celebrated
65 years of UNESCO membership in the presence of its foreign minister Bogdan
Aurescu and UNESCO director-general Audrey Azoulay. The latter congratulated
Romania for its long-standing membership and spoke about future projects. The
Romanian foreign minister said Romania benefitted enormously from cooperation
with UNESCO, in education, culture and science. The anniversary was marked by
an exhibition of documents and photographs from the archive of the Romanian
foreign ministry and a concert given by Violoncellissimo ensemble led by Marin
Cazacu. (CM)

6 October 2021
October 5, 2021 UPDATE

Government. Romania’s minority government formed
by the National Liberal Party and the Democratic Union of Ethnic Hungarians in
Romania fell on Tuesday after a vote of no-confidence in Parliament. The motion
against the government was initiated by the Social Democrats in opposition and
also got the votes of the Save Romania Union, itself in the coalition government
until not long ago, and the Alliance for the Union of Romanians. The motion got
281 votes in favour, with the minimum required number being 234. Romanian
president Klaus Iohannis said he would invite political parties for
consultations next week and called for maturity and responsibility. He
emphasised that Romania is in crisis, a crisis of the public healthcare system,
of the energy prices and, now, of government. He deplored the tensions between
politicians and described the situation as complicated.

Finance. The National Bank of
Romania on Tuesday increased the key interest rate to 1.5% per year, the
interest rate to encourage deposit to 1% per year and the Lombard loan interest rate
to 2% per year. The National Bank also decided to retain current levels of
minimum reserve rates for liabilities in the national and foreign currency for
lending institutions. In another move, the Romanian economy is forecast to see
a growth rate of 4.3% this year, after shrinking by 3.9% last year, while next
year it is estimated to grow by 4.1%, according to the World Bank’s latest
regional economic outlook published on Tuesday. Romania’s economy did better
than expected, according to the World Bank, by shrinking by 3.9% in 2020. A
proactive, but limited, fiscal response, of 4.4% of GDP helped companies retain
their employees and fuelled household incomes. However, the World Bank is
expecting poverty to deepen in the short-term because of the Covid pandemic.

Covid-19. Romania saw a record
number of new Covid cases since the start of the pandemic, as over 15,000 new infections
from 77,000 tests were reported on Tuesday, as well as 252 new related
fatalities. Some 14,500 people infected with Covid are receiving hospital
treatment and almost 1,500 are in intensive care, including 22 children. The
incidence rate passed 10 per 1,000 inhabitants in Bucharest. On Tuesday,
Romania activated the EU Protection Mechanism to
be able to purchase Tocilizumab, medication used in the treatment of Covid-19.
The head of the Department for Emergency Situations Raed Arafat explained the
decision to activate the Mechanism saying Romanian hospitals may run low on this
drug in two or three weeks’ time. He added that Romania is also considering
asking for certain equipment, especially individual medical oxygenators. In
another move, the European Medicines Agency approved the administration of the
third dose of the Pfizer and BioNTech vaccine to people over the age of 18, saying
that protection against Covid-19 may decrease in time, after the first two
doses. In Romania, the vaccine booster shot began to be administered last week.

Nobel. Scientists Syukuro
Manabe, Klaus Hasselmann and Giorgio Parisi on Tuesday were jointly awarded the
Nobel prize in physics. According to an announcement made by Goran K. Hansson,
the secretary general of the Swedish Royal Academy of Sciences, the three
scientists were rewarded for their groundbreaking contributions to our understanding of complex physical systems. On
Monday, American researchers David Julius and Ardem Patapoutian won the Nobel prize
in medicine for discovering how our bodies feel heat and touch. The Nobel
awards season continues with the prize in chemistry on 6th October,
literature on 7th October, peace on 8th October, and
economics on 11th October. (CM)

5 October 2021
August 18, 2021 UPDATE

Finance – Dan Vîlceanu is the new finance minister of Romania, after he was sworn in on Wednesday. He had been nominated by the National Political Bureau of the National Liberal Party – PNL, the main party in the ruling center-right coalition in Romania. The Prime Minister Florin Cîţu last month dismissed the former finance minister, Alexandru Nazare, and has acted as interim finance minister so far.

Covid – 541 new Covid-19 cases were reported on Wednesday in Romania, following about 35,000 tests. The authorities also reported 6 deaths in 24 hours in patients infected with SARS-CoV-2. The number of patients who need hospitalization continues to grow. Currently, there are over 1,000 people in hospital of whom 146 are in intensive care units. Against the backdrop of the rapid growth of COVID cases, hospitals have begun preparations for the 4th wave, which is expected in September, according to some experts.

