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Tag: NRRP

  • Budget deficit on the rise

    Budget deficit on the rise

    The warnings regarding the consequences of the growth of Romania’s budget deficit have become increasingly frequent and come from various directions, from European bodies, as well as from experts and analysts. There is nothing speculative about them, because they are based on numbers. The latest data in this regard were provided by the Ministry of Finance, according to which, after the first two months of the year, the budget deficit reached almost 29 billion lei, the equivalent of some 6 billion euros, which account for 1.67% of the Gross Domestic Product.

    Compared to the same period last year, it is almost double. Total revenues in January and February were higher by more than 17 percent compared to the first two months of 2023, being mainly supported by the evolution of collections from insurance contributions, VAT, European funds, payroll tax and excise duties, but expenses were much higher, increasing by over 27%. “The deficit is not a catastrophe,” said Prime Minister Marcel Ciolacu, in an attempt to ease analysts’ fears. He believes that, at the end of the year, Romania will fall within the established range.

    The budget was built on a budget deficit estimated at 5 percent of the GDP, which the opposition termed, however, as unrealistic, stating that the revenues were overestimated and expenses underestimated. The pace of growth will be sustained, the prime minister is convinced, optimistically anticipating that Romania will have the highest economic growth in Europe this year. And it will not be an economic growth based on consumption, it will continue to be triggered by investment, Marcel Ciolacu believes.

    On Monday, the European Commission published an in-depth analysis for 6 of the member states, including Romania. In our case, the community executive warns that Romania continues to face vulnerabilities related to the accounts of public finances and the external balance. High public and current account deficits, as well as the high inflation rate, which are all above pre-pandemic levels, make the economy potentially vulnerable to shocks, the European Commission points out. It notes that progress were made in narrowing the current account deficit in 2023, mainly on the back of monetary policy tightening and weaker private consumption, but with policies unchanged, risks related to its external position are expected to stay high in the following years.

    The document also reads that the pursuit of a credible fiscal consolidation strategy is the key priority of the policies aimed at mitigating the risks to the stability of the economy. This strategy will require the full implementation of the fiscal-structural reforms included in the National Recovery and Resilience Plan, especially those aimed at a structural increase in government revenues and a much stricter budget execution, states the analysis of the European Commission. (MI)

  • Investments in medical infrastructure

    Investments in medical infrastructure

    The health infrastructure in Romania has always been a topic of public interest and, therefore, speculated by politicians. After in almost 35 years since the Revolution of 1989 only 4 hospitals were built in Romania, yesterday the Bucharest Government signed a new contract for the construction of a regional hospital: the Craiova Regional Emergency Hospital, a massive project, which includes an eight-story building, over 800 beds for hospitalized patients, 19 operating rooms, 38 spaces for diagnostic and treatment services, as well as almost 1,600 of parking spaces.

    The Romanian Prime Minister Marcel Ciolacu has stated that with this project the Bucharest administration manages to wash away what he calls a “national shame” and to start the construction of the long-awaited regional hospitals.

    Marcel Ciolacu: “On February 28, we signed the contracts for the two regional hospitals in Iasi and Cluj, and today we are signing the contract for the third Regional Emergency Hospital in Craiova. The Regional Hospital in Craiova will serve the entire southwest region of Romania and will offer highly complex healthcare services, using the latest technology for diagnosis and treatment. The regional hospital will be able to treat over 800 people per day. (…) The three regional hospitals in Iasi , Cluj and Craiova will mean a step forward for the Romanian health system”.

    The Romanian Minister of Health Alexandru Rafila says that currently there are many ongoing projects in the health system financed by the National Recovery and Resilience Plan, as well as from other sources.

    Alexandru Rafila: “All these projects are not blocked, they are ongoing, and Romania currently has a rapidly developing hospital infrastructure. We want these things to be completed and patients in Romania to have access to health services”.

    By making investments, Romania has moved to a new paradigm, said the Minister of European Funds, Adrian Câciu. He has stated that, in total, seven billion euros are available for investments in health. The interdisciplinary medical unit that will be built in Craiova represents an investment of over two billion euros and will serve the counties of Dolj, Olt, Gorj, Mehedinţi and Vâlcea, all located in the Oltenia region, in the southwest of Romania.

    As soon as the mammoth medical units in Iasi, Cluj and Craiova have been completed, the Executive will face the reality of the lack of medical personnel. Although their salaries have increased since 2018 by around 80%, many still leave for Western European countries and deepen the shortage. According to the Administration of Hospitals and Medical Services in Bucharest, Romania currently has a shortage of 15,000 doctors. (MI)

  • A new Forestry Code in Romania

    A new Forestry Code in Romania

    On the very International Day of Forests, the Romanian government approved a new Forestry Code, developed through the National Recovery and Resilience Plan. “It is a balanced Forestry Code, which came to life following an extensive, serious and well-argued dialogue with all the actors in the forestry field”, said the Minister of the Environment, Mircea Fechet. The coming into force of this law is intended to rationalize the legal framework, to combat illegal logging and improve forest management. The document also provides for the establishment of the National Forestry Council, which will bring together all the professional organizations in this field, and the forest owners will be registered in a national forest register.

     

    At the same time, one of the most important provisions prohibits clear-cutting in almost half of the country’s forest area. Until now, clear-cutting was prohibited only in National Parks. Also, the ban will be extended in the Natural Parks. The new Forestry Code will allow the state to reforest those lands that have been deforested and abandoned by the owners, and the Environment Minister, Mircea Fechet, said that there are many such cases. He also mentioned that this bill establishes the legal framework for the digitized fight against illegal forest logging, using satellite images and smart cameras. At the same time, the new Forestry Code entitles forest owners, be they state institutions or private entities or individuals, to alternative security solutions: from specialized structures to security ensured by own means and based on regulations, specifying that forest security is mandatory by law.

