News

Daily Newsletter - 20 October 2021

Summary

Macroeconomic (3)
Financial (2)
Investment (3)
Legislative (1)
European News (1)
Social (2)
Macroeconomic 
More than 100,000 companies in Romania are currently at risk
More than 100,000 companies in Romania are currently at risk, amid the significant increase in operating costs, the prolonged financial blockage, the increasingly difficult access to financing and the growing distrust in business relations, Sierra Quadrant experts warn in an analysis on the state of Romanian economy at the beginning of winter. The rise of fuel, energy and gas prices has further exacerbated financial problems, primarily in the area of SMEs with lower capitalization, which are vulnerable to the crisis. 73,365 companies have thus faced insolvency, have suspended their activity or have been dissolved or deregistered this year, 13,398 more than last year, according to data from the Trade Register Office, which confirm Sierra Quadrant’s estimates at the beginning of the year.
Romanian e-commerce will grow by about 15% this year compared to 2020
GPeC and the main players estimate that Romanian e-commerce will grow by about 15% this year compared to 2020, and the entire sector will thus reach approximately EUR 6.5 billion, compared to EUR 5.6 billion at the end of last year. According to the aforementioned source, the figure only refers to physical products sold via the Internet. However, if digital services or the payment of utility bills are added, it would reach about EUR 8 billion, according to PayU estimates. The e-commerce sector recorded a 2-3 year advance amid the pandemic, and this evolution brought a very large number of Romanians who ordered online for the first time.
Construction works in the European Union fell in August
Construction works in the European Union fell in August, and Romania is among the member states to have recorded the biggest declines in construction works both month-on-month and at an annual rate, according to data published by Eurostat on Tuesday, 19 October. According to these data, construction works decreased by 1.8% month-on-month in the EU, and were down by 1.3% in the euro area. Among the EU member states, the biggest declines were recorded by Sweden (-10.5%), Hungary (-5.9%), Germany (-3.1%) and Romania (-2.6%). In the case of Romania, the decline from August comes after a 5% decrease in July.
Financial 
CEC Bank granted more than 20,000 mortgage loans, worth over RON 3 billion
CEC Bank, a top 10 credit institution controlled by the state, claims to have granted more than 3,800 housing loans in the first nine months of 2021, up by 34% against the similar period last year and to have reached a portfolio of over 20,000 granted mortgage loans, worth over RON 3 billion. The bank had provided RON 5.25 billion new financing in H1/2021, following which its loans portfolio had grown to RON 24.4 billion. The biggest increase was recorded at the level of the housing loans portfolio, of 17.5%, in the first six months of the year.
BCR and the Association of Regional Development Agencies in Romania sign a collaboration protocol
Banca Comercială Română and ROREG (Association of Regional Development Agencies in Romania) have signed a collaboration protocol aimed at promoting European financing opportunities, available to entrepreneurs, through Regional Operational Programs. The Regional Development Agencies will manage over EUR 11 billion during the period 2021-2027, of which over EUR 3.5 billion will be available to companies.
Investment 
New outpatient clinics will be built at County Emergency Hospital and TB Hospital in Galati
Over RON 20 million from European funds will be invested to build from scratch new buildings for the specialized outpatient clinics of the County Emergency Hospital and of the TB Hospital in Galati. New and modern medical spaces will thus be created, and the medical units will be arranged and equipped with the necessary medical equipment. Moreover, a new and modern building will be built to host the TB Hospital’s Outpatient Clinic. The latter will be equipped with a highly-performing CT scanner, which has already been purchased by Galaţi County Council.
Meta Estate Trust invested EUR 500,000 in The Lake Home residential complex in Sibiu
Meta Estate Trust, a holding company operating in the residential sector, has invested EUR 500,000 in the first phase of The Lake Home residential complex in Sibiu and intends to contribute to the next phases of the project as it is being developed. The Lake Home, a mixed-use real estate project, is being built by DMX Construction and will include 494 apartments, an 89-apartment aparthotel, three restaurants opening to Binder’s Lake, a cafe and 29 luxury single-family homes. The project is being developed on a 50,500 square meter area, of which 20,000 square meters are dedicated to green spaces.
Gersim Impex has borrowed RON 15.5 million from ING
Gersim Impex, the biggest local mobile phones distributor, has borrowed RON 15.5 million from ING to finance its working capital. The funds will be used for diversifying the company’s portfolio, mainly on the mobile terminals segment. At the end of September 2021, ING opened Gersim’s accounts and granted the credit facility for working capital, available as an overdraft and the issuance of potential commitments.
Legislative 
The Romanian Senate adopted a new draft law on Monday, 18 October
On Monday, 18 October, the Romanian Senate adopted a new draft law which proposes introducing financial education and legal education classes into the school curriculum starting from the next school year. The law will enter into force after it is promulgated by President Klaus Iohannis and published in the Official Gazette of Romania. According to the Vedem Just Association, the legislative proposal submitted to Parliament at the beginning of the year had initially only targeted the introduction of entrepreneurship and financial education classes, and the Chamber of Deputies adopted it in this form on 7 September 2021.
European News 
The significant increase in energy prices is a major concern for Romania
The significant increase in energy prices is a major concern for Romania, given its impact on citizens, businesses, and vulnerable consumers, President Klaus Iohannis said in a videoconference with European Council President Charles Michel and other EU leaders on Monday, 18 October. President Iohannis underlined the need to quickly identify solutions for the short term, as the energy crisis will seriously affect all member states, including households and the economy.
Social 
President Iohannis called a meeting to decide upon restrictive measures
President Klaus Iohannis announced yesterday that a meeting with all officials in charge would take place today, in order to decide upon restrictive measures, the only ones that can reduce the spreading of SARS-CoV-2 infection at this moment. Following yesterday’s record high number of new Covid-19 cases and deaths, President Iohannis stated that the fourth wave of the pandemic was more aggressive than anticipated and admitted that preparations for this new wave had been inadequate, amid a failed vaccination campaign.
Ministry of Health has distributed a new tranche of Remdesivir to hospitals treating Covid-19 patients
The Ministry of Health announced yesterday that it had distributed a new tranche of 8,570 vials of Remdesivir to 94 hospitals treating patients infected with SARS-CoV-2 in Romania. The criteria for the medicine’s distribution took into account the minimum number of vials/treated patient and the number of confirmed patients in hospital departments and intensive care units who require administration.