News

Daily Newsletter - 7 September 2022

Summary

Macroeconomic (4)
Financial (3)
Investment (4)
Legislative (3)
European News (1)
Social (2)
Macroeconomic 
Euro area is almost certainly heading for recession
The euro area is almost certainly entering a recession, with surveys published on Monday, 5 September, showing a deepening cost of living crisis and a gloomy outlook that is making consumers more wary of spending. Despite some easing of price pressures, according to the surveys, they remained high and the European Central Bank is under pressure as inflation is running at more than four times its 2% target, reaching a record 9.1% in August. The bank faces the prospect of raising interest rates aggressively just as the economy enters a downturn.
CFA recommends increasing contributions to private pension Pillar 2
The diversification of private pension funds’ investments portfolio and a level of commissions comparable to the one in Europe, in parallel with an increase in contributions to Pillar 2 private pension funds, are among the proposals of CFA Romania Association regarding the Draft Government Emergency Ordinance (OUG) amending and completing certain normative acts in the private pensions sector. CFA Romania believes that a thorough consultation of professionals in the fields they have relevant expertise in is beneficial both to institutions and organizations, but especially to consumers of financial products.
World Bank and Government entered into a partnership regarding human resources management
On Tuesday, 6 September, the World Bank and the Romanian Government, through the General Secretariat of the Government (SGG) and the two main implementation partners, namely the National Civil Servants Agency (ANFP) and the Ministry of Labor and Social Solidarity (MMSS), marked the finalization of the collaboration for the Development of a Unitary Human Resource Management (HRM) System in Public Administration, according to a press release issued by the international financial institution. The cited source also indicates that the technical analyses and policy recommendations provided within the project helped the government draw up draft laws for new recruitment models and competency frameworks for the public administration, and to develop a new methodology for monitoring public sector employees’ salary policy.
The 1.3 million economic operators active in Romania issue more than 1 billion invoices per year
The 1.3 million economic operators active in Romania issue more than 1 billion invoices per year, according to the National Agency for Fiscal Administration (ANAF)’s estimates. Moreover, Romania loses about EUR 10 billion from uncollected VAT contributions annually, mainly due to fraud, according to a press release. The cited source also indicates that this figure exceeds EUR 100 billion at European level, with Romania being the champion in VAT non-collection. According to experts, generalized electronic invoicing will help Romania save this money.
Financial 
BCR Social Finance has launched a financing solution for studies
BCR Social Finance has launched StudyUP, a financing product for people who want to cover the expenses generated by accessing study programs at university, master’s degree or PhD level, or for specialization courses in Romania, the maximum amount granted being RON 145,000. The StudyUP loan aims to support people aged 18-45 who want to complete their studies, and the accessed amounts can be used for one or several categories of expenditure, such as financing tuition fees (paid directly into the education service provider’s account), rent, textbooks, school materials and equipment, miscellaneous expenses (food, transport, maintenance, etc.) up to a maximum ceiling of one minimum wage in economy per month.
Revolut is under pressure from its auditors to improve internal controls
Revolut is under pressure from its auditors to improve internal controls after UK regulators highlighted significant flaws in the auditing of its accounts, including an "unacceptably high" risk of "material misstatement". The rapidly growing payments group, which has suffered a string of high-profile defections in its risk and compliance teams in recent months, is the unnamed "financial services provider" whose audit by BDO was criticized by the Financial Reporting Council in its latest audit quality inspections, people familiar with the matter told the Financial Times.
UniCredit has prepared a package of measures to support firms and households in Italy
On Monday, 5 September UniCredit, the second-largest bank in Italy, presented a set of measures worth up to EUR 8 billion to ease the pain of companies and households affected by record energy prices and wider price surge. Chief executive Andrea Orcel told a press call that UniCredit, which also operates in Germany, Austria and Eastern Europe, was working on similar measures for its other markets and gave assurances regarding the quality of the bank’s loan portfolio.
Investment 
Wrought iron manufacturer Trutzi plans to build a new plant in Suceava
Trutzi, a wrought iron elements manufacturer in Suceava, with a RON 350 million turnover, plans to build a new factory. Investments for this unit, as well as for other projects meant to streamline activity, amount to RON 150 million, and the company owned by Ciprian Nuțu has applied for RON 55 million state aid for this purpose. The project aims to create more than 150 jobs and major investments in latest generation technological lines. The company plans to launch the investment before the end of 2022.
Constructions company Maristar Com is preparing a major new residential project
