News

Daily Newsletter - 16 July 2020

Summary

Macroeconomic News (3)

SMEs recovered some losses in June

June was the best month for Romania's SMEs since the relaxation of pandemic restrictions, with their combined turnover being only 0.6% smaller year-on-year, according to a barometer published by billing and management company SmartBill.

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Construction market to pass new threshold

The turnover of the local construction market (buildings, civil engineering, and special construction works) increased by 17% compared to 2017 and exceeded by almost 30% the level of 2014, passing RON 84.4 billion in 2018. The turnover estimated for 2019 is RON 89 billion, while this year's figure was put at approximately RON 90 billion.

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Young farmers can apply for EUR 43 million in grants

The Rural Investment Financing Agency (AFIR) launched on Wednesday the call for applications for the National Rural Development Program 2014 - 2020 (PNDR 2020) sub-measure promoting the installation of young farmers. The total grant budget for this year is EUR 43.02 million, of which EUR 20 million is earmarked for young farmers in the diaspora.

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Financial News (3)

Amendments to decree postponing installment payments declared unconstitutional

Yesterday, the Constitutional Court admitted in a unanimous vote the complaint filed by the National Liberal Party (PNL) against the law approving Decree 37/2020, which allows debtors to postpone the payment of installments. The court declared the law unconstitutional in its entirety on grounds that it failed to observe the principle of bicameralism.

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Eugen Radulescu: "Interest rates are not very high, but they keep falling slowly"

"The interest rates on deposits are not very high, which also applies to loan rates, but the latter continue to fall slowly, not very fast. If we look at the numbers, we'll see that loan rates fell slightly every month, even though, aside from the twin deficits, we also have a problem called inflation," said Eugen Radulescu, head of the Financial Stability Directorate (DSF) at the National Bank of Romania (BNR).

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Banking system better positioned compared to 2008

Romania's banking system is stronger and more prepared to deal with difficulties, and the general situation is much better in all respects compared to the 2008 crisis, said Eugen Radulescu, head of the Financial Stability Directorate at the National Bank of Romania (BNR). "I would insist on the ratio between deposits and loans. At the moment, loans are somewhere around 70% compared to deposits, while in 2008 the situation was reversed. So, practically, lending was overwhelmingly based then on resources attracted from abroad. Today, lending is based on domestic resources," Radulescu said.

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Investment News (1)

Apa Nova to invest EUR 370 million in Bucharest water system

Apa Nova, the company which manages Bucharest's water and sewerage network, announced it would invest EUR 230.9 million in expanding and modernizing the city's network in the next 11 years. The company is also considering EUR 137 million worth of additional expenses, thus bringing the total to EUR 370 million.

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Legislative News (1)

President Iohannis signed food waste incentives bill

President Klaus Iohannis signed the bill amending Law 227/2015 (the Tax Code) and Law 217/2016 which regulates the efforts to reduce food waste. The new law offers some incentives to entities donating food products close to their expiry dates.

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Politics (2)

Ciolacu sends tough message to Iohannis, Orban

Marcel Ciolacu, interim leader of the Social Democratic Party (PSD), warned President Iohannis and Prime Minister Ludovic Orban that the PSD would file a motion of censure and "sweep out" the current government unless the child rearing aid budget is doubled.

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USR blasts PNL government over August 10 decision

Representatives of the Save Romania Union (USR) stated yesterday that DIICOT's decision to drop part of the case regarding the August 10 events allows the heads of the Gendarmes and Police, as well as the politicians who gave the orders, to avoid being held responsible in court, while also focusing the investigation on rank and file gendarmes. USR called the decision a new failure of the PNL government to rebuild trust in the state's institutions.

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Social (2)

CCR rejects Cabinet's complaint against child rearing aid law

The Constitutional Court rejected on Wednesday the Cabinet's complaint against the law doubling the child rearing aid. The Cabinet had referred the law to the Court because it lacked any financing sources to cover the increase.

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State of alert extended

The Cabinet adopted a decision extending the state of alert and the measures implemented over its course in order to prevent and combat the effects of the COVID-19 pandemic. The list of measures does not include the quarantining and isolation of infected or suspected individuals.

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