Daily Newsletter - 31 May 2022


Macroeconomic (3)
Financial (3)
Investment (4)
Legislative (4)
European News (1)
Social (2)
War could cost European economies up to EUR 920 billion of GDP
The supply chain problems generated by the COVID-19 pandemic and by Russia’s invasion of Ukraine could lead to EUR 920 billion losses at the level of the euro area’s Gross Domestic Product (GDP) by 2023, according to an Accenture report. The potential loss is equivalent to 7.7% of euro area’s GDP in 2023. Published on the occasion of the annual World Economic Forum in Davos, the report "From Disruption to Reinvention - The future of supply chains in Europe" explores three possible scenarios for how the war could evolve over the next year, simulating the impact of each scenario on the euro area in terms of costs and recovery timescales.
Minister of Finance made several economic statements
Finance Minister Adrian Câciu has stated that the International Monetary Fund (IMF) will not return to Romania as long as he leads the ruling coalition and the budget deficit commitments are maintained. Adrian Câciu has added that, for the first time in history, Romania’s fiscal-budgetary strategy will be submitted and adopted by the government on 31 July, as required by law.
All support for Romanian economy will be supported from Romania’s budget
Finance Minister Adrian Câciu stated, during the Chamber of Deputies plenary session on Monday, when he participated in the "Government Hour", as previously requested by Save Romania Union (USR), that the current Executive had taken over a complicated situation "representing huge deficits, 7% deficit, a large public deficit estimated to reach 7.3% in 2021, after having got to 9.4% in 2020, during the pandemic", an inflation that tripled in one year, when USR was also part of the governing, from 2.6% to 7.8%, and interest rates that doubled in a single year as well, in 2021, from 2.4% to 5.5%. The Social Democrat added that the government had come up with a support package for the Romanian economy, which had required pressure on the deficit, which was why the Executive had reduced spending by at least 10%.
Agrinvest Credit IFN aims to grant over RON 45 million new loans in 2022
Agrinvest Credit IFN, a company that finances small and medium-sized companies activating in the agricultural sector, aims to grant more than RON 45 million new loans in 2022, after having recorded an over 280% increase in the volume of granted loans at the end of April, compared to the same period of 2021, the company announced on Monday. In this context, the company has increased its ongoing credit facility at BRD Groupe Societe Generale by RON 10 million. Total exposure contracted from BRD has thus reached RON 20 million.
ING Bank reported a RON 276 million profit for Q1 of 2022
ING Bank recorded a RON 276 million profit in Q1 of 2022, up by 67% year-on-year, while the bank’s revenues grew by 23%, to RON 667 million. The bank claims its balance of granted loans increased by 21% compared to Q1/2021, to RON 35.5 billion lei. The need for stability and predictability among individual clients grew in the first quarter of the year. More than 70% of persons who contracted a new housing loan opted for the ING Ipotecar 7FIX loan, with a fixed interest rate for the first seven years, according to information provided by ING Bank.
BCR Asigurări de Viață to distribute nearly RON 25 million dividends
BCR Asigurări de Viață, the second biggest local player on the life insurance market and part of the Austrian group Vienna Insurance Group, is to distribute RON 24.798 million dividends to shareholders from the RON 30.71 million net profit recorded in 2021. The dividends granted to shareholders for 2020 tax year amounted to RON 24.22 million, compared to RON 28 million in 2019. The rest of the money will be distributed to increase the legal reserve – RON 1.54 million and as non-retained earnings.
Morgan Stanley invested EUR 10 million in the modernization of America House building
Morgan Stanley, the US investor that bought the America House office building in 2019, has finalized a EUR 10 million investment in its modernization. Renovation works focused on both the technical and aesthetic aspects of the building. Renovation was followed by an upgrade of the exterior ground floor area, including the expansion of terrace spaces, the adding of green spaces and corresponding lighting, the extension of the sidewalk, the replacing of paving and the unification of the shops and restaurants signage methods.
Stefan brothers from Autonom invested in a software business
Brothers Marius and Dan Ștefan, who control Autonom, the powerful group of companies from Piatra-Neamt, have set up a company specializing in software programming, which will develop an IT platform dedicated to the insurance sector following a EUR 500,000 investment. Daniel Valeriu Petcu, a specialist with more than 15 years of experience in IT and insurance, has also joined the project. The company will employ 5-6 people and will collaborate with specialized subcontractors by the end of the year.
Delgaz Grid to invest EUR 143 million for the modernization of distribution networks
Delgaz Grid, a company member of the E.ON Romania Group, is to invest RON 719 million (EUR 143 million) this year as a priority for the modernization, expansion, automation and digitalization of natural gas and electricity distribution networks. This is the biggest budget allocated in the past 17 years, since E.ON entered the Romanian energy market, according to a press release. The cited source also indicates that the investments are meant to increase the quality of services in terms of continuity and reliability, as well as the number of clients connected to the natural gas and electricity supply networks.
