Radio România Internațional

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August 31, 2024 UPDATE

LANGUAGE The Romanian Language Day was celebrated on Saturday both in Romania and in the R. of Moldova, where this holiday was first introduced, to mark a return to the Romanian language and Latin alphabet in the former Soviet Republic. Special events were held on both sides of the river Prut. In a message posted on this occasion, president Klaus Iohannis said the Romanian language is not just a set of words, but a means to pass on the cultural heritage and an invaluable heritage we are leaving for the future generations to cherish and enrich. As Mr. Iohannis emphasised, since last year the Romanian language has also been the official language of Moldova, after a law was promulgated by president Maia Sandu, replacing the phrase “Moldovan language” with the phrase “Romanian language.” This has been essential to restoring a historic fact, namely that Romanians living on both sides of the river Prut share a common language, culture and history, Iohannis said. According to him, Romanian is studied in 59 universities in 37 countries in the world. Public reading sessions, art exhibitions, film screenings, music recitals are organised by Romanian cultural institutes around the world to mark the Romanian Language Day.

VISIT The president of Romania, Klaus Iohannis, Saturday was on an official visit to the Republic of Moldova, for talks with his counterpart Maia Sandu. On this occasion, the two officials signed a Joint Declaration on bilateral cooperation to consolidate the resilience of the Republic of Moldova, which has received consistent support from Romania so far to withstand the many challenges it has been facing. According to Iohannis, the hybrid war waged against the Republic of Moldova and its citizens is growing more intense and taking ever more severe forms. He emphasized that Romania’s strategic commitment to supporting the democratic development of Moldova would remain unwavering in the long run, and called on all international partners to provide consistent support in its EU accession efforts. In turn, Maia Sandu said Romania played a vital part in consolidating her country’s energy independence, and also highlighted Bucharest’s support in the EU accession process. The Romanian president’s visit to Chişinău took place as Romania and Moldova celebrated the Romanian Language Day on August 31.

RATING Fitch Rating Friday reconfirmed Romania’s long- and short-term foreign-currency government debt rating at BBB-/F3 with a stable outlook, the finance ministry reports. According to the institution, the decision is supported by the capital inflow from the European Union, which sustains the country’s income convergence, foreign financing and macroeconomic stability, as well as a positive trend in the GDP per capita and in governance and human development indices, which are above ‘BBB’ category peers. The international institution’s decision reconfirms the confidence in the measures taken by the Romanian government to ensure public funding sustainability, the finance minister Marcel Boloş said. On the other hand, these strengths are balanced against large budget and current account deficits relative to peers, high budget rigidities, and a fairly high net external debtor position. The agency expects Romania’s economy to grow by 2.5% this year.

PENSIONS A bill on raising the pension tax threshold in Romania from EUR 400 at present to EUR 600 is to be endorsed next week in the Chamber of Deputies, the decision-making body in this respect, the culture minister Raluca Turcan announced. She said the measure had been promoted since 2022 by the National Liberal Party, and that after its endorsement in Parliament it would take effect on October 1. The ruling coalition comprising the Social Democratic Party and the National Liberal Party decided a few days ago that the new bill should be rushed through Parliament, instead of being endorsed by the government under an emergency order.

LAW The legislation regarding extended restraining orders took effect in Romania on Saturday. The goal is to protect all victims, irrespective of their relations with the abuser. The justice minister, Alina Ghorghiu, says that previously, restraining orders were only issued for cases of domestic violence, but the new legislation also includes psychological abuse. She encouraged all victims to seek protection and to report abuse cases, regardless of the form of abuse and of who the abuser is. In this context, the Romanian justice ministry has initiated an awareness raising campaign called “Living in fear is not living.” In 2023, nearly 80,000 cases of domestic violence were reported to the police, and in over 30,000 cases the victims were women. (AMP)

31 August 2024
January 1, 2024

SCHENGEN The EU Council voted unanimously in favour of Romania’s and
Bulgaria’s gradual accession to the passport-free Schengen Area, after Austria, the last member country opposing
the measure, lifted its veto. As of March 2024, air and maritime border checks
with these 2 countries will be abolished, with Austria, Bulgaria and Romania committing
to also agree on a deadline for ending land border checks.The decision also comprises measures to
tighten border checks and fighting illegal migration, so that Romania and
Bulgaria will continue to receive substantial financial support and assistance
from FRONTEX. The European Council president Charles Michel, the head of the
European Commission Ursula von der Leyen, the head of the European Parliament Roberta
Metsola and the EU Commissioner for home affairs Ylva Johansson are some of the
EU leaders who have welcomed the decision.This
is an important first step, Romania’s president said in his turn, and added
that lifting land border checks as well remains a priority for Romania.

PRICES The year 2024 begins with price
rises for fuels and foodstuffs as well as for some services. For traditional,
organic foodstuffs and for food products made in mountain regions, the VAT went
up from 5% to 9%. Excises are also raised for tobacco, alcohol and soft drinks
with high sugar content. Also, certain
micro-enterprises will have to pay higher taxes on turnover, with tax increases
also in place for banks, hotels and restaurants. Housing costs will also be higher, as the VAT in
the real estate sector goes up from 5% to 9% for units worth up to EUR 120,000.
Also as of January 1, meal and holiday vouchers are to be included in the total
incomes for which health insurance contributions are paid. Analysts predict
retail price increases will be substantial,
and expect consumers to turn to cheaper products, while producers will lower the
product weight in order to observe price caps.

