News

Daily Newsletter - 18 October 2017

Summary

Macroeconomic News (4)

Romania's economic stability: 2017's alarms, as seen in the European indicators 

Romania begins to show increasingly more warning signals for the short-term economic analysis underlain by Eurostat, with values significantly situated outside some balanced evolutions. The latest data do not reassure the potential investors and do not improve the country rating, despite the economic growth that reached 6% in the second quarter.

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Analysis. Firms struggle to find workers on tight labor market in Romania 

Romania’s private sector is registering demand for employees across the board, from welders and electricians to IT experts and agriculture and construction specialists. In an economy with an unemployment rate hovering around 4 percent, companies are exploring various options to increase their staff, ranging from the relocation of employees from other parts of the country, to offering vocational training for high school students and importing workers from outside the European Union. Solving the issue of the lack of employees is also on the agenda of the Foreign Investors Council (FIC), whose member companies have created some 200,000 jobs in the country. FIC representatives say that politicians should focus on the issue of demographics as the results will also be seen in two to three decades.

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Romania borrows more and more expensively: The interest in government securities for 10 years at the maximum level of the past three years 

The funding cost of governmental expenses rose in October, in aggressive rhythm on short term and increasingly more in all the due dates, according to the interests from the government securities market. "The interest rate in government securities for 10 years rose 4.26%, the highest level since October 2014", pursuant to a Banca Transilvania report. At the same time, the curve of yields in state securities increased by 16 basic points in October 2017 compared to the same month of last year.

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Florin Voidita, prime minister's counselor: Nearly one quarter of Romania's exports is ensured by the motor industry 

Nearly one quarter of Romania's exports is ensured by the motor industry, that is why this sector must be encouraged, and the Government has taken a series of measures for this purpose, Florin Voidita, state counselor of the prime minister, stated Tuesday, within Romanian Automotive Summit conference. According to him, production of new vehicles in Romania reached 360,000 units per year, but the number is small compared to Slovakia.

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Financial News (5)

Iulian Iancu: OMV Petrom representatives will be heard for the artificial increase in energy price and market manipulation 

Iulian Iancu (PSD), the head of the Commission for industries and services, contends that OMV Petrom representatives will be heard in the parliamentary investigation commission on the activity of the National Energy Regulation Authority (ANRE), for giving explanations about the manipulation of the market and the artificial price increase. His statements come provided that Razvan Nicolescu, former energy minister, accused Iancu of playing into the hands of the Russians from Gazprom, by the legislative amendments providing that 70% of the wholesale gas transactions should be made on the stock exchange and on OPCOM platforms, not on those of the Romanian Commodities Exchange (RCE).

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EXCLUSIVELY What royalties Exxon, OMV, Lukoil and the other companies that will extract gas from the Black Sea will pay. Plus: how many Romanian employees they must have, what permits are necessary and what fines the institutions that do not give the authorizations on time receive 

The companies exploring and exploiting deposits of oil and gas from the Black Sea will pay normal royalties, that is the royalties provided by law now or in the contracts concluded with the Romanian state, pursuant to a draft law adopted by the Government. The draft consulted by Hotnews.ro also provides that these companies (Exxon, OMV and Lukoil making already explorations in the Black Sea) must have at least one quarter of Romanian employees and must obtain permits from 9 institutions, among which the General Major Army State and the Ministry of Exterior.

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The Swiss from Georg Fischer AG want to buy Eucasting 

The Competition Council analyzes the transaction whereby the Swiss from Georg Fischer AG want to buy the Romanian company Eucasting RO SRL, the competition authority has announced in a press release. "This operation is an economic concentration exceeding the value thresholds provided by law, being subject to the Competition Council's control. The competition authority will evaluate this economic concentration in order to establish its compatibility with a normal competitive environment and will issue a decision in the time-limits provided by law", the cited source notes.

