Aggiornamenti Emergenza Covid-19

Con l’aggiornamento del 3 gennaio l’Italia è entrata nuovamente nella lista dei Paesi con tasso di infezione da covid19 superiore a quello registrato in Romania. Di conseguenza, ai viaggiatori in provenienza dal nostro Paese, o che abbiano soggiornato negli ultimi 14 giorni in uno dei Paesi in “lista gialla”, verra’ richiesto di osservare un periodo di isolamento di 14 giorni a partire dall’ingresso in Romania. L’isolamento può essere ridotto a 10 giorni se il viaggiatore non presenta sintomi e l’ottavo giorno dall’ingresso si sottopone a un test test negativo per il SARSCov-2-RT-PCR e il risultato è negativo. Per soggiorni di durata inferiore a 72 ore, il viaggiatore può essere esonerato dall’isolamento se presenta un test negativo per Sars-CoV-2-RT-PCR, effettuato al massimo 48 ore prima dell’arrivo in Romania. Il transito in Romania verso altre destinazioni è consentito, purché avvenga nell’arco di 24 ore.

Sono previste le seguenti esenzioni:

a) persone che pur provenendo da aree / paesi in “lista gialla” hanno trascorso, prima di arrivare in Romania, gli ultimi 14 giorni consecutivi in ​​una o più zone / paesi per i quali non è stabilito l’isolamento all’arrivo in Romania
b) conducenti di automezzi con una capacità massima autorizzata superiore a 2 , 4 tonnellate;
c) conducenti di autovetture che hanno più di 9 posti, compreso il sedile del conducente;
d) gli autisti di cui alle lettere b) e c) che si muovono per esercitare la professione nel proprio Stato di residenza da un altro Stato membro dell’Unione Europea o in un altro Stato dell’Unione Europea dallo Stato di residenza, indipendentemente dal fatto che lo spostamento sia effettuato con mezzi individuali o per proprio conto ;
e) membri del Parlamento europeo, parlamentari e personale appartenente a istituzioni internazionali, nonché rappresentanti della Romania in organismi e organizzazioni internazionali di cui lo Stato rumeno è parte;
f) piloti di aeromobili e personale navigante;
g) meccanici di locomotive e personale ferroviario;
h) Personale navigante romeno, marittimo e di navigazione fluviale, rimpatriato con qualsiasi mezzo di trasporto, su presentazione alle autorità competenti del ​​”certificato per i lavoratori del settore dei trasporti internazionali”, un modello del quale è pubblicato nella Gazzetta Ufficiale dell’Unione Europea, serie C, n. 96 I del 24 marzo 2020;
i) personale di navigazione marittima e fluviale che effettua lo scambio di equipaggio a bordo di navi situate nei porti rumeni, indipendentemente dalla bandiera battuta, se all’ingresso nel paese, nonché all’imbarco / sbarco dalla nave, presenta alle autorità competenti un ​​”certificato per i lavoratori del settore dei trasporti internazionali”, il cui modello è pubblicato sulla Gazzetta Ufficiale dell’Unione Europea, serie C, n. 96 I del 24 marzo 2020;
j) il personale di navigazione che sbarca da navi della navigazione interna battenti bandiera rumena in un porto rumeno, a condizione che i datori di lavoro forniscano il certificato per i lavoratori dei trasporti internazionali e l’equipaggiamento di protezione personale contro il COVID-19, per il tempo di viaggio dalla nave al luogo in cui può essere contattato tra i viaggi;
k) i lavoratori frontalieri che entrano in Romania da Ungheria, Bulgaria, Serbia, Ucraina o Repubblica di Moldavia, nonché cittadini rumeni impiegati da operatori
economici dei paesi citati, che all’ingresso nel paese dimostrano i rapporti contrattuali con i rispettivi operatori economici;
l) dipendenti di operatori economici rumeni che eseguono lavori, in base ai contratti conclusi, fuori dal territorio rumeno, al loro rientro nel paese, se
dimostrano i rapporti contrattuali con il beneficiario al di fuori del territorio nazionale;

m) i rappresentanti delle società estere che hanno filiali / succursali / rappresentanze o agenzie sul territorio nazionale, se all’ingresso sul territorio rumeno dimostrano i rapporti contrattuali con le entità economiche sul territorio nazionale;
n) persone che entrano in Romania per attività di utilizzo, installazione, messa in servizio, manutenzione, assistenza di attrezzature e tecnologie nel campo medico, scientifico, economico, della difesa, dell’ordine pubblico e della sicurezza nazionale, trasporti, nonché persone che svolgono attività professionali specifiche nei campi citati, se dimostrano i rapporti contrattuali / di collaborazione con il beneficiario / beneficiari sul territorio rumeno, nonché gli ispettori degli organismi
internazionali;
o) membri di missioni diplomatiche, uffici consolari e altre missioni diplomatiche accreditate a Bucarest, titolari di passaporti diplomatici, personale
assimilato a personale diplomatico, nonché membri del Corpo diplomatico e consolare rumeno e titolari di passaporti diplomatici e di servizio, nonché membri delle loro famiglie ;
p) dipendenti del sistema nazionale di difesa, ordine pubblico e sicurezza nazionale che rientrano in Romania da attività svolte per interesse professionale
al di fuori del paese;
q) alunni / studenti, cittadini rumeni o cittadini con domicilio o residenza fuori dalla Romania, che devono sostenere esami di ammissione o completare gli studi, che iniziano i loro studi in unità / istituzioni educative sul territorio del paese o viaggiano per attività legate all’inizio, l’organizzazione, la frequenza o il completamento degli studi, nonché i loro accompagnatori se minorenni;
r) gli alunni / studenti che frequentano i corsi di alcune istituzioni educative dall’estero, si recano quotidianamente da loro e presentano documenti giustificativi, nonché i loro accompagnatori se minorenni;
s) i membri delle delegazioni sportive internazionali che partecipano a competizioni sportive organizzate sul territorio rumeno, in conformità con la legge, i funzionari dei forum sportivi internazionali che organizzano queste competizioni, gli arbitri delegati nonché i giornalisti accreditati a queste competizioni;
t) atleti rumeni, che svolgono la loro attività in altri stati e che sono convocati nelle squadre nazionali per rappresentare la Romania in competizioni sportive organizzate in conformità con la legge, membri di delegazioni sportive rumene che rientrano in Romania da competizioni sportive internazionali, funzionari e arbitri rumeni che sono stati delegati a concorsi internazionali nonché giornalisti accreditati a questi eventi;
u) atleti stranieri titolari in squadre in Romania che rientrano nel paese in seguito alla partecipazione a una competizione internazionale ufficiale delle loro squadre e devono riprendere la loro attività sportiva presso il club, a condizione che abbiano concluso un contratto valido con una società sportiva in Romania;

v) le persone che lavorano con un contratto di lavoro, nel campo dell’assistenza sociale negli Stati membri dell’UE, se presentano un test negativo per SARS-CoV-2, eseguito entro e non oltre 48 ore prima dell’ingresso nel territorio nazionale;
w) troupe cinematografiche che svolgono attività professionale sul territorio rumeno sulla base di un contratto o documento comprovante la necessità di essere nel paese,
se presentano un test negativo per SARS-CoV-2, eseguito entro e non oltre 48 ore prima dell’ingresso nel territorio nazionale;
x) persone in transito, se lasciano la Romania entro 24 ore dall’ingresso nel territorio del paese.

 

COVID-19 cases in Romania and vaccination campaign (23-12.2020)

• Romania registers over 5,400 new COVID-19 cases in the past 24 hours: 5,459 new cases of infections with the novel coronavirus have been reported in Romania in the past 24 hours, out of 25,840 tests. 130 deaths have been reported in the past 24 hours, with the number of patients treated in intensive care reached to 1,251. Most new cases were registered in Bucharest – 967, Ilfov – 326, and Timis – 299. The highest rate of infection with the novel coronavirus per 1,000 inhabitants is registered in Ilfov (6.32) and Bucharest (5.3). Overall, Romania has passed the threshold of 600,000 COVID-19 cases since the start of the pandemic, with 516,423 patients being declared cured.

 

Political and regulatory

 