     

    Also, the bill establishes the communities dependent on the forest products and prioritizes them in relation to access to forest resources and introduces the phrase “agroforestry use” which means that pastures and agricultural crops will be able to be integrated with trees and shrubs. The bill also establishes the setting up of the National Forestry Council, which monitors and ensures that the forestry personnel operate in conditions of professional ethics, with the observance of professional standards. Ecosystems with high conservation value are defined and the National Catalog of ecosystems with high conservation value – strictly protected – is established. According to another provision, a new concept is introduced, the so-called “aging islands”, which become the mechanism through which forest areas covering at least 0.1 ha, with a great role in maintaining biodiversity, will be protected from cutting. Last but not least, another provision regulates access on foot or by bicycle to the lands of the National Forestry Authority. The new Forestry Code was sent by the government to Parliament, which will analyze and approve it in the form of a law that will replace the old code dating from 2008. (LS)

  • Talks on the NRRP

    Talks on the NRRP

    The Bucharest government amended, on Thursday, the multi-year budget related to the reforms and investments assumed through the National Recovery and Resilience Plan. Also, the Executive took a series of measures for the faster spending of funds from the NRRP, but also for the reorganization of the National Fiscal Administration Agency, in order to improve its ability to collect money to the state budget. The government also adopted a normative act that aims for the European funds from the NRRP to stay as little as possible in the accounts of the Romanian state and to reach the investment sites in the shortest possible time. The Minister of European Projects, Adrian Câciu explains:

    “We mainly approve the distribution of the sums due to Romania, under the REPowerEU chapter, and, here, it is very important that 1.2 billion euros will be made available to the households of Romanian citizens this year through vouchers for energy efficiency and vouchers for photovoltaic panels and batteries. And in May we will start the procedure for distributing these support programs for the population.”

    According to the minister, also through this redistribution of amounts, agriculture will also have access, for the first time, to the money from the NRRP. As for the information appearing in the public space regarding the blocking of payment request number 3 from the NRRP by the European Commission, due to the non-fulfillment of certain milestones, the minister announced that it is not blocked. The minister has stated that he is having talks with the representatives of the European Commission on the third request for payment within the NRRP, in the amount of 2.7 billion euros, and he expects the successful completion of the process and the entry of the money in the country’s budget.

    ‘There is nothing blocked. The relationship with the European Commission works very well and I want us to find solutions to carry out all the reforms’, Prime Minister Marcel Ciolacu also said. In addition, the head of the Government has announced that the reform coordinating ministers will meet, next week, with Celine Gauer, responsible for managing the NRRP at the European level, to analyze the important milestones in payment request number 3. The opposition in Bucharest has announced, recently, that Brussels officials would have objections in particular to the appointments made to the management of energy companies and to the agency that is to monitor state companies.

    Out of five payment requests that Romania could submit from the NRRP, according to the calendar agreed with the European Commission, the PSD-PNL government submitted only three and collected the money for only two. Payment request number 3, the last one submitted, also has problems, just like the previous ones, because the benchmarks were not met according to the commitments assumed’, said Cristian Ghinea, coordinator of the Public Policy Department of Save Romania Union. We recall that Romania benefits from a total allocation of around 30 billion euros for the implementation of the NRRP, in the form of grants and loans, which it should use until the end of 2026.(MI)

  • November 22, 2023

    November 22, 2023

    NRRP. The European Commission has announced that it has validated the changes made by Romania to the National Recovery and Resilience Plan. Among other things, there will be more funds for reforms and projects in energy and digitization. A similar decision was announced for Croatia, Finland, Greece and Poland. The new form of the NRRP must be approved by the European Ministers of Finance, after which an implementation decision will be issued by the European Council.



    G7+. The Romanian Minister of Foreign Affairs, Luminiţa Odobescu, participated, on Tuesday, in the G7+ meeting on supporting the energy infrastructure of Ukraine, in the Ministers of Foreign Affairs format, at the invitation of the US Secretary of State, Antony Blinken, in which context she emphasized the importance of a constant international support for Kiev. According to the MFA, Odobescu emphasized the role of the US in mobilizing partner states in efforts to support Ukraines energy sector. The head of Romanian diplomacy also mentioned the multidimensional assistance offered by Romania to the neighboring state, stressing the emergency support provided in the energy field. The meeting took place in videoconference format, with the participation of the Ukrainian Minister of Foreign Affairs, Dmitro Kuleba. The G7+ format dedicated to Ukraines energy infrastructure was launched last November in Bucharest. Officials from the USA, Japan, Canada, France, Germany, Italy, the United Kingdom, the Czech Republic, Estonia, Latvia, Lithuania, Poland, Romania, Slovakia, Bulgaria, Sweden and Norway took part in the fourth edition in this format organized on Tuesday , together with representatives of the EU, the European Energy Community and the United Nations Development Program.



    Tour. Romanian President Klaus Iohannis is travelling, today, to the island of Gorée in Senegal, a UNESCO heritage site, former outpost of the slave trade, where he will meet with local officials. The official talks with his counterpart, Macky Sall, will take place on Thursday, when a series of official documents will be signed. Also on Thursday, Klaus Iohannis will participate in the inauguration of the House of the United Nations in Senegal, the opening of an exhibition of traditional masks and will have a meeting with specialists from Senegal who studied at Romanian universities. Senegal is the last stage of the African tour undertaken by President Klaus Iohannis and his wife, Carmen. The previous stages of the ten-day tour of the Romanian presidential couple were Kenya, Tanzania and Cape Verde.



