Radio România Internațional

Tag: GDP

September 8, 2020 UPDATE

MEETING The Annual meeting of the Romanian diplomacy continued in a
digital format in Bucharest on Tuesday. NATO Deputy Secretary General Mircea
Geoana has conveyed a video message to the participants in the event
underlining that Romania is a vital NATO ally playing the role of a regional
pivot in terms of defence and deterring the threats against the alliance. On
the sidelines of the event, Foreign Minister Bogdan Aurescu on Tuesday held
talks with his Ukrainian counterpart Dmytro Kuleba. The two officials announced
the decision to set up a working group on energy issues, pointing out to a
series of ambitious common projects. The Ukrainian official thanked Romania for
supporting Ukraine’s territorial integrity and sovereignty underlining the
importance of security at the Black Sea. Also on Tuesday the head of the
Ukrainian diplomacy met Romanian Prime Minister Ludovic Orban who said that he
expected the authorities in the neighboring country to protect and promote the
rights of the Romanian community living in Ukraine.

DECLARATION The Chamber of Deputies in Bucharest on
Tuesday passed a declaration concerning the violation of fundamental rights in
the Republic of Belarus. Through the document, the Romanian Parliament proves
its solidarity with the people of Belarus at the same time calling for the
cessation of violence against peaceful protests and for a more articulated
response from the international community unless the situation improves. Last
week, the Romanian Senate passed a similar document. In another development,
the head of the European diplomacy Josep Borrell has made an appeal to the
authorities in Belarus to release immediately the people detained for political
reasons before and after the presidential election of August 9th. He recalled
the fact that the EU would impose sanctions on those responsible for violence,
reprisals and the rigged election. More than 100 thousand people took to the
streets of Minsk on Sunday for the fourth weekend in a row, despite the
deployment of a significant number of riot police and army troops. According to
the authorities, over 600 people have been detained. Alexander Lukashenko, 66,
who has been ruling Belarus for the past 26 years continues to rule out any
form of dialogue.

GDP In the second quarter of 2020, still marked by COVID-19
containment measures in most Member States, seasonally adjusted GDP decreased
by 11.8% in the euro area and by 11.4% in the EU compared with the previous
quarter, according to an estimate published by Eurostat, the statistical office
of the European Union. These were by far the sharpest declines observed since
the time series started in 1995. In the first quarter of 2020, GDP had
decreased by 3.7% in the euro area and by 3.3% in the EU. Among Member States
for which data are available for the second quarter of 2020, Spain (-18.5%)
recorded the sharpest decline of GDP compared to the previous quarter, followed
by Croatia (-14.9%), Hungary (-14.5%), Greece, Portugal, France, Italy and
Romania. The lowest declines of GDP were observed in Finland, Lithuania and
Estonia followed by Ireland, Latvia and Denmark. In Romania, according to the
national Statistics Institute, the GDP in the second quarter was by 12.3%
smaller than in the first quarter of the year. Finance Minister Florin Citu has
reminded that in Q2 economy was severely affected, for almost two months, by
the state of emergency. However, he said investment had a positive contribution
to the economic growth.

COVID-19 Authorities in Romania are making the
latest assessments of the situation so that they can announce by Thursday how
the school year begins on September 14 in every school. The National Institute
of Public Health presented on Monday the epidemiological situation across the
country for the past 14 days. Results show that in most of Romania, classes can
be held with the students present at school or a combination of normal school
attendance and online classes. Health Minister Nelu Tataru has said that the
next few weeks will be critical due to the beginning of the school year and the
local elections of September 27th. However, in his opinion, if rules are
observed, the number of coronavirus infections might decrease as of mid-October.
The most recent report shows a total number of confirmed infections in Romania
of 97 thousand and almost 4 thousand deaths. 460 patients are in intensive
care.

(translated by bill)

8 September 2020
August 14, 2020 UPDATE

Coronavirus Ro – The Romanian government has approved a decision on extending the state of alert by another month. The decision comes into force on August 16 and was prompted by the persistence of a high rate of contamination with the new coronaviurs across Romania as well as by the identification of new cases of infection on a daily basis. In Romania more than 68 thousand cases of contamination have been reported since the coronavirus outbreak, with almost 32 thousand patients having recovered. The Strategic Communication group has also announced that 473 patients are in intensive care. The total death toll in Romania stands at 2,904.

GDP — Romania’s GDP has dropped by 12.3% in the 2nd quarter of this year as compared to the 1st quarter, and by 10.5% as compared to the 2nd quarter of 2019, the National Institute of Statistics informed on Friday. A drop in the GDP was also reported in the first six months of 2020, when it decreased by 3.9% as against the same period of last year. The National Commission for Strategy and Prognosis also reviewed the estimates regarding the evolution of the Romanian economy in 2020, so, at present, the Commission forecasts a contraction going up to 3.8%, as compared to 1.8% previously estimated. According to the summer economic forecasts, published by the European Commission, Romanias GDP will register a significant drop – 6%, in 2020. Also the Romanian authorities estimate a budget deficit of 8.6% of the GDP. The annual inflation rate went up to 2.8% last month from 2.6% in June. The growth was caused by the increased prices of foodstuffs, services and nonfoods.

Navy Day — The Romanian Navy Day is traditionally celebrated on August 15, when Christians celebrate the Assumption of the Virgin Mary. This year the events have been adapted to the new context imposed by the Covid-19 pandemic. Thus, unlike in the previous years, this years edition, dedicated to the 160th anniversary of the establishment of the Romanian Naval Forces, takes place mainly online. The Naval Forces official Facebook page has already launched thematic contests and virtual projects that offer the public the opportunity to get to know the marines better. Recitals of the Military Music of the Naval Forces were also streamed online, as well virtual tours of Romanian ports. Nevertheless, on Saturday, on Navy Day, there will be ship parades on the Black Sea and the Danube. To prevent the crowding of people, access of the public will not be allowed.

