Daily Newsletter - 23 June 2022


Macroeconomic (3)
Financial (3)
Investment (3)
Legislative (4)
European News (1)
Social (3)
A period of stagflation in euro area is "not at all likely" in private sector’s opinion, says ECB
Market participants and consumers "now expect lower (economic) growth and higher inflation" in the euro area, which includes 19 EU member states, but "current forecasts from experts (from various private groups) suggest that stagflation is not at all probable," according to an article published in the European Central Bank (ECB)’s monthly bulletin. Stagflation occurs during a prolonged period of weak economic growth and high inflation, which, in the current case, would last until the end of 2023.
NBR has identified two severe and growing systemic risks to financial stability
The National Bank of Romania has identified two severe and growing systemic risks to financial stability, namely global uncertainties amid the energy crisis, the war in Ukraine and the COVID-19 pandemic, and the deterioration of domestic macroeconomic balances, including as a result of geopolitical and international developments, according to the latest Stability Report. In the financial sector, a new banking moratorium risks postponing the recognition of arrears. Global risks have grown since the outbreak of the war in Ukraine, having led to further increases in energy, fuel and raw material prices. The energy crisis was seen as a severe systemic risk in NBR’s report in December as well, but the outlook has now deteriorated.
Inflation is the most dangerous "poison" for world economy, according to Deutsche Bank CEO
Consumer price inflation in the euro area reached a new record high of 8.1% in May and the European Central Bank has confirmed its intention to start raising interest rates during its meeting in July. Central bank leaders and economists around the world have acknowledged that the aggressive tightening of monetary policies that may be needed to keep inflation under control could risk throwing economies into recession, with growth already slowing due to a confluence of global factors.
BCR Leasing ended 2021 with an over RON 1.79 billion value of financed goods
BCR Leasing, BCR Group’s financial leasing division, ended 2021 with an over RON 1.79 billion value of financed goods, up by about 32% compared to 2020, according to the information transmitted by BCR Leasing representatives for ZF’s "Romania’s Business Yearbook. Biggest players in economy", to be published in the following period. Moreover, Vlad Vitcu, CEO of BCR Leasing, has transmitted that the portfolio of granted financing has grown by 60%, and will exceed EUR 600 million at the end of June 2022.
BCR listed RON 702 million green bonds on Bucharest Stock Exchange on Wednesday
BCR, the second biggest credit institution in Romania, listed a new green bonds issue, worth RON 702 million, on Bucharest Stock Exchange (BSE), under the stock exchange symbol BCR27A, on 22 June 2022. This is the second green bonds issue listed by BCR on BSE, after the one in October 2021, worth RON 500 million. The non-preferred senior green bonds have a five-year maturity and a fixed annual interest rate of 9.079%.
Competition Council authorizes transaction by which BT intends to acquire Țiriac Leasing IFN
The Competition Council announced on Wednesday, 22 June 2022, that it had authorised the transaction through which Banca Transilvania SA (BT) intends to take over Țiriac Leasing IFN SA. Banca Transilvania SA is part of Banca Transilvania Financial Group, which also includes a number of trading companies and non-banking financial institutions. Banca Transilvania Group offers a wide range of financial services, including banking services for individuals and legal entities, financial investment services, portfolio management services, financial leasing, microfinancing and factoring.
Real estate developer Certion has opened the Moussay Olimp Beach Club project in Olimp
Certion, a company that develops real estate projects at the seaside and in the mountain area, has opened the Moussay Olimp Beach Club project in Olimp resort at the Black Sea, following an over EUR 500,000 investment. The Moussay Olimp Beach Club project spreads on over 5,000 square meters of beach, and includes a bar, special beach lounge and workation areas, sunbeds, a restaurant, an area for those fond of petanque, SUP and water activities area, volleyball area.
Gran Via Real Estate invests another EUR 26 million in the Gran Via Marina project
Spanish developer Gran Via Real Estate continues to invest in the Romanian real estate market by expanding its project in Constanţa, called Gran Via Marina, with two new blocks of 190 apartments, the investment for the second phase amounting to EUR 26 million, according to a press release. Gran Via Marina is an extensive residential project to be developed in several phases. The first phase was delivered last year, with a total of 192 apartments and a swimming pool dedicated to residents.
Abu Dhabi Ports Group is interested in making investments in the Port of Constanta
Transport Minister Sorin Grindeanu announced on Wednesday, 22 June 2022, that the management of Abu Dhabi Ports Group was interested in making investments in the Port of Constanta, in Molului Sud area. The Minister of Transport also said that during the meeting he had had with them in Abu Dhabi, they had also discussed a possible partnership for the development of the Intermodal Cargo Logistics Center from "Traian Vuia" International Airport in Timisoara, which "can thus become a strong regional commercial hub, connected to the rail and road transport networks".