    Israel. Israeli Prime Minister Benjamin Netanyahu asked his government to support an agreement that would pave the way for the release of some of the hostages that Palestinian militants Hamas took to the Gaza Strip after the October 7 attack on Israel. Hamas took about 240 hostages during the attack, which left 1,200 dead, according to Israeli reports. Following the subsequent airstrikes and invasion of the Gaza Strip by Israeli forces, Hamas authorities claim that more than 13,300 Palestinians have been killed, including at least 5,600 children. The deal announced between Hamas and Israel providing for the release of hostages in exchange for Palestinian prisoners includes three American citizens, including a three-year-old child, a senior White House official said. He stated that he expects a break in the fighting for a few days and that more than 50 hostages would be released by Hamas. The same official added that Washington is now hoping for a pause in hostilities on Israels northern border with Lebanon, where there are daily clashes between the Israeli army and the Lebanese Hezbollah, which it says is intervening in support of the Palestinian movement.. So far, Hamas has released only four hostages: two American women and two Israelis.



    Gaudeamus. The Gaudeamus Radio Romania International Book Fair opened its doors in Bucharest today. Its one of the most anticipated cultural events of the fall, reaching its 30th edition. Until Sunday, more than 500 releases and editorial events will take place at the fair . The longest-running book fair in the country gathers, this year, almost 200 participants, mainly publishing houses, but also educational, cultural and press institutions.



    Football. The Romanian national football team won Group I of the EURO 2024 preliminaries, after defeating the Swiss team 1-0 on Tuesday in Bucharest. The tricolors prevailed with the goal scored in the 50th minute by Denis Alibec and finished the group undefeated. As a result of this performance, Romania will be in the second pool at the December 2 draw for the groups of the final tournament in Germany. It is the sixth time that Romanian footballers qualify for the final tournament of the European Championship, after the editions of 1984, 1996, 2000, 2008 and 2016. (MI)

  • October 2, 2023 UPDATE

    October 2, 2023 UPDATE

    Kyiv. The security in Ukraine and in the surrounding states is
    fragile. Romania has the longest border with Ukraine. Russia’s attacks on the
    civilian infrastructure in Ukraine, including the ports on the Danube at the
    border with Romania, are worsening the situation. The statement was made
    on Monday, in Kyiv, by the Romanian Minister of Foreign Affairs, Luminiţa
    Odobescu, present at the informal meeting of the heads of diplomacy from the EU
    member states. According to the official, Romania is trying to help Ukraine by
    offering transit on the corridors of solidarity. At the same time, she
    reiterated Bucharest’s support for the start of EU accession negotiations with
    Ukraine, until the end of the year. It’s the first meeting of European foreign
    ministers outside the EU. The head of European diplomacy, Josep Borrell,
    described the meeting as historic. We are here to express our
    solidarity and support for the Ukrainian people, the official said. The
    head of Ukrainian diplomacy, Dmitro Kuleba, also welcomed the first meeting of
    his European counterparts in Kyiv, held ‘within the future borders of the
    European Union’.












    Francophonie. A House
    of Francophonie was inaugurated, on Monday, on the campus of the Polytechnic University in Bucharest, in the presence of the President of
    Romania, Klaus Iohannis. I encourage the academic communities throughout
    the country to get involved with all their energy in the process of developing
    international partnerships and collaboration with the business environment in
    order to increase the contribution of our higher education in the field of
    combating climate change, pollution and biodiversity damage. At the same time,
    we must focus on addressing the energy and cyber security challenges, the
    head of state emphasized. The celebration took place on the very day when the
    new academic year started. The house is the second of its kind in the
    French-speaking world, after the one in Paris. It was built in record time, one
    year, and will be able to accommodate 300 students and researchers
    participating in various scientific projects. Romania celebrates 30 years since
    joining the Francophone Movement.








    Stock Exchange. The Bucharest Stock Exchange had an yield of 22% in the first 9 months of the year,
    according to the Romanian Stock Market index (BET), rating 20 of the most
    traded companies in Romania. Factoring in the stock options provided by these
    companies, the stock market also recoded earnings of nearly 30%. A third of
    this growth was reported in September, when the two indexes reached an all-time
    high, growing by 9% and 10% respectively. The top three most traded companies
    last week were Hidroelectrica, OMV Petrom and Transilvania Bank.




    Government.
    The Romanian
    government approved on Monday, in an extraordinary meeting, the allocation of
    50 million lei (approximately 10 million euros) to allow the continuation of
    the activity of the Hunedoara Energy Complex, which entered insolvency in 2019.
    The money will reach the approximately 2,000 employees and will be granted from
    the reserve fund of the executive, to be recovered from the European Union.
    Prime Minister Marcel Ciolacu explained that a new company is being established,
    the Valea Jiului Energy Complex, which comes with proposals for production from
    green energy sources, both in the photovoltaic and hydro areas. In another
    move, the government decided that starting this month, aid will be granted to
    pensioners with incomes below 3,000 lei (approximately 600 euros). The gambling
    regime will also be regulated in the next meeting. Among other things, it is
    proposed that all operators have their tax headquarters in Romania.






    NRRP. Romania received the
    second installment of European funds as part of its National Recovery and Resilience Plan , worth 2.7 bln EUR. Romania has so far fulfilled 49 of
    the 51 milestones linked to the second installment. Two milestones regarding
    investments in energy have not been fully implemented, yet Brussels believes
    Romania has taken measures to remedy the situation. Prime Minister Marcel
    Ciolacu said the government must be efficient and transparent in administering
    these funds earmarked for a number of key reforms addressing green and digital
    transition. At the same time, Bucharest is focusing on implementing milestones
    and targets pertaining to the third installment, the Prime Minister added. So
    far Romania was disbursed 10 of the total of 29 bln EUR as grants and loans
    under PNRR.