Tennis — The Romanian tennis player Simona Halep, world’s no.2 and top seed in Prague, on Friday qualified to the semifinals of the WTA tournament hosted by the Czech capital which offers total prizes worth more than 200 thousand dollars, after defeating the Polish player Magdalena Frech (174 WTA) 6-2, 6-0. Also on Friday the Romanian Irina Begu qualified to the quarter finals after defeating the Swiss Leonie Kung 7-6, 5-7, 7-6. Another Romanian player Ana Bogdan withdrew from the competition at the score 5-2 against the Czech Kristyna Pliskova who thus goes further to the semifinals. In the doubles, the Romanian players Monica Niculescu and Raluca Olaru have qualified to the semifinals and will play against the Czech pair Barbora Krejcikova and Katerina Siniakova.

Agreement — The Romanian Foreign Ministry hails the announcement regarding the normalization of relations between Israel and the United Arab Emirates as well as the relevant role of the US that brokered the agreement. In this context, the Romanian diplomacy expressed confidence that the agreement between Israel and the UAE, two of Romania’s important regional partners, will contribute to the stability and security of the Middle East. This is the biggest progress towards peace between Israel and the Arab world in the past 26 years, being the starting point for the third agreement between Israel and an Arab nation, said the Prime Minister Benjamin Netanyahu. Israel also has peace agreements with Egypt and Jordan. The Palestinian National Authority labeled the agreement a “betrayal” of the Palestinian cause and called for an emergency meeting of the Arab League to denounce this agreement.

MAE — The Romanian Foreign Ministry MAE has categorically rejected Russia’s criticism related intentions to consolidate the American presence in Romania. The Romanian diplomacy on Friday published a response to the recent statements made by the spokesperson for the Russian Foreign Ministry Maria Zaharova who accused NATO and the US of intending to consolidate a north-south axis from the Baltic to the Black Sea, an axis meant to discourage Russia. MAE explained that NATO’s process to consolidate security in the Black Sea region was a legitimate and legal response after the illegal annexation of Crimea and Russia’s aggressive actions on the Black Sea basin. (translation and update by L. Simion)

14 August 2020
June 6, 2020

COVID-19
Romania has so far
confirmed over 20 thousand Covid infections. Out of these more than 14,100 patients
have been cured and released from hospitals. 1318 people have been killed by
the disease so far. 3,100 Romanian nationals have been confirmed infected
abroad, where 114 have already died. Romania’s Health Minister Nelu Tataru has
again said that wearing a mask in public places and transport vehicles remains compulsory
and that prevention measures must be maintained until there is no risk for
community contagion.

OUTLOOK In its latest communiqué, Standard & Poor’s rating agency has
confirmed Romania’s rating to ‘BBB-/A-3’ for long and short term loans in
foreign and local currency with a negative outlook. Although the agency expects
the pandemic’s negative economic effects to lead to an increase in the
country’s government debt to 43% of the GDP in 2020, it also estimates that
significant consolidation measures will be implemented upon the general
election in 2020. Romania’s rating outlook remains negative as the agency believes
the balance of foreign payments and of the budget may be at risk in the
following 18 months, unless political decision-makers can stabilize and
consolidate budgetary direction after this pandemic-induced recession. S&P
believes Romania’s economic activity will start improving in the second half of
this year and in 2021 the country may see a 4% economic growth. Romania’s
current account deficit is expected to increase up to 5% of the GDP in 2020 and
to 4% of the GDP until 2023 in the wake of increasing demand and a steady consolidation
of exports.

POLICE Romania’s Interior Ministry has increased the number of police
troops deployed during the Pentecost mini-holiday in this country. So roughly
21 thousand police, gendarme and firefighters have been deployed around the
country to ensure law and order during the holidays. Romania’s motorways will
be monitored by 17 hundred road police with over 300 radar guns backed by
helicopters from the General Aviation Inspectorate. Close to 52 hundred
gendarme troops have been deployed in the regions with a potential higher number of visitors,
such as the tourist resorts. More than 180 gendarmes from the mountain corps
are expected to be present on various mountain routes.

HOLIDAY Orthodox and Greek-Catholic believers from all
over the world, including from Romania will be celebrating Pentecost on Sunday,
marking the day when the Holy Spirit came down upon the 12 apostles enabling
them to convey God’s message in foreign languages they had never spoken before.
On the same day, upon Apostle Peter’s speech, almost 3,000 people embraced
Christianity, making up the first Christian community in Jerusalem, the nucleus
of the future Christian Church. Thousands of Romanians have taken to various resorts
on the Prahova Valley, the Danube Delta and the Black Sea coast for this
holiday.

(translated by bill)

6 June 2020
Pessimistic economic forecasts

The European Union will be experiencing the deepest recession in its history, the European Commissioner for the Economy, Paolo Gentiloni announced on Wednesday. He added that the European economy will contract by a record 7.4%. Commissioner Gentiloni explained that the COVID-19 pandemic, which will have severe social and economic consequences, significantly affected economic forecasts.

The EC spring forecast shows that recession and recovery will be uneven across the EU. The European Commissioner also said that insisting too much on state aid risks affecting the single market and its competiveness, that is why the EC will soon publish a unitary recovery plan. “Each Member States economic recovery will depend not only on the evolution of the pandemic in that country, but also on the structure of their economies and their capacity to respond with stabilizing policies, given the interdependence of EU economies”, Commissioner Gentiloni went on to say.

