Daily Newsletter - 1 October 2021


FIC (1)
Macroeconomic (2)
Financial (2)
Investment (2)
Legislative (2)
European News (1)
Social (3)
Foreign Investors Council has published the results of the "Business Sentiment Index" report

From an investment perspective, FIC noticed that companies' confidence in business opportunities is maintained, because for the next 12 months more than 53% of companies have investment plans. These results remain at high levels for BSI, marking a new peak. The bad news remains constant when looking at infrastructure, transparency and policy coherence, reducing bureaucracy and regulatory burden. Since 2016 these are, perceived as very weak and uncompetitive by most respondents. At the same time, FIC members consider that Romania has a very good opportunity to use the funding available for reform and resilience programs and find the most adequate solutions to address these issues by implementing PNRR. Although the political situation in the last month has not responded to the need for predictability of the business environment, the approval of PNRR is an important moment for this country project that we are ready to support in the implementation phase.

FIC releases Business Sentiment Index, autumn edition: The perception of the business environment

Net foreign assets of banks in Romania had a surplus of about EUR 6 billion in July 2021
The net foreign assets of banks in Romania, i.e. the difference between foreign assets and foreign liabilities, had a surplus of about EUR 6 billion in July 2021, a surplus which represents exported capital, Cristian Popa, a member of the National Bank of Romania’s Board of Directors, stated during an event organized by the Asset Managers Association (AAF). He said that Romania financed other states’ budget deficits inclusively through this surplus. Basically, he explained, commercial banks in Romania are currently lending money to the external sector. As a comparison, in July 2008, before the onset of that year’s financial crisis, net foreign assets had had a EUR 16 billion (over RON 80 billion) deficit.
Foreign direct investments totaled EUR 3 billion in 2020
Foreign direct investments totaled EUR 3 billion in 2020, after enterprisers’ equity amounted to EUR 3.9 billion, but the ratio between debts and receivables was negative, having generated a minus of EUR 994 million, according to data published on Thursday, 30 September, by the National Bank of Romania (NBR), in collaboration with the National Institute of Statistics (INS). Equity thus stood at EUR 983 million, while reinvested profit amounted to EUR 3.01 billion. Moreover, debt transactions with foreign direct investors and non-resident fellow companies (debt less claims) were worth –EUR 994 million, having had a negative impact on the total level of foreign direct investments.
Romanians’ appetite for consumer loans remains high
Romanians’ appetite for consumer loans remains high, the volume of new such lending products having reached nearly RON 2.63 billion in August 2021, the second highest monthly level of the past 14 years and up by 49.4% against the level recorded in August 2020. The previous monthly record of retail lending, of nearly RON 2.9 billion, had been reached in July 2021. The rise in lending comes despite an increase in the average interest rate to 9.5% in August, from 9.2% in July. Moreover, the volume of new RON-denominated retail loans stood at RON 18.9 billion at the end of the first eight months in 2021, 50.2% above the level recorded during the same interval of 2020, and the cumulated volume of new RON and euro-denominated retail loans got close to RON 19 billion, up by RON 6.2 billion (48.6%) against the level from January - August 2020.
OTP Bank intends to buy a state-owned bank from Uzbekistan
Hungarian banking group OTP Bank intends to take over Ipoteka Bank (Mortgage Bank), a state-owned bank from Uzbekistan, according to a memorandum signed by OTP and the government from Tashkent on Wednesday, 29 September. The Uzbek authorities had previously announced their intention to sell a 75% stake at Ipoteka Bank. However, on Wednesday, after the agreement was signed during a conference in Tashkent, the parties did not provide any details on the size of the participation or on the price of the transaction.
eMAG is investing EUR 300,000 in the leaders’ development program
eMAG continues to invest in the professional development of managers in the organization. Through the Grow Talent program, which the company is investing EUR 300,000 in, 85 eMAG leaders and future leaders part of the company have access to three business programs organized by Harvard Business School and London School of Economics, which will run until the end of 2021. The 85 managers to have joined the program will develop their strategic thinking, commercial, financial and operational strategy skills by attending three intensive courses.
