News

Daily Newsletter - 21 September 2022

Summary

FIC (1)
Macroeconomic (4)
Financial (2)
Investment (4)
Legislative (4)
European News (1)
Social (1)
FIC 
FIC Coordination: Coalition for Romania's Development meeting with PM Nicolae Ciucă on Tuesday

Daniel Anghel (FIC Board Member) chaired the delegation of the Coalition for Romania’s Development at the meeting with the Prime Minister Nicolae Ciucă held on 20 September. Ramona Jurubita, FIC Vice Presindet also joined the discussion. The main topics adressed were tax reform, Romania’s accession to the Schengen Area, Structural Funds and the National Recovery and Resilience Plan (PNRR). According to a press release issued by the Government, the protection of vulnerable consumers and of legal entity consumers, as well as risk security and reforms were also among the topics debated on the same occasion.

Prime Minister Nicolae-Ionel Ciuca’s meeting with the representatives of the Coalition for the Development of Romania

Nicolae Ciucă, after the meeting with the representatives of the Coalition for the Development of Romania

The meeting of Prime Minister Nicolae-lonel Ciucă with the representatives of the Coalition for the Development of Romania

The meeting of Prime Minister Nicolae-lonel Ciucă with the representatives of the Coalition for the Development of Romania
Nicolae Ciucă: "The entire Government is involved in Romania’s accession to the Schengen area"

PM Ciuca discusses tax reform with representatives of Coalition for Development of Romania

Ciucă, talks with the representatives of the Coalition for the Development of Romania about Schengen

Ciuca, discussions with the representatives of the Coalition for the Development of Romania about Schengen

Ciuca, discussions with the representatives of the Coalition for the Development of Romania about Schengen

Prime Minister Ciucă discussed the tax reform with the representatives of the Coalition for the Development of Romania

The prime minister discussed the reforms in preparation with the representatives of the Coalition for the Development of Romania

Prime Minister Nicolae-Ionel Ciucă met with the representatives of the Coalition for the Development of Romania

Fiscal reform, discussed at the Government

Prime Minister Ciucă discussed the tax reform with the representatives of the Coalition for the Development of Romania

