News

Daily Newsletter - 24 June 2022

Summary

FIC (4)
Macroeconomic (4)
Financial (3)
Investment (4)
Legislative (2)
European News (1)
Social (1)
FIC 
Foreign Investors Council has re-elected the organization’s management team

During the first meeting of the new mandate, FIC Board of Directors re-elected the organization’s management team remaining consistent with the same vision for economic sustainable development. Cristian Secoșan continues a new mandate as FIC President, together with Vice Presidents Ramona Jurubiță and Eric Stab, and Daniel Anghel as Treasurer. FIC will continue to address strategic themes for the Romanian economy and provide recommendations for medium and long-term measures aligned with the European good practices, but at the same time, it is ready to formulate position papers based on the expertise and practical knowledge of experts from the member companies and to react in an agile manner to the current challenges. The FIC Board of Directors maintains on the agenda the fundamental themes for Romania’s development: attracting investments, stability and predictability of the fiscal regime, strengthening the resilience of the energy sector, implementing sustainable measures in business plans, environmental protection, ensuring the population’s welfare and health, technological development, and implementing digital processes.

The FIC has elected its leadership

Cristian Secoşan, CEO of Delgaz Grid Romania, continues with a new mandate at the leadership of the FIC

Foreign Investors Council (FIC) Board of Directors follows the vision for sustainable development

Cristian Secoșan, a new term at the head of the Council of Foreign Investors
The FIC - The FIC Board continues the same vision for sustainable development

FIC reconfirms its management team and vision for sustainable development

The FIC - The FIC Board continues the same vision for sustainable development

The FIC - The FIC Board continues the same vision for sustainable development

Cristian Secoșan received a new mandate at the presidency of the Council of Foreign Investors (FIC)

Cristian Secoşan continues a new term as president of the FIC

Foreign Investors Council (FIC) Board of Directors follows the vision for sustainable development
Foreign Investors Council (FIC) re-elects management team

business organizations and bilateral chambers of commerce send a common message on fiscal measures

FIC as leading organization coagulated the viewpoint of its members and also of other organizations members of CDR platform to voice the concerns regarding the potential fiscal modifications, which were particularly discussed with the Prime minister in the CDR meeting on 16th of June having in mind the various statements made by politicians. As a result the most important business organizations in Romania, which reunite the biggest foreign and Romanian investors, have issued a joint statement making several recommendations to the Government regarding fiscal measures to balance the budget situation and not to affect companies operating in the business sector.

The strongest employers’ organizations in Romania have submitted to the Government a set of recommendations for fiscal measures:

Unison business response to government: cut government spending, cap wages, rebuild micro-enterprises

The strongest employers’ organizations in Romania have submitted to the Government a set of recommendations for fiscal measures:

Leading business associations recommend maintaining a single quota, reducing tax evasion and increasing tax collection

The business community recommends maintaining the single quota, reducing tax evasion and harsher sanctions

Fiscal measures proposed by the business environment: revaluation of the micro framework, capping of social health and pension c

The business environment requires the government a simple tax system, reduction of tax evasion and state spending

6 business environment recommendations for the government regarding fiscal measures

The business environment recommends maintaining the single rate, reducing tax evasion and harsher sanctions The business environ
The business community proposes recommendations for fiscal measures

The Romanian business environment "recommends maintaining the single quota"

Fiscal measures proposed by the business environment: revaluation of the micro framework, capping of social health and pension c

The business community recommends maintaining the single quota, reducing tax evasion and harsher sanctions

The proposals of the Romanian business environment for the modification of the Fiscal Code

Fiscal measures proposed by the business environment: revaluation of the micro framework, capping of social health and pension c

Fiscal measures recommended by the business environment

The business community recommends maintaining the single quota, reducing tax evasion and harsher sanctions

Business environment recommends flat tax preservation, cut of tax evasion, harsher sanctions

Business environment recommends flat tax preservation, cut of tax evasion, harsher sanctions

Foreign Investors Council - the voice of Investors in Romania

Daniel Anghel, Chairman of the FIC Foreign Direct Investments Taskforce stated that Romania attracted EUR 7.25 billion foreign direct investments last year, the highest amount of the past decade, adding that most investments came from the Netherlands, Germany, Austria, Italy and France. He participated in the third edition of "RoInvest" and pointed out that foreign investments in Romania had reached a peak during the period 2004-2009. 

FIC published a Study on the taxes paid by the FIC member companies underlining the significant direct contribution to the State budget, the economic growth registered in Romania, as well as to building wealth. The results show a detailed picture of the major contribution of large Romanian companies with foreign capital to the state budget, the most important indicator being the level of VAT collection, which is the highest.