Summit – US President Joe Biden and British Prime Minister Boris Johnson have agreed, on the phone, to attend a G7 virtual summit on Afghanistan next week, the White House and Downing Street have announced. It is President Joe Bidens first conversation with a head of state or government since the Taliban entered the Afghan capital, Kabul, after 20 years of military intervention by US-led international coalition in which the United Kingdom played an important role. In Brussels, EU foreign policy chief, Josep Borrell, admitted that the West had made mistakes in Afghanistan, especially because it did not anticipate the Talibans rapid takeover. He explained that the EU’s priority was to evacuate the European citizens as well as the Afghans who worked for the EU bloc. On the other hand, official sources from Abu Dhabi announced that the Afghan president Ashraf Ghani and his family are on the territory of the United Arab Emirates, where they were received for humanitarian reasons after leaving the country on Sunday.

Olympics — The nine Romanian athletes who received medals at the Olympic Games in Tokyo were decorated, on Wednesday, in Bucharest, by President Klaus Iohannis. These are: Nicoleta Ancuţa Bodnar and Simona Geanina Radiş — winners of the gold medal in the womens double sculls, Ana-Maria Popescu — winner of the silver medal in womens epee, Marius Vasile Cozmiuc and Ciprian Tudosă – silver in the mens double sculls, and Mihăiţă Vasile Ţigănescu, Mugurel Vasile Semciuc, Ştefan Constantin Berariu and Cosmin Pascari — winners of the silver medal in the quadruple sculls. The Romanian athletes’ victories in Tokyo are all the more remarkable as they were obtained in pandemic conditions, President Iohannis underlined. He also stated that Romanian sport should become a priority again, as it represents an important pillar for a healthy society. We remind you that Romania ranked 46th in the medals ranking obtained at the recent Olympic Games.

Tennis — The Romanian tennis player Simona Halep (13 WTA) on Tuesday obtained her first victory after a break of three and a half months, 6-4, 3-6, 6-1, against the Polish Magda Linette, in the first round of the tournament WTA 1,000 in Cincinnati (USA), which has total prizes up for grabs of over 2 million dollars. In the second round, Simona Halep will be up against Jessica Pegula. Also on Tuesday, the Romanian-German pair Horia Tecău / Kevin Krawietz qualified to the eighth finals of the doubles event of the ATP Masters 1,000 tournament in Cincinnati. The two defeated the Argentinean pair Federico Delbonis/Diego Schwartzman 7-5, 6-3. In the eighth final, the Romanian-German couple will face the pair Marcelo Arevalo (El Salvador) and Fabio Fognini (Italy). Tecău already won a title in Cincinnati, in 2012, together with the Swede Robert Lindstedt.

Agriculture – The wheat, barley and rapeseed crops obtained by Romania this year are the highest since the countrys accession to the European Union in 2007, the Agriculture Ministry officials announced. For wheat, the crop exceeds 11 million tons, an amount twice as big as that reported last year, when it was affected by drought. The total barley output stands at 1.88 million tons this year, which is a record level while the rapeseed output exceeded 3 tons per hectare. (LS)

18 August 2021
August 14, 2021 UPDATE

Covid Romania — On Saturday, Romania exceeded 400 new cases of COVID-19 reported in the past 24 hours. 408 cases have been reported and 5 associated deaths. 707 COVID patients are hospitalized of whom 108 are in intensive care. Experts are firm and warn that next month the incidence of new cases is going to increase sharply. Despite warnings, the pace of the national vaccination campaign remains fairly low — a little over 9,500 people have been vaccinated in the last 24 hours. In an attempt to increase the number of vaccinated people, the authorities are organizing new vaccination actions across the country, in places where festivals and concerts are held.

Afghanistan — The Afghan President Ashraf Ghani said in a speech to the nation that consultations were taking place with political leaders and international partners aimed at finding a political solution that would guarantee peace and stability in the country, Reuters and AFP report. In the past eight days, Taliban insurgents have managed to conquer half of Afghanistans provincial capitals. The capital, Kabul, Mazar-i-Sharif, the main northern city, and Jalalabad (east) are the only three major cities still under government control. The Taliban launched their offensive in May, with the start of the definitive withdrawal of US troops and other NATO countries from Afghanistan, an operation scheduled to end on August 31. The Talibans rapid offensive led to emergency measures. After a crisis meeting with NATO ambassadors, the NATO Secretary-General Jens Stoltenberg expressed deep concern about the high level of violence caused by the Taliban offensive, including attacks on civilians and targeted killings, and said that NATO would support the Afghan government “as much as possible.” A contingent of US forces arrived in Afghanistan on Friday to secure the evacuation of the US embassy staff. The Romanian Foreign Ministry has reassessed and raised the alert level for Afghanistan and urges Romanian citizens to urgently leave the territory of that state.

