Daily Newsletter - 5 May 2022


Macroeconomic (3)
Financial (3)
Investment (4)
Legislative (4)
European News (1)
Social (3)
Retail sales grew faster in Romania than in the EU
Retail sales in the European Union and the euro area fell above expectations in March compared to February, mainly due to lower fuel sales, according to data published by Eurostat yesterday. The data indicate that month-on-month retail sales decreased by 0.4% in the euro area and by 0.2% in the European Union. On the other hand, retail sales in Romania grew by 0.4%, following a 0.6% advance recorded in February. Economists interviewed by The Wall Street Journal had estimated a 0.1% increase in retail sales in the euro area in March, after a 0.4% advance in February.
Economic sentiment in Romania grew in April
Economic sentiment in Romania grew in April, for the second month in a row, while the one in the euro area kept falling, amid the war in Ukraine, according to the Economic Sentiment Indicator (ESI) published by the European Commission on a monthly basis. The European Executive’s economic sentiment indicator for Romania thus stood at 104.3 points in April, above ESI’s long-term average (100) and up by 0.6 points against the 103.7 point value recorded in March. ESI stood at 102.5 points and 102.9 points respectively in February and January.
Romanian Government remains committed to euro area accession
Government spokesperson Dan Cărbunaru stated on Wednesday that the Romanian Government remained committed to euro area accession, but its efforts currently focused on economic and social support measures following the effects of the Covid-19 pandemic, and on reducing the consequences generated by the military conflict in Ukraine. On Wednesday, the Government approved the 2022-2025 Convergence Program, which is based on the provisions of the 2022-2024 Fiscal-Budget Strategy and the 2022-2025 medium-term macroeconomic forecast.
Ioana Gorgăneanu is the new Head of Marketing and Communication Mastercard for Romania
Ioana Gorgăneanu has been appointed Head of Marketing and Communication Mastercard for Romania, Croatia, Israel and the Balkans. She will thus supervise the company’s marketing operations in Croatia, Romania, Israel, Bulgaria, Serbia, Bosnia, Montenegro, North Macedonia, Albania and Kosovo, Mastercard representatives reported on Wednesday. According to them, Ioana Gorgăneanu is to coordinate Mastercard’s local and regional initiatives, built in line with the company’s vision, which combines values such as a world beyond cash, financial inclusion and education, innovation, secure digital payments and interconnectivity.
EximBank’s merger with Banca Românească will be finalized by the end of 2022
The merger between EximBank, a bank owned by the Romanian state through the Ministry of Finance, and Banca Românească will take effect from a legal, accounting and tax point of view starting from 31 December 2022, and Banca Românească "will cease to exist as of the effective date of the merger, which will result in the dissolution without liquidation of the absorbed company and the universal transfer of all its assets to EximBank", according to the draft merger by absorption between the two banks. Basically, the merger between the two banks is carried out through Banca Românească’s absorption by EximBank. As a result, the number of banks in the Romanian banking system will decrease to 33.
Raiffeisen Bank obtained a RON 218 million net profit in Q1 of 2022
Raiffeisen Bank obtained a RON 218 million net profit in Q1 of 2022, up by 10% year-on-year. The increase in profit was generated by the growing volume of transactions made by both individual and corporate clients, while maintaining the bank’s risk profile at a very good level, according to the information provided by the bank. The bank’s operating income stood at RON 692 million on 31 March 2022, 12% higher than in the first quarter of the previous year. Interest income grew by 16%, supported by higher loan volumes, but also by an upward trend for interest rates on the market.
Dutch company Envipco invested over EUR 2 million in Sebeș
Dutch company Envipco has finalized an over EUR 2 million investment in a factory where equipment for the selective collection of beverage packaging will be manufactured, built in the city of Sebeș, Alba County. The factory has a 2,870 square meter production area, plus 520 square meters of office spaces. The production capacity of the unit in Sebeș is 6,000 RVMs (Reverse Vending Machines) in 2022 and will reach 15,000 RVMs in 2023.
Oradea City Hall is investing in the construction of an infectious diseases hospital
Oradea City Hall has an over EUR 135.8 million ongoing investment, financed from European funds, for the construction of an infectious and lung diseases hospital, with a maximum capacity of 326 beds. The total area of the project is 25,000 square meters, the hospital footprint is 10,516 square meters and the developed area is 40,334 square meters. The new hospital will be built on a 2.5 hectare land on Vlădeasa Street and will have four floors.
