The Foreign Investors
Council (FIC) celebrated this week 25 years of activity in Romania, an
occasion that brought together in a constructive dialogue the directors
and presidents of the largest companies in the country, representatives
of the Government, Parliament, Presidential Administration, regulatory
authorities, and international institutions. FIC has a solid history as
a partner for debates and consultations with the authorities and a
visionary approach to economic issues, with a focus on private
investment. During the 25 years of activity, the organization brought
together over 255 Romanian companies with foreign capital which
contributed with recommendations, analyses, studies and debates that
supported Romania’s evolution. Starting with the establishment of the
organization, the FIC Board of Directors members have been ambassadors
of foreign investments and of Romania as a destination for FDIs. The
organization has developed in line with foreign investments in the
country, which grew from a 6.8% FDI share of Romania’s GDP in 1997 to
38.64% FDI share in 2021. During the event, the Prime Minister of
Romania, Mr. Nicolae Ciuca, emphasized the constant partnership between
the Government and FIC in terms of stimulating foreign investments and
the organization’s contribution to identifying the best measures for
medium and long-term sustainable economic development, dialogue that
led to a record level of foreign investments in 2022. Also, the
Minister of Economy, Mr. Florin Spataru, the Minister of Labour and
Social Solidarity, Mr. Marius Budai, and the Minister of Environment,
Waters and Forests, Mr. Barna Tánczos, highlighted the significant
collaboration with the investors’ organization, and the measures they
are considering to support investments and economic activity: the
interactive map of the economic sectors – the Economic Atlas, the
industrial development strategy, rethinking of the activity by reducing
the impact on the environment and through new technology, ensuring the
necessary workforce (by improving dual and technological education and
career orientation). The investors in dialogue with the authorities
have covered the perspectives of the new Romanian Agency for Investment
and Foreign Trade, the process of examining foreign investments, the
status of implementation of NRRP and EU funds available to complement
private investments, Romania's accession to the OECD, the fiscal
framework stability, the implementation of the digitization processes
at the level of the administration and the environmental protection
measures.
The Foreign Investors Council (FIC)
published the results of the latest edition of the Business Sentiment
Index (BSI) held in September 2022. The answers show that, despite the
current challenges (inflation, energy market crisis and utility prices,
geopolitical context, supply chain bottlenecks, available and adequate
labour force), investors’ perception of the economic environment in
Romania is moderately optimistic. The business environment takes a more
cautious approach to new investments compared to last year’s edition
when BSI revealed a maximum appetite for investment (since 2014),
results that have been captured in the NBR report published at the end
of September and which highlight the level of 8.9 billion euros in
foreign direct investments in 2021, the second highest value of this
indicator after the one in 2008.
The best environmental and sustainability projects in Romania were
rewarded on Wednesday, 18 January, during the second edition of the
Green Report Gala, the most prestigious annual event which recognizes
sustainability initiatives carried out in Romania by companies, public
institutions or individuals. Ramona Jurubiță, Vice President of the
Foreign Investors Council and Country Managing Partner at KPMG Romania
was part of the Green Report jury.
The three main risks in Romania are those related to the energy crisis,
macroeconomic risks linked to inflation and the economic environment,
and risks related to changes in legislation and regulations, according
to information published in Allianz’s latest risk barometer for 2023.
At international level, cyber incidents and activity interruption risks
are companies’ biggest reasons for concerns for the second year in a
row.
The macro-financial context in Romania continues to be affected by the
current events, Eugen Rădulescu, Head of the National Bank of Romania’s
Financial Stability Department, stated upon the presentation of NBR’s
annual Financial Stability Report. He pointed out that there were two
severe risks in Romania, namely the increase in global uncertainties
amid the energy crisis and the war in Ukraine and the deterioration of
domestic macro balances, including as a result of regional and
international geopolitical developments.
Economic activity in the euro area has slowed this year compared to
2022, but will be well above initial expectations, despite inflation
and the energy crisis, European Central Bank President Christine
Lagarde said on Thursday. Europe’s labor market in particular has never
been so dynamic with unemployment at its lowest level in the past 20
years, the ECB president added.
In the first 11 months of 2022, banks recorded lower profit margins -
differences between active interest rate on new RON-denominated loans
and passive interest rate on new RON-denominated deposits - than in
2021 on the retail segment - between 1.79% and 5.24%. The lowest margin
level, of 1.79%, was reported in September 2022. Similarly low levels
of banks’ profit margins had also been recorded in 2008 and 2009, when
signs of the previous financial crisis were felt on the local market.