• Coalition leaders submit the new government members’ list and the governing program to Parliament. Nominees decided overnight: The leaders of the PNL, USR-PLUS and UDMR Coalition arrived at the Parliament on Wednesday morning, where they are submitting the list and the governing program, thus being on track for the investiture of the government led by the liberal Florin Cîțu later today. At around 11 AM, the hearing of the candidates for the positions of ministers should start in the specialized committees. They would last for only three hours, yet Orban said there will also be limited time allocated for questions in the committee hearings. The appointed prime minister, Florin Cîțu, estimated on Tuesday night that the vote to invest the government in the joint sitting of the Chamber of Deputies and of the Senate could take place on Wednesday, at around 6 PM, after which the first meeting of the Executive will take place. After the vote of confidence from the Parliament, the Prime Minister, the Ministers and the other members of the Government will take oath, individually, before the President of Romania. The three political forces in the Coalition already split the 18 ministries. PNL will control traditional ministries, including the portfolios of defense, interior, finance, energy, and foreign affairs, and will also appoint the ministers of education, culture, agriculture, and labor. These ministries are essential for president Iohannis’ main strategic projects, including the strategic partnership with the US in the energy and defense sectors.  The reformist alliance USR-PLUS will control the ministries with the potential to boost the public sector development: justice, EU funds, health, transport, research and development, and economy. The ethnic Hungarians’ party UDMR was assigned several key ministries as well: development (regional development financed from national budget) and environment (supposed to intermediate major financing for Green Deal), plus the ministry of youth and sports. Hearings are ongoing, currently favorable approvals were received by Cristian Ghinea (European Funds), Bogdan Gheorghiu (Culture), Sorin Câmpeanu (Ministry of Education), Virgil Popescu (Ministry of Energy) and Lucian Bode (for Ministry of Interior).
• Government list
  • PM – Florin Cîțu
  • Deputy Prime Ministers – Dan Barna (USR-PLUS) and Kelemen Hunor (UDMR)
• Ministers:
  • PNL
  •     Finance – Alexandru Nazare
  •     Foreign Affairs – Bogdan Aurescu
  •     Defense – Nicolae Ciucă
  •     Energy – Virgil Popescu
  •     Interior – Lucian Bode
  •     Education – Sorin Câmpeanu
  •     Culture – Bogdan Gheorghiu
  •     Agriculture – Adrian Oros
  •     Labor  – Raluca Turcan
  • USR
  •     Justice – Stelian Ion
  •     Health – Vlad Voiculescu
  •     Transports – Cătălin Drulă
  •     European Funds – Cristian Ghinea
  •     Economy – Claudiu Năsui
  •     Research, Innovation, Digitalization – Ciprian Teleman
  • UDMR
  • Development – Cseke Attila
  • Environment – Tanczos Barna
  • Youth and Sports – Novák Eduárd
• Who are the new ministers?
  • Asides from returning actual or former ministers, in PNL’s case, such as Bogdan Aurescu (MFA), Nicolae Ciuca (Defense), Virgil Popescu (Energy), Bogdan Gheorghiu (Culture), Sorin Câmpeanu (for Education, a position he also held in the past; surrounded by controversies brough up by the civil society but which were ruled out by Mr. Orban), Adrian Oros (Agriculture), Lucian Bode (to Internal Affairs, coming from the position of Minister of Transport), the novelties are: Raluca Turcan – formerly Deputy PM, now Minister of Labor, Alexandru Nazare (for Finance, his past experience is in the ministry of transport – minister and state secretary, in the finance ministry – as state secretary, as a MEP, and more recently as the govt. representative who consulted in the selection process for the hosting of the EU Cyber Center, which was awarded to Romania). USR has most novelties, being for the first time in power (as opposed to their partners from Plus, which had the Ciolos government nov. 2015-jan. 2017): Stelian Ion for Justice (attorney, MP in the legal committee, where he stood out for being vocal against the proposed changes in the justice system by the PSD and ALDE; a critic of Catalin Predoiu for not dismantling the Special Section for Investigating Justice Crimes); Vlad Voiculescu (previously health minister for 7 months in 2016, when he achieved the depoliticization of hospital management, took mandate during a measles epidemic, introduced the feedback mechanisms for discharged patients, worked on a draft vaccination law, which is yet to be passed; first minister to address the topic of bribery for doctors in hospitals); Catalin Drula (proposed for Transports, by profession IT software engineer, founded the Pro Infrastructure NGO for monitoring infrastructure projects, a vocal critic of nearly all transport ministers and now proposed for the very same position); Cristian Ghinea (for European Funds, returning from being a MEP in Brussels to a position he held in the past during the Ciolos government in 2016), Claudiu Nasui (for economy, head of USR Bucharest, known for being the MP most vocal for the zero tax on the minimum wage; licensed in economy, worked as financial banking analyst, auditor with a brokerage house, consultant for a financial advisory company; comes from a wealthy family); Ciprian Teleman (for Research/Digitalization, head of Plus Ilfov, geologist by profession, has business in coaching and mentoring). UDMR comes with Cseke Attila for the Ministry of Development (legal expert, with significant experience in administration and lawmaking, author of the administrative code; previous health minister where he contributed to its decentralization; and as senator he strived for the development of highways in Romania), Tánczos Barna (for Environment, economist, state secretary in Agriculture, Transport and Tourism; as senator he initiated bills for sustainable development of forests and eco-agriculture), and Novák Eduárd (for Youth and Sports, world and European cycling champion, head of the Romanian Cycling Federation).
  • Governing program: Major stipulations in the governing program refer to amending the constitution and justice laws, reform of CCR and integrity checks for public office, reorganizing the Ministry of Interior and digitalization of civil documents issuing; modernizing county and local roads, sewage and water networks, building and modernizing education units, building medical centers in rural areas, constructing or modernizing county and city hospitals, keeping 2% of the GDP for defense, consolidating E.U.-U.S.-NATO relations, new health law, reorganization of public health departments and decentralization, increasing health budget to 6% of the GDP, investments in health through European funds, developing complementary (private) health insurances by the model of private pension pillars, reginal hospitals in Iasi, Cluj, Craiova, keeping the public debt at no more 60% of the GDP on medium term, no new taxes or tax hikes, reorganizing the treasury with the operations part transferred to the private environment, drawing a study on lowering taxes on the minimum wage from 2021 and implementing a pilot program from 2022 on the best sector decided by the study with the decision to extend/generalize the measure in certain conditions of low deficit depending on the pilot stage results; lowering VAT on selective waste collection; EU-zone accession (EU currency adoption), allocating 2% for transport investments over the next 4 years and operationalizing the National Company for Road Investments; resolving inequalities in the pensions system and analyzing the impact of the pensions law, indexation of pension with the inflation; gradual increase of the budget for education to 6% of the GDP in four years and up to 1% of the GDP for research; waste management program, developing the EV charging network country-wide, improving and growing the national car pool renewal subsidies (RABLA, RABLA Plus), national reforestation program, reform of Romsilva, text message warning system for the air quality monitoring network; Agri Invest program for agriculture similar to IMM invest, development of the Port of Constanta, increasing competitivity of railway freight transport and rescuing CFR Mafa, digitalization of ANAF, extending 5G connectivity,  digital public administration/e-government/government cloud and digitalization of education and healthcare in the Covid-19 context. The full Governing Program document can be consulted here.
    • Comment: While the governing program can be viewed as a master plan, the investment part of it is heavily dependent on European funds and the performance and cooperation between ministries. Funds are in short supply and big hopes are pinned on money to be attracted through the Recovery and Resilience Plan. Justice reforms are a must in the context of the EU conditioning the funds on a rule of law monitoring mechanism.     
• PM Orban, after approval of list of ministers: There is no disadvantage if PNL doesn’t hold a ministry or the other: PNL (National Liberal Party) chair Ludovic Orban on Tuesday night said that, after the meeting of the National Political Bureau of the party validating the list of Liberal ministers proposed to be part of the Citu Government, some party members may have been upset by the fact that PNL no longer holds certain ministries, but the mandate has been respected one hundred percent and there is no disadvantage if the party does not hold one ministry or another. Asked, after the BPN meeting, about the reproaches brought against him by his party colleagues regarding the negotiations with the coalition partners, Ludovic Orban said PNL is not alone in governing.
• First meeting of new gov’t – next week; PM designate: vaccination campaign is priority: The first formal meeting of the Citu Government is said to take place next week. Prime minister designate Florin Citu declared, on Tuesday night, after the National Liberal Party (PNL) validated the list of liberal ministers, that the priority is to carry out under the best conditions the anti-COVID vaccination campaign, which would start in Romania on December 27. Also, according to Citu, until December 31, “a series of ordinances will follow that will prepare the budget and the next period”. The PM-designate, Florin Citu, declared on Tuesday that it is the role of the new Government to quickly manage the health and economic crisis. He said that he would do everything possible to have “a stable and long-lasting governing”.
• Romanian Social Democrats vow to make “tough opposition”: Romania’s Social Democratic Party (PSD) refused to attend the consultations summoned by president Klaus Iohannis on Tuesday. The party’s leaders announced to make “tough opposition”. Although it cannot count on the support of the other opposition party, the Alliance for Romanians’ Unity (AUR), at least not openly, PSD can leverage on the ruling coalition’s fragile majority in Parliament, although not as efficiently as it has done over the past year when it was in control of a volatile, informal majority.
  • Comment: “Tough opposition” does not mean they would side with AUR, but rather keep a close eye on a novel ‘multi-party’ government with certain young, and potentially inexperienced ministers and sanction slippages, while at the same time continuing to reform the party, grow in the polls, and prepare for taking over power in four years, or sooner if cracks appear in the governing alliance. This is precisely the reason why the governing coalition has signed a pact preventing party switching, among other things, and took some time to sort out the differences in the governing program so that (at least in principle) no matter whose party a minister is, he/she would follow the coalition-agreed direction. For PSD, a recent post-election poll shows that this is the correct path. Moreover, despite not having majority in any chamber, it can stop constitution revisions initiatives likely aimed by the coalition which require two thirds majority.
• Dan Barna announced which ministries he will coordinate as Deputy Prime Minister: Dan Barna said, when asked if he will be Deputy Prime Minister with a portfolio, that he has assumed the coordination of what he calls European Development. The USR leader specified that all ministries that have resources from European funds will be part of this portfolio, according to News.ro.
• ANAF launches action to monitor revenues from tutoring: ANAF analyzes the situation of the incomes obtained from tutoring, noticing that during the pandemic there is a higher risk of not declaring these incomes, shows a document analyzed by Profit.ro. ANAF has started a pilot project at the Prahova County Public Finance Administration, through which it tries to stimulate the voluntary compliance of those who obtain income from tutoring, but also of other individuals. Depending on the evolution of the situation and the fiscal risk represented, ANAF also considers anti-fraud checks in this field.

Impact on the economy

• Romanian steel mill Liberty Galati completes EUR 13 mln investment: Romanian integrated steel mill Liberty Galati, part of British group Liberty, has completed an investment project worth EUR 13.5 million for modernizing the air preheater at one of its blast furnaces. The project will improve the operating performance and reduce costs, the company announced in a press release. The GFG Alliance, led by Indian billionaire Sanjeev Gupta, which owns the Galati plant, announced that it plans EUR 1 billion investments at the Galati unit. These would be carried out through a ten-year program.
• E.ON builds EUR 4 mln power plant for Romanian fertilizer producer Azomures: E.ON Energie Romania will develop a EUR 4 million power plant under a turnkey project for mineral fertilizers producer Azomures, the company announced in a press release. The plant will use as an energy source the residual steam produced by the fertilizer producer. It will include a generator and a turbine in total condensation designed for low-pressure steam, produced by M + M Turbinen-Technik.
• Romanian experts launch AI4RO, a new initiative supporting the development of artificial intelligence in RO: An independent group of Romanian experts launched AI4RO (Artificial Intelligence for Romania), an initiative to support the development of artificial intelligence (AI) in the country.  AI4RO aims to encourage advanced AI research and develop a series of programs in this regard with its members and partners. It was set up at the initiative of the Secretary of State for Communications Dragos Preda, with the support of a group of Romanian experts: Maria Axente – Advisory Board Member, All-Party Parliamentary Group on Artificial Intelligence, United Kingdom (APPG AI); David Timiș – Board Member, AI Council Global Shapers Community (an initiative of the World Economic Forum); Adrian Dan – President of EurasAI; and Ioan Istrate – Vice President of EurasAI.

 

COVID-19 cases in Romania and vaccination campaign (22.12.2020)

• Romania registers just over 5,000 new COVID-19 cases in the past 24 hours: 5,009 new cases of infections with the novel coronavirus have been reported in Romania in the past 24 hours, out of 23,834 tests. 155 deaths have been reported in the past 24 hours, with the number of patients treated in intensive care reached to 1,252. Most new cases were registered in Bucharest – 819, Cluj – 341, Timis – 310, Iasi – 225 and Ilfov – 218. The highest rate of infection with the novel coronavirus per 1,000 inhabitants is registered in Ilfov (6.38) and Bucharest (5.59).
• The first tranche of vaccine against COVID-19, of 10,000 doses, will arrive in Romania on December 26: The first tranche of vaccine against COVID-19, of 10,000 doses, will arrive in Romania on December 26. The committee coordinating the vaccination had a meeting on Tuesday to discuss the state of readiness for the actual start of the immunization campaign. Meanwhile, according to an Avangarde poll, only 30% of Romanians say they will be vaccinated against the new coronavirus, 72% believe that churches should not be closed for Christmas and 70% would not agree with a new general quarantine

 

Political and regulatory

 

• President summons 2nd round of consultations today to designate the PM. PNL, USR-PLUS, UDMR signed ruling agreement: President Klaus Iohannis has summoned the parliamentary parties at Cotroceni Palace on Tuesday for the second round of negotiations to designate the Prime Minister. The announcement of the Presidential Administration came shortly after PNL, USR-PLUS and UDMR had signed the agreement of the ruling coalition. The agreement proposes Liberal Florin Citu as PM, Liberal Ludovic Orban as Chamber Speaker and Anca Dragu (USR-PLUS) as Senate Speaker. At the same time, the signatories have committed to not poach MPs from other parties and to discourage nepotism and clientelism. Attending the signing ceremony, the proposed person for the PM seat, Florin Citu has voiced his hope to have a government by Christmas, adding a budget draft is badly needed. PSD said it will not go to consultations at Cotroceni Palace and that it will make a strong opposition. Coalition representatives said they will go together to the consultations from 15:30.
• The new Parliament has been validated. Ludovic Orban elected, late at night, the president of the Chamber of Deputies. Senate is led for the first time by a woman: After 14 hours of sitting, the new parliamentarians from the 2020-2024 legislature were officially validated. The parliamentary parties PSD, PNL, USR, UDMR and AUR shared their leading positions but also the leadership of the two Chambers. The center-right alliance has officially taken power in parliament. In the Chamber of Deputies, Ludovic Orban was elected its chairman, after a marathon meeting that ended long after midnight. In the Senate, for the first time in the history of Romania, the Upper House is headed by a woman – Anca Dragu (USR). Dragu was a finance minister in the technocrat government led by Dacian Cioloş between November 2015 and January 2017. The deputies also elected the new Standing Bureau of the Chamber of Deputies: vice-presidents: Alexandru Rafila – PSD; Marius Budai – PSD; Laurențiu Leoreanu – PNL; Cristina Prună – USR; Secretaries: Daniel Suciu – PSD; Cristian Buican – PNL; Oana Morariu – USR; Ovidiu Ganț – national minorities; Quaestors: Alexandra Presură – PSD; George Tuță – PNL; Antonio Andrusceac – GOLD; Sereș Deneș – UDMR. The Senate meets this morning to elect the other members of its Standing Bureau. The center-right coalition holds majority in both chambers (7 to 6 in the Senate, and 8 to 5 in the chamber of deputies).
  • The leadership of specialty committees is as follows:
    • Deputies Chamber: PSD: Economic, Agriculture, Administration, Education, Abuses, Regulation, European Affairs Committees; PNL: Committees on Budgets, Environment, Health, Defense, Information Technology; USR: Labor, Culture, Legal, Youth and Sports Committees; UDMR: Foreign Policy; AUR: Committees on Equal Opportunities, Constitutionality; Minorities: Committee on Human Rights
    • Senate: PSD: Committees on constitutionality, foreign policy, European Affairs, environment, health, communications, human rights, regulation; PNL: Legal, Defense, Agriculture, Education, Culture and Transport Committees; USR: Budgets; Economic, Labor, Environment Committees; UDMR: Administration, Environment Committees; AUR: Committee for Romanian Communities Abroad and the Committee for the Investigation of Abuses.
• CGMB voted that the terraces and restaurants should be exempted from paying the public domain occupancy tax during January – June 2021: The Bucharest General Council (CGMB) adopted in Monday’s meeting, unanimously, a decision according to which the occupancy tax of the public domain for terraces and restaurants will be zero between January and June 2021, reports Agerpres.
• The Standing Council of UDMR approved the party’s ministers proposals: Cseke Attila received the approval of the party for the position of Minister of Development, Public Works and Administration, Tanczos Barna for the position of Minister of Environment, Waters and Forests, and Eduard Novak for the position of Minister of Youth and Sport. PNL/USR are yet to confirm their nominees, rumored versions here and here.
• The future Government will apply zero tax on the minimum wage from 2022 and only in agriculture – sources: The governing program of the future coalition PNL-USR-PLUS-UDMR will include exemption from taxes for the ceiling represented by the minimum wage for agricultural incomes, starting with 2022, authorized sources from the coalition told Profit.ro. Political sources told Profit.ro that, following the coalition negotiations, the government program agreed to apply the tax cut for the minimum wage in 2022 and only in agriculture.

