Daily Newsletter - 23 September 2022


FIC (1)
Macroeconomic (3)
Financial (3)
Investment (3)
Legislative (3)
European News (1)
Social (2)
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.
IMF chief has warned about the lack of action on inflation
The head of the International Monetary Fund, Kristalina Georgieva, has warned about the lack of action on inflation, saying that there will be "people on the street" globally unless steps are taken to protect the most vulnerable from inflation. She has also added that central banks around the world have "no choice" but to increase interest rates in an effort to combat inflation. She has also explained that events that have driven price increases, such as the Omicron variant of Covid-19 and Russia’s invasion of Ukraine, have made inflation the people’s biggest enemy.
Inflation and growing costs generate concern among organizations in Romania
Inflation and the growing costs, the lack of available workforce, the lack of qualified personnel for key roles, supply chain problems and the war in Ukraine are the biggest challenges for leaders when managing a hybrid work environment, according to an online survey conducted by BusinessMark. Moreover, 51% of respondents said the main problems generated by remote work were leadership’s relationship with employees and the lack of an evaluation system.
Risk perception for Romania’s external loans is on the rise
The premium that foreign investors are willing to pay to buy Romanian foreign currency-denominated government bonds is rising compared to transactions at the beginning of the year, and the bad news is that benchmark interest rates are also growing following the change in monetary philosophy by the ECB and the Federal Reserve. Romania borrowed EUR 1.35 billion from external markets at the beginning of the week, within the country’s fourth sale of foreign currency-denominated government bonds on foreign markets since the start of 2022. Ministry of Finance thus borrowed EUR 600 million over four years and EUR 750 million over seven years, and the yield the bonds were bought at is expressed as mid swap rate (benchmark in the euro area) +2.45% (risk premium) for four-year securities and with mid swap +4.05% for the seven-year ones.
Dollar exceeded RON 5 threshold, NBR having posted an exchange rate of RON 5.01/USD 1
The US currency exceeded the RON 5 threshold on Thursday, 22 September, the National Bank of Romania (NBR) having posted an exchange rate of RON 5.01/USD 1, 0.68% above the level on Wednesday, while the euro depreciated slightly, to RON 4.94/EUR 1. The dollar has appreciated 14% against the Romanian currency since the beginning of 2022. The US currency was exchanged for RON 4.37 on 3 January 2022. The dollar’s appreciation had been visible since the morning of 22 September, when the exchange rate exceeded RON 5/USD 1 on the interbank market, after the US currency had reached a new record high of the past two decades on international markets.
BCR and Cowork Timişoara have inaugurated The Office
On Tuesday, 20 September, BCR and Cowork Timişoara inaugurated The Office, a coworking space for technology companies located in the headquarters of BCR’s county branch. The space developed by Cowork Timişoara team with BCR and Amazon’s support was designed as a place of meeting and collaboration, which aggregates the communities of tech entrepreneurs and professionals.
Ministry of Finance borrowed RON 216 million through bonds maturing in 2026
Ministry of Finance reopened a bonds issue maturing in June 2026 and borrowed RON 216 million from banks on Thursday, 22 September, below the planned level of RON 400 million, at an annual interest rate of 8.3%. Total volume of demand had a nominal value of RON 376 million, of which banks bid RON 375 million on their own behalf, while non-competitive bids stood at RON 1.1 million.
Bobnet Group has launched a plant to manufacture Internet of Things devices in Pitesti
Bobnet Group, which developed the Bob Concierge start-up, has opened a plant to manufacture Internet of Things (IoT) devices for retail and logistics in Pitești and will invest EUR 5-10 million over the next few years to increase production. The company currently produces Bob Concierge devices for the residential market. The IoT devices will target the retail and logistics sector, including stores, restaurants or warehouses.