Constructions company Maristar Com, which is rehabilitating the Cernavodă Bridge, controlled by businessman Cristian Stancu, is preparing a major new residential project, on a 6.5 hectare plot of land recently acquired in the city of Ploiești, Prahova County, where it has other real estate developments as well. The MRS Residence GRADINILE project will be located in the north of Ploiești, close to another of the company’s residential developments, MRS Residence SMART. The total value of the new residential complex will amount to EUR 120 million. This is the company’s biggest investment in the real estate sector.
Kärcher Romania has inaugurated its new headquarters in Pipera
Kärcher, a player activating in the cleaning technology sector, has inaugurated its new headquarters in Bucharest, following a EUR 11.5 million investment. The company recorded a EUR 26.5 million turnover in 2021 and expects it to double by 2027. The opening of the new headquarters in Pipera district in Bucharest is the German group’s biggest investment in Romania in 2022. The last significant investments had been the opening of the newest Kärcher Center distribution showrooms in Timişoara and Militari Shopping.
Farmec invests EUR 500,000 to launch the newest skincare range in its portfolio
Romanian cosmetics manufacturer Farmec is to invest EUR 500,000 in research, design and communication, for the launch of Gerovital Must Have, a range based on active ingredients in high concentrations and latest generation technology, according to a press release. The cited source indicates that "Must be Gerovital" carries forward the tradition of Gerovital research, through effective and innovative clinical formulas that are affordable for home care. From niacinamide, to peptides, caffeine, vitamin C and AHAs, the range brings together ingredients recognized for their proven efficacy and Gerovital brand’s established expertise in skincare products. Gerovital Must Have contains six products, including four concentrated serums that come in handy pipette packs for optimal dosing, as well as two moisturizing skin creams.
Legislative 
PSD leader announces amendments to energy OUG that came into force on 1 September
The leader of the Social Democratic Party (PSD) Marcel Ciolacu announced on Tuesday, 6 September, that public services, churches and Metrorex (the metro company in Bucharest) must benefit from the capping and compensation of energy prices, which was why he would propose in Parliament some amendments to the ordinance (OUG) approved by the Government a few days ago. The PSD leader also gave the example of public trolleybus and tramway services that must benefit from the provisions of the ordinance and pointed out that amending the normative act was a priority of the current parliamentary session.
Senate tacitly adopted draft law allowing young people to vote starting from the age of 16
The Senate has tacitly adopted the draft law reducing the minimum age at which young people can vote in local and European elections from 18 to 16. The draft law’s tacit adoption note, whose debate and vote deadline had expired on 4 September, was read out during the plenary session by acting Senate President Alina Gorghiu, who chaired the meeting. The draft will now be debated by the Chamber of Deputies, the decision-making body in this case.
Associations and foundations will benefit from VAT reimbursement for building materials purchases
Associations and foundations will benefit from VAT reimbursement for the purchases of building materials, equipment and sanitary supplies needed for the construction, rehabilitation, modernization and equipping of hospital units, according to a draft law adopted by the Senate. The initiative belongs to the leader of Social Democratic (PSD) deputies, Alfred Simonis, who has indicated that civil society, through non-profit associations and foundations, has reacted very well over time to the need to improve hospital infrastructure and equip medical units with highly-performing equipment.
European News 
G7 members fail to meet Paris climate targets
Climate goals adopted by businesses in G7 countries show the 1.5C warming target of the Paris Agreement is "currently unachievable", according to a new report released on Tuesday (6 September). Planet heating would hit 2.7C if current emission pledges made by major companies across G7 countries were reflected globally, according to the report by CDP, a global non-profit group running a climate disclosure system for companies, cities and governments.
Social 
Romanians support EU sanctions against Russia and aid to Ukraine in a smaller share than EU average
Romanians support the sanctions imposed by the European Union against Russia and the aid granted to Ukrainian refugees, yet, in a smaller proportion than the EU average, according to a Eurobarometer survey. The Eurobarometer, conducted in June-July 2022, also shows that 67% of Romanian respondents are optimistic about the future of the EU, up by 8% compared to a similar survey conducted in January-February this year, before Russia’s aggression against Ukraine (EU average: 65%), according to a European Commission press release.
More than 300,000 pupils from underprivileged families receive aid for school supplies and clothing
The Ministry of Investments and European Projects (MIPE) announced on Monday, 5 September, that more than 300,000 pre-school children and pupils from underprivileged families would receive RON 500 aid for school supplies and clothing. The support, granted on a recurring basis since the 2021-2022 school year, is provided in electronic format, on a card. The cards of students who have already received them will be charged in September.