Daily Newsletter - 30 June 2022


FIC (2)
Macroeconomic (4)
Financial (4)
Investment (3)
Legislative (3)
European News (1)
Social (2)
Business organizations and bilateral chambers of commerce sent 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.

Interoperability law has been adopted by the Chamber of Deputies
FIC is a member of the Law and Technology Lab and was part of the elaboration of the interoperability law, by consultation and submitting input. On Wednesday, 29 June, the Chamber of Deputies adopted, as the decision-making body, the Interoperability Law, which will regulate and facilitate the exchange of data between the IT systems of various state institutions. The adoption of the Interoperability Law is an important and essential step towards the digitalization of public administration of Romania. As a result, civil servants will no longer be allowed to request documents which they already have access to, by contacting other state institutions.

Does the rail file disappear? Parliament passed the law on the exchange of data between public IT systems. 

The Interoperability Law, which eliminates the "rail file", was adopted by the Chamber of Deputies

The law "anti - file with rail", adopted

Interoperability Law, voted on Wednesday by Plenary, announces end of bureaucracy and rail case

UPDATE - The draft law on the exchange of data between information systems and the creation of the National Interoperability Platform

CFA Romania’s financial analysts expect inflation rate in Romania to exceed 9%
CFA Romania’s financial analysts estimate that the Romanian currency, the RON will depreciate to an average exchange rate of RON 5.1125/EUR 1 over the next 12 months, and expect inflation rate to reach an average of 9.50%, a new record high since CFA started conducting its monthly survey, more than ten years ago. The survey data also show that the state budget deficit for 2022 has reached an average value of 6.9% according to anticipations, while real GDP growth in 2022 has got to 2.9%, from 2.3% as estimated in the April survey.
Ministry of Finance has met all the milestones and targets set by PNRR
The Ministry of Finance continues the implementation of reforms and investments undertaken through Component 8 "Tax Reform and Pension System Reform", with a budget of EUR 371.8 million, of the National Recovery and Resilience Plan (PNRR) and has managed to meet all the four milestones and targets assumed for the first half of 2022. The Ministry of Finance has transmitted that milestone 191, related to the entry into force of the legislative framework on mandatory enrolment in the Virtual Private Space (SPV) of all taxpaying legal entities was also achieved in 2021, when Ordinance no. 11/2021 was approved, amending and completing Law 207/2015 on the Fiscal Procedure Code and regulating certain tax measures.
Morgan Stanley economists expect the euro area to slide into a mild recession
Morgan Stanley economists expect the euro area to slide into a mild recession in the fourth quarter of this year amid reduced energy supplies from Russia. In a report cited by Bloomberg, the bank’s economists wrote that the economy would contract for two quarters before resuming growth in the second quarter of next year driven by an increase in investment. They changed their forecast amid the likelihood of reduced natural gas flows from Russia into Europe and as indicators of consumer and business morale slide alongside persistently high inflation.
Arrears corresponding to the general consolidated budget grew by 4.72% in May
Arrears corresponding to the general consolidated budget grew by 4.72% in May 2022 compared to the previous month, to RON 187.78 million, from RON 179.31 million, according to data published on the Finance Ministry (MF)’s website. Arrears of over 90 days increased by 5.8%, from RON 63.9 million to RON 67.6 million, while arrears of over 120 days were up 5.6%, from RON 63.8 million in April to RON 67.4 million in May 2022. Moreover, arrears unpaid for more than 360 days rose from RON 51.6 million to RON 52.8 million (+2.32%). As to local budgets, arrears grew by 6.9%, from RON 158.74 million in April to RON 169.76 million in May.
Non-performing loans ratio in Romania reached 3.3% in March 2022
The non-performing loans ratio in Romania reached 3.3% in March 2022, still above the European average of 2%, and the national bank believes that the quality of loan portfolios could worsen in the future due to the deteriorating macroeconomic outlook, which may affect the activity of credit institutions. This is one of the conclusions presented in the National Bank of Romania’s June 2022 Financial Stability Report.
Non-performing loans recorded by Romanian banks amounted to EUR 3.4 billion in 2021
The non-performing loans recorded by Romanian banks amounted to EUR 3.4 billion last year, while unsecured retail and corporate portfolios with a nominal value of EUR 339.5 million were sold on the Romanian market, according to information provided by KRUK representatives. KRUK plans to accelerate its digital transformation in 2022 and will further invest in improving online payment solutions, in automating processes and in increasing its operational efficiency.
Libra Bank wants to issue bonds worth maximum EUR 10 million on BSE
The Board of Directors of Libra Internet Bank, a member of the US investment group New Century Holdings, with bonds listed on Bucharest Stock Exchange (BSE) under the symbols LIBRA28E and LIBRA30E, approved the main coordinates of a new bonds issue on 28 June, according to a report published on the local stock exchange yesterday. According to the resolution of the Extraordinary General Meeting of Shareholders no. 1 of 2 September 2021, approving the launch of a new bonds issue by the bank and authorizing the Board of Directors to take all necessary steps in this regard, the value of the new offering is EUR 4 million, with the possibility of supplementing it up to EUR 10 million euro.
Fitch has downgraded Euroins Romania’s financial soundness rating to "weak"