    Nobel. Katalin Kariko (Hungary) and Drew Weissman (USA) won the Nobel prize in Physiology or Medicine
    for their discoveries
    concerning nucleoside base modifications that enabled the development of
    effective mRNA vaccines against COVID-19, announced Thomas Perlmann, secretary general of the Nobel
    Committee at the headquarters of the Karolinska Institute in Stockholm, Sweden.
    Last year, the Nobel prize in medicine was awarded to Swedish paleogeneticist
    Svante Pääbo for his discoveries regarding human evolution. In the following
    days, the Nobel Prizes in physics, chemistry, economics, literature and peace
    will be announced. (MI)









  • Second tranche of Romania’s NRRP, disbursed

    Second tranche of Romania’s NRRP, disbursed

    At the end of last week, the European Commission transferred 2.76 billion euros to Romania, the second payment request under the Recovery and Resilience Mechanism (NRRP). The European Commission said that the payment was made because Romania fulfilled 49 milestones and objectives related to the second tranche. They cover key reforms in areas such as the green and digital transition – the adoption of the law on decarbonisation and the enforcement of the law on cloud services used in the public sector, Brussels said. At the same time, Romania also presented the reforms to improve the application of public policies, the promotion of tourism and culture, the development of human resources in the healthcare sector, the improvement of tax collection and the sustainability of pensions, the modernization of the education system infrastructure, as well as the consolidation of the independence of the judicial system and of the fight against corruption.



    The head of the Bucharest Government, the social democrat Marcel Ciolacu, hailed the Commission’s announcement. He said that the Romanian Government has the duty to manage efficiently and transparently these funds, which are intended for key reforms for the country’s green and digital transition. Ciolacu pointed out that the Romanian Government is now also focusing on completing all milestones and targets related to the third payment request in order to submit it to the European Commission as soon as possible and thus increase the chances of receiving the third installment earlier.



    In turn, the speaker of the Senate, Nicolae Ciucă, the president of the National Liberal Party, part of the ruling coalition alongside PSD, said that the wise use of money from Brussels will mirror in the stability of the budget and would have a multiplier effect, leading to the improvement of the living standards of every Romanian. The PNL leader also said that the National Recovery and Resilience Plan contracted by Romania is a complex one and that only for this second payment request, more than 3,000 documents had to be submitted. Payments under the NRRP, a key instrument at the heart of the NextGenerationEU program, are based on performance and depend on Romania’s implementation of the investments and reforms set out in its own plan.



    Romania submitted its second payment request to the European Commission in December 2022, and in June 2023 Brussels approved a partially positive preliminary assessment of it, but found that two benchmarks related to energy investment were not satisfactorily met. However, the Commission acknowledged that Romania has already taken measures to fulfill them. Romania’s National Recovery and Resilience Plan will be financed with over 29 billion euros, in grants and loans. The cumulative value of funds received by Romania so far under the National Recovery and Resilience Plan, is almost 10 billion euros. (EE)




  • August 29, 2023

    August 29, 2023

    Police. The Romanian Minister of the Interior, Cătălin Predoiu, has announced that the new interim head of the Constanţa Police Inspectorate (IPJ) is Chief Commissioner Mădălina Sorina Vlangăr. She has replaced Chief Constantin Glugă, who announced his resignation following the investigation into the accident on May 2, in which a 19-year-old drugged driver killed two young people and injured another three. According to the minister, the entire organizational structure at IPJ Constanta “will be rethought and adapted to the extent of the criminal phenomenon specific to this county and a new transitional managerial team will ensure the operation of the system until the new organization comes into operation”. The control body of the Minister of the Interior proposes the initiation of a preliminary investigation of the head of the Constanta County Police Inspectorate, as well as of other officers involved in the faulty management of the May 2 case. Cătălin Predoiu has announced that IPJ Constanţa will be completely reorganized, and that is were the reformation of the entire Romanian police apparatus will start.



    Accident. Many of the Romanian companies that sell LPG (liquefied petroleum gas) operate under illegal conditions, the central and local authorities have found after extensive checks launched at these companies. The checks were decided following the explosions that occurred, on Saturday, at an LPG station in the south of the country, and which caused the death of two people and the injury of several dozen, most of them firefighters. The station was operating illegally, and the National Anticorruption Directorate started two cases to investigate possible abuses by some civil servants who were supposed to control its authorization. According to the Ministry of Health, nine patients are intubated and mechanically ventilated, and 29 are hospitalized in moderate or mild condition. 12 patients have been taken over by hospitals from abroad.



    Diplomacy. The Annual Meeting of Romanian Diplomacy began in Bucharest today, under the title A firm foreign policy of Romania: managing challenges and maximizing opportunities. President Klaus Iohannis is receiving the heads of diplomatic missions, the heads of consular offices and the directors of Romanian cultural institutes. Foreign Minister Luminiţa Odobescus special guest will be the counterparts from Chile, Alberto van Klaveren Stork, and Lithuania, Gabrielius Landsbergis. The main theme of the Annual Meeting of Romanian Diplomacy in 2023 is centered on the reaffirmation of foreign policy priorities, in the sense of managing challenges and capitalizing on the opportunities created by the current international environment. In the context of Russias war of aggression in Ukraine, the need to intensify diplomatic dialogue and socio-economic efforts will be addressed, in order to strengthen the security architecture and international order based on rules. The Annual Meeting of Romanian Diplomacy is traditionally organized every year, close to the Day of Romanian Diplomacy – which, since 2005, has been marked on September 1.



    Talks. In Brussels, the Romanian Ministers of Finance, Labor and European Funds discussed with the technical teams of the European Commission issues related to the NRRP and the future law on special pensions. The Romanian authorities want to convince Brussels, among other things, to accept a budget deficit of up to 5.5% , as compared to the 4.4% previously established. The difference of one percent, say the ministers, comes from unplanned additional spending against the background of the war in Ukraine. Romania has spent 0.5% more of its GDP on defense and suffered losses due to the cheap Ukrainian imports. The Radio Romania correspondent in Brussels recalls that Romania is the only country for which there is an infringement procedure regarding its budget deficit, which was suspended in the context of the crisis.



