FIC Board members, Daniel Anghel (CDR Coordinator) and Ramona Jurubita (FIC Vice-President) had interventions during the Coalition for the Development of Romania press conference - "Merităm în Schengen" held on 17 November. Daniel Anghel, Coordinator of the Coalition for the Development of Romania (CDR): "I want to emphasize that only by being part of Schengen, Romania can fully benefit from its advantages as an EU member state. Only being part of Schengen, Romania would genuinely participate in the European “Area of Freedom, Security and Justice”. Without this status, Romania loses time and money and will not be able to recover the gaps to reach the objective of convergence with the EU average (a gradual increase of real income towards the average of the community block). Thus, from 2004, the year before the signing of the Accession Treaty until 2021, Romania recovered from the development gap, according to the GDP/capita indicator at purchasing power parities, reaching approximative 72% of the EU average in 2021, from approximative 34%, 17 years ago. Historically, economic gaps have been shown to recover due to inflows of foreign investment, technology and know-how. Accession to NATO and the EU were two decisive stages in Romania's development. The free movement of goods and services represents significant economic benefits by facilitating the integration of cross-border trade, advantages for transporters, advantages for foreign investment. Accession to Schengen area will eliminate additional verifications at internal borders unrelated to customs clearance of goods that cause delays.” Ramona Jurubita, Vice-president of the Foreign Investors Council (FIC): "Increasing the attractiveness for FDI has been a constant priority on the agenda of the Foreign Investors Council for 25 years and continues to occupy a central place on our agenda. We consider that an essential element in attracting foreign investments is Romania's accession to international structures. We can clearly observe how both the accession to NATO and later to the EU were events that boosted the growth of FDI in the states of Central and Eastern Europe. In the case of Romania, looking at the last 2 decades, we can note that the share of FDI stocks as a percentage of GDP was approx. 21% in 2003 before joining NATO, then it increased to approx. 42% GDP in 2021. Investments are always based on trust between the parties, and Romania's accession to the Schengen area is a test of trust between EU member states as partners of the same European economy. We believe that Romania has passed the test of trust. We still need the grade to be formally marked in the grade book."
The Fiscal Council salutes Government’s intention to target a lower budget deficit for 2022. The Fiscal Council believes that the cash budget deficit target of 5.74% of GDP, proposed by the Government in the second budget adjustment, is feasible. Analysts have also forecast a tax revenue gap (including socials security contributions) of about RON 3 billion (representing about 0.2% of GDP), as well as overspending on budget expenditure on goods and services and social assistance by about RON 3 billion (representing about 0.2% of GDP).
Annual inflation rate in the European Union continued to grow in October to 11.5%, up from 10.9% in September. Estonia (22.5%), Lithuania (22.1%), Hungary (21.9%) and Latvia (21.7%) recorded the highest rates, according to Eurostat data. Compared to September, annual inflation rate fell in 11 member states, remained stable in three and rose in 13 others, including Romania, from 13.4% to 13.5%. No fewer than 18 member states, including Romania, had recorded an annual inflation rate above 10% in September.
The volume of construction works grew by 8.9% as a gross series and by 6.6% as a working-day and seasonally adjusted series in the first nine months of 2022, year-on-year, according to data published by the National Institute of Statistics on Thursday. As a gross series, on structural elements, during the period January - September 2022, advances were recorded in current maintenance and repair works (+17.1%), capital repair works (+12.9%) and new construction works (+5.8%).
On Thursday, the Government approved this year’s second positive budget adjustment. Following the new budget adjustment, general consolidated budget revenues grow by RON 521.1 million, while general consolidated budget expenditures increase by RON 522.1 million. According to a press release issued by the Executive, the budget adjustment covers mandatory spending, proper functioning expenditure and social assistance expenses. Moreover, funds have been reallocated to programs carried out at the level of the main credit release authorities, which have an impact on economy and on supporting the population and businesses.
Revolut has exceeded 25 million individual customers at global level and currently processes 330 million transactions per month, according to a press release. This month, the fintech has also reached the threshold of 7.5 million customers in the CEE region, which includes Romania, Poland, Hungary, Bulgaria, Czech Republic, Lithuania, Latvia, Slovakia, Slovenia and Estonia. According to the cited source, Romania has reached 2.5 million individual customers and has recorded a 67% increase in its customer base over the past 12 months, ranking second after the UK in the overall classification. Poland, which has seen strong growth over the last six months, has also exceeded the 2 million customer threshold. Hungary (with almost 800,000 customers), Bulgaria (500,000 customers) and Lithuania (over 415,000) are also among the top five markets at regional level.
Omniasig, part of the Austrian Vienna Insurance Group (VIG), ended the first nine months of 2022 with RON 1.5 billion gross written premiums, up by 35% year-on-year, according to information provided by company representatives. Of the total underwritings recorded by Omniasig in the first nine months of 2022, about RON 1.1 billion were premiums written only on the RCA and Casco area combined, accounting for 73% of the company’s portfolio. Moreover, Omniasig paid RON 800 million compensations in the first nine months of 2022.