Fitch Ratings has downgraded the financial soundness ratings of Euroins Romania and two other general insurers part of the Euroins Insurance Group (EIG), with a negative outlook, citing "significant" decrease in capital, following the recalculation of EIG’s results for 2020. The financial rating agency downgraded Euroins România Asigurare-Reasigurare to "B+" ("weak") from "BB-" ("somewhat weak") and announced similar rating actions for two of EIG’s Bulgarian subsidiaries, namely Insurance Company Euroins AD and Insurance Company EIG Re AD (Euroins Re).
Energy drinks producer HELL Energy invests EUR 18 million in new offices
Hell Energy, one of the biggest players on the energy drinks market, is making a EUR 18 million investment in the town of Ungheni, Mures County. The project, launched at the beginning of 2022, involves the construction of a new office building for HELL ENERGY with a surface area of 3,800 square meters by the end of 2022, as well as a 10,000 square meter warehouse with a storage capacity of 12,500 pallets. The investment aims to increase storage capacity and streamline the delivery of products from four different ranges - HELL ENERGY (energy drinks), ENERGY COFFEE (ready-made ice coffee), SWISS LABORATORY (vitamin drinks), XIXO (teas and carbonated soft drinks) - to its 170 distribution partners. Once the investment is completed, the team in Romania will be expanded by recruiting 20 new employees.
Two hospitals in Galati will be modernized following an over RON 6 million investment
Galati County Council has announced that it has signed a new project with European funds, aimed at increasing the safety of patients in two of the most important medical units in the city of Galati. The two hospitals to be modernized are "Sf. Ap. Andrei" Emergency Clinical Hospital and "Sf. Cuvioasa Parascheva" Infectious Diseases Clinical Hospital in Galati. The money to start the investment will come from European funds, through the Large Infrastructure Operational Program.
Teilor jewellery stores chain plans to invest RON 27 million in business expansion
Teilor, the luxury jewellery stores chain present in the Central and Eastern European region, plans to invest RON 27 million in 2022 for opening new units, improving existing stores and for subsequent investments in the omnichannel customer experience. According to Teilor CEO Willy Dicu, the company continues to develop the brand’s notoriety on foreign markets, in Poland, Bulgaria, Hungary and soon in the Czech Republic, adapting campaigns and product portfolios for each country where TEILOR operates or is launched
PSD announces that it will amend the OUG on de-carbonization
The Social Democratic Party (PSD) announced on Wednesday, 29 June, in an official press release that it would amend the draft emergency ordinance on the de-carbonization of Romania’s energy system so that no energy production unit can be closed until equivalent production units were put into operation. PSD categorically supports all policies to reduce pollution and transition to a decarbonized economy, which must be a major objective for all EU Member States, the press release added. Moreover, PSD believes that, in the context of the energy crisis, Romania must use all its energy production capacities to protect the population and the national economy, as is the case in many European countries.
Draft law on reorganization and functioning of Romanian Scientists Academy has been adopted
On Wednesday, 29 June, the Chamber of Deputies adopted the draft law amending and completing Law 31/2007 on the reorganization and functioning of the Romanian Scientists Academy. There were 203 votes in favor, 60 votes against and 22 abstentions. According to the explanatory memorandum, the legislative initiative aims to update the address of the institution’s headquarters, to establish the competences by approving the Romanian Scientists Academy’s Statute, to provide for the possibility of establishing, by Statute, the rules for withdrawing the Academy membership, as well as to establish provisions regarding the salaries of the institution’s personnel.
Senate has adopted draft law on electronic communications
The Senate adopted on Wednesday, 29 June 2022, as the decision-making body, the draft law on electronic communications, after removing 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 Senate passed the law in the form agreed by the Chamber of Deputies during its meeting on 22 June. There were 72 votes in favor, 32 against and 2 abstentions.
European News 
EU countries have reached a deal on climate laws
EU countries clinched deals on proposed laws to combat climate change early Wednesday, backing a 2035 phase-out of new fossil fuel car sales and a multibillion-euro fund to shield poorer citizens from CO2 costs. After more than 16 hours of negotiations, environment ministers from the European Union’s 27 member states agreed their joint positions on five laws, part of a broader package of measures to slash planet-warming emissions this decade.
Government approves the deferral of loan instalments for a maximum period of nine months
Prime Minister Nicolae Ciucă announced on Wednesday, 29 June, before the Government meeting, that the Executive would approve the deferral of bank loan instalments for a maximum period of nine months. This measure will benefit both individuals and companies that are facing difficulties due to the rising prices. Corporate debtors must submit an affidavit confirming a minimum 25% decrease in their average monthly results for the last three months preceding the request for suspension of payment obligations, compared to the same period of 2021.
Government approves project allowing students to contract EUR 10,000 loans
During the meeting on Wednesday, the Romanian Government approved a project allowing students to contract EUR 10,000 loans and families to take out EUR 15,000 loans, which will be guaranteed by the state. The money can be used to pay rent, to complete studies, to cover nursery or kindergarten expenses or even to buy a car. Family Minister Gabriela Firea stated, at the end of the government meeting, that the possibility for young people and students to benefit from state-guaranteed loans had been postponed for several years.