    Schengen. Romanias accession to the Schengen area remains a priority for the next period, said the President of Romania, Klaus Iohannis, in Bucharest, in the opening of the Annual Meeting of Romanian Diplomacy. “Romanias place is in the Schengen area, and this objective must be achieved, both on the basis of our recognized performances, and as a confirmation of the fact that the Union is able to respond to the need for cohesion, resilience and increased security”, said Iohannis. He told the Romanian diplomats that, especially in the current context, they must convey even more firmly than before that Romania is “part of the solution and contributes directly and tangibly to the security of the European Union”. “In the face of all this, we have a legitimate expectation from all our European partners to demonstrate solidarity”, the Romanian president stressed.



    Defense. The Romanian Minister of Defense, Angel Tîlvăr, is participating, today and tomorrow, in Toledo (Spain), in the informal meeting of the EU Defense Ministers. The event will be opened by a working session dedicated to the EUs contribution to security commitments for Ukraine and the analysis of the regional and global impact of the Russian Federations war of aggression against the neighboring country. According to the Romanian Defense Ministry, on the sidelines of the event, the Romanian will participate in the second meeting of the Steering Committee of the EU Satellite Center and will sign, together with his counterpart from the Kingdom of the Netherlands and the representative of Lockheed Martin, the letter of intent regarding the establishment of the F-16 training center in Romania.



    Tennis. Romanian tennis player Sorana Cîrstea started with a victory this years edition of the US Open tournament, the last Grand Slam of the year. She defeated Kayla Day, on Monday, 2-0, at the Flushing Meadows arenas in New York. Cîrstea, seed number 30, will face the Russian Ana Kalinskaia in the second round. This will be the third duel between the two, who, so far have shared victories. Four other Romaians are playing, today, in the inaugural round of the US Open: Irina Begu will take on the German Tamara Korpatsch, Ana Bogdan will play against the American Sofia Kenin, Patricia Tig against the Canadian Rebecca Marino, and Gabriela Ruse, coming from the qualifications, against Karolina Pliskova, of the Czech Republic. (MI)


  • Central Bank’s reserves on the rise

    Central Bank’s reserves on the rise

    The longest-serving in office among all the key figures of post-communist Romania is the Governor of the Central Bank, Mugur Isărescu. Born in 1949, Isărescu is also the longest-serving head of the central bank in the world, having been governor since 1990. In 1999, he left for a year as an independent to head the center-right coalition government of the time, and then ran, unsuccessfully, in the presidential elections, where he obtained only 9.54% of the votes in the first round. After that he returned to the position of governor, with which he has been identified for almost a quarter of a century.

    He is not necessarily liked by everyone, but no one disputes his competence and dedication, especially since he continues to record achievements in the governor’s seat. The National Bank of Romania has accumulated a record foreign exchange reserve, which exceeded 53 billion euros at the end of last month. Compared to March, the increase is 112 million euros. The level of the gold reserve remained at 103.6 tons, so Romania’s international reserves – currency plus gold – are getting closer to the value of 60 billion euros, an unprecedented amount in the country’s history.

    Economic analyst Constantin Rudniţchi stated for Radio Romania, that a large foreign exchange reserve gives confidence to investors. The increase in foreign exchange reserves is largely due to the inflow of European funds, says Rudniţchi, but what is surprising, however, is that the money is not going at the pace it should to the implementation of projects, especially those include din the National Recovery and Resilience Plan. Constantin Rudniţchi:

    There is a problem, though, namely that this consolidation of the foreign exchange reserve shows us that European money is not spent in the economy, that is, it remains in the accounts of the National Bank, because this is the route, it consolidates the reserve, increases it, but does not reach the economy for reasons that we see, namely that projects, especially those stipulated in the NRRP, are not carried out in a more dynamic, faster way. As a conclusion, I think we can say that the foreign exchange reserve is an asset, if we can call it that, which provides more confidence in the Romanian economy. When we go to the markets and borrow, for example, it can be an asset, perhaps one of the few assets, because if we look, as I said, at the trade balance deficit, at the budget deficit, at the debt level that is growing rather quickly, these are rather question marks for those who want to buy Romanian government securities or Romanian bonds, but the foreign exchange reserve is an anchor that anyone can rely on in case of need.

    On the other hand, also from a press release from the NBR, it appears that the payments due in May 2023 in the account of the public debt denominated in foreign currency, direct or guaranteed by the Ministry of Finance, amount to around 272 million euros. (MI)

  • January 9, 2023 UPDATE

    January 9, 2023 UPDATE


    School. Schools and kindergartens reopened in Romania on Monday after the winter break, among seasonal flu and viral respiratory infection alerts. The authorities call on parents not to send their kids to school if they have symptoms. The education and health ministries have taken measures and issued guidelines to prevent the transmission of respiratory viruses. In another move, after a meeting with medicine manufacturers, the Minister of Health, Alexandru Rafila, gave assurances on Monday that antiviral drugs, which have been missing from the market for several weeks, will soon be available in pharmacies.



    Government. The government of Romania is considering a number of projects for the forthcoming period, which have already been agreed on within the ruling coalition, the PM Nicolae Ciucă announced. Healthcare, education and investments, including the targets and benchmarks undertaken under the National Recovery and Resilience Plan, are the main areas to receive special attention. The government posted for public debate a draft resolution on masters, Ph. D, post-doctoral and research grants abroad. In terms of healthcare system improvements, the proposed measures include hospital revamping using EU funds.



    Funding. Three new funding contracts have been signed between the European Investment Bank and the Romanian Ministry of Finance, with a total value of over 260 million euros. Most of this amount will be used for the rehabilitation, refurbishing and expansion, in the next three years, of 26 sanitary units across the country. They will be prepared to deal with possible future pandemics, but also to support the overburdened public hospital sector. The rest of the money will be redirected to works to improve the safety of national roads in Romania and reduce the number of accidents, within a larger project that includes roundabouts, passages and direction-signaling systems.



