News

Daily Newsletter - 19 February 2021

Summary

FIC Daily Newsletter | 19.02.2021
FIC (1) || Macroeconomic (3) || Financial (2) || Investment (1) || Legislative (2) || Politics (2) || Social (2)
Foreign Investors Council - FDI Report
The FIC FDI Report provides information regarding the impact of foreign investment in our country through a detailed analysis on foreign investment flows, and how they have contributed to Romania's economic growth in recent years. As a conclusion of the second FDI Report and considering the recent data issued by the NBR which shows that FDI decreased in 2020 by 60.38% compared to 2019, the FIC considers that the Romanian authorities should add to the list of priorities the attraction of higher volumes of foreign direct investment, by increasing the absorption capacity and developing medium and long-term strategies, taking into account the economic reality. The use of FDI is favourable to long-term economic development, especially in the current context, when we face limited resources for large investment projects and the government's ability to mobilize such resources is narrowed by significant budgetary constraints.
5,564 new insolvency proceedings were opened in 2020
5,564 new insolvency proceedings were opened in 2020, 13% fewer than in the previous year, having thus reached a record low of the past ten years, according to the latest Coface Romania study. The lowest level previously recorded had been in 2019, of 6,384 insolvencies, down by 22% against 2018, according to Coface Romania’s previous annual report.
Draft state budget law will be approved with a 7.16% deficit target
The draft state budget law will be approved with a 7.16% deficit target and with the same expenditure and revenue parameters, Prime Minister Florin Cîţu stated yesterday. The head of the Executive pointed out that introducing new taxes was not necessary in the following period. Moreover, the Prime Minister said that additional budget revenues could come from the economic evolution above expectations.
Fiscal Council analyzed the draft budget for 2021
A budget deficit adjustment of 4% of GDP based, almost exclusively, on budget expenditure is not realistic, the Fiscal Council indicates in the point of view issued on this year’s draft Budget. This correction refers to the interval 2022-2024. The institution led by Daniel Dăianu also considers that an adjustment based on expenditure alone is very difficult to achieve and the reduction of the budget deficit using this method is unlikely to exceed 2.5% of GDP.
EC urges Romania to properly transpose the 4th Anti-Money Laundering Directive
Yesterday, the European Commission sent a letter of formal notice to Romania for incorrectly transposing the 4th Anti-Money Laundering Directive (AMLD4). The European Executive pointed out that the transposition deadline for the Directive had been 27 June 2017. Apart from Romania, Germany and Portugal also received similar letters of formal notice. The three countries have two months to provide a satisfactory reply to the arguments raised by the Commission.
Number of investors in mutual funds has increased
Investors regained their interest in placements in (mutual) open-end investment funds in the last months of last year, and the smaller ones took the total number of participants to the record high of 351,102, according to data made available by the Fund Managers’ Association (AAF). However, the shock generated by the major uncertainties of the Covid-19 crisis was bigger than the appetite recovery in Q4/2020 and outflows were RON 3.1 billion higher than inflows last year.
Teslounge Bucharest inaugurated a showroom for Tesla cars in Romania
Yesterday, Teslounge Bucharest, the only leasing company that offers financing for the acquisition of Tesla cars in Romania, announced the opening of the first independent showroom in Romania dedicated to this brand. Teslounge Bucharest estimates that it will finance the acquisition of minimum 300 Tesla cars in Romania in 2021.
Government approves draft law abolishing Special Section for Investigation of Criminal Offences in the Judiciary
Yesterday, the Government approved the draft law for the abolition of the Special Section for the Investigation of Criminal Offences in the Judiciary (SIIJ), drawn up during the current Finance Minister Stelian Ion’s term. Cases will be subsequently redistributed to prosecutor’s offices that had competence before as well, namely the National Anti-Corruption Directorate (DNA), the Directorate for Investigating Organized Crime and Terrorism (DIICOT) or the General Prosecutor’s Office.
OUG on measures to reduce budget expenditure in 2021 has been approved
Yesterday, the Government approved the Emergency Ordinance postponing the increase in the pension point for 2022, eliminating holiday vouchers and other bonuses for public institutions and authorities’ employees in 2021, and offering students a 50% discount on public transport. The draft Government Emergency Ordinance (OUG) “regarding certain fiscal-budgetary measures, as well as amending and completing several normative acts”, which had been up for public debate, was included onto the government meeting’s agenda. It will now be published in the Official Gazette of Romania.
PSD will file a motion against the Minister of Economy
Social Democratic Party (PSD) leader Marcel Ciolacu has announced that PSD will file a motion against Economy Minister Claudiu Năsui, claiming the latter “had an administrator account allowing him to intervene” in the allocation of financial aid from European funds for small and medium-sized enterprises. He has pointed out that he hopes the National Anti-Corruption Directorate (DNA) and the Anti-Fraud Office are already investigating this case.
Energy Minister Virgil Popescu had a work meeting with Hungary’s Foreign Affairs and Trade Minister
Energy Minister Virgil Popescu had a work meeting with Hungary’s Foreign Affairs and Trade Minister Peter Szijjarto yesterday. The need to develop bilateral relations between the two countries, in the energy sector in particular, was emphasized during yesterday’s meeting. Hungarian Ambassador to Romania Zakonyi Botond and Secretary of State Mosoczi Laszlo also participated in the meeting as Hungary’s representatives.
Number of vacant jobs decreased at the end of last year
The number of vacant jobs stood at 35,600 in Q4 of last year, down by 3,800 against the previous quarter, according to a press release issued by the National Institute of Statistics. Compared to the same quarter of 2019, job vacancy rate dropped 0.22%, and the number of vacant jobs decreased by 11,500.