Macroeconomic 
Romania’s digital economy could grow 3.5 times by 2030
Romania’s digital economy could grow 3.5 times by 2030, to around EUR 52 billion, compared to EUR 14.8 billion last year, the main drivers of growth being investments in IT&C and e-commerce, according to the Digital Challengers on the Next Frontier report drawn up by McKinsey&Company. Romania’s digital economy could thus account for about 9.6% of GDP in 2030, compared to around 6% of GDP in 2021.
Companies are drastically reducing their stocks to protect themselves from inflation
Trade chains in Romanian economy have reached a level of fragility unprecedented since the previous economic crisis, according to Sierra Quadrant experts. Amid the rising inflation, most companies in economy, especially in sensitive sectors such as trade, constructions and the food industry, have drastically reduced their stocks in an attempt to protect themselves against the effects of inflation. Inventory rotation average in areas such as trade and food industry has fallen, on some segments of the market, from 120 to 30-45 days, and traded volumes have decreased by 40-60%, Sierra Quadrant data show.
Only 23 of the 65 major sectors in economy recorded advances in 2020 and 2021
Only 23 of the 65 major sectors in economy followed an upward trend in each of the past two years marked by the pandemic and unprecedented unpredictability. Overall, 2021 was better than the previous year for most industries, given that various sectors had been hit hard in the first year of the pandemic, from HoReCa to travel agencies and from betting and gambling agencies (closed for a while and operating with restrictions in the rest of the period) to sports activities - also affected by the same restrictions.
General debt grew to 48.8% of GDP in July
General debt grew slightly in July 2022, to 48.8% of GDP, from 48.3% of GDP in the previous month, according to Finance Ministry data. Government debt stood at RON 628.39 billion in July, up from RON 621.83 billion in June and RON 577.14 billion (48.8% of GDP) at the end of 2021. Medium and long-term debt was RON 606.91 billion in July and short-term debt amounted to RON 21.46 billion. Government securities accounted for most of this debt, namely RON 518.19 billion. Loans totaled RON 98.35 billion.
Financial 
40-45% of all Raiffeisen loans are state-guaranteed loans through governmental programs
State-guaranteed loans under governmental programs implemented so far account for 40-45% of the total loans granted by Raiffeisen Bank, and governmental programs with state guarantee are popular among clients, even if banks have their own loan offers, as, apart from the state guarantee, companies also benefit from subsidized interest, Raluca Nicolescu, SME Director at Raiffeisen Bank, explained during the ZF Live business program. She also pointed out that bank financing was not necessarily an obstacle any longer, only that companies, in order to be bankable, needed to have very good payment behavior, and must not have accumulated arrears to suppliers or to other banks or to the state.
ECB wants banks to review capital plans given downturn
The euro zone banking sector is robust ahead of a possible recession but the European Central Bank is still asking lenders to review capital projections given what is likely to be a difficult winter, ECB supervisor Andrea Enria said on Monday. Banks have built ample capital over recent years and also stand to benefit from rising interest rates but an almost certain recession and sky high energy costs are bound to weigh on parts of the sector.
Investment 
Spy Shop has invested EUR 1 million in a new 1000 sqm office near Timisoara
Spy Shop, an importer and distributor of security, video surveillance and photovoltaic systems, with a EUR 12 million turnover in 2021, will soon finalize the fitting out of a new office building and warehouse which it has invested EUR 1 million into and which will bring the total storage area to over 2,000 square meters. The warehouse will rapidly enter the circuit, as the company is in full swing with preparations for the shopping season with Black Friday as the spearhead.
Animax continues to expand its pet shops network in Romania with over €100,000 investments
Pet shops chain Animax, part of the Pet Network International group, has announced the opening of two new stores, one in Bucharest and one in Turda, following over EUR 100,000 total investments. Company officials have indicated that they plan to open six more units by the end of 2022 and that they expect 15% higher revenues than in 2021, when turnover had stood at EUR 52.5 million. Animax is currently one of the most important registered brands on the corresponding market and the largest pet shops chain in Romania, with 116 stores at national level.
OASIS Group starts the second phase of the PRIMA Shopping Center project in Sibiu
Oasis Retail Development & Consulting, owned by entrepreneurs Klaus Reisenauer and Kurt Wagner from Sibiu, has announced the start of the second development phase of the PRIMA Shopping Center project in Sibiu, a EUR 30 million total investment. The first phase of the project was inaugurated in Q4/2021 and comprises 11 stores spreading on 9,000 square meters. In the next development phase, several large retail stores will be built by the end of 2023.
Altex installs over 600 photovoltaic panels within a retail project carried out with Axionet
Altex is accelerating its strategy for the development and implementation of renewable energy, as it aims to become a true leader in the implementation of environmental protection policies in Romanian retail, by turning its service centers and logistics centers into true green buildings, according to a press release. Since 2021 up to present, Altex has installed over 8,000 photovoltaic panels, more than 600 of them on the store located at 58A Calea Aradului, in Timişoara, within the latest project started in collaboration with Axionet, a company specializing in green solutions.
Legislative 
Noisy cars will only be allowed on the streets in Bucharest during the day
Cars that generate noises above 95 dB(A) will no longer be allowed on the streets of Bucharest at night, according to a draft decision put up to public consultation by Bucharest City Hall. Drivers who fail to comply with the provisions will be fined up to RON 5,000. According to a report, road traffic noise is the most important source of noise pollution in Bucharest.
Records of traffic sanctions will be instantly generated online as per a legislative initiative
Save Romania Union (USR) Senator Claudiu Mureșan has announced that he has submitted a legislative initiative to allow drivers access to the history of their own traffic sanctions. According to the tabled draft law, the Romanian Police will provide direct access to driving license holders to the history of sanctions related to the traffic on public roads in the computer application regulated through Order no. 141 of 15 September 2014 regarding the record of withdrawn driving licenses and sanctions imposed against drivers of motor vehicles or trams.
PSD-PNL-UDMR readopted law on whistleblowers’ protection with ignoring USR’s proposals
On Tuesday, 20 September, the PSD-PNL-UDMR majority in the Chamber of Deputies’ Legal Committee readopted the law on the protection of whistleblowers acting in the public interest without taking into account the proposals submitted by Save Romania Union (USR), which aimed to facilitate the disclosure of irregularities in public institutions by reintroducing anonymous reporting, according to a press release issued by USR. USR had also proposed that reports that did not include the name, surname, contact details or signature of the whistleblower acting in the public interest should also be addressed as long as they contained enough information on breaches of the law. The PSD-PNL-UDMR majority rejected the proposal, arguing that whistleblowers need to disclose their personal contact details, which would obviously make them identifiable.
Chamber of Deputies adopted the draft law on CSM’s organization and functioning
On Tuesday, 20 September, the Chamber of Deputies adopted the draft law on the Superior Council of Magistracy (CSM)’s organization and functioning, proposing to repeal Law no. 317/2004, republished, with its subsequent amendments and additions. There were 191 votes in favor, 83 against and one abstention. The draft law is part of the justice laws package and was adopted by the special parliamentary committee in charge of the justice laws and was included onto the agenda of the Chamber of Deputies’ plenary session on Tuesday within an urgent procedure.
European News 
ANCOM has started the sale procedure for the 5G spectrum
The Romanian telecom authority ANCOM has started the sale procedure for the 5G spectrum, and companies interested in getting 5G licenses can announce their intention as of Monday. Bidders can choose between four frequency bands which include 700 MHz, 1,500 MHz, 2,600 MHz and one that ranges between 3,400-3,800 MHz. The right to use the spectrum will begin in either 2023 or 2026 and last up to 25 years. For 2,600 MHz bands, the spectrum can be used only for six years and three months to align with other rights in this frequency band. The starting prices for the auction of frequency bands total €693 million. Bidders can announce their intention to buy until 27 October, while the actual bids are expected to be held in early November.
Social 
Romania is among the EU countries where students went to school the least during pandemic
Romania is among the European countries where students went to school the least for face-to-face teaching during the Covid-19 pandemic, according to a new report published by the European network Eurydice on how the continent’s educational systems responded to the Covid-19 context. The same report also shows that the distance learning system that many systems resorted to during the pandemic and which was consistently used in Romania has exacerbated existing educational inequalities between students.