The coronavirus pandemic has severely affected consumer spending, industrial output, investment, trade, capital flows and supply chains. “The expected progressive easing of containment measures should set the stage for a recovery. However, the EU economy is not expected to have fully made up for this years losses by the end of 2021. Investment will remain subdued and the labor market will not have completely recovered” said Paolo Gentiloni.

According to the EC forecasts, only several countries will recover in the last semester of 2020: Germany, Austria, Poland and Slovakia. The countries that will report the severest economic contraction are Italy, Spain and France. As for Romania, the EC forecasts show that the GDP will drop by 6% in 2020, to increase in 2021 by 4.2%. According to Paolo Gentiloni Romania is expected to report a budget deficit of at least 8%. Actually, almost all the other EU Member States are expected to report higher deficits because they have to support the economy with liquidities and to protect jobs.

The European Commissioner also warned that, despite the measures taken, the unemployment rate will grow and the working hours will be reduced. According to the EC Spring Economic Forecast, in Romania the unemployment rate will reach 6.5 % in 2020 and 5.4% in 2021. As regards the inflation rate, it will reach 2.5% in 2020 and it is going to rise next year.

Bucharest authorities are convinced that Romania will come out well from the crisis caused by the coronavirus pandemic and that the economy will recover fast, given that several economic sectors have already resumed activity these days and that the government has announced more support measures. (tr. by L. Simion)

7 May 2020
October 10, 2019 UPDATE

MOTION Romania’s right-wing president Klaus Iohannis announced that Friday
would see the first round of talks with Parliament parties because Romania is
in dire need of a government after Parliament on Thursday passed a
no-confidence motion against the Social Democratic government led by Viorica
Dancila. Iohannis, who had described the former government as failed and
confused said that after learning the suggestions of the parties, he would come
up with a government formula and a clear mandate to provide a responsible and
efficient ruling until the Parliamentary election. In Iohannis’ opinion, snap
election is the best solution to the political crisis currently affecting
Romania. The outgoing Prime Minister, Viorica Dancila, has said that her
cabinet leaves with its duty done and made an appeal to the president, whom she
blames for the present political chaos, to quickly appoint a capable
government, ‘if he has any’. The National Liberal Party, which initiated the
motion through its president Ludovic Orban, said that Romania needs serious
projects and a government, which can show fairness. 238 senators and deputies
have voted in favour of the no confidence vote, which needed 233 votes to pass.
The political struggle intensifies less than a month ahead of the presidential election. We recall that both Klaus Iohannis and Viorica
Dancila are running for the presidential seat.

NOBEL Polish writer Olga Tokarczuk was given the 2018 Nobel Prize for
Literature while Austrian Peter Handke reaped this year’s edition of the
prestigious award. According to the
Swedish Academy, Tokarczuk, was given the
prize for a narrative imagination that with encyclopaedic passion represents
the crossing of boundaries as a form of life, while Handke, was recognized for
a body of work including novels, essays and drama that with linguistic
ingenuity has explored the periphery and the specificity of human experience.

GROWTH The National Institute of
Statistics has revised slightly downwards from 4.6% to 4.5% its estimates regarding
the growth of the country’s GDP in the 2nd half of 2019 as compared
to the same period of last year. In another development, the World Bank has
slightly improved estimates regarding Romania’s economic development for the
coming years but draws attention to the risk of a rise in pay inequities. The
WB recommends the government to include on its priorities agenda measures aimed
at curbing the high unemployment rate among young people and people with low
qualification and at making reforms in the public administration and the
state-owned companies.

(translated by bill)

10 October 2019
The Central Bank’s yearly report

The European
Commission has revised its forecasts on Romania’s economic growth rate this
year up to 4% pointing out to a rise in its GDP of up to 3.3%. However, there
is a significant difference between the European Commission forecasts and those
made by the authorities in Bucharest who drew up the country’s budget based on
a 5.5% growth.

According to the
EU Executive’s summer estimates, the growth rate is going to slow down next
year to 3.7%. Public consumption remains the economy’s main engine, spurred by
the latest pay rises. Investment is also on the rise chiefly thanks to the
recovery experienced by the construction sector, stimulated by fiscal measures.

The Commission believes
inflation will stay around 4.2% this year and at 3.7% next year. Romania has a
robust economic growth though it remains chiefly based on consumption, the
country’s central bank governor Mugur Isarescu says. During the presentation of
the bank’s annual report, Isarescu has explained how the economic growth is
backed less by investment whereas the export’s negative contribution has been
significantly higher than in 2007.

Mugur Isarescu: We have an economic growth or domestic absorption to be more correct,
beyond what the economy can provide. Consumption has been boosted more than
what the economy can provide and part of this growing demand, coming from pay
rises, from stimulated consumption, could not be covered from the domestic
output and was covered from imports instead. The consolidated budget was being kept
under 3% but it’s been the last time since 2015 when we are able to meet our
structural deficit budget around the limit of 3%. Budget, salary and investment
expenses are going in opposite directions.

Mugur Isarescu
has declared himself satisfied with the low fluctuation of the national
currency and also with the public debt, which remained at the same debt-to-GDP
ratio, around 35%, being among Europe’s lowest.

Mugur Isarescu: In spite of negativistic forecasts, the debt rate didn’t rise as against
the GDP. Of course, the GDP’s rapid growth has largely contributed to that.
Public debt stands around 35% of GDP, one of the lowest in Europe and we’d
better keep it at this ratio.

