Situation of COVID-19 cases in Romania
- Infection rate in Bucharest maintains above 3: In the last 24 hours, 3,400 new cases of COVID-19 were reported, out of 29,400 conducted tests. 65 patients infected with the novel coronavirus have died in the past 24 hours. The infection rate in Bucharest slightly increased to 3.23 / thousand inhabitants. 768 COVID patients are hospitalized in intensive care, the largest number since the start of the pandemic. After Bucharest, Alba County also exceeded this ceiling, with 3.06, with Harghita county is close behind with 2.84 per 1,000 inhabitants. Most new cases in the last 24 hours were registered in Bucharest (545), Cluj (228), Iasi (214), Timis (147), Prahova (132) and Alba (120).
Political and regulatory
- Bucharest has entered the red scenario: schools go online, restaurants, cinemas closed, facemasks mandatory in all public spaces: Bucharest Municipal Council for Emergency Situations has decided on Monday afternoon that the Capital should enter the red scenario, with schools going online and several venues, such as restaurants, cafes, cinema halls and theatres, as well as gambling halls being closed for the upcoming two weeks. At the same time, people in Bucharest must wear face masks in all public indoor and outdoor spaces as a mandatory rule. The facemask is compulsory for all people, including children over 5. The restrictions came in force at midnight. Exceptions were made for nurseries and afterschool units, while universities are free to decide for themselves. Meanwhile, HoReCa employees expressed their complete disagreement with the measure to close down restaurants and announced to stage a protest this evening.
- President slams Capital prefect over ignorance towards Covid incidence rate. Gov’t expected to sack him: After having stated a day ago that he doesn’t know which is the incidence rate of Covid-19 infections as he “was out shopping”, Bucharest prefect Gheorghe Cojanu is on the verge of losing his job. The Government is expected to adopt a resolution to dismiss the prefect in its Wednesday sitting, with sources revealing that Traian Berbeceanu, the current adviser of Interior Minister Vela, is to be appointed as the Capital prefect. “The Capital prefect’s attitude and the way he reacted are unacceptable and should not remain without consequences”, the Romanian president said, Klaus Iohannis said Monday evening at a press conference. Iohannis also stated that the pressure on the hospitals and on the intensive care units had reached huge peaks.
- President warns over risk for Romania to lose EU money, to be downgraded by the rating agencies: President Klaus Iohannis has warned in a press statement on Tuesday that Romania risks losing EU funds and being downgraded by the rating agencies if the state budget is not responsibly drafted amid economic crisis prompted by the Covid-19 pandemic. Asked if Romania might lose European money if pensions increase by 40pct and if our country will be demoted by rating agencies, President Iohannis replied: “Yes, there is a risk. Everyone expects from Romania to take measures that are, obviously, precautionary. So, they expect us to be responsible in managing our budget, given that the economic crisis is, unfortunately, a reality. (…)”
- U.S. Secretary of State Pompeo, Foreign Minister Aurescu discuss defense, energy, 5G cooperation: Minister of Foreign Affairs Bogdan Aurescu met on Monday in Washington with U.S. Secretary of State Michael Pompeo, with the top foreign affairs officials tackling, among others, Romania’s commitment to continue strategic investments in Defense, and energy and economic cooperation between the two states, the Ministry of Foreign Affairs said in a release, acording to AGERPRES.
- EduMin Anisie: We must prepare to teach online as long as necessary: The Minister of Education, Monica Anisie, stated, on Monday, referring to the possibility that classes take place exclusively online this school year, that it’s necessary those involved in the educational process be involved so that online teaching last “as long as necessary”, according to AGERPRES. The minister mentioned that all pupils in Bucharest that requested through the “School at home” program electronic devices, have received equipment, 8,057 tablets being distributed in this sense. A number of 1,259 educational units in the country are carrying out their classes according to the 3rd scenario (online), and 5,607 according to the 2nd scenario (mixed), the Ministry of Education and Research (MEC) informed on Monday, as reported by AGERPRES.