POLICE Close to 24,000 interior ministry staff are on duty
during the 4-day New Year’s holiday, while road traffic is monitored by 360 radar
speed guns and DUI check teams. Also, around 5,000 fire-fighters are on duty
every day around the country, to provide emergency assistance if necessary. The
border police also took steps to enhance border monitoring and to streamline
vehicle and person transit at checkpoints. Meanwhile, the authorities announced
having seized over 100 tonnes of fireworks kits and opening more than 500 criminal
investigations in this respect, and have once again called on parents not to
buy firecrackers for their children as such materials may be extremely
dangerous.

INVOICING Electronic invoicing is compulsory in Romania as of
January 1 for all B2B transactions. The system entails benefits particularly in
terms of curbing VAT frauds, the finance minister Marcel Boloş told a press
conference. He also said that those who will not use the e-Invoicing system may
receive sentences of 3 to 10 years in prison, if the new law on fighting
economic and financial crime passes the Constitutional Court review. The
authorities count on additional revenues of EUR 1 bln. Minister Boloş also said
that in December the national tax authority’s directorate for large taxpayers
secured a record-high total of EUR 3.2 bln in state budget revenues. On the
other hand, the government extended a cap on the price of compulsory motor
insurance policies, which will stay at the level in February 2023 until March
next year. The Cabinet also passed a bill making insurance compulsory for
electric bikes and scooters as well. (AMP)

1 January 2024
December 20, 2023 UPDATE

BUDGET Romania’s Parliament Wednesday endorsed the 2024 state budget
and social security budget bills, backed by the parliamentary majority made up
of the Social Democratic Party and the National Liberal Party. Next year,
Romania’s budget will focus on investments of roughly 7% of GDP and a 3.4%
economic growth rate, while the estimated budget deficit is 5% of GDP. According
to PM Marcel Ciolacu, the 2024 budget is aimed at development and equity, is based
on investment and secures the required funding for the promised pension and
salary increases. The opposition on the other hand argues that the budget is
built on unrealistic estimates which will fail to ensure economic development.

EVASION The Romanian Chamber of Deputies passed new measures to curb
tax evasion. Failure to withhold taxes and charges, submitting accounting
documents for fictitious expenses, keeping double accounting records or the use
of cash registers that are not connected to the National Information Control
System will be considered offences. Punishments, which range from one to ten
years in prison, are harsher for repeat offenders.

TIMIŞOARA The western Romanian city of Timişoara Wednesday marked 34
years since it declared itself the first city free of communism in Romania. To
celebrate the victory against communism, several events took place, including
short film and documentary screenings, and a marathon tour at the Brâncuşi
exhibition at the Art Museum. 34 years ago, after the repression of the
uprising that started on December 17, big factory workers went on strike and
gathered in the centre of the city. In front of the crowd, the army withdrew to
the barracks, the people arrested were released and the Romanian Democratic
Front was established. From Timisoara, the people’s uprising against the regime
led by the dictator Nicolae Ceauşescu spread to several other cities in the
country. Over 1,000 people lost their lives and around 3,000 were injured in
the events.

AWARD The president
of the Republic of Moldova, Maia Sandu, was awarded on Wednesday the Timişoara
for European values prize. The award and the EUR 30,000 prize will be handed
to her on January 12-13. According to Timişoara’s Mayor Dominic Fritz, in
selecting Maia Sandu as the recipient of this prize, the jury appreciated her
clear stand on Moldova’s integrity, and her determination in pursuing the goal
of Moldova’s European integration.

MIGRATION MEPs and
the representatives of EU member states have reached an agreement on a
comprehensive approach to the Union’s migration and asylum policies, one of the
most toxic political topics facing the bloc in recent years. The document is
aimed at standardising and stepping up migrant verification procedures at the
EU’s external borders, a solidarity mechanism and the repatriation of the
migrants ineligible for the refugee status. (AMP)

20 December 2023
New budget-related legislation promulgated

Subject to an excessive
deficit procedure for several years now, Romania has undertaken to bring this
indicator in line by next year. But the deficit figures are still worrying: in
the first 9 months of the year, the deficit deepened by some EUR 3 bln compared
to the corresponding period last year.

The government spent more than
it collected, and according to official data at the end of September the
deficit was 3.55% of GDP. At this rate, economic analysts say, it is rather
unlikely that Romania will be able to meet the deficit target of 4.4% of GDP or
at least the 5.5% discussed by the authorities in Bucharest with Brussels.

The financial analyst Adrian
Codirlașu, vice-president of CFA Romania, says this is because in the budget
law drafted early this year, the expenditure was underestimated and revenues
were overblown, which might push the budget deficit even over 6% of GDP by the
end of 2023. The stakes are particularly high given that, unless this problem
is addressed, Romania risks losing substantial funding under the National
Recovery and Resilience Plan.