Jazz – Sibiu, in central Romania, is hosting the oldest jazz festival in the country and one of the oldest in the world. The first show of this edition took place on Friday night, featuring the group Péter Sárosi-AZARA from Hungary and the Italian quartet Motel Kaiju, led by Niccolo Faraci. There will be a total of three days of jazz in Sibiu, and admission to all concerts in this edition of the Festival is free of charge. The first edition of this jazz festival was hosted by Sibiu in 1974.

UK – More than one million Romanians have applied for UK residency, and their contribution is extremely important in several sectors of the British economy, Radio Romania’s correspondent in London reports. According to professional associations, tens of thousands of Romanians work in the health and elderly care sectors as well as in agriculture, and estimates show that one in four construction workers is Romanian. Canary Wharf is Europe’s third largest financial center and is run by a Romanian, George Iacobescu, while the financial sector in the British capital employs about seven thousand Romanian citizens. All in all, more than six million EU citizens have been granted the right to remain in the UK after Brexit.

Finance — The Liberal MP Dan Vîlceanu is the proposal of Prime Minister Florin Cîţu for the position of Finance Minister, the PM announced on Saturday in a press conference. According to the CV posted on the website of the Chamber of Deputies, Dan Vîlceanu is an economist, with a PhD degree obtained in 2016, at the West University of Timişoara. We remind you that the Prime Minister Florin Cîţu dismissed Alexandru Nazare from the position of Finance Minister last month, and serves as interim finance minster until the appointment of a replacement for the vacant post.

Clarifications – Prime Minister Florin Cîţu made some clarifications on Saturday in connection with a fine he received in the USA 20 years ago for driving under the influence, a crime for which he was detained for two days. The information has appeared recently in the press, causing tensions within the ruling center-right coalition in Romania. Florin Cîţu said that he regretted the incident, that at the time of his appointment as prime minister the legal procedures were observed, and that he was not considering handing in his resignation. (LS)

14 August 2021
The finance minister, dismissed

Alexandru Nazare was dismissed as head of the finance ministry on Thursday, at the request of his fellow Liberal, the PM Florin Cîţu.

This is the second member sacked from the coalition government comprising the National Liberal Party, USR-PLUS, and the Democratic Union of Ethnic Hungarians, after the former health minister Vlad Voiculescu in mid-April. Voiculescus dismissal was requested by many at the time, and came in the wake of serious incidents that affected Romanian hospitals and of communication flaws, which outweighed his good intentions.

But now, Nazares rather surprising sacking fuels speculations that it has to do with the race for the presidency of the Liberal party, in which PM Cîţu runs against the incumbent speaker of the Chamber of Deputies, Ludovic Orban.

PM Florin Cîţu explains, however, that the decision was prompted by an analysis of the finance ministrys activity. The review apparently revealed delays in major projects related to the spending of EU funds and to fighting tax evasion.

Florin Cîţu: “Minister Nazare was given the chance to resign, but he chose to be dismissed. All the coalition leaders were informed as early as on Tuesday afternoon.

Alexandru Nazare tells a different story. In a post on a social network, the former minister said he was sacked for failing to join the team supporting PM Florin Cîţu in the race for party president. The decision is not based on objective reasons, Ludovic Orban said in Nazares defence, and warned that the appointment of a new finance minister should be decided in the Liberal Partys decision-making bodies and by the ruling coalition.

Ludovic Orban: “There are no serious reasons behind this removal. Normally, any such discussion should have first taken place within the National Liberal Party and within the ruling coalition.

The Social Democrats, in opposition, seized this opportunity to once again criticise the government. They believe government replacements are made only in order to soothe the egos of the politicians in power. The Social Democrats spokesman, Radu Oprea, argued,

Radu Oprea: “Unfortunately, the incumbent PM sets the country on fire, prices are going up, our people are getting poorer. Instead of doing his job in the government, he is only busy with his party campaign.