Impact on the economy

• Cluj-Napoca Technical University gets EUR 21 mln loan from EIB: The European Investment Bank (EIB) has agreed to support transformational investment at the Technical University of Cluj-Napoca (TUCN) through a new EUR 21 million, 25-year loan, the bank announced on December 18. The loan is the first granted under the EIB’s EUR 100 million “Romania Higher Education Programme Loan” and guaranteed by the European Fund for Strategic Investments, the core of the Investment Plan for Europe – also known as the “Junker Plan.”
• Romania’s residential electricity market fully liberalizes as of January: As of January 2021, all Romanian households will be supplied with electricity under a free market contract. Still, many of them are not aware yet and will most likely continue to be supplied under a so-called “universal service” contract under the universal access clause, which is in principle designed for other purposes such as clients in remote areas or when the market supplier fails to meet its obligation. NGOs in the energy sector imply that this might lead to abuses from the supplier of last resort – those held responsible for delivering universal services under contracts subject to consultations but not control of the energy regulator ANRE. Such consultations, involving the price paid by a large part of Romanian households after January 1, are still not completed less than two weeks before the end of the year. Those who fail to close a market contract as of January do not risk power outage, but will pay more under the universal service contract, explains Dumitru Chisalita, president of Intelligent Energy Association (AEI).
• Romanian Govt. meets half of the target set under IMM Invest scheme: Banks in Romania have extended about 23,000 loans totaling RON 10 billion (EUR 2 bln) to local small and medium-sized enterprises (SMEs) under the Government-backed scheme IMM Invest, announced Dumitru Nancu, the head of the body that handles the program (FNGCIMM), quoted by Ziarul Financiar daily. The bank lending data reported by Romania’s National Bank (BNR) partly reflect these figures. The volume of new corporate loans denominated in local currency surged to RON 3.9 billion (EUR 800 million ) in October, up 50% compared to the same month last year, according to data released by BNR.
• 4 in 10 consumers plan to spend less this Christmas than last year amid COVID-19 pandemic: Almost four in ten consumers (38%) plan to spend less this Christmas than last year in the context of COVID-19 pandemic, according to Deloitte 2020 Holiday Retail Survey. The study underlines that anxieties related to financial concerns are reshaping consumer’s approach to the shopping season, as respondents’ main reasons for the increased caution are related to the economic instability (50%) and their plans to save more (40%). The study surveyed more than 4,000 US consumers and provides key insights into how COVID-19 is influencing the holiday season. Meanwhile, a Reveal Marketing Research study shows the behavior of Romanians during the 2020 holidays, shows that more than half of Romanians are scared, worried and anxious about the 2020 holidays, and 1 in 4 Romanians wants to be healthy for Christmas.
• COVID-19 impact: Romanian hotel market recorded an average fall in profit by 73% in October 2020: A survey conducted by Cushman & Wakefield in partnership with FIHR, targeting Romanian hoteliers was launched in November 2020 to understand the impact of COVID-19 on the Romanian hotel industry, and their perspectives on the outlook of this sector. This survey is the second instalment after a previous questionnaire that was launched in April 2020. The intention is to gain the appropriate attention and appeal to authorities for more meaningful and targeted support towards our hospitality sector. The high performance achieved in 2019 was preparing hoteliers for an optimistic year in 2020. However, based on the survey results, the reality is that the Romanian hotel market recorded an average fall in profit by 73% in October 2020, compared to the same period in 2019.
• Colliers: It is possible that a large part of the companies will reduce their leased space to allow work from home permanently: The industrial and logistics space sector has had another very good year, and in the office sector there are already some positive signals, despite a decline that was forecast to be in the area of ​​40% in rental activity. The office sector was the hardest hit when a large part of the multinationals’ employees worked from home and it is possible that a large part of the companies will reduce their occupied space to accommodate remote work permanently, according to Colliers Romania International. The malls were also closed, and the traditional retail has moved online. “The office and retail sectors have been affected by the evolution of the Covid-19 pandemic, but even here we see some positive signals. In the absence of major shocks to the labor market, consumption has already returned to pre-pandemic values, while for the office sector, the last few months have strengthened the conviction that, in most cases, it is not possible to work from home constantly and on very long term. The vaccine gives us hope that, in these two sectors, things will mostly return to normal”, says Laurențiu Lazăr, Managing Partner at Colliers International. The vacancy rate will increase in these segments and will continue the trend this year, when the market also reported a decrease in demand for new space, of 40% in the office segment, especially since in 2021 almost 300,000 square meters will be delivered in buildings under construction, double compared to 2020. Software developers Oracle and Microsoft, the corporations that have the power to drive market trends, have announced to their employees that they can continue to work from home in the context of the pandemic. A tightening of office space may follow this decision, and real estate investors expect the signal to be picked up by other companies, Profit.ro reported.
• Declassification of information on Romania’s mineral resources, in the works: the National Agency for Mineral Resources (ANRM) has prepared a draft government decision on amending the Norms for the application of the Mining Law, which, among other things, removes from the normative act the provisions on the classification of certain information from the National Geological Fund (FGN) and the National Fund for Mineral Resources/Reserves (FNR/R), legislative change repeatedly requested, for several years, by the representatives of the profile industries.

 

COVID-19 cases in Romania and vaccination campaign (21.12.2020)

• Almost 2,500 new COVID-19 cases in the past 24 hours after 7,116 tests: 2,489 new cases of infections with the novel coronavirus have been reported in Romania in the past 24 hours, out of 7,116 tests. It is the lowest daily tally in our country in the past 2 months. 87 deaths have been reported in the past 24 hours. 11,430 Romanians infected with SARS-CoV-2 are currently hospitalized, with 1,255 in intensive care. The most numerous new cases have been reported in Bucharest -341, Ilfov -169, Argeș – 138, Constanța and Timiș -128 each. Ilfov County (6.73) and Bucharest (6.03) have the highest rate of infection with the novel coronavirus per 1,000 inhabitants, while eight counties are in the green area, meaning they report an infection rate lower than 1.5/1,000. Over the weekend, there were 3,350 new cases on Sunday (out of 12,234 tests) and 5,158 on Saturday (at 25,788 tests).
• First person in RO to receive the Covid-19 vaccine will be a healthcare professional: A healthcare professional from one of the ten first-line Covid-19 hospitals will be the first in the country to get vaccinated against the coronavirus, Valeriu Gheorghiță, the coordinator of the national Covid-19 vaccination campaign, told television station Digi24. President Klaus Iohannis will receive the vaccine in the second phase of the campaign.  On Friday, President Iohannis voiced hope that the pandemic can be beaten by summer next year if people get vaccinated. PSD deputy Alexandru Rafila, Romania’s representative at the WHO; said in parliament on Monday that the new coronavirus strain has been circulating since September 20 and that there is no evidence that the COVID vaccine is not effective against it, but it remains to be seen how effective the protective effect of antibodies is. Meanwhile, according to a survey conducted by the “Spiru Haret” Federation of Education Trade Unions between 16 and 21 December 2020, more than half (56.3%) of employees in the education sector do not agree to be vaccinated against Covid-19.

Politics

 

• PNL, USR-PLUS, UDMR agreement on the Cabinet: Florin Citu-PM, PNL to name the Chamber speaker, USR-PLUS to take the Senate and 6 ministries: The PNL, USR-PLUS and UDMR leaders have concluded the negotiations on establishing a ruling coalition that lasted more than ten hours on Friday and agreed on the future Cabinet, ministries and the Parliament top positions. The PM-designate is the incumbent interim Finance minister Florin Cîțu and there will be two deputy PMs, one from USR-PLUS and the other from UDMR. The future Cabinet will have 18 ministries, with PNL taking nine ministries, USR-PLUS- six ministries and UDMR portfolios. As for top positions in the Parliament, the Chamber speaker will be designated by the Liberals, while USR-PLUS will name the Senate speaker. USR-PLUS have also obtained the helm of the PM’s Chancellery. PNL, USR-PLUS and UDMR leaders agreed to have Florin Citu as PM, Ludovic Orban as speaker of the Chamber of Deputies, sources had told the mainstream media earlier on Friday. That means USR-PLUS took a step back, as it had also eyed the leadership of the lower chamber for Dan Barna, but they will be compensated by getting a deputy PM position and more ministries. Under this agreement, Dan Barna and Kelemen Hunor are favorites to take over the deputy PMs seats.
  • PNL ministries
    •     Defence Ministry
    •     Foreign Ministry
    •     Finance Ministry
    •     Interior Ministry
    •     Education Ministry
    •     Energy Ministry
    •     Agriculture Ministry
    •     Culture Ministry
    •     Labour Ministry
  • USR-PLUS ministries
    •     Justice Ministry
    •     EU Funds Ministry
    •     Health Ministry
    •     Transports Ministry
    •     Ministry of Research, Innovation and Digitisation
    •     Ministry of Economy, Entrepreneurship and Tourism
  • UDMR ministries
    •     Development Ministry
    •     Ministry of Waters and Forests
    •     Ministry of Youth and Sports
  • Rumored ministers for the Florin Cîțu Government: In PNL’s case, the current ministers, Nicolae Ciucă and Bogdan Aurescu, would remain for the Defense and respectively Foreign Affairs. For the Ministry of Finance, potential nominations are Lucian Ovidiu Heiuş / Bogdan Huşucă / Sebastian Burduja, for Internal Affairs – Marcel Vela might remain, but the names of Rareş Bogdan and Laurenţiu Leoreanu were also circulated. There is also information according to which the position was also proposed to the current Minister of Transports Lucian Bode, who will be left without a portfolio, after the ministry returned to USR PLUS following the negotiations. However, sources from PNL claim that Bode would have refused the post, arguing that the field he knows is that of transport. Rareş Bogdan also announced his intention to keep his mandate as a member of the European Parliament, specifying that Marcel Vela is a very good minister. The leadership of the Ministry of Energy would return to Virgil Popescu, who held this portfolio before in its extended form, while Raluca Turcan could be nominated for Education, yet Sorin Câmpeanu’s name is also circulated for this post. For Agriculture, along with the name of the current minister Adrian Oros, Emil Dumitru is also taken into account. For Culture, Bogdan Gheoghiu could keep his position, while Violeta Alexandru could remain for the Ministry of Labor, but Robert Sighiartău could also be taken into account. Possible ministers for USR are Stelian Ion  for Justice, Vlad Voiculescu for Health (he gave up the vice-mayor of Bucharest position today for this exact purpose in the General Council meeting, and his replacement, Horia Tomescu was validated as vice-mayor), Cătălin Drulă for Transports, and Cristian Ghinea for European Funds. For UDMR, the potential names to be validated later today are: Kelemen Hunor for vice-premier; Cseke Attila for the Ministry of Development; Tanczos Barna for the Ministry of Environment, and Eduard Novak for the Ministry of Youth.
  • Reactions:
    • PLUS leader, Dacian Ciolos, believes that the Ministry of European Funds and the National Recovery and Resilience Plan are the true Ministry of Finance for the coming years, since the national budget is based on the European funds allocated to Romania. “The relaunch of the economy and the evolution of jobs will depend on the complete attraction and smart investment of European money. The priorities negotiated by USR PLUS at European level with the Council will become the major investment priorities at home: the Digital Revolution, the Green Transition, Entrepreneurship and Competitiveness, Administrative Reform, the New Generation (youth and children) and Social Cohesion are the priority areas in which we will invest quickly and consistently, because we already have solutions and a plan”, added Dacian Cioloș. Thus, USR-PLUS plans to make best use of its portfolios in the future Government (Justice, Transport, Health, Research, Innovation and Digitization, European Funds and Economy, with its part of entrepreneurship and SMEs). Ciolos also wants the alliance to introduce in the protocol of the governing alliance with PNL and UDMR the principle of depoliticization of the administration, and selection made on the basis of competencies. Asked which ministry will manage the National Recovery and Resilience Plan (PNRR), Florin Cîţu said that the Ministry of European Funds – which returned to USR PLUS, but added that the Prime Minister and the Presidential Administration also have a role in achieving it. Meanwhile, Marcel Boloș, the current Minister of European Funds (MFE) and artisan of PNRR is considered within the PNL for the post of Minister of Public Finance, which goes to the Liberals, Boloș is supported by some leaders from the center, but also from the territory. Responding to critics made by Dacian Ciolos last week, Marcel Bolos said that the National Recovery and Resilience Plan (PNRR) has never been criticized by the European Commission. “There is no official document or position of the European Commission by which Romania is criticized for the construction of PNRR. It is political fake news,” Boso said in a press release issued on Monday.
    • Dacian Cioloș: I have all the support for Dan Barna as deputy prime minister. We will propose Anca Dragu to leadership of the Senate and Vlad Voiculescu to the Ministry of Health. “Tomorrow we will discuss in USR PLUS the nominations of candidates for the positions of ministers, probably the PNL will also do the same”, Cioloș told Digi24.
    • USR PLUS co-president Dacian Cioloș claims that the coalition protocol is finalized: “Most likely tomorrow the president will call us for consultations to confirm the coalition, to confirm the prime minister”. He said the government program would be ready on Monday. The co-president of USR PLUS estimates that the future government might be installed by December 27.
    • PSD Chair Marcel Ciolacu said on Friday that the social-democrats will never vote for the Government proposed by the right-of-center coalition
  • Other developments and pending issues:
    • PNL allegedly dodged a coup against Ludovic Orban from territorial leaders from western Romania (allegedly backed by Rares Bogdan). The official reason for trying to summon the National Political Bureau is to discuss and inform territory leaders about the negotiations (but in effect Orban’s position itself might be put to a vote since there are dissatisfactions), so Orban pointed out that the summoning was illegal as it can be made only by its president and the territory leaders abandoned the idea, for now.
    • Parliament is to meet today from 12 PM for investment, after which PNL-USR-Plus and UDMR will later sign the alliance pact
    • Investment on Monday might prove problematic, PSD announcing that an MP from the minorities group who went to the negotiations with Mr. Orban tested positive and per protocol everyone who had contact should isolate. Though this might be exaggerated by Mr. Ciolacu, such events are a common occurrence and might delay the investment. All 18 representatives of the minority parliamentary group are in quarantine, Varujan Pambuccian, the head of the group of ministers, informed the Deputies Chamber by phone. The Chamber of Deputies and the Senate are considered legally constituted after the validation of two thirds of the mandates of deputies, respectively of the senators and after the taking of the oath by them.
    • Actual nominees for ministries yet to be confirmed 
    • New round of negotiations at Vila Lac on the justice topic: A new round of negotiations is taking place at Vila Lac. Justice, amendments to the Justice Laws and the taxation of the minimum wage are on the list of topics on which negotiations take place, according to sources close to the negotiations. Meanwhile, yesterday a consensus was reached for the abolition of the Special Section on Investigating Justice Crimes (SIIJ), without deciding yet on a timetable and a manner to do this. PSD leader Marcel Ciolacu said Social Democrats will vote against the dissolution of the Section investigating magistrates.
• Romania suspends flights to and from the U.K.: Romania suspended the flights to and from the United Kingdom after the discovery of a fast-spreading strain of Covid-19 in the country. The measure applies for 14 days, on all airports in Romania, starting December 21 at 19:00, the National Committee for Emergency Situations (CNSU) decision reads. At the same time, Romania added the U.K. to the list of countries and territories with a high epidemiological risk, requiring those arriving from countries on the list to quarantine on arrival.
• Orban: Structuring Parliament Chambers is the priority now: National Liberal Party (PNL) Chairman Ludovic Orban said on Sunday, before a new round of negotiations with the Save Romania Union (USR) – the Party of Liberty, Unity and Solidarity (PLUS) and the Hungarian Democratic Union of Romania (UDMR) that at the moment structuring the Chambers of Parliament was a main priority, so the consultations at the Cotroceni Presidential Palace could begin for making up a new government.
• Gov’t opens dedicated Brexit section on its website: The Government has launched, on its website, the section “On the withdrawal of the United Kingdom from the European Union,” which provides useful information on the changes that will take place in the relation with the United Kingdom in the following areas: “customs regulations, taxes, certificates; transport, authorisations; business environment; mobility and citizens; justice and home affairs”, according to AGERPRES.
• PNL, USR Plus and UDMR decided on how to divide the 80 secretaries of state, the 42 prefects and the 85 sub-prefects: PNL, USR Plus and UDMR agreed, in the negotiations on the formation of the governing coalition, how to share exactly the positions of secretary of state in the future government, but also the counties in which each party will have the right to appoint prefects, political sources told G4Media.ro. Thus, out of the 80 secretaries of state that the Cîțu Government will have, PNL will appoint 42, USR Plus – 26, and UDMR – 12. Also, out of 42 prefects, PNL will appoint 23, USR Plus – 14 , and UDMR – 5. Last but not least, the three parties also divided their 85 sub-prefects: PNL will appoint 47, USR Plus – 28, and UDMR – 10.