    Unemployment. The unemployment rate in Romania dropped slightly, from 5.5% in October to 5.4% in November, according to data made public on Monday by the National Statistics Institute. The number of unemployed people aged between 15 and 74 estimated for November 2022 was 447,700, down from the 453,200 reported for the previous month and from the 450,000 reported for November 2021. The unemployment rate is 0.9% higher among men (5.8% for men and 4.9% for women). Unemployment among youth under 24 remains at a worrying 22.9%, the INS warns. The number of unemployed people aged 25 to 74 accounted for 74.3% of the total number estimated for November 2022.



    Culture. This year, the city of Timisoara (western Romania) is one of the three European cultural capitals, along with Elefsina in Greece and Veszprém in Hungary. The official opening of the event will take place between February 17 and 19, and throughout the year no less than 50 shows, concerts, premiere films, exhibitions and other forms of cultural manifestation are already included in the calendar of events, with more than 2,500 artists from the country and abroad participating. On the other hand, the city of Timisoara appears in a list of the best places to visit, compiled by the British daily “The Independent”. The publication urges tourists to admire the baroque buildings and historical squares of Timisoara, while also promoting art exhibitions, classical music concerts and jazz festivals. The mayor of the city, Dominic Fritz, stated that the stake this year is to attract tourists and investors.




    Ukraine. Wars like the one in Ukraine, where civilian areas are subjected to indiscriminate destruction, are “a crime against God and humanity”, Pope Francis said on Monday. In his annual speech to diplomats accredited to the Vatican, the Pope spoke about “the war in Ukraine, with its wake of death and destruction, with its attacks on civil infrastructures that cause lives to be lost not only from gunfire and acts of violence, but also from hunger and freezing cold”. Meanwhile, Ukrainian forces are withstanding constant Russian attacks on Bakhmut and other towns in the east of Donbas, the Ukrainian authorities announced today. “Bakhmut is holding out against all odds”, president Volodymyr Zelensky said in his Sunday address. The nearby town of Soledar is also holding out, “although there is even more destruction there and it is extremely hard”, he added.(MI)




  • A higher monetary policy rate in Romania

    A higher monetary policy rate in Romania

    The National Bank of Romania made several important decisions on Tuesday. The first concerns the increase in the monetary policy interest rate to 6.75% per year, from 6.25%. The Central Bank also increased the interest rate for the lending facility, as well as the deposit facility interest rate. The Central Bank decided to maintain a firm control over the liquidity on the monetary market and to maintain the current levels of the mandatory minimum reserve rates for liabilities in lei and in foreign currency of lending institutions. At the beginning of this year, the key interest rate was standing at the level of 2% per year.



    The increase is explained by the fact that the increasingly expensive electricity and food raised inflation, in September, to almost 16%, above the forecast level, says the National Bank. Inflation is expected to increase towards the end of this year again, to then take a gradual downward trajectory. It will drop below 10% only in the first semester of 2024, Central Bank experts predict.



    The Central Bank increased the monetary policy interest rate by 0.5 percentage points, taking into account the increase in inflation and the regional context, according to economic analyst Constantin Rudniţchi:


    I think that the situation in Central and Eastern Europe was also taken into account. Many central banks in neighboring states have already increased the interest rate more than Romania and, of course, if you have a higher interest rate, that national currency is more attractive. And here I am thinking about Poland, Hungary and, of course, the global context is not to be neglected at all, because it is clear that you cannot stay out of this game if, as it happens, interest rates are rising all over the world, from the United States to the Eurozone and then the National Bank also joins this trend and obviously it’s normal to do that.



    On the other hand, there is also good news, in Rudniţchi’s opinion, namely that the new increase in the key interest rate will not produce major effects in terms of interest rates in the interbank market, which are already above the level announced by the Central Bank. Constantin Rudniţchi believes that the current increasing interest rate trend does not benefit at all people or companies who have credits or who want to take out a loan.




    The evolution of inflation is marked by high uncertainties associated with schemes for capping and compensating energy and fuel prices, the escalation of the war in Ukraine and the associated increasingly severe sanctions. The inflation equation also includes, according to the NBR, the level of absorption of European funds, especially from the NRRP, and the fiscal policy, against the background of the excessive deficit procedure and the general tendency to increase the cost of financing. In its estimates, the Central Bank reconfirms the significantly higher than expected increase in economic activity in Romania in the second quarter of this year, but indicates a quasi-stagnation in the last two quarters of 2022. (MI)



  • September 23, 2022 UPDATE

    September 23, 2022 UPDATE

    NRRP. The Romanian
    Government has announced that it has covered two other milestones in the field
    of education, as provided for in the National Recovery and Resilience Plan
    (NRRP). Through an emergency ordinance adopted on Friday, measures were introduced
    to increase children’s access to early education. It is also allowed to use
    European funds for the conclusion of partnerships between universities and
    companies that want to get involved in the organization of dual higher
    education. The government wants a student who is a graduate of dual
    pre-university education to continue the same type of studies at the university
    level. The companies that will get involved will benefit from fiscal
    facilities. At the same time, the normative act allows so-called community
    kindergartens to be established in localities where there are not enough
    nurseries and kindergartens, which will function as structures of educational
    units.










    Mandate. Romania’s Foreign Minister Bogdan Aurescu has handed over the
    presidency of the Community of Democracies to the Foreign Minister of Canada,
    Melanie Joly during a ceremony held in New York on the sidelines of the UN
    General Assembly. Aurescu presented the highlights of the three-year mandate of
    the Romanian presidency adding that during these three years, democracies,
    human and international rights faced a lot of challenges, such as the Covid-19
    pandemic and the unjustified military aggression against Ukraine. According to
    him, under the Romanian presidency and with his support, on February 24th,
    a group of member states endorsed a declaration voicing their support for the
    democracy, sovereignty and territorial integrity of Ukraine within its
    internationally-recognized borders. At the same time the signatory countries firmly
    condemned the ongoing Russian aggression against Ukraine and unequivocally
    voiced their support for the Ukrainian people in its democratic
    aspirations.






