News

Daily Newsletter - 16 March 2017

Summary

FIC (1)

BR’s 17 leaders to watch: Eric Stab – FIC 

The Foreign Investors’ Council ( FIC) represents some 128 companies doing business in Romania, making its president, Eric Stab, a voice to be reckoned with.Last year Stab was elected for his second consecutive term as head of the FIC, an organization representing foreign investors doing business in Romania. “I believe the FIC is an important voice of the business community and a well-respected one in the whole country. I think it is important that the foreign investors who represent a significant share of Romania’s GDP can also express their views on the business climate in the country, on the issues they are facing and how to address them,” he told BR in an interview last year. The voice of an institution such as the FIC becomes particularly relevant in the context of potential legal changes, such as those proposed by the government this February. At that time the FIC had expressed its concern regarding the amendments the government had made to the Penal Code. “The FIC has always supported a predictable and transparent legislative process and has appreciated the results of the anticorruption policies in Romania. The FIC believes that any government, regardless of electoral cycles, should consider the fight against corruption and structural reforms to the Romanian economy as top priorities,” the organization said this February, after the government issued an emergency ordinance that would have partially decriminalized abuse of office.

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Macroeconomic News (5)

Corporate services up 7.3% in January 

The corporate services sector grew 7.3% in January, compared to the corresponding month of 2016. The main drive behind the trend was an increase in the demand for video-TV and transport equipment, according to data released on Wednesday by the National Statistics Institute (INS).

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Cabinet ready to slash spending 

The Grindeanu Cabinet is ready to take steps to reign in spending if the budget deficit target was exceeded, even as the public debt is expected to stay below 38% of GDP, according to the Minister of Finance, Viorel Stefan.

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Romania to enter middle income trap 

Romania will remain stuck in the middle income trap with a GDP per capita below EUR 10,000, unless structural reforms are implemented in the fields of education, healthcare and infrastructure. These reforms would also increase the potential GDP growth rate from 3% per year to 5% per year, according to BNR chief economist Valentin Lazea.

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Absorption rate for EU funds is 0% 

The EU Commissioner for Regional Policy, Corina Cretu, announced on Wednesday that she would discuss the EU fund absorption situation with the Romanian Cabinet. "Concerns have been voiced since the beginning of the 2014-2020 budget. It's March, 2017, and the absorption rate is 0% for the EUR 23 billion made available to Romania," said Cretu.

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EC: Romania could see highest budget deficit increase in EU 

The European Commission has voiced its concern with Romania's budget deficit for 2017, despite the assurances offered by Romanian authorities that there are no reasons for concern. Two weeks ago, the EC released the country report forecasting a budget deficit of 3.6% of GDP for Romania, above the EU's 3% cap.

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Financial News (3)

Raiffeisen Bank International posted EUR 104 million in after-tax earnings 

Austrian banking group Raiffeisen Bank International posted for 2016 a total of EUR 104 million in after-tax earnings from its Romanian operations, up 4.5% on an annual basis. The group's assets climbed 5% to EUR 7.6 billion, while the aggregated value of loans jumped 8% to EUR 4.8 billion, according to a press release.

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7,000 debtor relief notifications 

The number of debtor relief notifications was 7,000 at the end of February, accounting for an aggregated value of RON 2 billion in loans, according to deputy governor of the National Bank of Romania (BNR) Liviu Voinea.

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"The National Bank does not have the power to intervene in the contract relationship between banks and clients" 

The idea of having banks and clients reach common grounds through negotiations remains a dream, despite the fact that even lawyers had advised the banks to renegotiate the loan contract in order to avoid having judges change them, as the CCR did.

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Investment News (1)

Firea to pay EUR 1.5 million for investment 

Bucharest mayor Gabriela Firea explained that this year's budget includes the EUR 1.5 million needed to set up the first five subunits of fire fighters. The Ministry of Internal Affairs had asked for a total of 13 subunits. The First, Fourth and Sixth Districts will host one subunit each, while the Second District will host two.

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Legislative News (2)

President Iohannis signs macroprudential supervision bill 

President Klaus Iohannis signed the decree promulgating the Law for the Macroprudential Supervision of the National Financial System. Last year, the President had sent the bill back to the Parliament with a request to review. The law sets up a National Macroprudential Supervisory Committee (CNSM) made of BNR, ASF and Cabinet representatives with the purpose of safeguarding financial stability.

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Supermarket law could be expanded to all retailers 

Marcel Dima, an undersecretary with the Ministry of Agriculture and Rural Development (MADR), stated that Law 321/2009, which forces big retailers to stock at least 51% of their food products from the short supply chain, could be expanded to all Romanian stores.

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Politics (2)

Ponta and Dragnea made peace! 

Victor Ponta and Liviu Dragnea continued to issue critical statements of each other, even as the leader of the Social Democratic Party (PSD) rejected Ponta's resignation. "I support the Cabinet, I support the PSD. I don't support Dragnea. That's life," said Ponta.

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Ludovic Orban blasts deregulation delay 

Ludovic Orban has criticized the PSD Cabinet for postponing the full deregulation of the natural gas market, which he thinks should have been done two years ago. Orban accused the Cabinet of postponing deregulation in order to serve the interests of the two big companies that operate local monopolies.

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