Brand Management announces over RON 500,000 investments in sustainability
Brand Management invested more than RON 500,000 in the modernization and sustainability of the advertising infrastructure in 2021. The company also recorded a significant increase in its campaign portfolio in 2021 (87%). The advance was due both to the lifting of restrictions associated with the pandemic and to the more mature brand promotion habits. Telecom, fashion and jewellery clients are the pioneers of indoor advertising, enjoying its benefits and remaining loyal to it. More recently, large financial-banking or FMCG companies have also become active on this segment, with 2-3 campaigns per quarter.
Galaţi City Hall continues the series of investments in healthcare units
Galaţi City Hall continues the series of investments in healthcare units with beds through two projects worth RON 12 million altogether, VAT not included, namely "Resizing and reconfiguration of medical gas networks - <<Sf. Ioan>> Children’s Emergency Clinical Hospital in Galati - design and execution" and "Increasing the capacity of <<Buna Vestire>> Clinical Hospital of Obstetrics and Gynecology to manage health crisis through investments in equipment using medical fluids and works on electrical infrastructure". According to the press release issued by Galaţi City Hall’s Press Office, the contracts for the two projects have been signed and the public procurement contracts have been put out to tender.
Public institutions will be able to work together through administrative consortia
Government has approved the possibility for public institutions to work together through administrative consortia. The draft law will allow municipalities to apply for financing together and to exchange specialists within joint works. There were several collaborations between municipalities in the past, but only some of them were successful. Previous partnerships were based on cooperation protocols that could be terminated at any time.
Justice Laws Committee started debates on draft law regarding judges and prosecutors’ statute
The Special Parliamentary Committee in charge of Justice Laws started debates on draft law regarding judges and prosecutors’ statute on Thursday, 22 September. Save Romania Union (USR) MP Stelian Ion requested that debates on the draft law should be suspended in order to wait for Venice Commission’s opinion, but his proposal was rejected. The chairman of the Special Parliamentary Committee, Gabriel Andronache, replied that there was a regulatory deadline for the debates and if that was exceeded, the draft law would be tacitly adopted, which should be avoided.
OUG creating legislative framework needed to extend dual vocational education was adopted
Government has adopted an emergency ordinance (OUG) amending and completing National Education Law 1/2011. The normative act creates the legislative framework necessary for extending dual vocational education at university level. Moreover, higher education institutions will be able to set up, by themselves or by association, companies, foundations, associations, pre-university education units, consortia for dual education, with the university senate’s approval, in accordance with legal provisions in force. The condition for their establishment is that they should contribute to improving the institution’s performance.
European News 
European Commission is trying to build its economic resilience
One legislative proposal at a time, the European Commission is trying to build its economic resilience and reinforce the EU’s economic sovereignty. But to increase the EU’s leverage on the global stage, power relations between public and private interests within the EU will have to shift as well. On Monday, the Commission finally presented its proposal for the Single Market Emergency Tool (SMEI) that should allow the Commission to identify critical products and sectors, request information from companies in these sectors, and, in emergencies, reprioritize their orders.
Romania ranks 11th in a global top of population decline by 2050
Romania’s population will decrease by 15.5% by 2050. Romania thus ranks 11th in a global top of population decline, according to United Nations data, centralized by the investor content platform Visual Capitalist. The ranking of countries that will face significant population declines is led by Bulgaria (which will face a 22.5% drop in population by 2050), Lithuania (-22.1%), Latvia (-21.6%), Ukraine (-19.5%) and Serbia (-18.9%).
Romania’s self-employed are most at risk of poverty and social exclusion in EU
Almost a quarter (23.6%) of all self-employed people aged 18 and over in the European Union were at risk of poverty and social exclusion in 2021, according to data published by the European Union’s statistical office (Eurostat) on Thursday, 22 September. At national level, in 2021, Romania recorded the highest share of self-employed people at risk of poverty and social exclusion in the community bloc, of 70.8%, having also experienced the biggest increase from 2020 to 2021, of 5.1%.