The dispute in the Liberal Party only proves the governments sheer disregard for the citizens problems, the Social Democrats claim. Ironically, only 4 years ago, the Social Democratic Party generated a political crisis when it dismissed its own government through a no-confidence motion. The reason was the then prime ministers alarming insubordination to the partys authoritarian leader, Liviu Dragnea, currently serving a corruption sentence.

In constitutional terms, it is within the prime ministers powers to request the dismissal of a cabinet member. (tr. A.M. Popescu)

9 July 2021
The Week in Review November 21-18

Romania, 9 months since its first coronavirus case

Nine months after the first coronavirus infection was reported in the country, during which hundreds of thousands of other cases have been confirmed, the daily number of Sars-CoV-2-related deaths remains high, and so does the number of patients in intensive care.

Experts warn that although the daily number of new cases has been on a slight decrease since the beginning of this week compared to last week, this is not enough to be optimistic. They believe that only after 14 days with a positive trend can the situation be assumed to be stable.

Authorities introduced local lockdowns in areas with high infection rates. The results are already evident, and the rate is dropping. The restrictions introduced nation-wide, such as the compulsory face covering both indoors and outdoors, nighttime curfews and the switch to online classes in schools have also played a part.

President Klaus Iohannis said Romania will not go under full lockdown after the general election due on December 6. However, this is not the time for relaxation, he said, and urged citizens to continue to observe the safety measures and to spend the winter holidays with the members of their own households.

The president also voiced hopes that as soon as conclusive data is published, Romanians will be less skeptical with respect to a vaccine. According to a poll run by the Avangarde Social and Behavioural Studies Group, only 30% of the Romanians would get the coronavirus vaccine as soon as one is available in the country.

Meanwhile, Romanian authorities are presenting the anti-COVID vaccination strategy, which is seen as a matter of national security. The strategy will be submitted for endorsement by the Supreme Defence Council next week. Healthcare and other key sector personnel and high-risk social categories will be the priority groups to receive the vaccine.

The National Defence Ministry will play a very important role in supporting inter-institutional efforts during the anti-COVID vaccination campaign, providing the logistic means for this national campaign. The distribution strategy also takes into account the specific transport and storage requirements for each vaccine.

The government approved the 3rd budget adjustment this year

The Romanian Government Monday adopted the 3rd and last budget adjustment this year, one that takes the budget deficit to roughly 19.5 billion euros. Unlike earlier predictions, the budget deficit will reach 9.1% of GDP by year end, and the economy will shrink by 4.2%.

PM Ludovic Orban said the adjustment was required in order to cover the expenditure incurred with the COVID-19 pandemic, with the payment of increased pension benefits and balancing local budgets. He explained that new challenges and expenses had to be handled, as the pandemic and a number of recent laws have increased the pressure on the state budget.

Additional funds will be earmarked to the Labour Ministry for pension, furlough and flexible working time payments. The Health Ministry will also get more money for the anti-COVID efforts, including bonuses for ambulance staff, who had not been included in the original regulation providing bonuses to healthcare staff fighting the pandemic.

The finance minister Florin Cîţu announced an increase in Romanias contribution to the EU financial effort to produce a vaccine against SARS-CoV-2. He explained that this budget adjustment also ensures that public investment projects worth around 11 million euros will be carried on. Public education and agriculture have also received additional funds. The Agriculture Ministry will therefore be able to pay compensations to the farmers affected by this years drought. On the other hand, budget cuts were operated, affecting the Finance Ministry and the Interior Ministry, the Presidential Administration and the Chamber of Deputies.

Bucharest presents National Recovery and Resilience Plan

The Government of Romania Thursday night presented the National Recovery and Resilience Plan, which will use EU funding to help the Romanian economy overcome the crisis generated by the COVID-19 pandemic. The plan is designed to ensure the accelerated development of the country in the coming 4 years, and the EU money will be spent on new hospitals, hundreds of kilometres of motorway, school infrastructure and the digitization of public administration.

Under the plan, over 30 billion euros will be invested in the most important sectors of the Romanian society. Of the total, non-reimbursable grants amount to nearly 14 billion euro, and loans at favourable interest rates contracted by the European Commission on behalf of the member states account for the balance.