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How Romanian entrepreneurs earn revenues worth millions of dollars with online businesses on Amazon 

Over 2200 Romanian online entrepreneurs are part of Amazonian community at present, initiating businesses on Amazon that bring constant revenues of thousands, tens and even hundreds of thousands of dollars. Amazon makes absolutely all the services necessary to trade a product available: reception, storage, display on the site, delivery, customer support and bureaucracy.

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Authorities have discussed with EIB officials about an eventual funding line for the Romanian Post 

The minister of communications and informational society, Lucian Sova, and the acting director of the Romanian Post, Elena Petrascu, discussed, Tuesday, with the officials of the European Investment Bank (EIB) in Romania about establishing the necessary stages to obtain an eventual funding line by the Romanian Post, according to the competent minister's Facebook page.

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Investment News (4)

Wienerberger expands its brick business in Romania, by buying Brikston 

Wienerberger has reached an agreement with ADM Capital for buying the 98.3% stake of the brick manufacturer Brikston Construction Solutions SA (Brikston). By planning this acquisition, Wienerberger expands its brick activity in Romania. Brikston has been operating on the Romanian market for 50 years and has a production plant in Iasi, in the north-east of Romania.

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PENNY Market opens three new stores in October and reaches 212 units 

Rewe Romania company opens three new Penny Market stores, in Iasi, Agigea and Satu Mare, the store chain reaching 212 opened spaces in late October. In Iasi, the first Penny market of the city will be opened. The store measures 1,423.13 m2 and has 15 employees.

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Laufer: Several large companies will relocate their operations in Romania by the end of the year 

Several large companies will relocate their operations in Romania by the end of the year, attracted by the advantages found here, such as economic growth, remuneration level, single share and the potential of the internal market, Ilan Laufer, the minister of Business Environment, Trade and Entrepreneurship, stated Tuesday within a conference about SMEs' development. In advantages, he identified the 5.8% economic growth in the first semester, specifying that the major part of the economic growth comes from industry.

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Logo's plans for TotalSoft 

The largest independent software developer from Turkey entered Romania last year by the acquisition of TotalSoft, company founded in 1994 by the Romanian entrepreneur Liviu Dragan. Tugrul Tekbulut, co-founder of Logo and president of the board, who is also the technology director of the group at present, stated within a meeting with the press that Logo's strategy is to develop in the east first, then in the west, for becoming a powerful player globally in the end.

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Legislative News (2)

OPCOM monopoly, blocked in the plenary of the Parliament: The report requiring producers to trade at least 70% of the gas production on OPCOM, sent back to the commission 

The report adopting GEO 64, requiring producers to trade at least 70% of the gas production on OPCOM, which obtained the statute of monopoly to the detriment of the Romanian Commodities Exchange, has been sent back for the second time by the plenary of the Chamber of Deputies for redraft to the Commission of Industries.

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Dan Badin, Deloitte: There will be other fiscal amendments in 2017. The compulsory increase in gross wage - discussable constitutionally 

Only two months are left of 2017, but amendments of the tax legislation are still predictable by the end of the year - this is one of the ideas stated at the Annual conference Tax & Legal, organized Tuesday by Deloitte Romania and Reff & Asociatii. "We will probably see a high interest in the tax legislation area, in the last two months of 2017. 2018 seems to be a year when companies will not have an increased taxation, but it is likely to see other amendments of the tax legislation by the end of the year. We hope that after a such agitated year - this year - next year will be more stable from the viewpoint of the discussions on law amendments", Dan Badin, partner coordinator tax and legal services at Deloitte Romania, stated.

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Politics (1)

President Iohannis has signed the appointment decrees of the new ministers 

President Klaus Iohannis has signed the appointment decrees of the new ministers and the swearing-in ceremony will take place Tuesday, at 19.30. The National Executive Committee of PSD voted Saturday the new ministers of the Government, Felix Stroe being appointed at the Ministry of Transports, Paul Stanescu as vice prime minister and minister of Regional Development and Marius Nica, delegated minister of European Funds.

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