Daily Newsletter - 10 October 2017


Macroeconomic News (3)

Standard & Poor's warns about the Romanian economy's risk of overheating 

"Romania's pro-cyclical budgetary policy amplifies the wage growth pressures, in an economy that is already overheating. Although wage convergence is wanted, salary rises exceeding productivity substantially entailed, historically, the shift from periods of economic growth to decline. We anticipate that the economic growth focused on consumption will cause a rise in the tax and current account deficit, increasing the vulnerability of the Romanian economy to an abrupt decline on medium term. However, the public debt and the external debt are modest and let's admit the economic growth may remain sound for a long period", the report of the rating agency shows.


The cost of the budget deficit funding grows, the Ministry of Finance dismisses all the offers of banks at a Government securities auction again 

The Ministry of Finance dismissed, Monday, for the second time in less than one week, all the offers received from banks, within the auction for a benchmark state bonds issuance, on 79 months. The Ministry of Finance intended to attract RON 300m. The six banks participating in Monday's auction sent offers worth RON 380m in total, according to Agerpres.


The average net earnings dropped by RON 27 in August, up to RON 2364 

Employee's average nominal net earnings were RON 2364 in August, down by RON 27 (-1.1%) compared to the previous month, according to a press release published on the site of the National Institute of Statistics (INS). In August, the decrease of the employee's average net earnings compared to one month before was determined by the grant of occasional prizes in July (including quarterly, annual, holiday or for special performances prizes), wages and salaries in kind and money aids, sums from the net profit and from other funds (including meal tickets and vouchers).


Financial News (3)

The tax Authority quarrels with banks for 7-7.5% interests paid to the subordinated loans taken out from the "mothers" from abroad 

The bone of contention between the Ministry of Finance and the commercial systemic risk banks from Romania, the cost of subordinated loans, is a dispute that can be settled by the agreement of the Tax Authority with the bank or by the agreement of the Romanian Tax Authority with that from the bank's country of origin. What must be said is that the interest of the subordinated loans taken out by the Romanian banks from the parent banks were 1-1.5% higher than the interest at which international banks borrowed in 2015, in this case at a 6% level, as Mihai Ion, CFO Raiffeisen Bank, shows.


Cleaning continues, but at a slower pace: the rate of bad loans went down at 8.19% in August 

Non-performance rate decreased by 1.5% since the beginning of the year. The rate of bad loans from the local banking system reached 8.19% in late August, according to NBR.


The Competition Council takes into account an investigation in the banking system, if it discovers irregularities in Robor's growth 

3-month Robor index rose to 1.79% today, according to the data published Monday by the National Bank of Romania (NBR). This evolution takes place provided that the indicator fell twice last week: from 1.8% to 1.79%, to 1.78% respectively. The Competition Council takes into account an investigation in the banking system, if it discovers hints in the recent Robor growth, Bogdan Chiritoiu, the head of the institution, said.


Investment News (2)

Immochan has invested 50m euros in 1000 apartments and in the infrastructure of the project from Tractorul factory from Brasov 

Immochan and Avantgarden Immo Invest are close to the completion of the second phase of the residential project they build in partnership in Brasov, on the land of the former Tractorul factory. The investment in the 1000 apartments and in the infrastructure of the project amounts to 50m euros.


The IT developer Luxoft continues investments in Romania and prolongs the contract with Novo Park by 2025 

Luxoft Romania, the local branch of the Russian software developer with the same name, prolonged until 2025 the leasing contract with the office park Novo Park from Pipera area, where the company had moved in 2007 in a 9500 m2 space.


Legislative News (1)

The draft amending the Fiscal Code for moving the social contributions: the burden of contributions to independent activities increases 

The Government does not renounce the move of social contributions integrally to the employee, despite the challenges come from the business environment and trade unions. In order to keep the employee's net earnings, without raising employer's total cost, the overall amount of contributions and the income tax are also diminished (from 16% to 10%), while for independent activities other important changes are provided as well, according to the draft law amending the Fiscal Code, elaborated by the Government and obtained by The burden of contributions rises for authorized natural persons.


Politics (3)

Tudose announces a government reshuffle this week. The three ministers with criminal issues are targeted and there are at least other two ministers I will ask to leave the Government 

Prime minister Mihai Tudose has announced that a government reshuffle will take place this week, specifying that the three ministers with criminal issues as well as at least other two members of the Cabinet are targeted. He has said "there will be some tough, but necessary decisions". Asked about a survey which has showed that PSD would continue to do good in Romanians' preferences, but the Government would be viewed badly, prime minister Tudose has said that, supposing it is true and departing from the premise that it is true, either he is the guilty one, or there are problems in the Government, like that linked to the ministers with criminal issues.


RePatriot asks the Government for electronic vote for the Romanians from diaspora and for the support of repatriation through entrepreneurship 

RePatriot team, project of Romanian Business Leaders Foundation, has presented to the Government, in a meeting with prime minister Mihai Tudose, the results of the study on Romanians from diaspora and has asked for the introduction of electronic vote, along with programs and public policies to stimulate Romanians' return in the country through entrepreneurship and investments. The meeting of RePatriot team and ambassadors with prime minister Mihai Tudose took place in the context of RePatriot Summit - We invest in Romania 2017, which ended Sunday, 8 October, after four days of debates and workshops that took place in Bucharest at Bragadiru Palace and in Poiana Brasov.


Liviu Dragnea: There is no conflict in PSD or in the coalition 

The leader of social democrats, Liviu Dragnea, stated Monday, that "there is" no conflict in PSD about topics floated in the press, among which the justice laws, the submission of a notification to CCR in Belina case or an opinion survey.