This performance
has also been noticed by the rating agencies, and that could allow us to get bigger
loans from the international market at relatively low costs, Mugur Isarescu has
explained. The problem is how we use money and why we see this deficit increase.
Referring to the inflation rate, the central bank governor said that after an
increase in the first half of last year, towards the end of the year, it
reached the level of 2017.

With a mandate
of almost 30 years at the helm of the country’s central bank governor, Mugur
Isarescu says that Romania boasts a credible central bank stable at international
level, which has obtained good financial results.

(translated by
bill)

11 July 2019
July 8, 2019 UPDATE

TENNIS Romanian tennis player Simona Halep who is currently ranking 7th
in the world’s standings, on Monday clinched a 6-3, 6-3 win against the
15-year-old US challenger Cori Gauff in the round of 16 of the Wimbledon
tournament, the third Grand Slam tournament this year. Gauff was the revelation
of the present edition of the prestigious competition and before meeting Halep
she had defeated experienced players, including her famous compatriot Venus
Williams. Simona will next take on Shuai Zhang of China on Tuesday. Halep’s
best performance at Wimbledon was the 2014 qualification for the semifinals.
Also on Monday the pair made up of Romanian Horia Tecau and Dutch Jean-Julien
Rojer qualified for the quarter-finals after Argentinians Horacio Zeballos and
Maximo Gonzales had abandoned the game. We recall that Tecau and Rojer won the
Wimbledon tournament in 2015.

EXAM The baccalaureate pass rate in Romania has this
year been around 73.7%, one percent higher than last year, the country’s Education
Ministry has announced. 177 students have got the highest mark, 73 more than
last year, whereas 84 students have been eliminated for fraud or attempted
fraud. The highest pass rate has been registered in capital Bucharest and in
Cluj, western Romania.

AGREEMENT The Romanian government on Monday signed an agreement with the
European Investment Bank through which the latter offers technical assistance
for building three regional hospitals in Iasi, north-eastern Romania, Cluj
Napoca in the north-west and Craiova in the south-west. The aforementioned
projects benefit from European funding. According to Romania’s Health Minister
Sorina Pintea, the agreement has a total value of roughly 12.9 million Euros.
In turn, the bank’s vice-president Andrew McDowell said the expertise of the
EIB experts would be transferred to the Romanian personnel with the Project Implementation
Unit of Romania’s Health Ministry.

GDP Romania’s GDP went up by 1.3% in real terms in the first
quarter of the year as against the last quarter of 2018 and is by 5% bigger as
compared with the same period of last year, according to provisional data made
public on Monday by the National Institute of Statistics. Romanian authorities
estimate a 5.5% increase in Romania’s economy this year, while international
financial institutions have put it at under 4% – the European Commission at
3.3%, the IMF at 3.1%, the European Bank for Reconstruction and Development at
3.2% and the World Bank at 3.6%. On the other hand, the net medium salary stood
around 660 in May, down against the month before. The IT and cloth
manufacturing sectors reported the biggest salaries.

(translated by bill)

8 July 2019
March 7, 2019

REPORT – Romania’s estimated Gross Domestic Product for 2018 stood at around 196 billion euros, up by 4.1% in real terms as against 2017. According to the National Statistics Institute, industry contributed the most to this growth, with almost 24%. The gross fixed capital formation, a higher volume of imports of goods and services and a reduced volume of activity in the construction sector had a negative contribution to the GDP increase. The European Commission has recently pointed out, in its winter economic forecast, that the economic boom that started in Romania in 2017 slowed down in 2018. The real GDP growth decreased from 7% in 2017 to 4% in 2018, according to the EC report. In the fall of 2019 the IMF has revised downwards its economic forecast for Romania for both 2018 and 2019.

PROTESTS — Professors and students with the National University of Political Studies and Public Administration (SNSPA) on Thursday have expressed their solidarity with the magistrates’ protests and have joined their colleagues in other university centers in condemning attempts to subordinate justice to the political power. Actors in several theatres across Romania, the capital Bucharest included, have organized protest rallies in support of the magistrates. The recent emergency order 7, modifying again the justice laws, is vehemently criticized by the magistrates.

EC – Romanian PM Viorica Dancila continues her working visit to Brussels. Today she is meeting with the Brexit EU Chief negotiator, Michel Barnier, to discuss the protection of the European citizens’ rights, given the nearing exit deadline set for March 29. On Wednesday, the first day of the visit, Dancila met with the European Commission’s First Vice President, Frans Timmermans, and discussed about the recent modifications to the justice legislation in Romania. The European official has voiced concern with respect to the latest evolutions in matters regarding the Mechanism for Cooperation and Verification. Dancila and Timmermans have decided that Romanian and European Commission experts should meet next week to further discuss these matters.

SUBPOENA – The former chief of the Anti Corruption Directorate, Laura Codruta Kovesi, has been subpoenaed today by the Section for the Investigation of Magistrates, to be heard in a case in which she is accused of abuse of office, bribe taking and false testimony. Kovesi denies the accusations. The case involving Kovesi was opened in December 2018 following a complaint filed by the former MP Sebastian Ghita, a fugitive who has been prosecuted in several corruption cases in Romania and has fled to the neighboring Serbia. The former chief prosecutor of the Anti-Corruption Directorate in Romania, Laura Codruta Kövesi, is the first on the list of preferences for the position of European Chief Prosecutor. The New European Prosecutor’s Office will closely cooperate with OLAF, to detect and investigate cases of fraud all across the European Union.