Distribuție Energie Electrică România plans to invest RON 689 million in 2022
Distribuție Energie Electrică România, part of the Electrica Group, plans to invest RON 689 million in 2022 in the modernization and development of the electrical power distribution system, according to a press release issued by the company. The main directions target continuity and quality parameters in electricity supply, energy efficiency and reduction of network losses; operational efficiency, hence the reduction of maintenance costs. According to the cited source, the company’s medium-term plans include further modernization of the network infrastructure, accelerated digitalization, the development of alternative channels for interactions with users, as well as creating a modern working environment for employees, by implementing the Digital Distribution concept.
Bosch to invest billions in climate-neutral technology
Bosch recorded a significant increase in sales and profit in 2021 tax year, despite the unfavorable context, according to a press release issued by the company. Sales revenues generated by the technology and services provider grew by 10.1%, to EUR 78.7 billion, and its operating profit (EBIT from operations) was up more than 50%, to EUR 3.2 billion. Moreover, Bosch will invest about EUR 3 billion within the next three years in climate-neutral technologies such as electrification and hydrogen-based technology.
The draft law on the studying of the subject on the 1989 Revolution was adopted
The draft law on the studying of the subject on the 1989 Revolution, initiated by Liberal MP Marilen Gabriel Pirtea, was adopted with a final vote in the Chamber of Deputies on Wednesday, 4 May. The legislative proposal provides for the subject <<History of the 1989 Revolution and the change of regime in Romania>> to be included into the high-school curriculum. The draft law received the necessary votes for adoption (215 votes in favor of the final form of the draft law, 17 votes against it and 44 abstentions) and the new law will now be sent to the Senate.
Government has approved a new draft law
The Government has approved a draft law on the prudential supervision of financial services and investment companies, which separates, between the National Bank of Romania and the Financial Supervisory Authority, the authorization, regulation and supervision of credit institutions that are part of large investment firms according to the activities they carry out. According to a press release issued by the Executive, the normative act transposes into the national legislation several European directives in the field of prudential supervision of financial investment services providers (SSIF) and amends Government Emergency Ordinance (OUG) 99/2006 on credit institutions and capital adequacy.
Government has adopted an OUG on the management of the Modernization Fund
The Government has adopted, upon the Energy Ministry’s proposal, the Emergency Ordinance establishing the institutional and financial framework for the implementation and management of funds allocated to Romania from the Modernization Fund, as well as amending and completing certain normative acts. The Modernization Fund available to Romania is worth over EUR 13 billion for the period 2021-2030, based on estimates of the price of greenhouse gas emission certificates.
Legislative Council has issued an opinion on the draft Offshore Law
The Legislative Council has issued an opinion on the draft Offshore Law, the deadline for submitting amendments is 11 May and the law will subsequently get to the relevant committee, Energy Minister Virgil Popescu stated during the briefing at the end of the Government meeting on Wednesday. When asked about Black Sea Oil&Gas representatives’ discontentment with the draft law, the minister said he was convinced the US company would be extracting gas from the Black Sea in the second half of the year.
European News 
Romania’s government cloud project is overshadowed by controversy
The Romanian cloud project is the centerpiece of the government’s digitalization plan, set to attract €500 million from the EU and bring the country closer to Europe’s e-governance targets. However, the proposal has so far mostly succeeded in stirring up controversy. The first steps taken by the Romanian authorities to legislate the government cloud have provoked negative reactions from representatives of the civil society and even from some state institutions that are supposed to join the said cloud. In line with Europe’s e-governance targets, Bucharest committed to universal access to public services online. Moreover, there would be an online history of the citizens’ interactions with the state, and personal data and documents would be protected by high-performance cybersecurity systems.
Employers who increase minimum wage by RON 200 will not pay taxes for this amount
Employers can increase the basic gross minimum wage by RON 200 starting from 1 June 2022, an amount which no taxes and no social security contributions will be paid for, according to a draft ordinance put up for public consultation on the Finance Ministry’s website. The Ministry of Finance has drawn up the normative act needed to implement the measure adopted under the governmental program "Support for Romania – RON 200 extra to minimum wage (voluntary tax-free increase)".
Parents will have days off when school suspends physical attendance due to COVID-19
The draft law granting parents days off to supervise their children when teaching activities with physical attendance in schools are suspended due to the spread of the SARS-CoV-2 coronavirus was adopted during the Chamber of Deputies’ plenary session on Wednesday. The draft law regulates the approving of Government Emergency Ordinance 110/2021. These provisions shall apply to parents whose jobs do not allow them to work from home or do teleworking.
70% of Romanians do not know how illness or an accident could affect them financially
About 70% of Romanians are unaware of the financial consequences that their death, illness or being involved in an accident could have, according to the latest Aegon survey, conducted together with Reveal Marketing this year. According to the cited source, only 40% of Romanians already have a financial plan in case of illness or accident. Of the analyzed segments, 47% of modern families said they had such a plan in place, while only 34% of traditional families have a financial back-up plan in case of illnesses or accidents.