News

Daily Newsletter - 25 January 2019

Summary

Macroeconomic News (4)

ANAF starts inspections

The National Fiscal Administration Agency (ANAF) has publicly announced the start of Operation Iceberg, a large fiscal inspection campaign aimed at the big companies operating in all economic sectors. According to the press release issued by the institution, the operation will take place throughout the year 2019 and its mean feature is "an increase in the fiscal controls, both in number and effectiveness, targeting big companies with the purpose of maintaining a fair treatment for all categories of taxpayers who operate in Romania".

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Financial Repression, the Romanian Way

The Emergency Decree 114/2018, which has prompted many reactions, might have more profound implications than initially thought. It appears to be a first step in the current governing coalition’s strategy of attempting to enhance the state’s role in the economy. At the same time it widens further the gap between economic and political reasoning by ignoring basic economic principles. These types of measures usually bring, in time, additional costs for the population and push the economy on a path of lower potential growth. There are three fundamental issues related to the ordinance measures that have the largest impact on the economy. They relate to timing the economic rationale and the fact that they apply to a small and open economy.

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Iron and steel exports up 13.5%

Romania exported iron and steel worth EUR 2.12 billion in the first 10 months of 2018, up 13.5% compared to the corresponding period of the previous year, according to data centralized by the National Statistics Institute (INS). Imports of iron and steel amounted to EUR 2.892 billion, up 12.7% compared to January-October 2017, with a deficit of EUR 771.7 million in this segment.

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Wheat exports down 6%

Romania exported 3,163 million tonnes of wheat in the second half of last year, up 9.5% from the second half of 2017, but down 6% compared to the corresponding period of 2016, according to data provided by port authorities. In December, 2018, exports amounted to 59,700 tonnes, two times lower than in December 2017.

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Financial News (3)

Andrei Radulescu, Banca Transilvania: Investor repositioning put pressure on the exchange rate

Andrei Radulescu, head of macroeconomic analysis at Banca Transilvania, believes that the recent pressures on the EUR/RON exchange rate are the result of the market participants' repositioning of expectations by incorporating the latest decisions and signals from the domestic economic policy, including the more aggressive state intervention in economy.

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Forex market looking for new balance point

The European currency was rising toward RON 4.77 on Thursday, especially on the foreign markets, while Romania had a bank holiday. Quotations started just over RON 4.763 per EUR and went down temporarily, falling under RON 4.76, but quickly rallied above Wednesday's average (RON 4.7569 per EUR). On Wednesday, the RON was targeted by speculators, sending the interbank quotations over RON 4.78.

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PSD throws exchange rate responsibility on BNR

"The currency exchange rate cannot and must not be set by government order. It would be the end of the free market. The only institution that has the power to manage the RON/EUR exchange rate is the National Bank, which now has EUR 36.8 billion in reserves that allow it to control rate variations." - this is the message issued by the Social Democratic Party (PSD) in response to the depreciation of the national currency.

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Legislative News (1)

EC requests custom debt rule change

The European Commission (EC) decided on Thursday to send a formal notice to Romania, asking the national government to align its customs debt legislation to the EU Customs Code (EU Regulation No. 952/2013). Under these rules, customs authorities have three years to communicate a debt to the debtor. If the customs debt arises from a criminal offense, the customs authorities have ten years to communicate it.

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Politics (2)

Codrin Stefanescu: PSD members want Liviu Dragnea to run for president

PSD Secretary-General Codrin Stefanescu said on Thursday evening at Antena 3 that PSD members would like Liviu Dragnea to be the presidential candidate. However, the decision will be taken after February 15.

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PM Dancila unhappy with "disinformation"

Romania took over the rotating presidency of the Council of the European Union with a firm pro-European conviction that will guide it in advancing the EU agenda, Prime Minister Viorica Dancila said in Brussels on Thursday. On Thursday, Prime Minister Dancila presented the priorities of Romania's term before the plenary meeting of the European Economic and Social Committee, but had to face new questions and criticism regarding respect for the rule of law and government actions to weaken the fight against corruption.

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Social (2)

EC asks Romania and Estonia to improve electric and electronic waste management

The European Commission has decided to send official notifications to Romania and Estonia regarding their deficiencies in the implementation of European regulations for the management of electrical and electronic waste. The Commission warned the two countries that waste from products such as TVs, refrigerators and mobile phones is estimated to reach 12 million tonnes by 2020. Thus, if not properly managed, it could cause environmental and health problems.

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Romania ranks last in EU index of college graduates in 25-54 age group

Romania ranks last in the European Union based on the percentage of people aged 25-54 who graduated a higher education institution - 20%. Ireland heads the index with a 50% rate, according to data provided by the European Statistics Office (Eurostat).

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