JAI – The Justice and Home Affairs ministers in Bucharest, Carmen Dan and Tudorel Toader respectively are taking part on Thursday and Friday in Brussels in the Justice and Home Affairs Council, taking place in the context of Romania’s holding the Presidency of the Council of the EU. The meetings’ agenda includes topics such as European cooperation in the field of justice and border security, the reform of the European asylum-granting system as well as migration and terrorist threats. On Friday, justice ministers will be updated on the most recent steps taken for the setting up of the European Prosecutor’s Office to become operational in 2020 and to have its headquarters in Luxembourg.

TENNIS – In the first round of the US tournament in Indian Wells, the Romanian-born Canadian tennis player Bianca Andreescu defeated Romania’s Irina Begu, 6-7, 6-3, 6-3. Simona Halep and Mihaela Buzarnescu will prove their mettle in the women’s singles’ second round. In the women’s doubles, Monica Niculescu and Raluca Olaru have got through to the round of 16. Monica Niculescu will pair up with American tennis player Abigail Spears, while Raluca Olaru will play alongside Croatia’s Darija Jurak. (Translated by Elena Enache)

7 March 2019
European Commission recommendations for Romania

Romania is one
of the ten EU Member States currently facing economic imbalances. This is the
recommendation stemming from the European Commission’s winter report for
Romania which assesses the country’s progress on economic and social
priorities.

In its report
the European Commission highlights the need to promote investment, pursue
responsible fiscal policies and implement well-designed reforms. Challenges
vary significantly across countries and call for appropriate and determined
policy action. As regards Romania, the report shows that no real progress has
been made concerning the fiscal framework, the minimum wage or the governance
of state-owned companies.

The European
Commission believes further efforts are needed in order to obtain tangible
results. In its assessment, the Commission warns that the power of the tax
system to reduce poverty and correct social disparities is limited. Income
inequality remains one of the highest in the EU and a third of Romanians are at
risk of poverty, the highest rates in the EU, the report also reads.

The document
also points to the fact that the tax structure is characterized by low levels
of revenues, with high reliance on consumption taxes. The tax-to-GDP ratio
stood at 24.9 % in 2017, the lowest value since 1996. This represents the
second lowest level in the EU – well below the EU average of 39.2 %.

Moreover, EU experts
repeatedly refer to the Government’s emergency decree no. 114, which brings a
series of fiscal modifications, some criticized both by the opposition and the
business sector. At the end of last year, without impact assessment or
consultation of stakeholders, the government adopted an emergency decree
introducing a new tax for banks (the tax on greed) levied on total
assets exceeding 2% of the interbank interest rate (ROBOR).

The Commission
says the tax is likely to put a strain on financial stability by impacting the
solvency and profitability of banks and by worsening further the situation of
weaker banks. At the same time, the tax could also impact credit activity and
reduce flexibility for monetary policy. The European Commission report shows
that the measures stipulated by decree no. 114 weaken the second pillar of
pensions based on defined contributions.

The measures
have a negative impact on Romanians’ future pensions and will hamper the
development of the capital market and future investment, will increase
uncertainty and make Romanian economy less attractive for both domestic and
foreign investors.

28 February 2019
IMF mission to Romania ends

An IMF team was on a one-week visit to Bucharest,
where they discussed with the Romanian authorities about the country’s
macro-economic prospects and budget policies for next year.

The visit was also designed as a preparation for a
consulting mission due early next year. Economic activity in Romania
remains strong with unemployment at a record low, is one of the IMF experts’
conclusions. However, according to a news release issued by the international
financial institution, despite several years of strong growth, the budget
deficit has gone up rather than down, as it should during good times, and the
2018 target remains at risk without further measures.

The
2019 budget and the medium-term financial framework should target smaller
deficits, in line with the commitments to the European Union, and should keep
the public debt to GDP ratio on a downward trend. In this respect, current
initiatives to improve the efficiency of public spending, such as expenditure
reviews and centralized procurement, are welcome, says the IMF, adding that the
modernization of revenue administration is also essential.

IMF
experts also argue that increases in public-sector salaries and planned changes
to pension benefits should be reassessed for their negative implications for
fiscal sustainability and long-term growth.

Also,
in view of enhancing the economic growth potential, structural reforms and good
governance are needed. In this regard, strengthening the institutions in charge
with public investment is a priority, to help address Romania’s large
infrastructure gap, including by means of facilitating better absorption of EU
funds, reads the IMF news release.

The
Fund forecasts a 4% growth rate for 2018, a 3.5% year-end inflation rate,
relatively stable current account deficit in the medium run and a budget
deficit of over 3% of the GDP, both this year and in 2019, if current policies
are maintained.

In
turn, the European Bank for Reconstruction and Development estimates a 4.2%
economic growth rate in Romania this year, with a slow-down to 3.6% in 2019.
The IMF and EBRD forecasts are significantly higher than the ones made by the
European Commission, which expects Romania’s economic growth rate to go down to
3.6% this year and 3.8% next year, as the rise in private consumption will slow
down and the negative balance of trade will deepen.

13 November 2018
September 7, 2018

DNA Prosecutor Adina Florea, proposed by Justice Minister Tudorel Toader for the head of Romania’s main anti-corruption agency (DNA), is to be heard by the Superior Council of Magistracy on September 27th. The opinion of this body is required but not binding. The proposal is also to be endorsed by president Klaus Iohannis. Adina Florea is prosecutor with the Court of Appeal in Constanta (south-eastern Romania). The position of DNA chief remained vacant after the sacking of Laura Codruta Kovesi.