Impact on the economy

• Florin Citu: 2021 budget to be completed and presented by future gov’t: The budget for next year will be completed by the new Government, Minister of Finance and National Liberal Party (PNL) candidate for the position of Prime Minister Florin Citu said on Sunday, pointing out that, after the negotiations for the majority coalition, new projects will be announced and some fund reallocations will be made for next year. He showed that there should be more tripartite discussions with the employers and trade unions regarding the minimum wage in the economy, as the Ministry of Finance is taking into account several options. According to him, the National Liberal Party (PNL), the Save Romania Union (USR) – the Party of Liberty, Unity and Solidarity (PLUS) and the Hungarian Democratic Union of Romania (UDMR) hope that the new Government will be installed by December 27, that is why the negotiations are taking place “from dusk till dawn.”
• ‘Green’ car sales up approximately 22pct 11 months into 2020: More than 7,300 new ‘green’ cars were sold in the first 11 months of the year in Romania, up almost 22% compared to the same period in 2019, according to the Association of Car Manufacturers and Importers (APIA) data, consulted by AGERPRES. The share of new electric and hybrid cars in the total local car market was 6.7%, on November 30, 2020, above the level of the similar period in 2019, when it was 4.1%.
• Adina Vălean: European Commission to support investments in both clean mobility and the digitalization of the transport sector: European Transport Commissioner Adina Vălean emphasized that 2020 was the year of a severe mobility crisis, in which transport was severely affected, but now the European Commission’s Economic Resilience and Recovery Mechanism will support investment in both clean mobility and the digitalization of the transport sector. The European official also pointed out that, by 2050, transport must reduce its greenhouse gas emissions by 90%, and to achieve this target, every means of transport must contribute. The European Commissioner for Transport, Adina Vălean, received the Special Prize on Sunday evening from the organizers of the 5th edition of the Smart City Industry Awards Gala.

 

Situation of COVID-19 cases in Romania (18.12.2020)

• Romania registers over 5,300 new cases of COVID-19 in the last 24 hours: Romania reported 5,340 new coronavirus cases in the last 24 hours, out of 27,482 tests, according to the official daily report released on Friday. 188 deaths were reported in the past 24 hours, while the number of COVID-19 patients treated in intensive care units amounted to 1,270.
• Klaus Iohannis: Restrictions will be kept for the Holidays: President Klaus Iohannis says that this year for the Holidays the restrictions in place will be kept. Iohannis said police will still patrol during the holidays, and those who do not follow the rules will be fined.

 

Political and regulatory

 

• Orban-Barna-Kelemen joint statement: Talks go on, all solutions stay on the table: PNL, USR-PLUS and UDMR leaders have agreed to continue talks to form the new Government. “All solutions stay on the table”, reads their message. “We decided to continue talks to form a new majority”, said PNL chairman Ludovic Orban, adding that they will communicate together on the result and evolution of the discussions as agreements are made on various topics. “All options are on the table”, he said. “Each side expressed a certain flexibility during the meeting today. We are willing to find a stable solution. Today at 17:00 hrs the colleagues started working on the ruling programme. Tomorrow we’ll continue the discussion on the political issues. Each party advanced its mandate, we are in the negotiation stage”, USR-PLUS co-chair Dan Barna said in his turn.
  • Comment: USR Plus expressed a clear preference for Florin Citu as PM, but the party might not easily give up the claim to the Deputies Chamber leadership, which it sees as essential for the reforms it aims being the decisional chamber without which no campaign promises can be enforced.  As such USR Plus would claim in exchange big compensations such as an equal number of ministries (7-7 PNL/USR and 2 for UDMR or 8/7/3), major authorizing ministries (such as the Ministry of Finance, Ministry of Justice or Ministry of Development) in addition to the leadership of the senate. There are even signs from the PNL, with PNL vice president Cristian Busoi saying that Florin Citu would be the reasonable option. Ludovic Orban would have told USR-PLUS that he took note of this option and it will be discussed within the party, before giving an answer. On the other hand, in the negotiations USR Plus would also insist for the dismantling of the European Funds Ministry (over low performance) and its competences be shared between ministries according to the funding programs. The is sensitive as Romania plans to access significant European funds in the next and thus this ministry would become a leading portfolio in terms of the sums it manages. While all seems to suggest that Dan Barna would not necessarily cling to the Deputies Chamber leadership, the proposal advanced of an equal or almost equal number of ministries cannot be accepted by the liberals in principle as their election result is higher than USR’s (25% against USR’s 15%). Asides from jointly communicating with the media, nothing much seems to have changed. Meanwhile the option of Nicolae Ciuca seems to have faded and might not resurface anytime soon, considering the dismissals or resignations that continue in the government under interim leadership. Talks continue this morning at Vila Lac.
  • UPDATE: At today’s talks at Villa Lac, USR would have agreed with the option of Florin Citu PM – Ludovic Orban head of the deputies chamber. The devised formula for sharing the ministries between PNL, USR and UDMR is 8/7/3, therefore an increase to 18 ministries. In this formula, Dan Barna and Kelemen Hunor would be deputy prime ministers. The liberals would not be too pleased because “Orban’s position cost the party so much”.The agreement is in principle, and specific details will be decided later should a new deadlock on nominalizations not occur.
• PSD: Romanians might be foreclosed by ANAF: PSD claims that the current Government has “forgotten”, in the midst of political negotiations, to postpone the deadline for the resumption of foreclosures, so that many Romanians might have an unpleasant surprise for Christmas. “The resignation of Prime Minister Orban and the blocking of negotiations for a new government have left the country in the hands of an interim government, which cannot issue emergency ordinances. As a result, the measure cannot be extended in time, and the suspension of enforcement will end on December 25, 2020.”
• Marcel Ciolacu: No position in Parliament to be held by PSD leaders: The National Political Council of the Social Democratic Party (PSD) decided on Thursday that no position in Parliament will be held by any member of the party leadership or by any organisation chairman, Social Democrat leader Marcel Ciolacu announced. According to him, it is time to promote young, professional people.
• Negotiations in Brussels, completed successfully. The agreement will bring in Romania over 30 billion euros: The European Parliament and the EU Council have reached an agreement on the European Resilience and Recovery Mechanism, which will bring in Romania over 30 billion euros, Romanian MEPs announce. MEP Siegfried Mureşan states that all the provisions of the agreement are in Romania’s interest, while MEP Dragoş Pâslaru announces the six main themes for the allocation of these funds: 1. The Digital Revolution; 2. Green Transition; 3. Entrepreneurship and Competitiveness; 4. Resilient Administration; 5. The New Generation (young people and children); 6. Social Cohesion.
• Nicusor Dan announces that he has asked for more time from the European Commission in the pollution infringement cases: The Bucharest General Mayor Nicusor Dan, announces that he requested more time from the European Commission regarding two infringement proceedings against Romania related to air quality in Bucharest, arguing that the desire is “to be judged on the results of this mandate”.