A large-scale set of tax and
budget related measures has been drawn up by the government, which took
responsibility for it before Parliament to rush its endorsement. The measures
include tax raises, new taxes and the scrapping of tax facilities. Delayed for
a month after the Opposition challenged it at the Constitutional Court, the
bill eventually reached president Klaus Iohannis’ office, and it was signed
into law on Thursday.

Some of the provisions in the Law
on tax and budget related measures to ensure Romania’s long-term sustainability
will take effect within days, while the others will be enforced as of January
1, 2024. Meanwhile, PM Marcel Ciolacu is also expecting proposals concerning
the reorganisation of ministries and government agencies and corporations, as
the budget reform is also intended to help reduce expenditure.

But figures suggest that these
measures are not enough, and more is needed in order for the deficit to be
narrowed by the end of the year and for Romania not to lose tens of millions of
euro in EU funding, PM Marcel Ciolacu explained, particularly since expenditure
usually tends to increase at year end. This is why a new emergency order is
required in order to reduce expenses, decision-makers in Bucharest announced.

By capping public sector and
city hall spending, including the expenses incurred with organising festivals
and competitions, Romania would have some room to breathe, and the risk of
undesirable financial consequences would be alleviated. Also, PM Marcel Ciolacu
traveled to Brussels on Thursday to persuade the European Commission that the
measures taken by his Cabinet are enough to keep the budget deficit on a
positive trend. (AMP)

27 October 2023
New fiscal measures approved as constitutional

The oppositions notification against theset of fiscal and budget-related measures for which the Cabinet has taken responsibility before Parliament has been dismissed by the Constitutional Court. The judges decided that the bill is constitutional, so the president may sign it into law. The president of the Constitutional Court of Romania, Marian Enache, explained:

Marian Enache: “The Court is satisfied that the Governments responsibility with respect to the bill concerned a unique and unified purpose, namely to increase revenues to the public budget and to cut down on expenditure. After the constitutionality review, we concluded that, in procedural terms, the responsibility procedure was in line with the requirements of the Constitutional Court and its case law. In terms of the substance, the Court found that provisions challenged by the signatories of the unconstitutionality notification are within the scope of the lawmakers right of suitability assessment in the financial and fiscal area.”

The core principles of the new legislative package include reducing public fund misuse by restricting procurement, reducing the number of executive positions and merging certain public institutions, scrapping a number of tax exemptions, fighting fraud and tax evasion.And according to PM Marcel Ciolacu, the implementation of these measures will help narrow this years budget deficit to 5.7% of the GDP.

The Constitutional Courts decision proves that the allegations of the Opposition were ungrounded, says Gabriel Andronache, head of the Liberal floor group in the Chamber of Deputies:

Gabriel Andronache: “This is obviously not the same situation as the precedent mentioned by the Opposition parties in their notification. These are provisions that are organically connected, so the grounds for unconstitutionality cannot be upheld.”

Save Romania Union, in opposition, which challenged the bill, sees the Courts decision as unfair and argues that the new legislation is an attack against the incomes of Romanias honest citizens. Ionuţ Moşteanu, spokesman for USR:

Ionuţ Moşteanu: “What we see today is Ciolacu raising the taxes for honest Romanians using the hand of the Constitutional Court. But this Court has renounced its constitutional role, and is trampling on its own past decisions. Essentially, the Court helps Ciolacu to get his hands into the pockets of hardworking people, to raise taxes so that he may continue to pay his party cronies.”

The USR president, Cătălin Drulă, announced the party would table a simple motion against the finance minister. (AMP)

19 October 2023
The government assumes responsibility for new fiscal measures

Romania’s coalition government made up of the Social
Democratic Party and the National Liberal Party on Tuesday assumed
responsibility in Parliament for an extensive fiscal and budgetary reform aimed
at reducing budget waste and ensuring the sustainability of the country’s
finances in the long run by eliminating a number of tax reliefs, taxing luxury
and reducing tax evasion.

In his Parliament address, the Social Democrat prime
minister Marcel Ciolacu said the package of measures also includes keeping a
low VAT level for food, medicine and firewood and raising the minimum wage by
10%, while imposing an additional tax on the profits of banks and large
companies. Marcel Ciolacu:

An era is coming to an end today in Romania’s
history. No more trickery. Everyone will pay depending on how much they earn.
You can’t be a millionaire but pay tax like someone earning the minimum wage.
You can’t earn excessive profits but not pay anything in the country where you
earned them, and simply showing up for work doesn’t entitle you to bonuses of
tens of thousands of lei with no accomplishments to account for them.

Ciolacu gave assurances that ordinary people will not
pay extra taxes, but that luxury, excessive profits and vice will see
additional taxes. To fight tax evasion, he said fines would grow significantly
and the goods resulting from illicit activities would be confiscated and the
sums that cannot be justified will be subject to a 70% tax. The reform also
provides for a minimum tax on turnover, reducing the number of management
positions in the public sector and caps on certain bonuses.