The plan has been subject to public debate as of Thursday, with civil society invited to make suggestions, to be reviewed by the Government. After that, the plan will be sent to Brussels. Several NGOs working in the education, healthcare and social fields have already voiced their intention to contribute to the document, which, they say, must include first and foremost support measures for vulnerable categories and pay special attention to underprivileged youth and children, helping them to complete their education. (translated by: A.M. Popescu)

28 November 2020
Government to make new budget adjustment

The government in Bucharest is working on its third budget adjustment this year, mainly intended to allocate more funds to healthcare in the context of the coronavirus pandemic. This new adjustment is needed, according to Finance Minister Florin Cîțu, to secure the funds for healthcare, social assistance and education until the end of the year. Funds will be further allocated for investment and for the payment of compensations to the farmers whose crops were affected by drought. The new budget adjustment is based on a deficit of 9.1% of the GDP, against the background of economic contraction triggered by the health crisis.

Instead of the original economic growth forecast of 4.2%, based on which the state budget was designed at the beginning of the year, Romania’s economy has shrunk by 8%, which mirrors in the deficit, a decrease generated by a drop in revenues and the payment in installments of taxes owed by companies from March to October, Minister Citu explained. He also said that the social insurance budget will be supplemented in order to cover the recalculation of pensions and the financing of the support measures for companies, in the context of the pandemic.

The National Commission for Strategy and Prognosis revised downwards the economic growth forecast, to a 4.2% drop in the GDP this year, while the inflation rate will reach 2.2% at year-end. In Brussels, the European Commission’s autumn economic forecast projects Romania’s deficit to exceed 10% of the GDP in 2020 and to further go up in the following years. The Commission asked for a thorough assessment of the economic situation in Romania, just as it did in the case of another 11 member states where major macroeconomic imbalances were signalled.

According to the European Commission, the deterioration of the economic outlook and the introduction of emergency measures to combat the pandemic and its economic consequences can only partially explain the projected rise in the deficit in Romania, because important underlying drivers of the fiscal situation that were already present before the pandemic struck in 2020, have not been modified. These include underfunded large pension increases, a higher child allowance, reductions in indirect taxes and cuts in social security contributions for some categories of workers.

The Commission also points out that the government’s attempts to limit the impact of some of these measures have been rejected by parliament. The Commission has reminded that the Excessive Deficit Procedure (EDP) was launched against Romania in April 2020, after in 2019 the country exceeded GDP deficit limit. The Commission believes that, in the light of the continued exceptional uncertainty created by the Covid-19 pandemic and its extraordinary macroeconomic and fiscal impact, no decision on further steps in the Romania EDP can be taken. (Translated by Elena Enache)

19 November 2020
Government to make new budget adjustment

The government in Bucharest is working on its third budget adjustment this year, mainly intended to allocate more funds to healthcare in the context of the coronavirus pandemic. This new adjustment is needed, according to Finance Minister Florin Cîțu, to secure the funds for healthcare, social assistance and education until the end of the year. Funds will be further allocated for investment and for the payment of compensations to the farmers whose crops were affected by drought. The new budget adjustment is based on a deficit of 9.1% of the GDP, against the background of economic contraction triggered by the health crisis.

Instead of the original economic growth forecast of 4.2%, based on which the state budget was designed at the beginning of the year, Romania’s economy has shrunk by 8%, which mirrors in the deficit, a decrease generated by a drop in revenues and the payment in installments of taxes owed by companies from March to October, Minister Citu explained. He also said that the social insurance budget will be supplemented in order to cover the recalculation of pensions and the financing of the support measures for companies, in the context of the pandemic.

The National Commission for Strategy and Prognosis revised downwards the economic growth forecast, to a 4.2% drop in the GDP this year, while the inflation rate will reach 2.2% at year-end. In Brussels, the European Commission’s autumn economic forecast projects Romania’s deficit to exceed 10% of the GDP in 2020 and to further go up in the following years. The Commission asked for a thorough assessment of the economic situation in Romania, just as it did in the case of another 11 member states where major macroeconomic imbalances were signalled.

According to the European Commission, the deterioration of the economic outlook and the introduction of emergency measures to combat the pandemic and its economic consequences can only partially explain the projected rise in the deficit in Romania, because important underlying drivers of the fiscal situation that were already present before the pandemic struck in 2020, have not been modified. These include underfunded large pension increases, a higher child allowance, reductions in indirect taxes and cuts in social security contributions for some categories of workers.

The Commission also points out that the government’s attempts to limit the impact of some of these measures have been rejected by parliament. The Commission has reminded that the Excessive Deficit Procedure (EDP) was launched against Romania in April 2020, after in 2019 the country exceeded GDP deficit limit. The Commission believes that, in the light of the continued exceptional uncertainty created by the Covid-19 pandemic and its extraordinary macroeconomic and fiscal impact, no decision on further steps in the Romania EDP can be taken. (Translated by Elena Enache)

19 November 2020