 

Impact on the economy

• Significant tax changes – clarifications on the liability of liberal professions for tax obligations, micro-enterprises, tax consolidation, tax inspections: A large number of changes will be introduced in the Tax Code and Fiscal Procedure Code, based on projects promulgated today by President Klaus Iohannis. The bills were submitted to the Parliament since last autumn by Senator Eugen Teodorovici, then Minister of Finance, after they were initially prepared by the Ministry of Finance to be assumed by the Government. Most of the changes have been previously requested by the business community. The two laws bring dozens of pages of amendments to the Fiscal Code and the Fiscal Procedure Code, including: specifying that individuals who carry out economic activities independently are liable for tax obligations due as a result of the profession or activity with their assets, including their personal ones; Fiscal consolidation of the tax on profit due by fiscal groups of companies; Development of the concept of “effective management location” for non-resident legal entities registered in a state with which Romania has concluded a Double Taxation Avoidance Convention; Exclusion from the scope of taxable income, of salary income, of the usage for personal use of certain vehicles that are not used exclusively used for the purpose of economic activity; Suspension of the fiscal inspection in the situation of notifying the judicial bodies; Possibility to re-verify the inspection also at the taxpayer’s request; The sanction with nullity of the fiscal administrative act in the situation in which the fiscal body does not comply with certain obligations it has to respect; Changing the competence to resolve appeals from ANAF to the Ministry of Public Finance; Regulation of the possibility to re-examine the decision on resolving the contestation. The bill adopted by the Senate is available here. Top 10 novelties, here.
• Romania’s media market demonstrates resilience in 2020: The aggregated advertising budgets spent on the Romanian media market this year have remained at approximately the same level as in 2019. This is the best performance among EU markets, shows an analysis published by GroupM. “The local market recovered very quickly after the significant decrease in the second quarter (-30%), registering an increase of 15% in the second half. This makes us confident about 2021, a year for which we forecast 3.4% growth, generated mainly by the Digital segment (+17.6%),” said Mihai Visan, Head of Trading at GroupM, quoted by Ziarul Financiar. The figures registered this year on the local market followed the global trends, with the most hurt segments being Outdoor & Cinema (-22.3%), respectively Radio (-13.5%).
• Survey: Romanians spend 51% of the winter holidays budget on food: Half of Romanians’ holiday budget (51%) is allocated to food, a study by Reveal Marketing Research on the consumption behavior during the 2020 holiday season showed. According to the respondents’ answers, out of an average 2020 holiday budget of RON 1,059 (EUR 217), RON 539 (EUR 11) go on food, RON 395 (EUR 81) on gifts, and RON 125 (EUR 25.6) on decorations.
• Almost half of active companies in Romania have market services as main activity, in 2019: Almost half of total active companies in Romania (48.7%) had in 2019 market services as main activity, sector which recorded the highest number of employees, the equivalent of 36.6% of the total, according to the data published by the National Institute of Statistics (INS), on Friday, as reported by AGERPRES.
• Average number of pensioners drops by 7,000 persons in Q3: The average number of pensioners was 5.125 million persons in the third quarter of 2020, decreasing by 7,000 persons over the previous quarter, and the average number of pensioners from social state insurance has reached 4.675 million persons, according to data of the National Institute for Statistics (INS) sent on Friday to AGERPRES.
• Romanians to benefit from 15 legal days off in 2021, with only 7 on working days: Romanians will have 15 legal days off next year, according to the Labour Law, but only seven will be during the week compared to 11 in 2020, according to AGERPRES.
• Engie took over a photovoltaic park of over 9 MW: ENGIE Romania has completed the acquisition of a photovoltaic park, composed of two farms, with a total installed capacity of 9.3 MW. The park is part of Ever Solar SA, a subsidiary owned by the German photovoltaic park developer, Soventix, and Alpin Solar, co-owner and developer. The photovoltaic farms are located in the village of Cristuru Secuiesc in Harghita County.

Situation of COVID-19 cases in Romania (17.12.2020)

• Romania registers close to 5,700 new cases of COVID-19 in the last 24 hours: Romania reported 5,697 new coronavirus cases in the last 24 hours, out of 28,099 tests, according to the official daily report released on Thursday, December 17. 107 deaths were reported in the past 24 hours, while the number of COVID-19 patients treated in intensive care units amounted to 1,297 on Thursday.  Most new cases reported in the last24 hours were in Bucharest – 903, followed by Ilfov – 340, Constanta – 305 and Iasi – 300. The highest incidence rate per 1,000 capita is registered in Bucharest – 6.64, followed by Ilfov – 6.45 and Constanta County – 5.95.
• People who had Covid-19 will also be able to get the vaccine. Vaccination starts on December 27: The first doses of anti-COVID 19 vaccine, around 10,000, will reach Romania between Christmas and New Year and will be used to vaccinate the medical staff working in the infectious diseases hospitals, Romanian Health minister Nelu Tataru said. He added that, for a start, 32 vaccination centers will operate in Bucharest. He announced that the vaccination of the population will start in March-April, voicing hope that a great part of the citizens will be vaccinated “by the beginning of summer”. Nelu Tataru also said that the central and territorial warehouses for the COVID vaccine had been operationalized. The Minister of Health, Nelu Tătaru, announced on Thursday that the national vaccination strategy was approved at the Government meeting. Interim Prime Minister, Nicolae Ciuca, stated on Thursday that the success of the anti-COVID-19 vaccination campaign will depend in a great measure on the way in which the authorities communicate. The European Union has decided to take advantage of its option to buy an additional 100 million doses of the coronavirus vaccine developed by Pfizer and BioNTech, after refusing a bid for a much larger deal in July. Meanwhile, in response to concerns over potential allergic reactions to the vaccine the National Committee for Coordinating Vaccination Activities pointed out today that so far only two cases were confirmed of tens of thousands vaccinated in the UK and that allergic reactions are known for any vaccines and are extremely rare.

 

Political and regulatory

 

• Romania’s would-be center-right coalition partners can’t agree on who will lead new Government: The leaders of Romania’s National Liberal Party (PNL), which is leading the negotiations for forming a center-right coalition, approved a more “flexible” mandate of the negotiation team – including two scenarios for distributing the leading positions among the two main partners. The problem is that both of them have been previously rejected by the reformist block USR-PLUS. PNL would accept to maintain the nomination of finance minister Florin Citu for the prime minister position if the Liberal leader Ludovic Orban gets the top position in the Chamber of Deputies. This is the scenario that led to the deadlock in the negotiations last Sunday. USR-PLUS block said that they accept Citu, or any Liberal prime minister, as long as they get the top position in the Chamber of Deputies. The second scenario approved by the Liberal leadership regards a new term for prime minister Ludovic Orban and the Senate president position for Florin Citu (as a consolation prize), while USR-PLUS can lead the Chamber of Deputies. However, USR-PLUS also rejected this scenario claiming that Orban is not fit for another term. Moreover USR-Plus also denied working on any other scenarios than Florin Citu and Dacian Ciolos during the weekend, and that Ludovic Orban forced the interpretation of what they discussed, as they did not propose Orban to return at the helm of the Executive. Allegedly, at Tuesday’s meeting the liberal leaders also contested his desire to be PM again, and Florin Citu refused to withdraw his bid, arguing that he will only step down if the PNL’s National Standing Bureau votes for that. Upon giving statements for the media, after the party’s meeting ended, Orban pointed out that his partners did not respect the agreement of communicating jointly and only officially and urged them for mutual respect and to avoid waging a “media war” that may undermine the negotiations chances. He took no questions from the media.
  • Comment: Although presented as offering more choices for USR, the announcement made, last evening, by PM Orban, with Florin Citu as the first choice and Ludovic Orban the second one, suggests that he did not gather support to be the main and only choice and that some leaders rallied behind Mr. Citu. The choices are not that flexible because Mr. Orban won a deputy seat, and Mr. Citu a senator seat, which is why they were presented this way, incompatible with USR’s claims for Dan Barna, also a deputy. Following the decisions reached in the PNL last evening the deadlock is passed on to USR to resolve in a similar fashion. USR’s preference has not changed: Florin Citu PM and Dan Barna as head of the Deputies Chamber or Dacian Ciolos PM and the leadership of the chambers go to the PNL. UDMR said it can work with either option (Orban or Citu), but pointed out that the other two parties that do not give the prime minister should receive the leadership of the two chambers. Meanwhile, tensions run high, with the leader of the PNL deputies, Florin Roman, comparing Dacian Ciolos to (ex-PSD head) Liviu Dragnea and USR deeming PNL unserious: “I think we need more seriousness if possible, from the PNL, which with 25% in the elections wants to make the Christmas tree, put on the globes, come with the gifts and also bring Santa Claus. And this with ‘Here is Cîțu, there goes Cîțu’, this ‘eeny, meeny, miny, moe’, is unacceptable when you want to govern the country through the crisis”, said the USR deputy Emanuel Ungureanu. A new meeting between coalition leaders is scheduled today at Vila Lac from 13:30.
• Sebastian Ioan Burduja – released from the position of Secretary of State at the Ministry of Public Finance: Sebastian Ioan Burduja was released, upon request, from the position of Secretary of State at the Ministry of Public Finance, by a decision of the interim Prime Minister Nicolae Ciuca published on Wednesday in the Official Gazette. The former Secretary of State, Sebastian Burduja, elected deputy in the Romanian parliament, issued a press release saying he is honored of the position in which he was elected to. “I assure you that I will continue my mission in Parliament with the same honor and responsibility,” Sebastian Burduja posted on his social media page.
• Grindeanu: PSD has a 35% share in Parliament; it cannot be ignored: The Social Democratic Party (PSD) has a share of approximately 35% in Parliament, and this cannot be ignored, PSD First Deputy Chairman Sorin Grindeanu said on Wednesday. Grindeanu mentioned that in the coming days the PSD leadership forums and parliamentary groups will establish the strategy that the party will adopt in Parliament.

 