VISIT Romanian Prime Minister Viorica Dancila and her Spanish counterpart Pedro Sanchez have signed in Madrid two bilateral agreements in the field of public administration and defence. The second accord sets the conditions under which fresh exchanges of experience as well as joint military drills are to be hosted in the future. The two ministers have hailed the excellent cooperation in the economic field, which knows an upward trend, both in term of exchanges, which are currently reaching 4 billion euros and the volume of the Spanish investment in Romania. Viorica Dancila and Pedro Sanchez have agreed to carry on the initiative of staging the first joint government session. Romania and Spain have been running a Strategic Partnership they signed five years ago. At the same time Spain is home to a large community of Romanians estimated at 870 thousand members at the beginning of 2018, the largest community of foreigners in Spain. The Romanian Prime Minister hasn’t met the representatives of the Romanian community in Spain as some of them took to the streets to protest the situation created at the Diaspora meeting in Bucharest on August 10th.

GDP GDP in the Euro Area and in the EU has increased in the second quarter of the year by 0.4% as compared to the first quarter with Malta reporting the highest growth of 1.9%. According to the Statistical Office of the European Union Eurostat, Romania and Estonia have each had a 1.4% growth. Provisional data released by the National Institute for Statistics has also confirmed that Romania’s GDP has increased in the second quarter of the year by 1.4% as compared to the first quarter. In the first half of 2018 the country’s GDP went up by 4.2% as against the same period last year. All the sectors of the economy have contributed to this increase, but mainly industry, trade and some of the services.

FOOTBALL Romania’s national football squad is today playing Montenegro in a home game of the newly-formed Nations League. Our footballers will be taking on Serbia on Monday, while in October they will by up against Lithuania. The best four sides of each tier will join a play-off session in a bid to qualify for Euro 2020 if they have failed to achieve qualification during the European Championship preliminaries.

7 September 2018
The Week in Review, August 10-17

Clashes at the rally of Romanian expats in Bucharest

Over 450 people, including 35 gendarmes, received medical treatment further to the clashes on Friday night at the rally in Victoriei Square, a gendarme spokesperson told a press conference on Saturday. Some 100,000 people gathered on Friday in front of the Government headquarters in Bucharest, at a rally of Romanian expats, joined by many locals. Also on Friday, in several cities in the country, tens of thousands of people took to the streets to voice their solidarity with the protest of diaspora members, chanting anti-government slogans. The protesters, disgruntled with the current government formed by the Social Democratic Party and the Alliance of Liberals and Democrats, demanded the resignation of the cabinet and early elections. There were clashes between the protesters and the gendarmes, and the riot police used tear gas and water cannons to disperse the crowd. Police reported the presence of groups of provocateurs in front of the Government headquarters. The gendarmes moved in after some of their colleagues were attacked. The President of the country Klaus Iohannis firmly condemned the brutal police intervention against the protesters in Victoriei Square and said the Interior Minister, Carmen Dan, must immediately present explanations for how the ministry handled the events. Opposition leaders also criticised the response of riot police, and asked for the resignation of the Interior Minister. Previously, politicians in Power had said the Opposition should take responsibility for the rally.

Inflation likely to drop in 3rd quarter, National Bank says

The National Bank of Romania lowered its year-end inflation forecast from 3.6% to 3.5%. Estimates for 2019 were also cut, from 3% to 2.7%, Governor Mugur Isarescu announced. He explained that the inflation rate might get back into the range targeted by the central bank, unless new shocks appear, whose effects cannot be influenced by the monetary policy. On the other hand, Romania’s economic growth rate forecast by the National Bank for this year is nearly 4%, as against 7% in 2017. Mugur Isarescu believes it is better for the economy to grow steadily on long-term, in keeping with its potential. With higher economic growth rates come more investments, higher productivity and better workforce, the central bank chief explained.

Foreign Ministry and Defence Ministry present reports

After the recent presentation by PM Viorica Dancila of the performance of her Cabinet six months into its term in office, each ministry presented a report on its activity so far and on its projects for the near future. On Tuesday, the Foreign Minister Teodor Melescanu and Defence Minister Mihai Fifor held a press conference to this end. In the field of diplomacy, one widely debated topic is the prospective relocation of Romania’s embassy in Israel from Tel Aviv to Jerusalem. According to Teodor Melescanu, an analysis of the situation has been completed and will soon be sent to the Presidency, the Prime Minister and Parliament. As regards Romania’s relations with Russia, he said bilateral dialogue must be based on the interests of both parties and comply with the principles and standards of international law. The Foreign Ministry also said that preparations for Romania’s taking over the rotating presidency of the Council of the EU in the first half of 2019 were going as planned. As a NATO member, one of Bucharest’s priorities is to strengthen its position within this organization. The latest NATO Summit approved Romania’s proposal to host a 3-star command centre. A special meeting was also organized, devoted to security in the Black Sea area, and Romania secured a considerable increase of NATO member naval forces in the region. Also in the defence sector, Mihai Fifor added that efforts continued to upgrade the equipment of the Romanian Army, for which 2% of the GDP has been earmarked. Some of the achievements of the first 6 months include the procurement of American missile systems and the start of procurement procedures for 4 multirole corvettes. The main challenge facing the Defence Ministry, Mihai Fifor also said, is the development of the Cantacuzino Military Healthcare Institute, whose situation has deteriorated in recent years. Authorities hope that its transfer under the authority of the Defence Ministry last December will be a new start for the institution.