The opposition, who is unhappy with the measures
announced by the government, has three days since the presentation of the bill
in Parliament to file a no-confidence motion. There is, however, little chance
of this happening, as they are unlikely to gather the 117 signatures needed.
The Save Romania Union and the Force of the Right, a splinter Liberal group,
said they would contest the measures in the Constitutional Court. The Alliance
for the Union of Romanians, another party in opposition, says the government’s
proposals are damaging to the economy but that it does not believe they are
unconstitutional.

If the Constitutional Court rejects the challenges,
the bill is automatically adopted, and the coalition government will go on
together. No one in Romania is under any illusions, however, that, once this
episode is over, political squabbles will stop here, given that the stakes are
enormous in the run-up to next year’s presidential, parliamentary, local and
European elections. (CM)

27 September 2023
Tax measures under review

New fiscal measures are set to take effect on October 1 in Romania, after they were posted for public review by the finance ministry, following months of negotiations. The authorities are hoping to narrow the budget deficit and to avoid losing billions of Euro in EU funding.

One such measure is a 1% tax on turnover for small and medium-sized enterprises with annual revenues of up to EUR 60,000, and a 3% tax if their revenues go above this threshold. Banks and large companies with turnover in excess of EUR 50 mln are to pay a minimum tax of 1%.

In the IT industry, the income tax exemption valid so far will only remain in place for employees making up to EUR 2,000 a month, while contributions to public health insurance funds are reintroduced for workers in agriculture, the food industry and constructions.

Holiday vouchers will be worth more, but they will only be received by public sector employees with net incomes below EUR 1,600, and a ceiling will be introduced for the bonus paid for dangerous or harmful working conditions.

In turn, the VAT for housing and photovoltaic panels will be raised from 5 to 9%, and foodstuffs with high sugar content will carry a standard 19% VAT rate. The 5% VAT remains in place for firewood, thermal power, books and access to tourist sites and cultural events.

In the case of houses worth over EUR 500,000 and vehicles over EUR 75,000, a 0.3% tax will be levied on the difference between those ceilings and the asset value.

The government also plans to cut at least 25% of the state secretary positions, to scrap vacant posts and restrict executive positions in public institutions and in companies running on public capital.

The bill outlining these measures is first to be passed in Cabinet, and then the ruling coalition made up of the Social Democratic Party and the National Liberal Party will take responsibility for it before Parliament. Within 3 days after the document is presented to Parliament, a no-confidence motion may be tabled, and if endorsed, it leads to the Cabinet stepping down.

The Opposition argues that the proposed measures will have a negative impact on the economy, on entrepreneurs and the liberal professions, which is why Save Romania Union announced it was already discussing with other parliamentary parties the options for a no-confidence motion.

In theory, such a motion stands no chances to pass, but in practice nothing is impossible. And since in 2024 Romania will hold local, parliamentary, presidential and EU elections, the stakes are huge and a failure, either for the government, or for the Opposition, is equally dangerous. (AMP)

20 September 2023
Fiscal measures to reduce the budget deficit

A state budget deficit significantly above the target has prompted the Romanian authorities to take steps to address the situation.

The finance minister Marcel Boloș announced on Thursday that this set of tax-related measures must be endorsed in September, first of all in order to ensure that EU funding is not suspended.

“Not implementing these measures or implementing them too late would lead to a budget deficit of around 7% of GDP,” Marcel Boloș explained, and warned that this is a turning point for Romania.

The set of changes announced by the finance minister includes measures targeting multinational corporations and a 10-fold increase in fines in order to curb tax evasion. Adding to these are increased royalties, even 1000 times, for mineral resources and hydrocarbons, and an extensive reorganization plan for the national tax administration agency in order to improve revenue collection.

Marcel Boloş: “It is unfair for companies that develop mineral resources and have billions in turnover and huge profits to pay minimal, even insulting royalties to the state budget. These will be rearranged, and some royalty categories will be even 1,000 times higher. It is only reasonable. These are royalties for the exploitation of mineral resources and hydrocarbons as well as for the land itself, and it is ridiculous and absurd for the state budget to receive RON 2.5 million for 300,000 hectares.ˮ

As for the measures targeting the public sector, Marcel Boloş mentioned decentralization and the regionalisation of public services, so as to eliminate what he called the “splurge” of public money.

“We need a lot less bureaucracy, a lot more thoughtfulness in spending public money,ˮ Marcel Boloș pointed out. According to him, these measures are expected to have a combined impact of 2% of GDP.

Meanwhile, the news from the Fiscal Council is not encouraging. The institution made an upward adjustment of its budget deficit forecast, and says the deficit will be over 6% of GDP unless correction measures are implemented. According to the Councils annual report, the budget deficit for the first half of the year, standing at 2.3% of GDP, is around 0.63% higher than in the corresponding period of last year. The reasons have to do with the slower dynamics of certain categories of revenues and an increase in spending above the levels in the budget law. The Council reiterated the importance of introducing immediate corrections and of substantially increasing tax revenues. (AMP)

18 August 2023
August 2, 2023

BUDGET The ruling coalition made up of the Social Democratic Party and the National Liberal Party carry on talks on the fiscal measures that must be implemented in order to reduce the state budget deficit. Overall public expenditure cuts of some EUR 1.2 bln are targeted, concurrently with tax increases by a similar amount. Public institution mergers, the scrapping of 200,000 public sector jobs that are currently vacant, personnel downsizing and cuts in the management allowances paid by public companies are some of the measures considered by the government. The 2 parties have also agreed on 2 VAT rates, 9% and 19%, although a 5% VAT rate will be in place as an exception for books alone. The Social Democrats and the Liberals however differ as regards a proposed additional 1% tax on luxury homes and on the profits of companies with more than EUR 100 mln in turnover.

