News

Daily Newsletter - 4 January 2021

Summary

Macroeconomic News (5)

APIA authorized EUR 179.19 million in payments

The Agriculture Payments and Intervention for Agency (APIA) announced on Thursday that it started on December 22 to settle the applications submitted by farmers under Measure 21 of the National Rural Development Program (PNDR) 2014-2020 - "Temporary exceptional support to farmers and SMEs which have been particularly affected by the COVID crisis". So far, EUR 179.79 million were paid out on account of 122,447 unique applications.

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"The pandemic has an asymmetric impact, affecting mainly low-income employees"

The minimum gross basic salary will increase by 3% this month, from RON 2,230 per month to RON 2,300 per month, representing a net increase of RON 41, resulting in a minimum net monthly salary of RON 1,386. According to the draft decision, the Cabinet took into account an inflation rate of 2.2% and a real increase in labor productivity per person of 0.8% for 2020.

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MFP to borrow RON 5.1 billion in January

The Ministry of Finance (MFP) has scheduled loans worth RON 4.5 billion from the commercial banks this month, including RON 400 million worth of discounted treasury certificates and seven issues of government bonds worth RON 4.1 billion. Up to RON 615 million worth of extra funding could be raised through supplementary sessions of non-competitive bids.

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Number of dissolved companies down more than 25%

The number of dissolved companies reached 23,341 in the first 11 months of 2020, down over 25% compared to the corresponding period of the previous year, according to data centralized by the National Office of the Trade Registry (ONRC). The highest number of dissolution decisions were registered in Bucharest: 4,499 companies, down 17.66% compared to the first 11 months of 2019.

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Hospitality industry decree published

The decree providing assistance to the hospitality industry was published in the Official Gazette. More than 73,000 companies will benefit from a maximum aid of EUR 800,000 each, according to the Minister of Energy, who previously held the entire Economy, Business Environment, and Tourism portfolio.

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Financial News (3)

Exchange rate at new all-time high

The RON/EUR exchange rate rose to a new all-time high of RON 4.8750/EUR in September, 2020, but failed to break through the psychological threshold of RON 5/EUR. In December, the exchange rate stayed mainly above the RON 4.87/EUR level. Most of the analysts polled for the monthly CFA survey expect a reference exchange rate of RON 4.9253/EUR for the next six months.

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New card payment rules come into force today

The Romanian banking system is implementing the new protocols for securing electronic payments, thus increasing the protection and confidentiality of the consumers' financial data when they make online card transactions on websites located in the European Economic Area. According to the new protocols, consumers will confirm through strict authentication all online card transactions on websites in the European Economic Area.

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NPL pressure continues to fall

Banks continued to clean up their balance sheets in the first ten months of 2020. As a result, the average non-performing loan (NPLs) rate of the Romanian banking system fluctuated around 4% of all loans, according to BNR. The average non-performance rate decreased to 3.92% in October, the lowest figure for the entire year.

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Legislative News (2)

VAT cap expansion postponed for 12 months

The Cabinet has decided to postpone by one year the expansion of the 5% VAT cap from EUR 93,000 to EUR 140,000. The decision was adopted by decree on the night of December 30, one day before the beginning of 2021. The Cabinet's decision had not been announced in advance.

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Labor stimulus measures to continue in 2021

The Ministry of Labor announced the adoption of a decree extending the social protection measures aimed at stimulating the hiring of unemployed people. Employers who employ on full-time contracts individuals registered with the county employment agencies will receive monthly, for a period of 12 months, 50% of the employees' salaries, but not more than RON 2,500 per employee.

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Politics (2)

Marcel Ciolacu's New Year message: "I urge you to rise and make your voice heard again"

Marcel Ciolacu, president of the Social Democratic Party (PSD), urged Romanians to stand up and make their voice heard in his New Year's message. The leader of the largest party in the country added that 2021 will be a difficult year, but Romanians will defeat the virus and take back control over their lives.

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President's New Year speech

President Klaus Iohannis focused his New Year's message almost exclusively on gratitude to those who saved lives during the coronavirus crisis and on the hope of leaving the pandemic behind through responsible solidarity. "The return to the normality that we all long for is getting closer, but it depends on each of us," said the president. At the same time, Iohannis did not forget the grieving families of the "too many" who "lost the fight against the disease".

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Social (2)

Protests threatened over education salaries

Members of the "Spiru Haret" Federation of Education Unions (FSE) have asked the union's leadership to start organizing protests if the Government refuses to include in this year's budget an increase in the salaries of education employees, according to an official statement.

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COVID vaccination campaign deadlines

Valeriu Gheorghita, coordinator of the COVID vaccination campaign, announced on Saturday evening that 90% of the 270 vaccination centers in Romania will start operating on January 4 and that 20,000 people should be vaccinated every day. According to data communicated on Saturday, 13,200 people had been vaccinated in Romania.

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