News

Daily Newsletter - 4 July 2017

Summary

Macroeconomic News (4)

Romania becomes EU home appliances hub 

The home appliances manufacturing plants located in Romania made EUR 1 billion worth of goods and parts this year, twice higher compared to 2009. The biggest players are Arctic (Dambovita county), De'Longhi (espresso machines - Cluj county), Philips (espresso machines, oral hygiene - Hunedoara county), Electrolux (stoves - Satu Mare county), Miele (parts - Brasov county) and Electroarges (vacuum cleaners - Arges county).

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Ministry of Energy wants to revive AGRI project 

The Ministry of Energy supports the revival of the AGRI natural gas pipeline interconnection project. The project company will begin the procedures required to secure EU financing, according to secretary of state Robert Tudorache.

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Cabinet postpones tax decision till autumn 

The Cabinet will conduct a series of simulations regarding the implementation of the turnover tax. The initial proposal was met with determined resistance from the business sector. The Cabinet will try to establish whether this type of tax can be applied by sector or by turnover bracket.

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Retail sector brings in EUR 74 billion 

Even though international food retailer Kaufland reported a massive EUR 2.1 billion turnover for 2016, small retailers account for 71% of the retail sector's turnover and most of the workforce. On the other hand, the average SME's turnover is 700 times lower compared to a big company.

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Financial News (4)

Mihai Purcarea says local savings wasted 

Mihai Purcarea, head of BRD Asset Management, stated that the RON 60 billion held by Romanians in overnight deposits, mostly current accounts, are wasted because they bring no benefit. "In 2010, approximately 20% of all savings stayed in overnight deposits. Today, it's 35%. This is huge. Practically, a third of Romanians' wealth stays in overnight deposits, at zero interest," said Purcarea.

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Isarescu: The exchange rate was stable during the political crisis 

Foreign turmoil and local political uncertainty had a modest impact on the RON/EUR exchange rate. The 1% fluctuation was five times lower compared to what the top currency paid went through, but the media made much of it. "The exchange rate has proved stable," said BNR Governor Isarescu.

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BRD allocated RON 157.7 million budget 

BRD was allocated an extra RON 157.7 million worth of guarantees that would allow the bank to grant RON 315.4 million in new Prima Casa loans. Since the beginning of this year, the bank has issued RON 500 million worth of such loans.

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BNR postpones post-crisis cycle 

The board of directors of the National Bank of Romania (BNR) decided on Monday to stick to the current monetary policy. The board hinted that BNR is "ready to use every tool at its disposal" at the first sign that the national economy is losing its "capacity to cope with possible negative foreign trends," according to the BNR press release.

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Investment News (2)

BAT invests EUR 60 million in Ploiesti 

Cigarette producer British American Tobacco (BAT) announced that it would invest approximately EUR 60 million in its Ploiesti plant this year, three times more than initially expected. The group will build a new production hall and retool the plant before relocating part of its Bulgarian operations.

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CEO reaches 48% of this year's investment plan 

The Oltenia Energy Complex (CEO), one of the biggest electricity producers in the country, announced that it had completed 48% of this year's RON 630 million investment plan. Sorin Boza, CEO of the company, has warned that the new EU directives on energy are setting up hurdles that could push coal plants out of the market and that Romania is not prepared for this situation.

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Legislative News (1)

Abuse of office powers threshold discussed 

During the second discussion of the minimum threshold that would make any abuse of office powers a crime, DNA prosecutors said it should be set at the minimum salary. A small group of CSM members, on the other hand, want the threshold set high.

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Politics (1)

Who are Dragnea's "lieutenants" in the Cabinet? 

Liviu Dragnea has staffed Mihai Tudose's Cabinet with a number of people who had proved loyal over the years and who are tasked with making sure the Cabinet would obey every order coming from the party headquarters. Among these people is Sevil Shhaideh, whom Dragnea had wanted as prime minister.

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