NEWS.RO CONFERENCE Daniel Anghel: Romania has been among Europe’s tigers in attracting foreign direct investment, the largest am

Foreign direct investment per capita in Romania stands at 4870 euros. In Hungary the indicator is 9000 euros 

NEWS.RO CONFERENCE - Daniel Anghel: Romania has been among Europe’s tigers in attracting foreign direct investment, the largest

Romania findts itself in a difficult economic context


Romanian Government and CDR members signed  a memorandum

The Romanian Government and the members of the Coalition for Romania’s Development (CDR), which reunites the most important business organizations in the country, have signed a new cooperation agreement regarding consultation on several strategic issues for the Romanian business environment.

The Government and the Coalition for the Development of Romania have signed a collaboration agreement

Collaboration agreement between the Romanian Government and CDR: Aims at macroeconomic stability

The 6 strategic themes of the consultations between the business environment and the Government

Coalition for the Development of Romania: It is important to have a structured dialogue between the business environment and the

Macroeconomic 
Romanians part of Millennials and Z Generations expect economic situation to deteriorate
The economic evolution and the social and political situation are reasons for concern for Romanians part of the Millennials and Z Generations, who expect economic conditions (59% of Millennials and 49% of Generation Z) and the social-political context (55% and 45% respectively) to worsen this year, at least 10% more than in 2021, according to the Deloitte Global Millennial and Gen Z Survey 2022, conducted in 46 countries around the world, including Romania. This outlook makes them more prudent about their jobs. As a result, the share of those who want to stay in the same company for more than five years has increased in the past year from 32% to 41% among Millennials, and from 21% to 42% among Generation Z, while the number of those who want to leave earlier than two years has decreased from 44% to 28%, and from 39% to 29% respectively.
Economic recovery is slowing down and GDP growth is visibly affected by the high inflation
According to OTP Bank analysts, economic recovery is slowing down and GDP growth is visibly affected by the high inflation, by the stagnating real wages, by the slowing global growth and by the effects of the Russia-Ukraine conflict. However, it seems that the positive results recorded in Q1/2022 will be enough to achieve an estimated 4% annual GDP growth, even if performance in the following quarters slows down, the bank has indicated. Given the performance of economic recovery, the results for Q1/2022 came as an unexpected surprise, as the market had expected a correction in GDP growth in the first three months, following the stagnation recorded in the second half of 2021.
Romania ranks 7th in EU in terms of natural capital and 16th in terms of produced capital
Romania ranks 7th in the European Union in terms of natural capital - a component of national wealth, but 16th in terms of produced capital, Luminița Chivu, Director of the Romanian Academy’s National Institute for Economic Research (INCE), stated during the National Economic Forum "Romanian Economic Model in European Union. Romania - Horizon 2040". She said that the value of the average natural capital per capita was USD 9,149, Romania ranking 11th among the EU Member States from this point of view.
The most companies in difficulty came from trade and the constructions sector
The most companies in difficulty in the first four months of 2022 came from trade and the constructions sector. 40,760 companies were closed at the level of the entire economy, a record high of the past three years. During the period January – April 2022, 1,008 trade and construction companies faced insolvency (+61 compared to the similar interval of 2021), 8,390 companies were de-registered (+349), 4,302 were dissolved (+711) and 1,729 suspended their activity (+265).
Financial 
Mandatory automotive insurance has faced three major bankruptcies in the past ten years
Mandatory automotive insurance (RCA), the most controversial line of business for insurance companies, has faced three major bankruptcies in the past ten years, namely Astra Asigurări, Carpatica Asig and now City Insurance. During all this time, the number of players has shrunk, the volume of underwritten premiums has tripled, to nearly RON 6 billion, and insurers have reset their market shares. Ten years ago, the RCA market had about RON 2 billion underwritten premiums and 11 companies operating in this line of business. In the meantime, some of the players stopped selling RCA policies and the market was divided among the remaining companies.
Insurers must have the capacity and agility to adapt to an intense year 2022
Insurers must have the capacity and agility to adapt to an intense, challenging year 2022, with a deteriorating economic environment and uncertainties, but which may bring new changes and opportunities, Mihai Tecău, CEO of Omniasig, said in the questionnaire for ZF’s "Romania’s Business Yearbook. Biggest Players in Economy". Omniasig CEO indicated that raising awareness of the need for insurance among as many different categories of public as possible had been the challenge for both the company and the entire industry since the beginning of 2022.
Over 90% of cards issued by BCR in the past six months were made of recycled materials