On Thursday, the Ministry of Finance borrowed a record sum of RON 4.19
billion from banks through an auction of government bonds with a
nominal value of RON 500 million, maturing in July 2029, at an interest
rate of 7.39% per year. Eight primary dealers participated in the
auction. Total demand amounted to RON 4.65 billion, of which banks bid
RON 4.51 billion in their own name and RON 20 million on behalf of
clients. The coupon rate was 4.85% and the yield to maturity for the
average auction price was 7.38%.
UniCredit Bank, together with its partners from Amundi Asset
Management, a top 10 company at global level in terms of managed
assets, has launched four new themed investment funds with an ESG
component that offer investors portfolio diversification opportunities
aligned with the latest market trends in sustainable development,
according to a press release. The cited source also indicates that the
launch of the four themed funds (CPR Invest Climate Action, CPR Invest
Medtech; CPR Invest Hydrogen and AMUNDI Funds Multi-asset sustainable
future) completes the portfolio of funds already available in the
bank’s offer and promotes responsible financing, in line with
UniCredit’s strategy of supporting ESG fundamentals.
Private healthcare operator MedLife, listed on Bucharest Stock Exchange
(BSE) under the symbol M, has announced the opening of its largest
medical clinic in the city of Deva, following 13 transactions made in
2022, according to a BSE report. The MedLife Deva Hyperclinic provides
access to integrated imaging services, laboratory tests, examinations
and comprehensive investigations. The new multidisciplinary unit
contains a radiology and imaging department, two biological sample
collection cabinets, examination rooms, post-anaesthesia rooms and ten
units where 17 medical and surgical specialties will carry out their
activity.
Premier Energy, one of the largest natural gas suppliers in Romania,
which manages a pipeline network of over 2,500 kilometres, the largest
of an operator not affiliated to any international group, has acquired
the Nalbant wind farm (Tulcea), one of the best performing wind farms
in the country, previously owned by Enex SRL. This is Premier Energy’s
seventh transaction, after the six acquisitions and mergers carried out
in 2022, worth almost EUR 55 million. The company has thus become one
of the most active players in the renewable energy sector, with
renewable energy production capacity reaching 50 MW, in addition to the
700 MW managed portfolio.
Electrica Furnizare continues to strengthen its position on the energy
services and solutions market in 2023 by entering into a new
partnership with Fermador, according to a press release. The turnkey
photovoltaic power solution to be provided by Electrica Furnizare for
Fermador will allow the latter to reduce its CO2 emissions by more than
53 tons per year. Within the project, 384 photovoltaic modules of 540
WP will be installed on the roof of the Fermador farm in Henci, with a
total installed power of 0.2 MW.
The possibility for authors to renounce their PhD title has been
removed from the draft of the new law on higher education, which has
been leaked to the press. PhD theses will be available for consultation
90 calendar days before their presentation, subject to copyright rules.
Compared to the Cîmpeanu version of the law, this new form is a step
forward, according to education expert Ștefan Vlaston.
Save Romania Union (USR) Senator Simona Spătaru has urged Education
Minister Ligia Deca to publish the draft amendments to the Education
laws. According to a USR press release, the drafts have not been
officially presented by the Ministry of Education, despite all the
discussions and public pressure on the issue. USR has added that Ligia
Deca has ignored calls for her to publicly present the reform
directions she wants to pursue, and has not accepted USR’s invitation
to come to the Parliament’s Education Committee either.
The European Commission has exhausted all options to tackle soaring
food and input prices, EU Agriculture Commissioner Janusz Wojciechowski
told EU lawmakers, reiterating that the only way forward is to increase
the EU farming subsidy budget. Speaking in front of the plenary session
of the European Parliament on Tuesday (17 January), the Commissioner
stressed that soaring inflation has left its mark on the agrifood
sector in the past year.
The labor and pension crisis is deepening in the EU. The EU population
has lost about 5 million people over the past ten years, mainly from
Romania, Bulgaria and Latvia. The European Commission aims to step up
efforts to help European regions train, retain and attract workers in a
bid to limit the negative impact of the demographic transition on
regional economies and address the decline in the working age
population.
After two years of decline, maternal mortality grew considerably in
Romania in 2020 and 2021, coinciding with the Covid-19 pandemic. Thus,
the number of women who died during pregnancy or after giving birth
increased exponentially in 2021, from 32 deaths in 2020 to 51 the
following year, an alarming 60% advance, according to data from the
National Institute of Statistics (INS). In 2018 and 2019, maternal
mortality was down, with 18 and 20 deaths respectively. In this
context, Save the Children Romania organization has warned on the need
for integrated programs to ensure access to healthcare services for
pregnant women in vulnerable communities, and for the proper equipping
of maternity hospitals and intensive care units.