Impact on the economy

• Turnover in market services rendered mainly to enterprises rise in first ten months by 3 pct: The turnover in market services rendered mainly to enterprises, in nominal terms, rose in the first ten months of this year over the similar period of 2019, both as a gross series as well as a series adjusted depending on the number of working days and seasonality by 3 pct and 2.7 pct, respectively, according to AGERPRES.
• Wholesale turnover up 2.8 pct per gross series January through October 2020: Turnover in wholesale trade (excluding trade in motor vehicles and motorcycles), in nominal terms, increased in the first 10 months of this year compared to the similar period in 2019, both as a gross series and as a series adjusted for the number of working days and seasonality by 2.8 pct and 2.1 pct, respectively, as reported by AGERPRES.
• Electric and hybrid cars reach 6.7% of total car sales in RO: The share of electric and hybrid cars in Romania’s total car sales advanced to 6.7% in January-November, from 4.1% in the same period last year, Profit.ro reported. In absolute terms, they increased by nearly 22% year-on-year to 7,345 units in the first eleven months of 2020. The performance came amid an overall 26% contraction of the new car sales in Romania in the same period.
• MedLife shareholders approve capital increase and elect new board members: MedLife, the biggest private medical services provider in Romania, will increase its capital by RON 27.68 million (EUR 5.7 mln) to RON 33.2 mln (EUR 6.85 mln) by incorporating its reserves, the company’s shareholders decided on Tuesday, December 15. The company will issue 110.7 million new shares with a face value of RON 0.25 per share, which will be distributed for free to the shareholders. MedLife’s shareholders also elected a new Board of Directors to lead the company in the next four years. MedLife founders Mihai Marcu and Nicolae Marcu keep their seats in the board, alongside Dorin Preda, Dimitrie Pelinescu Onciul, and Ana-Maria Mihaescu. The shareholders also elected three new board members: Ovidiu Fer, Voicu Cheta, and Stefan Alexandru-Frangulea.
• Romanians save just over EUR 700 on average in 2020: Romanians set aside as savings or investments EUR 59 per month on average in 2020, 6% more than one year earlier and 28% more compared to 2015, according to a Central and Eastern Europe (CEE) regional report carried by Erste Bank Group. The report revealed a similar growing trend in all the countries and a rising awareness for the importance of setting aside money. Czechs and Serbs posted the largest increases (both up 9% year-on-year), outpacing the growth in the average monthly savings volume in Romania (up 6%), as well as in Hungary (up 3%), Slovakia and Croatia (both up 2%).
• Labour cost convergence in Romania decelerates during pandemic: The nominal hourly labor cost in Romania increased by 5-6% year-on-year in Q2 and Q3 this year, after an 8.1% annual advance in Q1 and double-digit growth rates (12-13%) in the second half of 2019. The rise of the labor cost in the European Union also slowed down to 1.6% year-on-year in Q2 this year (versus 5.7% in Romania), from 2.3-2.4% yoy growth rates in the second half of 2019. The labor cost in Romania, the second-lowest in the European Union, is catching up with the rest of the Union, posting robust growth rates over the past year – yet not narrowing too much the gap between local wages and those in the western member states.
• Romanian HoReCa posts 30% lower turnover in Jan-Oct: The turnover volume index of the Romanian companies that deliver services to households compressed by one third (-32.9%) in January-October compared to the same period of 2019, the statistics office INS reported. The steepest decline was in the tour agencies’ segment, which halved revenues. The turnover volume index – which reflects the aggregated revenues expressed in constant prices (real terms) – plunged by 31.3% in HoReCa, the segment with the highest contribution to the overall household services market.
• RO organic wine producer raises EUR 2 mln in private placement and will list its shares: Romanian organic wine producer Vifrana successfully closed on Monday a private placement of shares through which it drew RON 9.55 million (close to EUR 2 mln) from local investors, Ziarul Financiar reported. The company will list its shares on the Bucharest Stock Exchange’s AeRO market, most probably in May next year, according to local brokerage firm Goldring, which managed the placement.
• Small-sized RO developer to raise EUR 3 mln with 3-yr EUR bonds: Romanian real estate developer QUALIS Properties, active in the residential segment in Brasov, wants to raise EUR 3 million with three-year bonds, Ziarul Financiar reported. The company is ready to pay a 9% annual coupon. The bonds will be issued in a private placement intermediated by BRK Financial Group (BRK).
• Stress levels double during pandemic, with 30 pct of Romanian employees ending up exhausted: Stress levels doubled during the coronavirus pandemic for one in four Romanian employees, and 30 pct of them have already reached exhaustion, according to a BestJobs release sent on Thursday to AGERPRES. Disorganized and chaotic working environment (31.6 pct), overload (26.6 pct) and new responsibilities that are out of their area of competence (24.6 pct) are the three main stressors cited by employees who responded to the BestJobs survey. Another 23.8 pct of respondents explain the high stress by not gaining a balance between personal and professional life, and 21 pct are stressed because they have to take over the responsibilities of their colleagues.
• ROCA has joined the Artesana shareholding to support the construction and endowment of a new dairy factory: ROCA Investments has entered the Artesana shareholding in order to support the company’s scaling, construction and endowment with a new dairy plant that will triple production capacity, according to a statement issued on Thursday for AGERPRES. Artesana started as a small family business in 2007, and currently sells premium natural artisanal dairy products. As a result of the increase in the demand for 100% natural products, the Artisan Factory from Tecuci has reached the maximum threshold of its production capacity. To meet the growing demand, the Donici family together with the ROCA team will develop a new factory on the existing land in Tecuci, in order to triple the production capacity.
• Although mall traffic has fallen by up to 40%, retail sales are boosted by online, which grew by 30% in the first 9 months: Colliers International consultants see a sharp increase in consumer activity on the e-commerce segment, which has become a fundamental element to the continuous transformation of retail, along with the development of technology and changes in consumer behavior. There has also been a significant increase in the number of people over the age of 55 who now switch from shopping in physical stores to online stores. “The pandemic forced retailers to adapt to the new reality in just a few weeks, which meant operational improvements, focusing on online marketing or launching online sales from scratch, working with delivery companies or supermarkets as places to collect orders, implementation of security measures, correlation of the stock with changing demand, and so on. This leads to a relatively rapid recovery in sales after the state of emergency lockdown and even a slight increase in sales for certain categories, such as food, household products, sporting goods or cosmetics,” said Simina Niculiță Partner & Head of Retail Agency with Colliers International. “Although consumers’ habits have been affected by the pandemic, the supply of commercial spaces in Romania has increased. In the first half of the year, a retail park was inaugurated in Miercurea Ciuc, with just under 12,000 square meters. While several retail projects were delayed due to the state of emergency, others continued to advance, such as NEPI’s Shopping City Târgu Mureș (almost 40,000 sqm), completed in July, and AFI Brașov (45,000 sqm) and Prime Kapital’s Dâmbovița mall (33,000 sq m) was opened with small delays in the fall. In the next period, we expect to see most of the investments in smaller retail centers and parks and convenience projects”, Simina Niculiță added.
• Romanian household electricity consumers get more time to change their supplier: An important last-minute provision adopted by energy watchdog ANRE protects to some extent household customers who do not change their electricity supplier or contract until January 1st, 2021, when the market it is liberalized. Consumers will get an extra month in which they can choose a competitive offer.
• Builders, energy auditors and thermal insulation materials producers call on the future government to triple EU funding for energy efficiency of buildings: Several professional organizations, including some of construction contractors, energy auditors and manufacturers of thermal insulation materials, call on the future government to increase more than 3-fold, from 1.2 to 4 billion euros, the allocation of EU funds from the National Recovery and Resilience Plan (PNRR) post-COVID 19 for investments in increasing the energy efficiency of buildings.
• UNTOLD expands its business in the tourist area, with cruises: UNTOLD, one of the largest music festivals in Europe, expands its business in the tourism area, entering into a partnership with the representatives of croaziere.co for the organization of luxury events on the Mediterranean, with festival experiences.
• The Danes from FirstFarms sell more land in western Romania: The Danes from FirstFarms, with a series of investments in Romanian agriculture, signed a new sale transaction, this time of 238 hectares, out of a total of 1,675 hectares of land in western Romania, for the equivalent of over 11.4 million euros.
• Lidl builds another store in Bucharest, on a land on which Rockefeller wanted to build apartments: German discounter Lidl, 3rd by sales in Romania, after Kaufland and Carrefour, is waiting for the necessary approvals for the construction of a new store, on a land in the Bucharest neighborhood Vatra Luminoasă bought from the Rockefeller financial group, according to the information obtained by Profit.ro. The retailer thus reaches to most units opened in a year since entering the market in 2011. The former owner of the land had planned for it the construction of a residential neighborhood with hundreds of apartments, but its plans have changed and it withdrew from the local market.

 

Situation of COVID-19 cases in Romania (16.12.2020)

• Romania registers slight drop in new COVID-19 cases: Romania reported 5,991 new coronavirus cases in the last 24 hours, out of 28,191 tests, according to the official daily report released on Wednesday, December 16. The figure is slightly lower compared to the one reported the day before – 6,171 new cases out of 25,185 tests. 164 deaths were reported in the past 24 hours and the number of COVID-19 patients treated in intensive care units amounted to 1,267 on Wednesday. The situation is still worrying in Bucharest, as the city recorded 1,127 new cases of coronavirus infection in the past 24 hours. Next were the counties of Ilfov – 433 new cases, and Brasov – 308.
• President of the European Commission, on the start of vaccination campaigns in the EU: The 27 Member States of the European Union will be able to ‘start in the same day’ the anti-COVID-19 vaccination campaigns, immediately after the European Medicines Agency (EMA) will officially notify the authorization of the vaccine developed by Pfizer / BioNTech, European Commission President Ursula von der Leyen announced in the European Parliament on Wednesday, AFP reports, according to Agerpres. “Finally, in a week’s time, the first vaccine will be authorized, so vaccinations will be able to start immediately (…) It is a huge task,” said the EU chief executive. “There is a good chance that the first vaccine will be approved by the European authority before Christmas and before New Year’s Eve the first batch will be distributed, it will be a symbolic tranche of 10,000 doses, reaching 5,000 people. The second tranche comes in January and it will be used to vaccinate all medical staff and people at high risk. The campaign is well prepared, the centers are ready,” said Klaus Iohannis.

 

Political and regulatory

 

• Romania’s former PM Ludovic Orban reportedly wants another term: Former prime minister Ludovic Orban, the leader of the National Liberal Party (PNL), reportedly informed his would-be ruling partners, the reformist block USR-PlUS and UDMR leaders, in a private meeting, that he aims to get another term, for which he needs the support of all the three parties in the coalition.  According to G4Media.ro sources, Orban’s partners asked for time to consult with their parties. The Liberals are considering the option of Ludovic Orban being proposed for prime minister again as a solution to unblock the negotiations with USR-PLUS and UDMR. However, this version was publicly rejected by Dacian Cioloș, who wrote on Facebook that “USR PLUS’ message is simple: “we were serious when we said that a new beginning is needed for Romania”.
  • Comment: Ludovic Orban’s way of unblocking the negotiations, in reply to Dan Barna’s proposal which was firmly rejected, looks like a show of force. USR and UDMR might not have many objections to the liberals’ prime minister proposals, as USR anyway intended to go with Dacian Ciolos as candidate for this post. All in all, it does not seem that this option was reached very transparent, either within his own party or with coalition partners, and will thus have to be validated. So far, it is a proposal that all sides will have to consider. Florin Citu is yet to announce his withdrawal as PM pick, which suggests that nothing has been decided yet. Faced with an ultimatum, negotiations might have to be resumed from scratch (reset to the inconclusive talks from the past weekend). PNL’s pick for PM between Florin Citu and Ludovic Orban will potentially be decided at the party meeting this evening. President Iohannis says negotiations should take as long as necessary, no government in sight by Christmas.
  • The President’s reaction: President Klaus Iohannis said today that he would accept the coalition’s proposal, be it Ludovic Orban, Florin Citu or someone else: “I am waiting for the parties to come up with a proposal. Regardless if it is Orban, or Cîțu, I will accept the parties’ proposal. I don’t know what they’re negotiating there. Yes, that’s what I said, if a coalition is formed and it proposes Ludovic Orban, then I will accept him”, said Klaus Iohannis. “I do not want to repeat the mistakes that have been made in the past, I do not want to have contradictory and harmful discussions after the formation of the government. I want things clarified before the government is formed. Our parties are still in the stage of learning how to negotiate coalitions, how to negotiate portfolios, and why not say it openly, how to negotiate government programs. As you know, we’ve had coalitions before, and we can’t say that they worked extraordinarily well. So I want the parties to avoid these mistakes. That’s why I didn’t get involved in the negotiation. The President has no place in a negotiation between parties. The parties have to agree. I want us to have enough patience, to wait for the parties to negotiate all these things”, said Klaus Iohannis. In his opinion the failure so far was because some negotiated via the media: “A negotiation is made between the teams from the parties and no intermediate results are communicated, such as who quarreled with whom. Such communications only undermine public confidence. What do we gain if we lose confidence in politicians? All we gain is the raise of parties with extremist, anti-systemic approaches,” Klaus Iohannis said, hinting at the outcome of Dan Barna’s negotiation proposal in the media that lead to this situation.  Klaus Iohannis thus believes that there will not be a government installed by Christmas: “We will not have a government before Christmas. It would be optimal for the new Government to be installed immediately after Christmas, but you see that the negotiations take time, they even stop. I don’t think it’s good to push politicians too hard from behind, not to discuss sensitive issues and then break up the coalition. I prefer to discuss all the issues and then have a coalition that governs very well, ”said Klaus Iohannis. He also said he does not believe in PSD’s boycott of the parliament’s investment and at the same time dismissed the version for a left wing government: “From my information, PSD does not negotiate with any other party or no other party negotiates with the PSD, and PSD alone, yes, it did obtain the most votes, but this does not mean that it can issue claims to the government.” In regards to AUR’s Asked when he believes there will be a second round of consultations with parliamentary parties, President Iohannis replied: “When the results crystallize a bit.” The head of state also stated, when asked whether he would intervene as a mediator, if the parties do not reach a consensus, that he will not leave the country without a Government. Other main statements: here and here.
  • Orban would push forward: The National Political Bureau of PNL will meet today, starting with 17.00, in a videoconference system. Ludovic Orban’s plan would be for his name to be the prime minister pick to result from the meeting.
  • USR opposes: USR PLUS expressed its desire and availability to continue the talks on the structure and program of a coalition majority alongside PNL and UDMR, mentioning that “both versions of Prime Minister proposed by the parties at the consultations with the President of Romania, Dacian Cioloș from USR PLUS and Florin Cîțu from PNL, have our support. We believe that a possible new government led by Ludovic Orban, given the resignation of the prime minister and failure to fulfill the commitments made towards USR PLUS, does not meet the expectations of the center-right electorate who wants a new beginning and a government with a reformist mandate.”
• Dacian Ciolos: ‘The National Resilience and Recovery Program cannot be a new PNDL, but must contain structural reforms’: Dacian Ciolos said that the National Resilience and Recovery Program (PNRR) cannot be a new PNDL (National Program for Local Development) and states that European Commission officials have criticized the Orban government’s plan to attract 30 billion euros from the EU. The PLUS leader added that this is another reason for the three parties that want to form a governing coalition to end “this saga with the dividing of positions” as soon as possible and to seriously discuss the governing program, according to news.ro. He added that those in the European Commission criticized the PNRR proposed by the Orban Cabinet and said it did not envisage any serious reform in areas such as digitalization, education, environmental protection and economic sustainability. The USR PLUS alliance announced on Tuesday that it proposed in the negotiations for the formation of the governing coalition with PNL and UDMR a reform of the management system of European funds in Romania, including the reorganization of the Ministry of European Funds, of the managing authorities and operational programs 2021 – 2027, AGERPRES informed. According to a press release sent to AGERPRES, before the start of negotiations, USR PLUS informed that it wants European funding (the regular cohesion funds and the National Recovery and Resilience Program) to be a separate chapter of the talks. In the opinion of USP PLUS, if this money will be used through the same “cumbersome mechanisms” of the Ministry of Public Finance, then Romania risks not being able to use it anymore. At the same time, the alliance supports the correlation of European funds with national development funds. On the (separate) issue of “discussions on the prime minister’s name”, the co-president of the USR-PLUS Alliance Dacian Cioloş stated on Tuesday, that USR PLUS’ message is simple: “We were serious when we said that a new beginning is needed for Romania”. Finance Minister Florin Cîţu would have told PNL leader Ludovic Orban that he is not withdrawing “under any circumstances” from the race for prime minister, liberal sources told News.ro. Cîţu was supported in the party by Robert Sighiartău, Rareş Bogdan and Raluca Turcan. Ludovic Orban told his party colleagues that he wants to get either the head of the Chamber of Deputies or the position of prime minister. UDMR is willing to support either Ludovic Orban or Florin Cîțu for the position of prime minister, political sources said for News.ro. The ethnic Hungarians’ party believes that the PNL, the party with the most seats in the future governing coalition, has the right to propose the prime minister.
  • Comment: USR Plus co-president Dacian Ciolos continues to insist on the core issue of the negotiations, respectively the governing program. European Funds is a main concern for USR Plus and it wants the European Funds Ministry reformed and the National Recovery and Resilience Plan rewritten as soon as possible. Dacian Ciolos is knowledgeable in European affairs and most likely knows the status of this plan and also the fact that the EU will closely monitor how member states will use European funds through a new anti-corruption mechanism. The Ministry of European Funds also issued a press release on Tuesday, saying that the Romanian authorities work closely with European Commission to draw up the National Recovery and Resilience Plan in accordance to feasibility and technical requirements. Meanwhile, onto the second issue of the PM pick and political rumors, Florin Citu has not said anything official yet, but it is possible that he does not want to repeat similar past experiences of being used as PM pick for political games. However what he did officially say, in a message on Facebook, was to dismiss “rumors in the media” regarding Romania’s financial situation: “There is no problem, funding is ensured for the first 4-5 months of next year; there is money for health, investments, salaries, pensions. We started working on the budget for 2021 on the structure of the current government of 16 ministries, but it can be easily scaled if the negotiations lead to a different structure of the government. Romania’s financial situation is in good hands and there aren’t and will not be any problems in the next period,” Florin Citu said.  The message is interesting because it seems that he is prepared to leave his affairs in order at the Ministry of Finance, as he prepares to advance, with a clean conscience, to a higher position.
• Army joins Romanian public health departments’ efforts to fight COVID-19: About 600 soldiers will work with the public health departments (DSP) in Romania in the next period to help control the spread of COVID-19, the Ministry of Defense announced. They will help with epidemiological investigations, but also work as call-center or computer operators. The first 230 of them operate, starting Tuesday, December 15, in the counties of Alba, Arad, Bacău, Bihor, Botoșani, Brașov, Caraș-Severin, Cluj, Constanța, Covasna, Dâmbovița, Giurgiu, Gorj, Harghita, Hunedoara, Iași, Maramureș, Mureș, Neamț, Prahova, Sibiu, Suceava, Teleorman, and Tulcea. “Also, the military staff is prepared to carry out their activity, under the same conditions, in Bucharest and other counties, depending on the requests from the public health departments,” the Defense Ministry said. Raed Arafat, the head of Romania’s Emergency Services Department, said that the military help is welcome and that other states have also turned to such a solution.
• Gheorghiu, after creation of group to amend copyright law: Let us leave no more room to abuses: The Minister of Culture, Bogdan Gheorghiu, announced on Tuesday the creation of the working group for amending and supplementing Law 8/1996 on copyright and related rights, in this context the minister stating that solutions must be found to correct the legislation, in order not to leave room for abuses or interpretations. “The year 2020 has shown us more clearly the vulnerabilities of copyright law. Therefore, in addition to the obligation to transpose European rules into national law, we must find other solutions to correct the law, so that we no longer leave room to abuses or interpretations. I am referring to the proposal of a collective management body of a methodology based on Law 8/1996 on copyright and related rights, for which there are several dissatisfactions,” Bogdan Gheorghiu said in a statement from the Ministry of Culture. The working group will identify solutions both to transpose into the national legislation the European directives EU Directive 790/2019 on copyright and EU Directive 789/2019 on cable and satellite transmissions, and to achieve certain clarifications required by the cultural sector, states the Ministry of Culture.
• Barometer: Church, Army and Academy – first places in Romanians’ trust: The Church, the Army and the Romanian Academy occupy the first places in terms of the degree of trust granted by Romanians, according to the first barometer of the religious life in Romania, presented on Wednesday in the Aula Magna of the Romanian Academy, as reported by AGERPRES.
• Criminal file in rem in connection with Traian Basescu’s statements that he didn’t cooperate with Securitate: The Prosecutor General’s Office has opened a criminal case in rem, in which an investigation is being carried out in connection with the statutory declarations by former President Traian Basescu that he did not cooperate with the former Securitate communist secret police, according to AGERPRES. According to the Prosecutor General’s Office, in this case it was ordered to start the criminal prosecution in rem in terms of committing the offence of false declarations.
• ForMin Aurescu to have political talks with North Macedonian counterpart in Bucharest: Foreign Affairs Minister Bogdan Aurescu will hold political consultations on Wednesday with his North Macedonian counterpart, Bujar Osmani, who is conducting an official visit to Bucharest. Interim Prime Minister Nicolae Ciuca had a meeting on Wednesday with Foreign Affairs Minister of the Republic of North Macedonia Bujar Osmani, on the occasion of the latter’s visit to Bucharest, in which context he reiterated that Romania will continue to be “an active and vocal supporter” of the Republic of North Macedonia throughout its EU accession process
• President Iohannis meets new ambassadors of Canada, Japan and Portugal: President Klaus Iohannis welcomed at the Cotroceni Presidential Palace on Tuesday agreed Ambassador of Canada Annick Goulet, agreed Ambassador of Japan Hiroshi Ueda, and agreed Ambassador of the Portuguese Republic Maria Teresa Netto dos Santos Mariano Shearman de Macedo.