BCR has accelerated the transition to a "green" cards portfolio in the past six months, as part of the bank’s commitment to reduce its carbon footprint through its activities and services. As a result, more than 90% of the cards issued from December up to present through the new current account packages for individuals available at BCR, George and George for Young People, were made from recycled materials, which means a reduction of the carbon footprint by about 2.7 tons.
Investment 
ING Bank provided financing to Boromir Group to support investments
ING Bank Romania has granted successive tranches of financing amounting to over EUR 25 million to Boromir Group, the biggest business with Romanian capital operating in the milling and bread-making sector, in the past three years. The long-term loans were granted bilaterally and were contracted for the refurbishment and modernization of the plants in Râmnicu Vâlcea, including for the construction of a new warehouse and production space, for the automation of production processes and for the launch of new product lines, ING representatives have indicated.
International Finance Corporation wants to invest much more in infrastructure projects
Cristian Nacu, senior country officer for Romania and the Republic of Moldova of International Finance Corporation (IFC), stated, during "RoInvest", an event organized by News.ro news agency, that the institution wanted to invest much more in infrastructure projects in the following period, as infrastructure investments had been strongly requested by all its dialogue partners. IFC is the largest global development institution focusing on the private sector in developing countries.
Beltrame Group announces EUR 200 million investments over the next five years
AFV Beltrame Group, one of the biggest manufacturers of steel bars and special steels in Europe, which bought COS Târgovişte in March this year, recruited personnel and carried out modernization works on the plant and started producing concrete steel under the Donalam brand, having thus reached two steel processing units, in Călăraşi and Târgovişte. Donalam Târgovişte will be the only concrete steel production unit in Romania. Total investments for the modernization and refurbishment of the old plant will amount to EUR 100 million over the next few years. Moreover, the manufacturer will invest EUR 100 million for the construction of a photovoltaic park to ensure the necessary power for its production units.
LEMET has reached EUR 7 million investments at mid-2022
LEMET, one of the leaders of the furniture market in Romania, finalized over EUR 7 million investments in the construction of new production facilities and in the development of the LEMS furniture stores network in the first part of 2022. The LEMET furniture factory in Prahova now has a functional 6,500 square meter photovoltaic panel power plant and a new production unit of over 8,500 square meters. The photovoltaic panel plant has an average annual electricity production of 1,000 MWh/year, thus allowing LEMET to cover a large part of the electricity consumed in its production activity. Moreover, CO2 emissions have been reduced by more than 275 tons per year.
Legislative 
Government has adopted a new draft law
During the meeting on Thursday, 23 June 2022, the Government approved a draft law ratifying the Agreement regarding Cooperation in the Field of Defense Industry between the Governments of Romania and of Poland, signed in Warsaw, on 3 March 2022. According to the draft law’s substantiation note, the Agreement aims to encourage industrial cooperation and research, development and innovation activities for the benefit of both parties.
Government has approved the implementation norms for household activities
The Government has approved the implementation norms regarding the regulation of household providers’ activity, thus establishing the way in which household activity vouchers are granted, the way in which household beneficiaries can use them, as well as the way in which they can be exchanged for cash. The new system will only enter into force on 1 January 2024. Until then, the Government has to approve the implementation norms and to develop the management platform for the new system. However, the system will remain optional for household activity providers.
European News 
European Commission tabled a new Nature Restoration Law on Wednesday, 22 June
The European Commission tabled a new Nature Restoration Law on Wednesday (22 June) with legally binding targets and €100 billion for EU member states to restore nature and reverse biodiversity loss in agriculture, forests, oceans and urban areas. The aim of the proposed regulation is to restore natural degraded ecosystems, in particular those with the most potential to remove and store carbon, and to reduce the impact of natural disasters linked to global warming. The Commission proposal came as Europe is hit by extreme weather, with Italy affected by severe droughts and water shortages already before the beginning of summer, and intense rain storms leading to severe flooding in Spain.
Social 
Nine out of ten pay rises do not cover inflation
The major demand for goods and services after the lifting of Covid-19 restrictions and the conflict in Ukraine have led to an accelerated rise in inflation, to 14.5% at the end of May, according to the National Institute of Statistics, having thus affected Romanians’ financial situation. Only some of the employees in Romania have received pay rises since the start of the year, but in 90% of cases, the salary increases were below inflation, which has led to a significant drop in purchasing power, of as much as 50%, according to a survey conducted on BestJobs recruitment platform.