- Chiritoiu: Non-resident companies in Romania will be fined depending on turnover at global level: Non-resident companies in Romania will be fined depending on the turnover at a global level, once the Competition Law is amended, said, for AGERPRES, Bogdan Chiritoiu, the head of the Competition Council. “For companies not registered in Romania, we will issue fines starting from the global turnover. For companies registered in Romania, the fines will be issued on the basis of the turnover in Romania. Fines should be so high that they discourage companies to break the law,” said Chiritoiu. The new legislation also includes a recommendation of the European Commission, based on a study of the community executive, according to which the formation of a cartel incurs damages in the form of product or services’ prices going up by 20 pct. “Thus, we presume that the price has gone up by 20 pct following a cartel and it becomes the task of those who formed the cartel to prove it was less,” Chiritoiu explained. OUG 170/2020 was published in the Official Journal on Friday, October 16.
- Tariceanu and other ALDE members running in parliamentary elections to join Pro Romania: Chairman of the Alliance of Liberals and Democrats (ALDE) Calin Popescu Tăriceanu will join Pro Romania party and will run on the lists of this political party in the parliamentary elections, informs a press release sent on Monday to AGERPRES. ALDE representatives bring to mind that on October 8, the party leadership approved the merger protocol between ALDE and Pro Romania, the merger being validated on November 8 at the congress.
- PSD’s Ciolacu: Closing schools, but holding elections, the normal Romania promised by the president: Social Democratic Party (PSD) national leader Marcel Ciolacu said on Monday that the officials are using “double standards” when dealing with the health crisis, as they want to close schools because of the COVID-19 pandemic, while the National Liberal Party (PNL) and President Iohannis desire to hold a general election, according to AGERPRES. Prime Minister Ludovic Orban said on a television show that, from the government’s point of view, December 6 for holding the general election is “the constitutional and legal date,” and “any extra day in which the incumbent Parliament remains in office is a wasted day for Romania.” In turn, President Klaus Iohannis stated at a press conference Monday evening that the parliamentary elections were established according to the law, and they will be held on December 6.
- CCR unanimously rejected the complaint of the Ombudsman on Quarantine Law: The provisions of the Quarantine Law on (forced) hospitalization of patients and the secondment of doctors are constitutional, CCR ruled.
- Value cap for dwellings that benefit from the 5% reduced VAT taxation was increased: The reduced rate of 5% VAT will be applied on the tax base for the delivery of dwellings with a usable area of up to 120 sqm, excluding annexes, and whose value does not exceed the amount of 140,000 euros, stipulates a bill adopted by Parliament, by the final vote of the Chamber of Deputies. The ceiling provided so far in the Fiscal Code is RON 450,000, excluding VAT, and the new ceiling would be applied from January 1st, 2021.
Impact on the economy
- Romanian small firms hesitate in applying for microgrants: Only 21,000 Romanian small firms applied for the EUR 2,000 micro-grants on the platform launched by the Economy Ministry until Friday, October 16, at 18.00. Thus, in the first week, not even half of the 50,000 companies expected to share the EUR 100 million budget have submitted requests. Thus, the Economy Ministry extended the application period until October 21.
- Romania’s automobile production hits new record in September: The two automobile factories in Romania, Dacia and Ford, delivered a total of 57,846 cars in September, 56% more compared to the same period last year and an all-time record, according to data from the Romanian Automobile Manufacturers Association (ACAROM). Dacia assembled 36,416 units and Ford – 21,430. Without the pandemic, Romania could have delivered over 500,000 new cars in 2020. In the first nine months of 2020, the total production of cars in Romania amounted to 304,875 units, down by 14% compared to the similar period of 2019.
- RO snacks producer Golden Foods issues EUR 1 mln bonds: Romanian snacks producer Golden Foods, which makes nuts and seeds sold under the Elmas brand, has launched EUR 1 million bonds last week and will list the papers at the Bucharest Stock Exchange. The company pays an interest rate of 9% per year, Ziarul Financiar daily said.
- Private placement of RO cyber security firm Safetech heavily oversubscribed: Romanian cybersecurity company Safetech Innovations closed a private placement for 20% of its shares within 37 seconds on October 19. The company planned to raise RON 2.5 million (some EUR 500,000) from Bucharest Stock Exchange investors, but the offer was quickly oversubscribed. By the end of the day, the investors placed orders for 8.57 times more shares than the company had on sale.
- CFR Infrastructura launches EUR 815 mln tender for upgrading Timisoara-Arad railway: CFR Infrastructura, the company that manages Romania’s railway network, published on Monday, October 19, the tender announcement for modernizing the Timisoara – Arad railway line, Economica.net reported. The contract is estimated at RON 3.92 billion (EUR 815 million).