 

Impact on the economy

• Romania defers domestic appliance scrappage scheme for cybersecurity vulnerabilities: The Romanian authorities halted and deferred this year’s edition of the domestic appliance scrappage scheme just minutes after opening the registration. The program’s managers cited “cybersecurity vulnerabilities.” Environment minister Mircea Fechet fired the head of the subordinated body that manages the program – the Environment Fund Administration (AFM) – Dan-Catalin Vatamanu. The Government earmarked a EUR 40 million budget for this edition of the domestic appliance scrapping program. “Due to the general context of cybersecurity instability, suspicions regarding the computer security of the application process and previous attempts to defraud the registration process, by cloning information specific to the official program, the Environment Fund Administration announces the postponement of the registration session for individuals until a date to be communicated later, in order to implement additional safety measures. We apologize for the malfunctions, and we assure that the AFM will take the necessary diligence for carrying on the program in good conditions,” AFM said in a press release, quoted by Economica.net.
• Tesla close to opening office in Bucharest: Electric car producer Tesla is close to opening its office in Bucharest as it announced several open positions on the company’s official website. For the beginning, Tesla wants to hire five people, including a store manager, two service technicians, a service manager, and a sales consultant, according to Ziarul Financiar.
• Romanian lender Patria Bank lists EUR 8.2 mln subordinate bonds: Romanian lender Patria Bank, controlled by private equity fund Emerging Europe Accession Fund (EEAF), with EBRD, EIF, DEG (Development Bank, part of the KfW banking group) and BSTDB (Black Sea Trade and Development Bank) among its investors, has listed the EUR 8.2 mln subordinate bonds previously issued under a private placement.
• SoftOne Romania takes over Greek software integrator Orosimo: Cloud ERP solutions provider SoftOne Romania, a member of the Olympia investment group owned by businessman Panos Germanos, has taken over Greek software integrator Orosimo Software.
• Romania’s nuclear plant signs EUR 50 mln contract with Slovenian electricity supplier: Romanian nuclear power producer Nuclearelectrica (SNN) signed, on December 14, a contract worth RON 242.5 mln (EUR 50 mln) with the Slovenian company GEN-I, for the supply of “band” (constant power) electricity between January and December 2021, Ziarul Financiar reported. The contracted quantity represents about one-tenth of Nuclearelectrica’s annual production.
• OMV Petrom and Auchan Romania open first of a planned 400-unit supermarket chain: Romanian oil and gas group OMV Petrom and Auchan Retail Romania, the local subsidiary of French retailer Auchan, have inaugurated the first MyAuchan convenience store in a Petrom gas station (in western Bucharest), according to a statement from the company. It is the first of a chain of 400 such stores to be developed by the two companies under a EUR 50 million project scheduled for completion in 2024.
• The Kazakh-Romanian Energy Investment Fund has opened ten gas stations under the Rompetrol brand and reaches to 30 gas stations. By 2023, the Fund will have 84 gas stations in Romania: the Kazakh-Romanian Energy Investment Fund has completed the construction of a new gas station in 1 Decembrie locality, Ilfov County, and reaches 10 new gas stations opened this year, operated under the Rompetrol brand, and by 2023, the Fund will have 84 gas stations in Romania.
• Metro’s Romanian proximity store franchise LaDoiPasi aims to get to 2,000 units by end-2023: Romanian proximity stores franchise LaDoiPasi, launched in 2012 by the German retailer Metro, will reach 1,400 units by the end of 2020 and competes with Profi for the position of the largest retailer in Romania (by the number of units). “We will have [under franchise] a total of 1,400 stores. We are a partner for local entrepreneurs, and together we build lasting businesses. And the plan is that, by 2023, we will reach 2,000 stores nationwide,” says Adrian Ariciu, CEO of Metro Cash & Carry Romania, quoted by Ziarul Financiar. The stores under LaDoiPasi label are operated by the entrepreneurs who own them.
• Local authorities invest EUR 50 mln to extend subway line in southern Bucharest: Bucharest’s District 4 City Hall will start the project for extending the M2 subway line further to the south of the city. The project consists in building a new subway station and a 1.6-kilometer above-ground metro line. The total cost amounts to over EUR 50 million and will be mostly covered with EU funds, the District 4 City Hall announced. Work on this project should take 22 months. The new subway station will be located between the Berceni station – currently the end station for the M2 line – and Bucharest’s southern ring road.
• Construction works increase by 19.5 pct in October 2020 over October 2019: The volume of construction works has increased by 3.4 pct as a brute series in October over the previous month and by 19.5 pct compared to the similar period of last year, shows the data published, on Wednesday, by the National Institute for Statistics (INS).
• Spending by non-resident tourists in Romania at 190.4 mln lei in Q3, 2020: The total number of non-resident tourists checked in with Romania’s collective tourist accommodation facilities in the third quarter of this year was 95,000, their spending amounting to 190.4 million lei, informs the National Institute of Statistics (INS) on Wednesday.
• APIA authorises over 4.8 million lei payments for state aid in livestock breeding sector: The Agency for Payments and Intervention for Agriculture (APIA) has authorised the amount of over 4.8 million lei for the payment of state aid in the livestock breeding sector, which represents the differences corresponding to February, June and the second quarter, as well as those of July, August, September and the third quarter of 2020.

Situation of COVID-19 cases in Romania (15.12.2020)

• Romania logs more than 6,000 daily Covid-19 cases: Romania added 6,171 coronavirus cases in the past 24 hours, bringing the total to 565,758 on Tuesday, December 15, according to the daily report. The new cases were recorded out of 25,185 tests carried out over the same interval, with 24.5% of the tests returning positive. Bucharest reported the highest number of daily infections (1,143), followed by the counties of Iași (288), Constanța (278), Cluj (264), and Timiș (222). Bucharest had an infection rate of 7.01 per 1,000 inhabitants. The death toll reached 13,698 after 204 coronavirus patients died in the past 24 hours. A total of 12,202 Covid-19 patients were admitted to hospitals in the country, 1,255 of them to intensive care units.  The highest incidence rate per 1,000 capita is registered in Bucharest – 7.01, and in the counties of Ilfov – 6.64 and Constanta – 6.28. The head of DSP Bucharest, Oana Nicolescu, declared on Tuesday, after a meeting with HoReCa representatives held at the Capital Prefecture, that the quarantine of Bucharest was not discussed. Asked by journalists if Bucharest could be quarantined until Christmas, she replied: “I have not discussed this situation, I still count on each individual that he will respect the measures we have imposed.”