The value of a food voucher cannot exceed RON 30
The Presidential Administration has transmitted that on Wednesday, 22 June 2022, President Klaus Iohannis promulgated the law amending and completing Law 165/2018 on the granting of value vouchers. The normative act stipulates that the nominal value of a food voucher cannot exceed RON 30. Moreover, the promulgated law also allows paying for children’s camps with holiday vouchers granted to parents. Holiday vouchers can therefore also be used to cover the costs of national or themed school camps organized in Romania and which holders’ children participate in. The procedure regarding the payment of camp costs is established by joint order of the Minister of Education and the Minister of Finance.
Deputies voted on a new draft law
The draft law submitted by Save Romania Union (USR) deputies Oana Țoiu and Oana Cambera, which grants victims of domestic violence the right to have access to emergency or social housing, was adopted with a majority of votes during the Chamber of Deputies’ plenary session on Wednesday and will be sent for promulgation, USR has announced. The law includes victims of domestic violence into the category of long-term beneficiaries of social housing and stipulates the possibility of providing them with additional temporary housing, upon their request, for the duration of the protection order.
Chamber of Deputies has adopted the Communications Code
On Wednesday, 22 June, the Chamber of Deputies adopted the draft law on electronic communications, after having eliminated several provisions declared unconstitutional by the Constitutional Court of Romania (CCR), including the one according to which providers of electronic hosting services had the obligation to provide information on traffic data, subscribers or customers’ identification, payment methods and access history. The draft law was adopted with 188 votes in favor, 55 votes against it and 10 abstentions.
Parliament gives green light for renewable energy production on degraded agricultural lands
During Wednesday’s plenary session, the Chamber of Deputies voted on the amendments and completions to Law 18/1991 that will allow building renewable energy production parks on third, fourth and fifth quality class agricultural lands, included in the category of arable lands, pastures, vineyards and orchards, as well as on those where land improvement works have been carried out. The law voted on Wednesday, 22 June 2022 ensures a framework for the authorization and development of renewable energy production facilities that is easy to understand and implement and which is meant to encourage investments in this sector.
European News 
EU reached a deal on corporate sustainability reporting requirements
The European Union has reached a deal on corporate sustainability reporting requirements for large companies from 2024, the French EU Presidency announced on Tuesday, 21 June. Regulators have grown more worried about companies engaging in greenwashing, or making exaggerated climate-friendly claims to attract investor cash. Members of the European Parliament and EU governments struck a provisional agreement on new reporting rules for large companies, said Bruno Le Maire, France’s economy minister who represented the EU’s 27 member states in the talks.
A change in the fiscal legislation has been included onto the more extensive list of tax measures
A change in the fiscal legislation to limit fringe benefits granted to employees such as phones, cars, gym memberships or medical clinic subscriptions has been included onto the more extensive list of tax measures being prepared by authorities. While fringe benefits are not currently limited, a measure now being prepared would cap them at no more than 33% of an employee’s monthly salary. Authorities thus want to combat the practice used by some employers of offering a lower salary as part of a salary package containing various other benefits.
Applying balanced tax brackets would be beneficial for most low- and middle-income citizens
Applying balanced tax brackets would be beneficial for most low- and middle-income citizens, while those who obtain high and very high incomes will have to return a little more to the society. However, this is the only way to reduce the increasingly indecent inequalities in the Romanian society, the members of Cartel Alfa National Trade Union Confederation indicate in an open letter to the initiators and supporters of the 2022 Taxation Pact. Cartel Alfa underlines that the initiative of a National Taxation Pact is welcome, given that the tax system in Romania is inefficient, outdated and unfair, and rather an obstacle to the country’s development. The Romanian state, with budget revenues of only 27% of GDP, much below the 41% European average, fails in its constitutional mission to ensure its citizens’ welfare, trade unionists point out.
Romanians say their level of living has decreased because of the war in Ukraine
Nearly half of Romanians say the war in Ukraine has led to a decrease in their level of living, while one third say they have not been affected, but expect their situation to become worse, according to a Eurobarometer survey published by the European Parliament. The majority of EU citizens believe the war in Ukraine will soon affect their lives or already has an impact on their level of living. About 40% of respondents said that their level of living had already deteriorated or would further deteriorate next year because of the war in Ukraine. In Romania, the percentage is higher - 46%. Another 36% have not yet been affected, but expect this to happen.