E-Distribuţie Dobrogea invested RON 1.7 million in a medium voltage line in Tulcea County
E-Distribuţie Dobrogea, the electrical power distribution operator part of the Enel group, has invested RON 1.7 million for the modernization of the medium-voltage power line supplying electricity to both household consumers and economic operators in Agighiol, Colina, Iazurile and Valea Nucarilor localities, Tulcea County. The modernization works involved the installation of a 4.2 kilometer long 20 kV underground power line, of loops, poles and remote-controlled separators. This upgrade will reduces the number and duration of power supply cuts in the area, will allow taking over clients in the aforementioned localities and will increase operational safety and the capacity to connect new consumers.
Government adopted an Emergency Ordinance amending the Criminal Code
On Monday, the Government adopted an Emergency Ordinance amending the Criminal Code in order to bring the latter in line with the Constitutional Court of Romania (CCR)’s ruling and to prevent many defendants from avoiding penalties based on the statute of limitations. By amending the Criminal Code in accordance with CCR’s decision, the Government avoided a legislative vacuum. If CCR’s ruling had been published in the Official Gazette of Romania before the Criminal Code was amended, the more favorable law would have applied and many criminal cases would have been at risk of being closed due to the statute of limitations. According to judicial sources, Elena Udrea, Tudor Pendiuc (a former mayor of Pitești), Lucian Duță (a former director of the National Health Insurance House), Sorin Blejnar (the former head of the National Agency for Fiscal Administration) were among the potential beneficiaries of CCR’s decision.
Senators adopted draft law to establish the Romanian Sports Day
On Monday, Senators adopted a draft law establishing the Romanian Sports Day on the first Sunday of June, with 68 votes "in favor" and 23 votes "against". According to the explanatory memorandum, fewer and fewer Romanians are practicing recreational or performance sports, one of the negative consequences of this phenomenon being a reduction in population’s overall health. The Senate is the first legislative chamber to deal with this project.
President Iohannis promulgated law approving Government Emergency Ordinance 110/2021
President Klaus Iohannis promulgated a new emergency ordinance on Monday. The promulgated normative act approves Government Emergency Ordinance 110/2021, which regulates the granting of days off to parents to supervise their children, in the event of limitation or suspension of teaching activities involving physical presence in educational establishments, due to the spreading of the SARS-CoV-2 coronavirus, as well as to parents or legal guardians of severely disabled children who do not go to school or who have in their care, supervision and maintenance an adult person classified as disabled or severely disabled with a personal assistant, in the event of limitation or suspension of the day-care services they benefit from.
Chamber of Deputies adopted draft law on "Anghel Saligny" National Investments Program
The Chamber of Deputies has adopted, as the decision-making body, the draft law regarding "Anghel Saligny" National Investments Program. The draft law regulates the creation of a legislative framework that would allow administrative-territorial units to promote investment projects in eligible sectors, in order to ensure access to essential services for the entire population, increase the quality of living and avoid the risk of depopulation in underdeveloped communities.
European News 
Foreign Minister Aurescu had phone conversations with Finnish and Swedish counterparts
Foreign Minister Bogdan Aurescu had phone calls with his Finnish and Swedish counterparts and with NATO Secretary-General Jens Stoltenberg about their plans to join the alliance. Finland and Sweden formally applied to join the NATO alliance on 18 May, but Turkey has vowed to block the process. Aurescu said he informed Stoltenberg, Swedish Foreign Minister Ann Linde and Finnish Foreign Minister Pekka Haavisto about his discussions in Istanbul with the Turkey leadership about the two Nordic countries’ bid to join NATO. On Friday (27 May), Aurescu took part in the Romania-Poland-Turkey Trilateral meeting on security issues in Istanbul and met Turkish President Recep Tayyip Erdogan and Foreign Minister Mevlut Cavusoglu.
MIPE will issue and distribute over 2.5 million social vouchers
On 1 June, the Ministry of European Projects and Investment (MIPE) will start issuing, distributing and charging the social vouchers offered through the governmental program "Support for Romania". The vouchers with a nominal value of RON 250 are intended for people in situations of material deprivation or at risk of poverty. More than 2.5 million beneficiaries will receive such vouchers.
Government has extended financial support measure for reduced working hours
On Monday, the Government extended, through an emergency ordinance, until 31 December 2022, the implementation of the financial support measure for reduced working hours (Kurzarbeit Program), targeting employers and other economic entities facing a reduction in production due to the international economic crisis, generated by the rising inflation and the dropping purchasing power, as well as amid the armed conflict in Ukraine. The Kurzarbeit program had been initiated by the Government in the context of the epidemiological situation caused by the SARS-CoV-2 coronavirus and had been implemented during the state of emergency/alert period and for three months after its end, i.e. until 8 June.