- Romanian startup launches virtual engineer team in partnership with Druid and UiPath: KFactory, the first Industry 4.0 startup funded in Romania, has launched the first team of virtual engineers dedicated to the manufacturing industry. This new concept is part of the company’s goal to innovate the manufacturing industry’s entire production process by understanding how all the variables involved influence its performance. KFactory has developed the virtual engineering team in partnership with Druid and UiPath, two of the fastest-growing tech companies launched in Romania.
- Historical change in the financial market: ATMs with cryptocurrencies in all cities of Romania: Bitcoin Romania, a cryptocurrency trading platform operating on the local market, launches a new business direction by taking a step towards the offline area. The management of the company created a franchise for ATMs with cryptocurrencies, the franchisors having the possibility to obtain profit after 1-3 months from the investment. The management wants to register at the end of the year a network of 100 ATMs compared to 20 at present.
- The video game development industry in Romania generated for the first time a turnover of over 200 million dollars: For the first time in the history of the game development industry in Romania, the turnover registered by the over 100 studios operating locally exceeded USD 200 million. The amount represents an increase of 14.65% compared to 2018.
- Gazprom’s oil division has significantly increased the capital of its Romanian bunker subsidiary in the port of Constanta: Gazpromneft, the oil division of the Russian state gas giant Gazprom, has increased by 72% the share capital of its Romanian subsidiary specializing in refueling operations of ships (bunkerage) from the Black Sea in the port of Constanta, Gazpromneft Marine Bunker Balkan SA, which it took over about 7 years ago.
- In the pandemic, the real estate transactions market reached over 738 million euros in the first 9 months of the year: The investment market seems to be the least affected by the health crisis, while the office segment – the most affected of all real estate sectors and in full transformation – another 40,000 sq m of new deliveries are expected for this year. The industrial market benefits from the most opportunities, and the residential area remains the most stable, according to the latest Crosspoint Real Estate study.
- Danone optimizes its costs at group level: The strategic review of the Danone group’s activities, recently announced by the company, will not affect the Romanian business, Danone officils told ECONOMICA.NET. They did not however comment on whether there will be changes in the top management of the local branch, in accordance with the new strategy which provides for a migration of the management structure to one focused more on geography than on product groups.
- Romania could receive 6-7 billion euros from the Modernization Fund for investments in the energy sector: The total allocation of European money for Romania from the Modernization Fund for investments in the energy sector is estimated at 6-7 billion euros, of which about 1.3 to 2 billion euros will be available in the first two years, said on Tuesday, the Secretary of State with the Ministry of Economy, Energy and Business Environment (MEEMA), Dan Dragos Dragan, in a video conference organized by the Bursa newspaper.
- Loans worth a combined 14 bln lei granted so far under IMM Invest program: A number of 20,000 loans worth a combined 14 billion lei have been granted so far through the IMM Invest Program for small and medium-sized businesses, the general director of the National Credit Guarantee Fund for Small and Medium-sized Enterprises (FNGCIMM) Dumitru Nancu told a video conference organized by the Bursa Group on Tuesday, according to AGERPRES.
- Three-month interbank offered rate rises to 2.15 pct per year: Romania’s three-month interbank offered rate ROBOR, which is used for pricing floating rate consumer loans in RON, has gone up on Tuesday from 2.15 pct per year, from 2.10 pct per year, the value on Monday, according to information published by the National Bank of Romania (BNR), according to AGERPRES.
- BNR announces indebtedness data for companies and individuals: At the end of the first half of this year, the Romanian population had a total debt of approximately 165.2 billion lei (34.3 billion euros), higher by 8.7 billion lei, respectively by 5.5% compared to the level in H1 / 2019, shows the data from the National Bank of Romania. The companies’ indebtedness made a jump of only 2.3 billion lei in one year, respectively of 1.1% compared to H1 / 2019, to 208.6 billion lei (43.3 billion euros). The total debt of the population and companies reached at the end of the first half of 2020 to 373.8 billion lei, being 11 billion lei, respectively 3% above the level of H1/2019. Relative to the GDP, the total debt of the population fluctuated around 16%, while the share of corporate debt in the GDP is about 20%, and the cumulative retail and corporate debt represents about 36% of the GDP.