E-COMMERCE Last year Romanians spent nearly EUR 7 bln online, one-quarter of the amount on clothes and footwear alone. According to a survey, the Romanian e-commerce market comprises a rough 100 online stores reporting over 1,000 orders per day. One in 5 Romanians regularly order online, and 50% of them do so twice every 3 months. In Europe, the share of online shopping rose from 55% in 2012 to 75% in 2022, with the highest increases reported in Estonia, the Czech Republic and Romania.

FORESTRY A new draft Forestry Code was released for public consultation on Tuesday in Romania. The surface areas where forest clearing is banned will be increased approx. 10 fold, and the vehicles that carry wood illegally will be seized. The bill will also enable the government to take over the task of reforesting land that has been cleared and subsequently abandoned by its owners. The measures come after the European Commission initiated an infringement procedure against Romania for failure to implement several environment-related directives.

FOREIGN AFFAIRS The Romanian foreign ministry warns citizens who are traveling or intend to travel to the Italian island of Sardinia that local authorities there have issued a code orange alert for wildfire risks. On the other hand, the ministry also announced it was taking steps to repatriate 4 Romanian nationals from Niger, as the security situation in that country is worsening.

UKRAINE Russia’s continued attacks against the Ukrainian civilian infrastructure on Danube, in the proximity of Romania, are unacceptable. These are war crimes and they further affect Ukraine’s capacity to transfer their food products towards those in need in the world, the president of Romania Klaus Iohannis posted on Wednesday on social media. A Russian drone attack hit Ukrainian port infrastructure in Izmail, on the Danube, close to NATO-member Romania. According to Kyiv, the attack caused fires at the port and industrial infrastructure and damaged the elevator there. Russia started targeting Ukraine’s ports after terminating a UN deal enabling the country’s grain exports via the Black Sea.

UNTOLD Thousands of gendarmes, firefighters, anti-drug and local police officers, as well as 800 private security guards, have been mobilized for the 4-day music festival UNTOLD in Cluj-Napoca, which begins on Thursday, to make sure that safety measures are complied with by all participants. Two mobile hospitals and 3 first-aid stations will be located near the festival site. The line-up for the 8th edition of UNTOLD, one of the largest music festivals in Europe, includes over 250 artists from Romania and abroad. Tens of thousands of music lovers from around the world are expected to attend. (AMP)

2 August 2023
July 30, 2023

GOVERNMENT The government
prepares to pass a set of fiscal measures in the coming days, designed to bring
more money into the state budget and to keep the deficit close to this year’s
target of 4.4% of GDP. As of this autumn, employees in agriculture,
constructions and IT may have to contribute 10% of their incomes to the public
healthcare fund. The government also intends to keep only 2 VAT rates, 9% for
foodstuffs, pharmaceuticals and hospitality services, and 19% for all other
sectors. Governmental sources say the ruling coalition are also discussing a
reorganization of the public sector, by scrapping 200,000 posts which are
currently vacant. At the same time, the Cabinet is working on measures to support
citizens cope with the rising inflation. The government is considering an
increase in minimum wages in 2 stages: to roughly 670 euro in September and to
750 euro as of January next year. But the plan is opposed by private
entrepreneurs, who say they cannot afford to raise minimum wages for employees.
According to a recent poll, should this measure be introduced, more than half
of the private entrepreneurs in the country said they would raise prices for
their products and services or downsize their staff.

FIRE A Romanian fire fighter unit specialising in
wildfires is leaving for France today, as part of a redeployment programme
organised by the Directorate General for European Civil Protection and
Humanitarian Aid Operations (DG ECHO). As many as 40 Romanian fire fighters
with fire engines, water tanks and other equipment will be stationed in
Marseilles, on the Mediterranean Coast.

TRIBUTE The Bucharest National
Opera orchestra performs tonight for the first time at the Musikverein hall in
Vienna, in a tribute concert to the Romanian composer Ciprian Porumbescu. The
year 2023 was declared the year of Ciprian Porumbescu, to mark 170 years since
the birth and 140 years since the death of the famous composer. The concert
will consist exclusively of works by Ciprian Porumbescu: New Moon, the first
Romanian operetta, the Ballad, the Romanian Rhapsody. The soloists, choir
and orchestra of the National Opera House in Bucharest are conducted by Daniel
Jinga, with special guests including maestro Gheorghe Zamfir and the soloist
Maria Coman.

UKRAINE A Ukrainian drone
attack on Moscow hit 2 office buildings last night, the mayor of Russia’s
capital city Sergei Sobyanin said, according to France Presse. According to the
Russian defence ministry, a drone was shot down and 2 others were neutralized but
crashed into a building compound. This was the latest in a string of attacks
that Moscow blames on Kyiv, while also claiming the US and their NATO allies
have provided assistance to Ukraine. Meanwhile, the Ukrainian authorities say
at least 2 were killed and 1 wounded in a Russian missile attack on the city of
Zaporizhzhia.