    Ukraine. Ukrainian president
    Volodymyr Zelensky has called on Russians to resist the partial military mobilization
    announced by president Putin. According to Zelensky, 55 thousand Russian troops
    have been killed in this war. Want more? No? Then protest, fight back, run
    away or surrender to the Ukrainian army, Zelensky says in a video message in
    Russian language. He has accused the Russian citizens of being accessories to
    the crimes their troops are committing against the Ukrainians. Clashes between
    the two armies have carried on both in the south and eastern Ukraine. In
    another development, until Tuesday, four regions in southern and eastern
    Ukraine, under Moscow’s total or partial control, are to vote in a referendum on
    joining Russia. The polls, hastily organized
    after being announced this week, have been widely condemned in the west as
    illegitimate.










    Visit. Romanian president
    Klaus Iohannis has met with members of the Romanian community on the West Coast
    of the US and told them that Romania is in a complicated situation created by
    the war in neighboring Ukraine, but the country is doing well and the economy has
    been growing. According to Iohannis, Romania has received nearly 2 million and
    a half refugees from that country and has eased Ukraine’s grain exports. 60%
    of Ukraine’s grain exports have so far been done via Romania and we are making
    efforts to increase this quantity, Iohannis said. The president has also
    stated that the almost 450 thousand Romanians who are living in the USA have
    built an extraordinarily important bridge between the two countries. The
    community of Romanians in the USA is the fifth largest after those in Italy,
    Britain and Germany. We recall that on Tuesday and Wednesday Iohannis headed
    the Romanian delegation attending the UN General Assembly.








    Japan. The head of the
    Romanian government, Nicolae Ciucă, will visit Tokyo next week, to participate
    in the state funeral organized in honor of former Japanese Prime Minister
    Shinzo Abe. Japan is one of Romania’s main partners in Asia, both politically
    and economically, and there are all the prerequisites to transform this long
    bilateral relationship, of over a century, into a privileged relationship at
    the level of strategic partnership . We want this to happen as soon as possible,
    Nicolae Ciucă has stated. He will be received by his Japanese counterpart,
    Fumio Kishida, and will have meetings with the delegation of the Japan-Romania
    Parliamentary Friendship League and with the president of the House of
    Representatives in the Japanese Diet, Hosoda Hiroyuki. The Head of the Romanian
    Executive will also have bilateral meetings with officials from other countries
    who came to Tokyo on the occasion of the funeral, including the Prime Minister
    of Australia, Anthony Albanese, and the Prime Minister of the Republic of South
    Korea, Han Duck-soo.










    South Korea. The Romanian Minister of Defense, Vasile Dîncu, who is on a formal visit to
    South Korea, has had a meeting with his counterpart Lee Jong-Sup. A letter of
    intent has been signed establishing the milestones for concluding a framework
    cooperation agreement in the field of defense. Another topic addressed was the
    international security situation, with an emphasis on the challenges in the
    Black Sea region, and Asia-Pacific. The two officials have also discussed the
    status and perspectives of strengthening cooperation within international
    organizations, a framework ensured by the status of the Republic of Korea as a
    global partner of the North Atlantic Alliance. (MI)





  • European Commissioner for Jobs and Social Rights visits Bucharest

    European Commissioner for Jobs and Social Rights visits Bucharest

    The European Commissioner forJobs and Social Rights, Nicolas Schmit, has paid a visit to Bucharest, where he discussed with Romanian officials the measures that Bucharest should take to combat poverty, but also the impact of the war in Ukraine on the European economy.



    Nicolas Schmit said, that, first of all we need to make sure that this war does not lead to a new economic crisis in Europe, which is a very important issue. Of course, there are several elements that are uncertain, such as the price of energy, which can influence many sectors. Fortunately, Romania is in the situation in which its almost autonomous, and its energy situation is very good, the Commissioner said.



    Together with Prime Minister Nicolae Ciuca, the Commissioner mainly analysed the EUs response to the crisis trigger by the Russian military aggression. The Romanian PM presented Romanias strategy for ensuring energy independence through the use of nuclear energy, developing the capacity to produce renewable energy and exploiting new offshore natural gas reserves.



    Romania had a massive inflow of Ukrainian refugees on its hands and has handled the situation remarkably well, the European Commissioner told a news conference in Bucharest on Thursday.



    Nicolas Schmit also expressed the European Commissions support for a rapid access to the funds already available to Member States and gave assurances that they would be supplemented with new resources.



    Brussels wants to support the Romanian government in its efforts to help young people find a job, the commissioner said after a meeting with Labor Minister Marius Budai. He said this could be done by implementing a community initiative called the “Youth Guarantee” and accessing the existing funds.According to the European Commissioner, the implementation of the “Child Guarantee” is also important because poverty is still a serious issue in Romania, especially among children. Children need better opportunities, better care, better education and nutrition, the Commissioner said, also stressing the issue of poverty among the elderly.



    In turn, the Romanian minister Marius Budai said that the 9.4% of the GDP cap that limits spending on pensions, as provided in the NRRP, should be made more flexible, because sticking to this cap might lead to impoverishing the population.



    Marius Budai: “I agree and support, as I told the Commissioner, any reform that would benefit the Romanian state and that would be in line with everything stipulated by the provisions of the European Union treaties. We are also deeply attached to this European project, but I will never sign a reform that will maintain or lead to the impoverishment of Romanian citizens “.