Proactive environmental policies

The Romanian Minister of the Environment Minister Gratiela Gavrilescu has announced several regional meetings with the general public to discuss waste management topics. The Minister has also added that 9,000 households without electricity will receive photovoltaic systems under a project called “The Centennial of Light.” Authorities want electricity to be supplied to every single household in Romania, and the installation of the first PV systems might begin as early as this year. Another project run by the Ministry is the launch of a scrapping programme for home appliances. Gratiela Gavrilescu says the ministry has sufficient funding to initiate this programme. The exact worth of the vouchers to be awarded under this programme is to be decided on and made public by mid-August. On the other hand, in its meeting scheduled for August 20, the Government will discuss the proposed issue of 30,000 additional vouchers for the 2018 edition of the car scrapping programme. So far 21,000 vehicles have been purchased under this programme.

Romanian teams playing in Europa League

3 Romanian football sides played on Thursday the first leg of the 3rd preliminary round of Europa League. Vice-champions FCSB (formerly known as Steaua Bucharest) drew, 0-0, against the Croatian team Hajduk Split. Kicked out of the Champions League by the Swedish side Malmo FF, Romanian champions CFR Cluj won easily against the Armenian team Alashkert, 2-0. In turn, the winners of Romania’s Cup, CSU Craiova, were defeated 3-1 by RB Leipzig of Germany. The return leg is scheduled for next week.

18 August 2018
November 14, 2017

GDP — In 2017 Romania’s real GDP went up by 2.6% in the third quarter as against the previous quarter, and by 8.8% as compared with the same period last year, according to the National Statistics Institute. In the first nine months this year Romania’s economy grew by 7%. Early this month the National Forecast Commission revised upwards the country’s economic growth prospects for this year, from 5.6% to 6.1%. Also, according to the European Commission, the Romanian economy could go up by 5.3% this year and by 4.2% in 2018. In October the IMF also revised upwards the Romanian economy’s growth estimations for this year, from 4.2% to 5.5%.

CELEBRATION — Romania celebrates today 139 years since the southeastern province of Dobruja was unified with the country. The province had been, up to that point, under Ottoman rule. In 1878, following the Russian-Romanian-Turkish war, the International Peace Congress in Berlin recognised Romania’s independence and the province of Dobruja together with the tiny Snake Island in the Black Sea as part of its territory. Authorities in the counties of Tulcea and Constanta are staging ceremonies to celebrate this historic event.

NO-CONFIDENCE MOTION – The National Liberal Party, the main right wing opposition party in Parliament, is today starting negotiations with representatives of other parliamentary parties to support the no-confidence vote against the coalition government made up of the Social Democratic Party and the Alliance of Liberals and Democrats and headed by Mihai Tudose. The Liberal President Ludovic Orban has announced that information campaigns will be organised across the country and protest rallies will be staged in the country and abroad. The Liberals also requested the Ombudsman to challenge the tax reform promoted by the government in the Constitutional Court. Rallies were staged in Bucharest and other cities to protest against the governments new measures and the bills on the amendment of the laws governing the justice system. Both the prime minister Mihai Tudose and the Social Democratic leader Liviu Dragnea said they would not reconsider their planned changes to the tax code, which they say would bring in more revenues to the budget and the pension fund, while also simplifying procedures for businesses.

QUAKE – Iran has declared a day of mourning for the victims of Sunday’s quake. According to the authorities’ latest report, over 450 people lost their lives after the earthquake struck the country near its Iraki border. The US Geological Survey said the epicentre was about 32 kilometers southwest of the city of Halabjah and measured 7.2. On the Iraqi side, the most extensive damage was in the town of Darbandikhan, in the semi-autonomous Kurdistan Region. Iran is prone to near daily quakes as it sits on many major fault lines. In 2003, a 6.6 magnitude destroyed the historic city of Bam, killing 26,000 people.

TENNIS – The Romanian-Dutch pair Horia Tecau and Jean-Julien Rojer today face the Finnish-Australian pair Henri Kontinen and John Peers in their second match at the ATP World Tour Finals in London. In their first match on Sunday, Tecau and Rojer lost to the all-French pair Pierre-Hugues Herbert and Nicolas Mahut. This is the fifth time Tecau plays in the World Tour Finals doubles after 2011, 2012, 2014 and 2015, the last time he was there winning the title together with Rojer.

FOOTBLALL – The Romanian national football squad today take on the similar team of the Netherlands, in a friendly game in Bucharest. On Thursday, November 9, in the city of Cluj, Romania outclassed the national team of Turkey in a test game, 2-nil. Today’s match is the fourth for the Romanian team with Cosmin Contra as head coach, who replaced in September the German Cristoph Daum.

(Translated by Elena Enache)

14 November 2017
October 21, 2017 UPDATE

Catalonia — Head of the Spanish Government, Mariano Rajoy, announced on Saturday that regional elections will be staged in Catalonia within the next six months, to return to what he called “normality”. The Council of Ministers in Madrid decided on Saturday in an emergency meeting, that the powers of the Catalan administration would be transferred to the central government. Also, the Council called on the Senate to authorise the ousting of the separatist leader Carles Puigdemont and his government and to dissolve Catalonia’s Parliament. Spain’s upper house of parliament is scheduled to vote on the plan next Friday. Previously, Puigdemont threatened to make a formal declaration of independence unless the government agreed to a dialogue. Catalan authorities said about 90 percent of those who voted in the referendum on Oct. 1 opted for independence. But only 43 percent of the electorate participated, with opponents of secession mostly staying at home.

Bill – Romanian Minister of Public Consultation and Social Dialogue, Gabriel Petrea, said on Saturday that the new version of the social dialogue law is almost ready. The law is to be submitted to Parliament for approval and enter into force starting next year. Minister Petrea announced that the last meeting this year between trade union confederations and employers’ associations representative at national level would be held on Monday.

