Daily Newsletter - 23 July 2020


Macroeconomic News (4)

Minister says EU funds cannot be used for current expenses

The Minister of European Funds, Marcel Bolos, said the almost EUR 80 billion allocated to Romania at the EU Summit cannot be used for current expenses, such as salaries and pensions. Bolos added that the funds will be used mainly for infrastructure projects, such as highways and railroads, as well as the reconstruction of the irrigation system, for healthcare, education and digitization.


Which industries affected by COVID-19 crisis may experience liquidity problems?

Real estate transactions, hotels & restaurants, and entertainment, cultural and recreational activities have the lowest numbers of credit lines expiring in July, 9%-15% of all credit lines, which indicates that these industries will not experience major liquidity problems, according to the National Bank of Romania (BNR). On the other hand, air transport, textiles, and travel agencies & tour operators are facing the highest risk of having to renew their credit lines.


Romania needs to increase project implementation capacity

"The historical chance we have comes with a great challenge, namely that we have to increase our project implementation capacity, because Romania has a not particularly good record when it comes to absorbing European funds. The Orban Cabinet is the first to begin the fund allocation negotiations with the European Commission before the start of a budget," said Minister Marcel Bolos.


Romania had second highest Q1 government deficit in EU

Romania's government deficit amounted to 7.2% of the GDP in the first quarter of this year, the second highest in the European Union after Malta (8.5%). The deficit increased in both the eurozone and the European Union, compared to the previous quarter, following the implementation of isolation measures by the member states.


Financial News (3)

Number of e-commerce transactions up

ING Bank saw a 27% increase in the number of e-commerce transactions between March 16 and May 15, compared to the corresponding period of 2019, while the value transactions jumped approximately 20%, according to Alina Iacomi, head of digital at ING Bank Romania.


EBRD injected EUR 5.1 billion in economies affected by coronavirus

The European Bank for Reconstruction and Development (EBRD) announced it had invested a record EUR 5.1 billion in the first half of this year to support economies in its region affected by the coronavirus pandemic. In Romania, where EBRD is a major investor, the bank focuses on financing infrastructure projects, boosting productivity and helping the financial sector consolidate. So far, EBRD has invested almost EUR 8.7 billion in the Romanian economy.


New version of "Noua Casa" program discussed

The Cabinet discussed a new version of the decree outlining the "Noua Casa" program. Clients can borrow up to EUR 140,000 with state guarantees in order to buy new houses, more than double the previous cap, but the down payment goes up from 5% to 15%. The borrowing cap for buying old houses is EUR 70,000.


Investment News (2)

10 million invested in boosting digital competencies

The Cabinet approved on Wednesday the National Digital Competency Program (PNCD) for the employees of big companies. The program will use EUR 10 million in EU funds to launch vocational training programs in the field of "digital literacy".


16 bidders vie for EUR 100 million contract

The Special Telecommunications Service has received 16 bids from parties interested in landing the contract for designing and building telecommunications networks. The seven-year contract was estimated at EUR 99.4 million, VAT not included.


Legislative News (1)

Renewable energy producers unhappy with farmland law

The producers of renewable energy have joined the oil companies in warning the authorities that the new law regulating the selling of farmland is a hurdle for renewable energy projects, one that also blocks the use of more than EUR 10 billion in EU funds.


Politics (1)

Ponta: It's obvious that the elections should be postponed

Victor Ponta, leader of Pro Romania, stated on Wednesday evening that the local elections should be postponed because the risk of spreading the coronavirus is too great.


Social (2)

All social aid to increase

The Social Reference Indicator (SRI), which is used to calculate unemployment benefits and all forms of social aid, will increase from RON 500 to RON 1,200, representing a 140% increase compared to the current value. This is the first increase of the ISR in more than 10 years and it was pushed through Parliament by opposition senators.


First village under quarantine

The village of Cartojani, Roata de Jos Commune, Giurgiu County, was placed under quarantine yesterday, at 5 PM. The village has 30 confirmed cases out of a population of 3,000. The quarantine will be in place for 14 days.