SPORTS Romania finished 4th
at the European Youth Summer Olympic Festival in Maribor (Slovenia), with 9
gold, 6 silver and 5 bronze medals. This is the best performance for Romania in
this competition, after the ones in 1995 (Bath) and 2003 (Paris), when it came
out 3rd. On Saturday, the last day of the event, Romania won 2 gold medals,
thanks to Alin Şavlovschi, in the men’s 2,000 m hurdles race and Bianca Maria
Tiţa, Ştefania Balint, Maria Denisa Capotă and Alexandra Ştefania Uţă, who won
the women’s relay race with a new competition record (2’06”13). Romania’s
women’s handball team won the silver after losing the final to France, 32-27. Three other
medals were won in the tennis competition, by Giulia Safina Popa in the women’s
singles, Giulia Popa and Alexia Tatu in women’s doubles and Yannick Theodor
Nicolas Alexandrescou/Alejandro Mateo Berge Vega Nourescu in the men’s doubles.
In the gymnastics competition, Alexia Gabriela Vânoagă won the silver in the
beam final. Romania participated in the Festival with a team of 92 athletes. (AMP)

30 July 2023
July 26, 2023 UPDATE

HEAT Wednesday was a new day with extreme heat in Romania. The capital
city Bucharest and several counties in the south and south-east were subject to
a code red alert for temperatures above 40 degrees Celsius and a
temperature-humidity index above the critical 80 units. Code orange and yellow
alerts were also in place elsewhere in the country. On Tuesday the extreme
temperatures disrupted railway traffic and caused road traffic restrictions. On
the other hand, violent storms were reported in the west, north and centre of
the country, where substantial damages were reported. On
Thursday, the temperature is expected to drop significantly, to highs between
19 and 28 degrees Celsius.

PROTEST Romanian construction workers Wednesday picketed the government
headquarters to protest the Cabinet’s decision to scrap the tax facilities
granted to the employees in this sector. The head of the National Trade Union
Bloc (BNS), Dumitru Costin, said the proposed amendments to the Fiscal Code
affect not only the construction sector, but other categories of employees as
well. The BNS and the Familia General Federation of Trade Unions came up with a
set of measures to avoid the scrapping of tax facilities as of September 1,
including a new collective bargaining agreement for the sector and a gradual
elimination of the fiscal facility, in keeping with the roadmap agreed on under
the National Recovery and Resilience Plan as of 2025. They also suggest adjustments
to budget appropriations for the investment projects funded by the government
or from EU funds, as well as a salary policy for this sector for the
forthcoming years able to ensure balanced salaries, especially in the private
sector.

MEETING The Romanian
foreign minister Luminiţa Odobescu Wednesday had talks with her French
counterpart, Catherine Colonna, about the security situation at the Black Sea.
In a Twitter post, Odobescu described the dialogue as very good. Bilateral
cooperation was reconfirmed on this occasion. We have emphasised our joint
support for Ukraine and the R. of Moldova, as well as our determination to
consolidate security and resilience at the Black Sea, the Romanian diplomacy
chief said in her post.

DIPLOMACY The foreign
minister of the Republic of Moldova, Nicu Popescu, Wednesday requested a
limitation on the number of Russian diplomats accredited to Chişinău. He said
the country has been for several years the target of hostile policies on
Russia’s part, and that some of them were completed via the Russian Embassy
there. Ambassador Oleg Vasnetsov was summoned to the Moldovan Foreign Ministry
for explanations, after a media report revealed that the Russian diplomatic
mission had installed high-performance espionage and interception equipment on
its rooftop. The media in Chişinău mentioned 28 satellite dishes and telecoms
devices, while individuals tied to Russian intelligence services were seen on
the buildings. The authorities in Chisinau decided that the two countries’
embassies would have equal numbers of diplomatic personnel, specifically 10 diplomatic
positions and 15 administrative, technical and support posts, Moldpres reports.
Consequently, the staff of Russia’s embassy in Chişinău will be reduced from 84
to 25.

NATO The NATO
secretary general Jens Stoltenberg convened a first NATO – Ukraine Council
meeting at ambassador level on Wednesday, at the request of Kyiv. The meeting
focused on consultations on recent developments, with participants discussing
the transport of Ukrainian grain via the Black Sea, the NATO spokesperson Oana
Lungescu said. Ukraine’s request came after Russia terminated the so-called
grains deal and started attacking the Ukrainian port infrastructure. Also on
Wednesday, the head of the press office for the southern Ukrainian defence
command, Natalia Humeniuk, said Russia was already using Shahed-type drones
assembled in Russia.

SWIMMING The Romanian swimmer David Popovici Wednesday qualified into
the final of the 100m freestyle race at the World Championships in Fukuoka (Japan). Popovici, the defending world champion in
this event, also holds the world record, set last year at the European
Championships in Rome. The 100m freestyle final is scheduled for Thursday. On
Tuesday, Popovici, also a former world champion in the 200m freestyle event,
finished the competition’s final on the 4th place. (AMP)

26 July 2023
Fiscal resetting in Romania

The finance ministry made public the bill modifying the Fiscal Code of Romania, due to be endorsed by the government next week.