The Ministry of Finance (MF) borrowed RON 967.5 million from banks through a benchmark government bonds issue with 143-month residual maturity at an average yield of 8.29% per year on Thursday, 17 November, according to data published by the National Bank of Romania (NBR). The nominal value of the issue was RON 400 million and the banks subscribed RON 1.397 billion.
Spanish developer Hercesa is to launch a new real estate project in Bucharest, in the Ghencea area, with 482 apartments. The value of the investment amounts to EUR 52 million. Stellaris Residencias, a complex located near the new Steaua multi-purpose stadium, will be delivered in four phases. Construction works on the first phase will be finalized in the last quarter of 2024. 129 apartments in an 11-storey block of flats will be delivered within the first phase of the project.
US e-commerce giant Amazon has announced that it will invest USD 2.5 billion in its cloud services in Spain over the next ten years, and will thus create 1,300 jobs, according to Le Figaro. The investment will be used to set up and operate a cloud computing hub in Spain, Amazon Web Services’ eighth data storage network in Europe. Amazon Web Services has been present in Spain since 2012 and is building the necessary infrastructure for the new data centers.
Electrical and electrotechnical parts manufacturer Weidmüller Interface Romania, the local subsidiary of the German group Weidmüller, has started construction works on two new production units at its site in Tăuții-Măgherăuș, Maramureș County. With this new construction, the company is to expand its site by 6,800 square meters. Once the investment is finalized, the total area will amount to 21,800 square meters (the biggest production unit within the Weidmüller group). The new investment will create around 500 new jobs, according to a press release issued by Maramureș County Council.
The law approving Government Ordinance 18/2021 amending and completing Law 95/2006 regarding health care reform and amending some normative acts in the healthcare sector was promulgated by President Klaus Iohannis on Thursday, 17 November 2022. The normative act also repeals Article 4 of Law 584/2002 on measures to prevent the spread of AIDS in Romania and to protect people infected with HIV or suffering from AIDS. The aforementioned article provided for the establishment of the National Commission for the Surveillance, Control and Prevention of HIV/AIDS Cases - organized as an inter-ministerial body without legal personality.
The Government approved on Thursday, 17 November 2022, an emergency ordinance for the establishment of a state aid scheme in the form of a financial grant to agricultural producers whose crops established in the autumn of 2021 were affected by soil drought. The financial resources needed to implement the scheme amount to RON 365.6 million and are ensured from the state budget, through the Agriculture and Rural Development Ministry (MADR) ’s budget for 2022, the Ministry has indicated.
On Thursday, 17 November, the Government adopted a Government Decision approving the Methodological Norms for the evaluation, contracting, financing and monitoring of the Core Research and Development Programs. The Government Decision regulates the financing mechanism of the aforementioned Program for the period 2023-2026, according to the Executive’s press release. The criteria that will be used to evaluate the projects are meritocracy and predictability in order to ensure the continuity of internal research programs and to meet citizens and economy’s expectations.
On Thursday, 17 November, the Government approved a memorandum on Romanian Government’s support for operators in sugar beet processing industry. According to the Government’s press release, the normative act provides for measures to support farmers who grow sugar beet, as well as to re-launch the sugar beet processing industry. The support is granted both from European funds, through the National Strategic Program - Common Agricultural Policy, through direct payments, including voluntary coupled support (VSC), and from the state budget, in order to maintain areas with a potential and tradition, and to increase the area cultivated with sugar beet, so that processors can evaluate, determine and ensure the quantities of raw material, as well as the necessary cash flow for working capital and/or investments.
A mixed team of experts from the European Commission and member states, including the Netherlands, will visit Romania to clarify any issues regarding the country’s implementation of the Schengen acquis, the government said on Wednesday. The European Commission has again asked the Council to welcome Bulgaria, Croatia and Romania into the Schengen area, which allows travel without border controls, at a vote in December. EU Home Affairs Commissioner Ylva Johannsson said that following recent fact-finding missions by EU agencies, it was clear that "these three nations deserve to feel fully European". Bulgaria and Romania Invited a team of experts last month to assess their legal frameworks and governance relating to borders, sharing of security information and efficient police cooperation in an attempt to assuage any remaining concerns from member states.
More than 50% of Romanians believe that the situation in the country is worse than it was in 1989, according to surveys conducted by INSCOP Research, within the "Romania Agenda 2050" project, commissioned by Strategic Thinking Group. According to the survey conducted in September-October referring to the three main problems of the Romanian education system, 53.6% of those interviewed mentioned some teachers’ low level of training and lack of interest, 45.1% mentioned school drop-out among children from underprivileged environments, and 41% mentioned the lack of discipline among pupils.
During the meeting on Thursday, 17 November, the Romanian Government adopted, through an emergency ordinance, the second budget adjustment for 2022. Following this decision, the budget allocated to education increases by a total of RON 554.35 million (RON 320 million - budget for education managed by the Ministry of Education, and RON 234.35 million - amounts allocated from VAT from the state budget through local budgets). The additional RON 320 million from the state budget for the Ministry of Education is intended to ensure the salaries of personnel in public pre-university education units.