Attack — A Romanian citizen is among the people injured in Munich, Germany on Saturday, by a man who carried a knife, the Romanian Foreign Ministry announced. The Romanian citizen has been slightly injured and did not need to be hospitalised. As many as five people were injured in the attack and a suspect was detained by the special forces.

ECONOMY –Romanian economy might grow more than estimated in 2017 and 2018, according to a World Bank report. The GDP could go up by 5.5% this year, due to fiscal stimulation measures and improved results of the European economy. Increased consumption will trigger, however, an increase in the current account deficit and inflation. The report also shows that Romania’s GDP will go up by 4.1% in 2018 and by 3.6% in 2019. The World Bank has warned, however that increased fiscal pressure and excessive domestic demand make Romanian economy more vulnerable to shocks.

SUMMIT — Brexit and migration were the main topics discussed at the recent Brussels summit. After two days of talks, the European leaders are united and determined to go forward with optimism, as they want to create ‘a better Union closer to the citizen.’ As for the Brexit negotiations, Romanian President Klaus Iohannis, who represented Romania at the summit, said that the progress made is insufficient. The Brussels meeting also included talks on migration, a phenomenon that the EU continues to deal with and which has decreased. Iohannis announced that Romania had decided together with the countries participating in the summit to back the Nuclear Agreement with Iran. The EU’s digital agenda, security and defence, the EU’s relations with Turkey and North Korea’s nuclear programme were also discussed during the summit.

TENNIS — Romanian tennis player Simona Halep, number one in the world, will be up against French player Carolia Garcia, WTA’s 9th seed in the WTA Finals in Singapore, which brings together the eight best players of the year. Halep, aged 26, who has recently become the world’s best player is also the first Romanian player to achieve this historic milestone since the computer rankings were introduced in 1975, being the 25th woman to hold the no. 1 ranking. Her rise to the first sport brings to an end the reign of Spain’s Garbiñe Muguruza, who spent four weeks in the top position. Halep entered the Top 10 for the first time on January 27, 2014, and has been there ever since. (Translated by Elena Enache)

21 October 2017
October 21, 2017

CATALONIA — The Spanish Government has begun a crisis cabinet meeting to trigger the suspension of Catalonia’s political autonomy after the region missed a deadline to clarify an ambiguous declaration of independence. The central Government confirmed on Thursday it would invoke article 155 of Spain’s 1978 constitution, which allows it to take control of a region if it breaks the law. Madrid said that the Catalan leader Carles Puigdemont had refused to comply with a request to confirm whether the region had declared independence. Puigdemont appeared to declare independence after the October 1st referendum but then he immediately suspended it, calling for dialogue with Spain, a request so far denied. His request for the European Union to mediate in the dispute was denied, with the EU supporting the Rajoy government and saying it would not recognize an independent Catalonia.

MEETING — Romanian Defense Minister Mihai Fifor said on Friday in Krakow, Poland, that it was high time for Romania and Poland to tighten cooperation in sectors such as defence. Minister Fifor made this statement at a meeting with members of the Romanian community and Polish students studying the Romanian language at the Jagiellonian University. The Romanian official underlined the long-lasting friendship between Romania and Poland and the two country’s good cooperation under the Strategic Partnership. On the occasion of his visit to Poland, Fifor met with Romanian military dispatched in this country as part of the US Army – led NATO Battle Group.

ECONOMY –Romanian economy might grow more than estimated in 2017 and 2018, according to a World Bank report. The GDP could go up by 5.5% this year, due to fiscal stimulation measures and improved results of the European economy. Increased consumption will trigger, however, an increase in the current account deficit and inflation. The report also shows that Romania’s GDP will go up by 4.1% in 2018 and by 3.6% in 2019. The World Bank has warned, however that increased fiscal pressure and excessive domestic demand make Romanian economy more vulnerable to shocks.

SUMMIT — Brexit and migration were the main topics discussed at the recent Brussels summit. After two days of talks, the European leaders are united and determined to go forward with optimism, as they want to create ‘a better Union closer to the citizen.’ As for the Brexit negotiations, Romanian President Klaus Iohannis, who represented Romania at the summit, said that the progress made is insufficient. The Brussels meeting also included talks on migration, a phenomenon that the EU continues to deal with and which has decreased. Iohannis announced that Romania had decided together with the countries participating in the summit to back the Nuclear Agreement with Iran. The EU’s digital agenda, security and defence, the EU’s relations with Turkey and North Korea’s nuclear programme were also discussed during the summit.

ELECTION – Voting in the Czech parliamentary election began on Friday and continue today with opinion polls predicting victory for businessman Andrej Babis’s centrist ANO movement and other protest parties. Babis is on course to achieve election success on a wave of popular support, anti-immigrant sentiment and a widespread distrust of traditional politics. This despite the fact that the country’s economy is performing well and immigration into the Czech Republic, a country of 10 million people, is virtually non-existent. Although Andrej Babis is not expected to secure a majority, a win for ANO would be yet another success for Europe’s anti-establishment wave.

TENNIS — Romanian tennis player Simona Halep, number one in the world, will be up against French player Carolia Garcia, WTA’s 9th seed in the WTA Finals in Singapore, which brings together the eight best players of the year. Halep, aged 26, who has recently become the world’s best player is also the first Romanian player to achieve this historic milestone since the computer rankings were introduced in 1975, being the 25th woman to hold the no. 1 ranking. Her rise to the first sport brings to an end the reign of Spain’s Garbiñe Muguruza, who spent four weeks in the top position. Halep entered the Top 10 for the first time on January 27, 2014, and has been there ever since. (Translated by Elena Enache)

21 October 2017