Notino is investing EUR 3 million in the development of its logistics center in Bucharest
Notino, one of the biggest online perfumes and cosmetics retailers, has made new investments in the development of its logistics capabilities, according to a press release. The company is developing its 7,000 square meter logistics center in Bucharest, the investment amounting to about EUR 3 million. In 2020, Notino decided to open a distribution center in Romania, in order to offer customers the highest quality services and faster delivery. The decision was further accelerated by the Covid-19 pandemic, when transport and movement in the European Union were restricted, having thus led to an unprecedented situation.
Liberal Senator Nicoleta Pauliuc has submitted a draft law
Liberal (PNL) Senator Nicoleta Pauliuc, the chair of the Senate’s Committee on Defense, Public Order and National Security, has submitted a legislative initiative according to which all economic operators providing toilet discharge services have the obligation to be equipped with GPS systems. The initiative is mainly aimed at discouraging the practice of illegally discharging septic trucks’ contents into rivers or in unauthorized areas. The legislative initiative proposes completing Government Emergency Ordinance no. 195/2005.
President Iohannis promulgated two laws on access to EU funds through PNRR
On Thursday, 30 September, President Klaus Iohannis promulgated two laws regarding access to refundable and non-refundable external funds from the European Union within the Recovery and Resilience Mechanism, namely the Law approving Government Emergency Ordinance (OUG) no. 155/2020 and the Law approving Government Emergency Ordinance (OUG) no. 24/2021. According to OUG 155/2020, the National Recovery and Resilience Plan (PNRR) is Romania’s strategic document, which substantiates reform priorities and investment areas at national level, for the establishment of the Recovery and Resilience Mechanism. OUG 24/2021 completes the first ordinance by adding procedures regarding negotiation, but also implementation of funds within the Recovery and Resilience Mechanism.
European News 
Government changes rules aimed at limiting the spread of COVID-19
As the 14-day COVID-19 incidence rate in Bucharest went over the six per 1,000 persons threshold, the government decided to change some of the rules. Over the past weeks, COVID-19 cases have increased rapidly in the country, with daily cases reaching 11,000 on Tuesday, 28 September. Health authorities have already predicted that Romania could see more than 20,000 COVID-19 cases a day in October. At an incidence rate of over six per 1,000, schools should be closed according to rules set just a month ago. But now, the government is considering abandoning school closures regardless of the number of infections. Schools could still face closures in cases where a certain number of students and teaching staff test positive.
Only 1.3% of the elderly in Romania benefit from social services
Minister of Labor and Social Protection Raluca Turcan stated on Thursday, 30 September, that only 1.3% of the elderly in Romania benefitted from social services, which meant that many seniors were not registered and did not have access to the aid they could obtain from the state. The minister pointed out that she had already started consultations for the amendment of the Social Assistance Law. There are 3.8 million elderly people aged over 65 in Romania, representing 17.3% of the country’s population.
Health Ministry is expanding network of pharmacies where free rapid antigen tests can be performed
Secretary of State in the Ministry of Health Andrei Baciu announced on Thursday, 30 September, that the network of pharmacies where free rapid antigen tests can be performed to detect SARS-VOC2 infection had been expanded. He stated that there were currently 106 such pharmacies in 19 counties in the country and new units, part of the pharmaceutical networks in Romania, would be added to the list in the following period.
CNCAV provides new information on anti-COVID-19 vaccination in special situations
The National Committee for the Coordination of Anti-COVID-19 Vaccination Activities (CNCAV) announced on Thursday, 30 September, that immunization with another type of serum based on RNA Messenger was allowed for all persons who had received the first dose of Vaxzevria (AstraZeneca) and who had decided to postpone the booster shot for more than three months. In the case of people who got vaccinated with the first dose of Vaxzevria (AstraZeneca) less than three months ago, the decision to change the type of serum upon the second dose will be made following a medical recommendation, according to the contraindications and precautions included in the Summary of Product Characteristics (SPC).