The planned amendments include increases of the tobacco and alcohol excises, of taxes on gambling revenues, a lower ceiling for tax facilities in the constructions sector, agriculture and the food industry, and scraps previous tax facilities for the hospitality industry, with operators in the sector set to return to a regular tax on turnover. All these measures are scheduled to take effect on August 1.

The document also includes provisions due to come into force as of January 2023, such as a raise on dividend taxes from 5% to 8% and a change in the criteria that define microenterprises by lowering the revenue ceiling from EUR 1 mln to EUR 500,000, with the microenterprise legally bound to have at least one employee.

Also, as of January 1, VAT will be raised from 5% to 9%, both for food and beverage deliveries and for restaurant and catering services, as well as for accommodation services. The bill also stipulates changes in property owners taxes.

On the other hand, governmental sources also mention a possible adjustment of pension benefits to the inflation rate, starting next year.

The draft amendments to the Fiscal Code were one of the topics discussed by president Klaus Iohannis in a recent press conference. He pointed out that a modernisation of the fiscal legislation was due, and added that he had discussed this with the Liberal PM Nicolae Ciucă and the relevant ministers. The president also emphasised that no taxes and charges were considered for regular people, but that the changes are related to situations that had not been regulated properly before:

Klaus Iohannis: “I have asked them to analyse things very carefully, to avoid putting additional burdens on regular people and not to discourage businesses, but instead to make changes that make things more transparent and fairer. Virtually, this would improve revenue collection to the state budget, and better collection means less tax evasion.”

Romania does not plan an austerity procedure at this time, the president also added, and explained that measures of that kind taken during the 2009 economic crisis failed to yield good results. He also warned that the government cannot earmark substantial funds for offsetting the rise in fuel prices at the expense of investments, which are still necessary.

Mr. Iohannis voiced satisfaction with the work of the government, and said the Cabinet members did their job well and solved a lot of problems. (AMP)

6 July 2022
Decisions on European money

The European money is waiting to be used, after the Romanian Government has approved the emergency decree allowing access to a loan worth almost 15 billion Euros granted by the European Commission under the Recovery and Resilience Mechanism. More than 29 billion Euros, of which over 14 billion represent a grant and about 15 billion a loan, will be made available to Romania through the National Recovery and Resilience Plan. During his recent visit to Brussels, the Prime Minister Nicolae Ciucă discussed with European officials about how this national plan, supported by European funds, will become a reality. Nicolae Ciucă has announced in Brussels that the government will soon create a structure to monitor, coordinate and verify the way in which this European instrument will be used.

According to the Finance Ministry, the loan from the European Commission will be used to achieve three major goals. To finance the reforms provided in the National Recovery Plan, to cover the state budget deficit and to refinance the government public debt. The money will be transferred in 10 installments, until December 31, 2026, as the objectives that Romania has assumed are gradually fulfilled and the investments associated with the loan are made. Each money transfer, including the pre-financing, shall be granted on favorable terms at the cost level of the European Commission. The loan will be paid back over the next 30 years, in equal installments, with a 10-year grace period. “I want Romanians to know what happens with the loans we take; I believe that they have this right, given that it’s them who will support the loan reimbursement. I will do my best to ensure that every Euro borrowed is put to work and contributes to the development of the country and the improvement of peoples lives “, the Finance Minister, Adrian Câciu underlined.

On the other hand, the European Commission has proposed three new taxes in the Community bloc. Over the next few decades, they are going to allow for the reimbursement of funds collected by the EU to finance the NextGenerationEU grant component, the Unions economic recovery package meant to support Member States affected by the coronavirus pandemic. The first tax is based on revenue from trading emission certificates. The second tax is based on the resources generated by the mechanism proposed by the EU to adjust carbon dioxide emissions at the border, the so called CBAM — Carbon Border Adjustment Mechanism. The Commission proposes the allocation of 75% of the revenues generated by this border adjustment mechanism to the EU budget. The third tax is based on the share of residual profits of multinationals that will be reallocated to EU Member States under the recent OECD agreement on reallocating taxing rights. In the period 2026-2030, it is estimated that these new sources of revenue will generate a total of up to 17 billion Euros annually for the EU budget. (LS)

23 December 2021
December 18, 2021

VISIT The PM of Romania Nicolae Ciucă will be on a visit to
Brussels on Monday and Tuesday, for talks with senior EU and NATO officials. According
to the Government, on Monday the Romanian PM will have a working dinner with
the president of the European Council Charles Michael. On Tuesday, Ciucă will
have meetings with the president of the European Commission, Ursula von der
Leyen and with other EC members. The PM will also have a meeting with the
secretary general of NATO Jens Stoltenberg at the NATO headquarters.

BUDGET The
government of Romania passed a number of measures on which the 2022 public
budget is based. An emergency order freezing the salaries of public officials and
other public sector staff, with 2 exceptions, was endorsed by the Cabinet with
amendments compared to the version subject to public debate. The bill also
includes other measures, such as a low VAT rate only for the purchase of a
family’s first home. The new tax provisions, alongside the new Ceilings Act,
are the foundation of next year’s state budget, and are designed to reduce
expenditure and maintain the public deficit below 6.2% of GDP.

