News

Daily Newsletter - 31 May 2017

Summary

FIC (1)

Foreign investment 

The Bucharest University of Economic Studies (ASE) and the Foreign Investors Council (FIC) launched the study entitled Foreign Direct Investments: their evolution and importance for Romania.The main conclusion of the study is that FDIs played a decisive role in the past 20 years and have helped the Romanian economy in its transition to functioning free markets. Considering the large investment needs of Romania, it is likely that foreign investors will continue to play a significant role in the future. Some conclusions of the study that are worth pointing out: Foreign companies employ a third of the work force in the private sector in Romania; Foreign companies are responsible for 70% of Romanian exports; Romania has the lowest stock of FDI/capita in the region; A lot of the FDI in Romania came as equity; Almost half of the Romanian FDI Stock has flowed in industry; Foreign investors contributed significantly to increasing the productivity of the Romanian economy.

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Macroeconomic News (4)

Budget to be revised in August 

Prime Minister Sorin Grindeanu stated on Tuesday that the state budget does not include money for ambulances, although some funds could be found at the next budget revision, which may happen in August. "The budget will be revised in summer, sometime in August," said Grindeanu.

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Start-Up Nation program to begin on June 15 

The Start-Up Nation program will begin on June 15 with the launching of the electronic application that allows beneficiaries to register with the program. "The budget is RON 1.7 billion, provided by both the Romanian government and the EU, and we're likely to see the birth of the most popular entrepreneurial initiative support program in the country," said Minister Alexandru Petrescu.

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Activity increases across economy 

The economic activity trends of May-July, 2017, are characterized by growth, according to a press release issued by the National Statistics Institute (INS). Activity is increasing across the board and the number of employees will grow moderately in construction, services and retail.

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Gross salaries up more than 30% in Romania 

Gross salaries have increased by more than 30% in Romania since 2010, while the labor deficit and rising labor costs plaguing Central and Eastern Europe is a concern for companies, according to a Coface report. "The CEE labor market continues to improve. Unemployment rates are at their lowest yet, but most CEE economies are still above the EU unemployment average," noted the report.

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Financial News (4)

Four banks are up for sale 

Banca Romaneasca, Bancpost, Veneto Banca and Marfin are the four banks available for sale. Banca Transilvania and OTP Bank are interested in Banca Romaneasca (the acquisition would allow BT to overtake BCR, while OTP would see its market share jump to 5.2%). Garanti Bank also wants to boost its market share, while Intesa Sanpaolo wants to change strategy. Piraeus Bank is waiting to see whether its shareholders want to sell it or not.

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CEC Bank posts RON 15.8 million in gross profits 

CEC Bank has posted RON 15.8 million in gross profits for 2016 and offered no information about the year-on-year performance.

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Lenders raised standards in Q1 

Local lenders raised their lending standards in the first quarter of this year for both consumer loans granted to retail clients and for mortgages, according to the National Bank of Romania (BNR). The lending standards for SMEs also increased slightly, according to BNR.

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BNR wants sustainable increase in financial intermediation 

Romanian banking employees are not very efficient because of the low financial intermediation rate. The average banking employee manages EUR 1.7 billion, compared to EUR 15.1 million in the European Union, according to the latest financial stability report from the National Bank of Romania (BNR).

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Investment News (1)

Michelin to invest EUR 33 million in Zalau 

The Michelin group will invest another EUR 33 million in its Zalau plant in order to be able to begin making new tire models for the intermediary market, including the Tigar brand. The plant produces rubber mixes and other semi-finished goods, truck tires for the lower and upper markets under the BFGoodrich, Taurus, Kormoran, Riken, Tigar and Orium brands, tires for civil engineering, construction, mining, farming and other specific activities.

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Legislative News (1)

Milk labeling bill back before Parliament 

After two official letters from the European Commission voicing its disagreement regarding numerous paragraphs of the milk and dairy product labeling law, which was passed last year, the MPs will take up a draft bill for amending this law, which has never actually been enforced.

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Politics (2)

PMP to seek parliament commission 

The PMP caucus is planning to propose the establishing of a standing commission tasked with handling the Parliament's relationship with the civil society. The decision is the result of talks held on Tuesday, which focused on the dialog between elected officials and the civil society.

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USR wracked by internal strife over family referendum 

Deputy Cristian Ghinea (USR) has accused his own party leader, Nicusor Dan, of trying to impose his point of view on the issue of revising the Constitution and changing the definition of family. "A clear majority was forming, which supported [a rejection of the initiative]. At that point, Nicusor Dan threatened to resign if the party took a stand. A number of members gave in, unfortunately, to the blackmail," said Ghinea.

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