    Recently, the European Commissioner for Home Affairs and the European Commissioner for Humanitarian Aid and Crisis Management have also travelled to Bucharest to support Romania against the background of the crisis it is faced with at the border with Ukraine. (MI)

  • Economic prospects and social readjustment

    Economic prospects and social readjustment

    The Covid-19 pandemic affected the Romanian economy for two years. Prospects for the situation to recover had existed, all the more so since, in early March, the authorities in Bucharest decided not to prolong the state of alert and not to impose any restrictions. The invasion of Ukraine, which almost coincided with Romanias overcoming the pandemic, triggered, however, new problems that overlapped with the existing ones: very large increases in electricity and natural gas prices, with effects on all consumption prices.



    During a visit to Bucharest, the European Commissioner for Economy, Paolo Gentiloni, spoke of an already visible impact on inflation, which rose in February to 6.2% in the European Union and 7.9% in Romania. This year – the official from Brussels pointed out – Romania could have an economic growth of over 4%, but the Russian invasion in Ukraine will affect it. So, against the new background created after the pandemic, with the war in Ukraine raising fears, actions must be coordinated at EU level to prevent a serious crisis and to maintain the resumption of economic growth, through Recovery and Resilience Plans.



    Obviously, the European Commissioner for Economy also stressed, these plans, being drawn up before the war, could be adjusted within the limits of the Community regulations in force, but they are extremely important anyway, as they are the driving engines of growth in a difficult situation.



    Through its NRRP, Romania, for example, could benefit from over 29 billion euros. The Romanian executive is working on a package of measures to manage the effects of high inflation and the conflict in Ukraine, especially in order to counteract the rise in energy and food prices, the Romanian Minister of Finance, Adrian Câciu, said. He also stressed that at least 70-80% of the measures to be implemented should be financed with European money.



    One of these measures would be to support over 3.5 million low-income Romanians. They could be helped with vouchers to deal with the wave of price increases and there are discussions in this regard in the governing coalition. The Social Democratic Party has proposed the granting of 50 euro vouchers for basic food, every two months, to families with children, people with disabilities and low-income pensioners. Pupils from poor families would also be helped with vouchers worth 30 euros to buy supplies, clothes and food. The Liberals agree with the food aid and have even proposed doubling some of the vouchers. (MI)

  • January 12, 2022 UPDATE

    January 12, 2022 UPDATE

    COVID-19 Romania reported
    8,600 new Covid cases and 44 related deaths on Wednesday. The incidence rate is
    on the rise around the country, including the capital Bucharest, where it
    passed 3 cases per 1,000 inhabitants, the city now being in the red tier. This
    means that restaurants, cinemas, gyms and other venues can open at 30%
    capacity. Also, schools where the vaccine uptake among staff is under 60% will
    switch to online teaching. The National Public Health Institute confirmed the
    sustained community transmission of the Omicron variant, saying almost half of
    the cases did not have contact with someone infected. In the meantime,
    preparations are being made for opening outpatient Covid evaluation centres
    around the country.


    CORRUPTION The Interior Ministry’s Anti-Corruption Directorate
    Wednesday conducted 25 home searches in the counties of Neamţ and Iaşi (north-east),
    as part of investigations concerning forgery and fraud offences involved in the
    obtaining of COVID vaccination certificates. Physicians and nurses received
    bribes in exchange for fictitious vaccination certificates. Late last year the Anti-Corruption
    Directorate announced that since the start of the pandemic 168 criminal cases
    were initiated with respect to fictitious vaccination and other offences. According
    to the institution, Romania saw the largest-scale frauds in the EU in this
    respect, with over 3,000 fake COVID certificates issued at Petea border
    checkpoint. Some 1.8 million COVID-19 cases have been reported in Romania
    since the start of the pandemic, and around 60,000 COVID patients died. Amid
    anti-vaccine feelings fuelled by certain media outlets, politicians and opinion
    leaders, Romania has the second-lowest vaccination rate in the EU.


    EU FUNDING Over 1.9 billion euros will be transferred to Romanian
    government accounts on Thursday, as part of the loans given to Romania under
    the National Recovery and Resilience Plan, after the targets for Q4 2021 were
    reached, the Ministry for EU Projects and Investments announced. The funds will
    add to the 1.85 billion euros in grants paid by the European Commission on
    December 2, 2021. Bucharest is to receive over 29 billion euros under the
    National Recovery and Resilience Plan. The loans in the programme will be used
    for the funding of large-scale projects, including motorways, water supply and
    sewage networks, the digitisation of SMEs and reforestation, the Ministry
    explained.


    GROWTH The
    National Institute of Statistics confirmed its 0.4% estimate with regard to the
    growth of the Romanian economy in the third quarter of last year compared with
    the previous quarter, but changes were made to the share of investments and
    consumption in GDP growth. Also, in the third quarter, the net added value saw
    important changes in the sectors of information and communications,
    constructions, financial mediation and insurances and real estate transactions.


    ECONOMY The Romanian economy is expected to grow by 4.3% this year,
    as against a 4.5% growth rate forecast in June 2021, reads the World Bank’s report
    on Global Economic Prospects, released on Wednesday. For 2023, the World Bank
    forecasts a 3.8% GDP growth for Romania, while for last year the institution
    estimates the country’s economic growth rate stood at 6.3%. The institution
    expects the global economy to grow by 4.1% in 2022 and by 3.2% in 2023.


    FOREIGN POLICY
    Romania will continue to develop as an active, trusted, involved and
    respected member of the EU and NATO. Romania’s approach is focused on
    continuity, based on the three essential pillars of its foreign policy:
    consolidating the country’s role and influence in the EU and NATO and
    developing and deepening the strategic partnership with the US, said
    president Klaus Iohannis at his annual meeting with foreign diplomats in
    Bucharest. He also said strengthening the US military presence in Romania is a
    major goal. Given the recent security challenges, it is obvious that we need
    stronger action in terms of defence and deterrence, the Romanian president
    added. Iohannis also said Romania is worried about the security situation in
    Ukraine and its implications for Euro-Atlantic security and added that Romania
    will continue to support the efforts of the Republic of Moldova to join the
    European Union. (tr. A.M. Popescu)