ANTI-CORRUPTION The government approved the 2021-2025 National
Anti-Corruption Strategy, the justice minister Cătălin Predoiu announced. He pointed
out that the document is a political commitment to support all institutions
involved in fighting corruption, and also a first goal met out of the ones
included in the National Recovery and Resilience Plan in the judicial sector. Predoiu
added that the Strategy is correlated with international instruments to which
Romania is affiliated, such as GRECO and the Cooperation and Verification
Mechanism. The CVM was introduced in January 2007, upon Romania’s and Bulgaria’s EU accession, to support the 2
countries in overcoming deficiencies in judicial reform and in fighting
corruption.

BORDER Romanian border checkpoints are getting crowded these days,
as many Romanians living abroad are coming home for Christmas. Queuing is
reported at the checkpoints on Romania’s western borders, as apart from travel
documents the digital Covid certificates and the PCR tests must be checked. Crowding
was also reported on the Otopeni International Airport, near Bucharest. Hundreds
of people waited for a long time for the authorities to check their documents. On
Monday, an additional digital form will be introduced, to trace travellers. In order
to streamline border crossing, at the checkpoint in Giurgiu (south), the number
of border police will be increased by 20%.

MINORITIES Romania
celebrates on December 18 the Day of Ethnic Minorities. The president Klaus
Iohannis said on this occasion that ethnic minorities make an essential
contribution to social cohesion and that only together can a modern Romania be
built, with no place for racism, xenophobia and intolerance. Protecting cultural
heritage, including that of national minorities, is a priority for the Culture
Ministry, which treasures the culture of minorities as an element contributing
in the shaping of Romanian culture as we know it today, reads a news release
issued by the institution. As many as 18 ethnic minorities are officially
recognised in Romania at present, namely Hungarian, Rroma,
German, Ukrainian, Russian, Lipovan, Jewish, Turk, Tatar, Armenian, Bulgarian,
Serbian, Croatian, Czech, Slovakian, Polish, Greek, Albanian and Italian.

COVID 733 new COVID-19 cases and 64 related fatalities were
reported in the last 24 hours in Romania, the authorities announced on
Saturday. The coordinator of the vaccination campaign, Valeriu Gheorghiţă, announced
on the other hand that the number of people requesting their first doses of anti
Sars-CoV-2 vaccine is on the decrease. He detailed that the number of people
who get their first vaccine doses drops by 15-25% from one week to the next. Valeriu Gheorghiţă also said that Romania
might receive Pfizer vaccine children doses next month, and the vaccination of
children aged 5 to 11 may begin in the second half of January. (tr. A.M. Popescu)

18 December 2021
State budget without new taxes

Romania’s ruling coalition, made up of the Social Democratic
Party, the National Liberal Party and the Democratic Union of Ethnic Hungarians
in Romania (UDMR), is to submit the draft budget law for 2022 to Parliament by December
20, for discussion and endorsement. The 3 parties intend to have the
fiscal-budgetary strategy passed by Christmas.

The law
must provide funding for investments, the increase of public pensions and
allowances, while at the same time keeping the budget deficit under control.

The idea of
introducing new taxes has triggered debates in the new ruling coalition. The Liberals
once again emphasised that next year’s budget will not be based on new taxes. However,
the Social Democrats and UDMR sought to levy an additional 1% of turnover tax
on companies with turnover in excess of 100 million euro. According to UDMR,
the money would cover healthcare and education investment needs, but the
business community voiced discontent with the measure.

The Liberal
president Florin Cîţu mentioned that these companies paid taxes in advance last
April, when the economy was shut down, and argued that it is not fair for the
same businesses to be penalised.

In turn, PM
Nicolae Ciucă promised there will be no such taxes. This is precisely what we
pledged in the governing platform, namely that no such tax will be levied this
year. The governing plan was endorsed by Parliament and it will be applied as
such,ˮ Nicolae Ciucă pointed out.

The finance
minister Adrian Câciu said in turn that the budget will not include new taxes,
and that any change in the tax system will be predictable and operated after talks
with private businesses. He said Romania needs solidarity now, to protect
low-income citizens from price rises, especially in the energy sector. We will
achieve this by stimulating the economy and encouraging the companies that
produce in Romania, regardless of their ownership, because all that is produced
in Romania is produced by Romanian employees. A product made in Romania means
jobs for Romanians. By supporting Romanian producers, we provide guarantees that
hundreds of thousands of people will have stable, safe jobs, the finance
minister Adrian Câciu explained.

In turn,
the Social Democratic leader Marcel Ciolacu said that should the coalition
decide to introduce a new tax, this will not take effect sooner than in 6
months’ time. On the other hand, he said the country has major problems in
terms of tax evasion and VAT collection. Romania is estimated to have tax
evasion accounting for 10% of GDP at the moment. Moreover, 34% of the VAT owed
is not collected,ˮ Marcel Ciolacu warned. (tr. A.M. Popescu)

13 December 2021