News

Daily Newsletter - 2 November 2022

Summary

Macroeconomic (3)
Financial (2)
Investment (4)
Legislative (3)
European News (1)
Social (1)
Macroeconomic 
Half of Romanians fear they will not be able to heat their homes in winter
In a context marked by inflation, energy crisis and inevitably rising prices, Reveal Marketing Research conducted a representative survey at national level to find out how Romanians are preparing for the cold season. 58% of Romanians said they would have major difficulties in paying their utility bills in the coming winter, and 50% are worried about not being able to heat their homes, according to the study. The rising utility costs have generated changes in consumption and purchasing behavior.
More than 1,900 projects have been submitted for Measure 4.1.1 BIS
The Ministry of Investments and European Projects (MIPE) announced on Tuesday, 1 November that more than 1,900 projects had been submitted for Measure 4.1.1 BIS, through which SMEs in the food and constructions industries received EUR 300 million investment grants for technological upgrades and that another EUR 500 million calls for energy efficiency were open to businesses. The financing contracts will be signed with a standstill clause starting from the end of November.
NBR’s foreign exchange reserves were up by EUR 2.5 billion at the end of October
The National Bank of Romania’s foreign exchange reserves stood at EUR 46.291 billion at the end of October, compared to EUR 43.711 billion on 30 September 2022. Moreover, the gold stock remained steady at 103.6 tons. However, following the change in the international price of gold, its value amounted to EUR 5.495 billion. Romania’s international reserves (foreign currencies plus gold) on 31 October 2022 stood at EUR 51.786 billion, compared with EUR 49.380 billion on 30 September 2022.
Financial 
Millenium Insurance Broker comes to BSE through a 20% share capital increase
Insurance-reinsurance broker Millenium Insurance Broker, a company where Autonom Services mobility network is a majority shareholder, carried out a private placement on 17-25 October with a view to listing on the AeRO market of Bucharest Stock Exchange (BSE), following which it attracted around RON 4.2 million. The money will be used for development. Through the share capital increase, the company issued and sold 347,587 ordinary shares to 42 investors (31 individuals and 11 legal entities), representing 20% of the total number of shares, with a nominal value of RON 0.28/share and a trading value of RON 12/share. The difference from the nominal value was the issue premium.
Arval Romania takes control over BCR Fleet Management’s fleet
BCR Group and Arval Romania finalized the agreement for the transfer of part of BCR Fleet Management’s operational leasing activity after the Competition Council validated the transaction. Arval Romania thus took control of BCR Fleet Management’s fleet on 1 November. The agreement had been concluded by the two companies in June. The entire process benefited from consultancy provided by RTPR for Arval Romania and by Filip & Company for BCR.
Investment 
Nokian Tyres will build EUR 650 million plant in Oradea
Giant Nokian Tyres announced on Tuesday, 1 November, that it would invest EUR 650 million to build a new tires plant in Romania. The plant, designed to manufacture 6 million tires per year, will replace some of the lost production after Nokian sold its operations in Russia. The manufacturer’s factory in Russia had an annual capacity of 17 million car tires.
Cometex invests over EUR 1.2 million in renewable energy production equipment
Cometex, a company part of the Altex group, has joined the project "Investing in a greener and healthier future", part of the "Energy Program in Romania" program, an initiative of Innovation Norway. Following a selection process, the company received EUR 1.2 million project financing for the implementation of photovoltaic panels, of which 50% is non-reimbursable funding. The project initiated by Cometex targets the purchase and installation of six innovative energy efficiency systems, consisting of solar panels and dedicated additional equipment, which will cover an area of 14,444 square meters and will have an installed capacity of 998.40 Kw.
Orange Romania to install solar panels on 300 network sites
Operator Orange Romania has announced that it is using alternative energy resources to reduce the CO2 footprint associated with its network. The first phase of the initiative, to end in 2024, targets the equipping of 300 network sites with solar panels, along with 4 communications interconnection centers and data centers. Their number will continue to grow in the second phase, which will last until 2026. The company is thus taking a step towards achieving the environmental targets set at Orange Group level and continues its efforts to implement solutions that will supply energy from renewable sources to Orange networks, while reducing the CO2 footprint of its operational activities.
Transelectrica announced the pre-commissioning for the modernization of Munteni substation
Transelectrica announced on Tuesday, 1 November, that it had carried out the technical pre-commissioning procedure for the modernization of the 400(200)/110/20 kV Munteni transformer substation, an over RON 45 million investment. As the station has been in operation ever since 1978, the investment involved a technological updating process in order to allow the system to operate in proper conditions. Transelectrica also indicated that the works had been carried out by contractor TIAB SA.
Legislative 
Senators rejected RON 3,000 minimum wage for employees in the beverages industry
Senators, through the vote of the PSD, PNL and UDMR majority, rejected the draft law initiated by the Liberals, which provided for a minimum salary of RON 3,000, with tax and social contributions exemption, for employees in the beverages industry - wine, beer and other alcoholic beverages – and in the mineral water production sector, similar to the wages in the constructions sector, in agriculture and in the food industry. The draft law will now be sent to the Chamber of Deputies for debates and the final vote.
COTAR calls for repeal of law which only facilitates profit tax deductions for corporations
The Confederation of Authorized Operators and Transporters in Romania (C.O.T.A.R.) believes that Law no. 20/2022 fails to comply with all procedural criteria and is not actually meant to introduce defensive driving for citizens’ benefit, but, in reality, facilitates the non-payment of profit tax by multinational companies. The Confederation has also pointed out that the declared preventive nature for traffic on public roads does not match the fact that the deduction can only be made by certain companies in Romania, provided they make a profit.
Klaus Iohannis promulgated a law to finance children and juniors’ sports activities
President Klaus Iohannis has promulgated the law based on which minimum of 30% of sums available in the local budget will be allocated for financing sports activities in order to support programs dedicated to children and juniors. The normative act completes Article 18 (1) of the Law on Physical Education and Sport (Law 69/2000) and aims to promote a healthy lifestyle among children and juniors. The draft law was initiated by Save Romania Union (USR) and voted by the Chamber of Deputies as the decision-making body.
European News 
EU protests against "discriminatory" tax breaks for US-made electric cars
The EU urged the United States on Monday (31 October) to grant its firms special status to sell electric vehicles, as Brussels rails at "discriminatory" measures in President Joe Biden’s flagship economic plan. The 27-nation bloc is upset about Washington’s "Inflation Reduction Act", which will see vast spending on green energy initiatives and includes tax breaks for US-made electric cars and batteries. Brussels says those benefits for American electric vehicle makers would put e-cars made in the EU at an unfair disadvantage on the lucrative US domestic market. After talks between the bloc’s trade ministers and US representative Katherine Tai in Prague, EU officials said European cars should get the same exemptions as those from Canada and Mexico.
Social 
Romania moves up one place and ranks 43rd in 2022 Social Progress Index global classification
Romania has moved up one place, for the second consecutive year, and ranks 43rd in the global classification regarding the 2022 Social Progress Index, which assesses the quality of life and social wellbeing in 169 countries, drawn up by the non-profit organization Social Progress Imperative with Deloitte’s support. Romania no longer ranks last among European Union member states in 2022 and fills the penultimate place, ahead of Bulgaria, which ranks 44th. Romania obtained 76.89 out of 100 points, a slightly lower score than in the previous year, but one that places it in the second category (after it had been among the countries in the third category in 2021), after Barbados, Argentina and Hungary.