 

Political and regulatory

 

• RO President says it’s too early for a prime minister-designate: After his first round of consultations with the parliamentary parties, Romanian president Klaus Iohannis concluded that it is too early for the appointment of a prime minister-designate. The political parties came up with four candidates for the prime minister seat, two of whom came from the would-be center-right ruling coalition – a detail that perhaps weighted a lot in the president’s decision to summon the second round of consultations. “This first round of consultations led to a good exchange of views between the representatives of these parties and me, but I can say that today, the conditions for appointing a candidate to form a new Government are not yet met,” said president Iohannis in a press statement after the consultations, quoted by Hotnews.ro. At the consultations with president Iohannis, the biggest parliamentary party, the Social Democratic Party (PSD), proposed medical doctor Alexandru Rafila, Romania’s representative at the World Health Organisation, for the prime minister seat. PSD also proposed a “national unity government.” The other two major parties in parliament, the Liberal Party (PNL) and the reformist block USR-PLUS, came up each with their own candidates – finance minister Florin Citu and PLUS president Dacian Ciolos. UDMR says that the biggest of the coalition parties (namely PNL) should nominate a candidate. The fifth parliamentary party, AUR, nominated Calin Georgescu for the PM seat. Georgescu served as executive director of the National Center for Sustainable Development between 1997 and 2013. In 2013, he became president of the European Research Center of the Club of Rome. He also served as Secretary-General in the Ministry of Environment.
• Iohannis: I intend to convene new Parliament on December 21: President Klaus Iohannis stated on Monday, at the Cotroceni Presidential Palace, that he will convene the new Parliament in a week’s time. “Given that the Central Electoral Bureau has communicated the final results of the parliamentary elections, the conditions for convening the new Parliament are now met and I can inform you that I intend to convene the new Parliament on December 21, next week. The new Parliament will constitute on Monday,” said the head of state.
• PSD’s Ciolacu: It is possible that Romanian Parliament will not be formed on 21 December: There is a possibility that the Romanian Parliament will not be constituted on the 21st of December if two thirds of the MPs do not come in person, on Monday night said the Social Democratic Party (PSD) leader Marcel Ciolacu for the private broadcaster Romania TV, adding that he does not instigate, but “every parliamentarian can have a problem on the same day”, according to AGERPRES. He pointed out that the PSD excludes any other variant besides that in which Alexandru Rafila is proposed prime minister. Sources from PSD revealed that the Social Democrats are annoyed that, following PNL-USR-PLUS-UDMR negotiations, the committees in Parliament that would be assigned to PSD have a lower stake in the legislative hierarchy. PSD first vice-president, Sorin Grindeanu, told Digi24, that PSD might boycott the establishment of the new Parliament if procedures on the shares obtained by the parties in the new legislative body are not observed. Asked if PSD will boycott the establishment of the new Parliament, Grindeanu replied: “Partially yes, if the CCR ruling and the shares in Parliament are not observed. According to the Constitutional provisions, the leadership positions in Parliament are proportionally shared with the votes obtained by each party in elections, starting from the standing bureaus of the two chambers up to the leaderships of the committees. From what we read in mass media, those who were negotiating the past days did not quite take into account the CCR decisions. We sent this warning to President Klaus Iohannis, telling him that we want all these rules observed”.
• USR-PLUS takes a step forward to unblock negotiations: Barna no longer wants the Chamber speaker seat, eyes a deputy PM one: Co-chairman of USR-PLUS, Dan Barna has announced a new proposition to PNL and UDMR leaders, Ludovic Orban and Kelemen Hunor in an attempt to unblock negotiations for a centre right-wing coalition. Barna proposed that all three of them should be part of the Government, as deputy PMs, and proposed another person for the Chamber Speaker position: Cătălin Drulă. “We are trying a new solution by proposing another bid for the leadership of the Chamber of Deputies. We consider that a balance must exist. I will propose Cătălin Drulă, a colleagues with a significant expertize, for the chamber speaker seat,” Barna said. He argued that negotiations would be thus unblocked, and PNL, USR-PLUS and UDMR will be able to further approach debates about the ruling programmes. USR Plus co-president Dacian Ciolos pointed out that positions and people are important but it is more important to lay out serious commitments, and thus the alliance prioritizes governing and reforms and not people who ask for positions. “The announcement made by Dan Barna today shows that we are ready to offer solutions, not cling to our positions,” Cioloș wrote on Facebook. UDMR and Ludovic Orban criticized the  announcement, as negotiations are not carried out via the media, but among partners. Meanwhile, Klaus Iohannis and Ludovic Orban have had a meeting at Cotroceni in advance of a new meeting between PNL, USR-Plus and UDMR leaders later today. Given the timing, the President might have wanted to lend some advice.
  • Comment: It is unlikely that the offer of Deputy PM seats is even wanted, yet it shows willingness to negotiate under the motto patented by PM Orban upon resigning of not “clinging to positions”, which might become the official motto of these negotiations. It is a way of testing the waters and many more such propositions will be made as there is plenty of time until December 21 to “test” positions, but little to discuss on the governing program and these are potentially the actual negotiations taking place in the background instead of those launched in the media to test the partners’ reactions, a practice criticized by both UDMR and Plus leaders, but which seems adopted by USR and PNL which have their own internal disputes surrounding their leaders. UDMR seems to position itself as the voice of reason, and is actually the party with most experience in coalitions, having had such partnerships with either PNL and PSD in the past. President Iohannis seems to wait for the parties to iron out their differences, but does take an active consultative role. Although considered the first major obstacle, is just one obstacle and there is no word of progress on ministries, therefore any breakthrough in this respect is only symbolic and not indicative of a major breakthrough in negotiations. It might be a way of conveying the message that there are enough positions for everyone, but the elephant in the room remains: the parties expect results from their leaders, in line with their governing goals and expectations. So, for any concession there is an issue of accountability, and in USR’s case also accountability to their partners from Plus.
• Alexandru Rafila suggests imposing a general lockdown during the holidays, claiming the economic impact will be small: Doctor Alexandru Rafila, PSD’s proposal for the position of prime minister, insists on imposing a generalized lockdown during the holidays. “(…) the figures from the last weeks no longer reflect the situation. European countries have established a holiday lockdown, when the economic activity is reduced and the impact on the economy will be reduced,” says Alexandru Rafila.
• Ciolos: There must be balance between PM, Chamber Speaker: Dacian Ciolos, co-chair of the Save Romania Union – Party of Liberty, Unity and Solidarity (USR PLUS) Alliance, said that the alliance wants a trust-based agreement for a future governing coalition, but also that there must be a balance in terms of holding the position of prime minister and that of the Chamber of Deputies Speaker. In a press statement made on Monday, following the consultations at the Cotroceni Palace, Dacian Ciolos underlined that USR PLUS does not want “any formula in which PSD [Social Democratic Party] can be involved” in the government. He stressed that the negotiations must include the program and governance objectives, as well as the construction of the coalition to carry out this program. According to the USR PLUS leader, the organization of early elections would “represent a catastrophe for Romania and an irresponsibility” on the part of the one who advances such a variant. Dan Barna, co-chair of USR PLUS, said that the idea that “the whole decision in the state is in the hands of a single party in the coalition and the other coalition partners are training partners” is not feasible for the government’s credibility. Dan Barna on Monday said that, following the consultations at the Cotroceni Presidential Palace, the alliance is optimistic regarding the chances of establishing a stable and balanced center-right majority.
• Orban: PNL proposes holding Chamber speaker office for good reasons: National Liberal Party (PNL) Chairman Ludovic Orban on Monday said that the PNL decided to claim that the presidency of the Chamber of Deputies should be held by him for very well-founded reasons, taking into account the weight of the majorities created and the political experience, according to AGERPRES. Ludovic Orban also said that he had made several proposals to unblock the situation regarding the presidency of the Chamber of Deputies, but no agreement was reached.
• Romania’s electoral authority announces distribution of MP seats: Romania’s Central Electoral Bureau (BEC) announced the distribution of MP seats among parties. The Social Democratic Party (PSD) received 157 of the total 466 MP seats, resulting in an aggregated share of 33.7%, G4media.ro reported. The second-biggest party, the Liberal Party (PNL), got 134 seats (28.8%). Even with the support of its allies, the reformist block USR-Plus (80 seats or 17.2%) and UDMR (30 seats or 6.4%), the Liberals will not rise much above the 50% majority threshold – namely, the three parties will accumulate 244 or 56% of the votes in joint sittings. In the Chamber of Deputies, the decision-making chamber for most of the bills, the three-party coalition would hold a faint 51.2% majority – but, traditionally, the ruling coalition can count on the votes of the ethnic minorities (18 MPs or 5.5% of the total).
• Mark Gitenstein, Mircea Geoana, convinced US-Romania relationship will be strengthened during future Biden administration: Mark Gitenstein, former US ambassador in Bucharest, and Mircea Geoana, former Romanian ambassador in Washington and current NATO deputy secretary general, expressed their conviction on Monday, in an online discussion, that the relationship between the United States and Romania will consolidate during the next US administration, under the presidency of Joe Biden, according to AGERPRES.
• Interim PM Ciuca recommends citizens to reduce travel during winter holidays, to limit COVID-19 spreading: Interim Prime Minister Nicolae Ciuca said that, given the situation of the COVID-19 pandemic, he recommended that citizens reduce travel during the winter holidays to limit the spread of the novel coronavirus and added that the authorities did not consider adopting new restrictions. Asked if the authorities are also prepared in case of an increase in the number of COVID-19 cases during the holidays, he said: “We are also prepared for this hypothesis, for this scenario.” The interim prime minister said that the authorities do not envisage imposing new health protection measures during this period.
• President Klaus Iohannis calls meeting with Nicolae Ciucă and Nelu Tătaru at Cotroceni: President Klaus Iohannis will have a work meeting on the management of the epidemic on Tuesday, from 15:00, at the Cotroceni Palace, attended by the interim Prime Minister Nicolae Ciuca, the Minister of Health, Nelu Tataru, and the head of the Department for Emergency Situations, Raed Arafat.
• Aurescu: Romania remains deeply concerned about unresolved conflicts in Black Sea region: Romania remains deeply concerned about the many unresolved, protracted, sometimes called “frozen” conflicts in the Black Sea region, which affect stability, security and cooperation in the area close to Romania, with an impact on our national security, Minister of Foreign Affairs Minister Bogdan Aurescu said on Monday. He opened the conference on “Multilateralism and Peace,” organized by the Romanian Diplomatic Institute on the occasion of celebrating 65 years of Romania’s UN membership.
• Iohannis: Strengthening and extending Strategic Partnership with US represents a basic pillar of Romania’s foreign policy: President Klaus Iohannis stated on Tuesday that the strengthening and extending of the Strategic Partnership with the USA represents a basic pillar of Romania’s foreign policy, according to AGERPRES. “Strengthening and extending the Strategic Partnership with the United States of America represents a basic pillar of Romania’s foreign policy, for the promotion of the fundamental interests of our country, in the spirit of continuity and predictability. I hail the significant progress recorded in recent years of putting in practice our common vision, of an extended, durable, dynamic Strategic Partnership, profoundly anchored in Euro-Atlantic values, capable of responding to the need to manage the risks and threats that we face,” said the head of state at the US Embassy, at the ceremony to decorate interim PM, Nicolae Ciuca. He congratulated Nicolae Ciuca and showed that the decoration the latter received represents recognition for the particularly important role that he had in developing bilateral military relations between the United States of America and Romania. Nicolae Ciuca is being decorated with the Legion of Merit (in the rank of officer) as recognition for his merits during his activity as head of the Defence General Staff, in the January 2015 – December 2019 period.
• Maia Sandu: Romania’s president to visit Moldova by year-end: Romania’s president Klaus Iohannis will make a visit to Moldova by the end of the year, the country’s newly elected president Maia Sandu announced. Iohannis last visited Moldova in January 2015, shortly after the start of his first mandate as president.
• Romania wants to maintain trade balance surplus with the UK at least at last 2-3 years’ level: Romania wants to maintain a surplus of the trade balance with the United Kingdom at least at the level recorded in the last 2-3 years, said on Tuesday the president of the Romanian Chamber of Commerce and Industry (CCIR), Mihai Daraban, mentioning that, in this sense, more information is needed among economic operators, according to AGERPRES.
• CCR: Law on new system of taxation of service pensions ruled as unconstitutional (sources): The Constitutional Court ruled on Tuesday that the Law on the new system of taxation of service pensions, which provides for the taxation of 85% of pensions exceeding the amount of 7,000 lei, is unconstitutional, said sources from CCR, according to AGERPRES.
• Last bill adopted by the current Parliament: Defendants in tax evasion cases can avoid jail if they pay the damage: The Chamber of Deputies adopted, on Tuesday, as a decision-making body, with 195 votes in favor, 72 against and 19 abstentions, the legislative proposal amending the Law prevention and combating of tax evasion in the sense that the defendants accused of tax evasion up to 100,000 euros can avoid jail time if they pay the damage in full. It was the last plenary session of the 2016-2020 legislature and this law was the last item voted on the agenda.
• Calin Popescu-Tariceanu, indicted for abuse of office and complicity to usurp official attributions: The former president of the Senate Calin Popescu-Tariceanu was indicted, on Tuesday, by the General Prosecutor’s Office for abuse of office and complicity to usurp official attributions, according to AGERPRES. Tariceanu is accused of not acknowledging the cessation of the mandate of Senator Cristian Marciu, who had a final court ruling regarding the infringement of the law of incompatibilities.

Impact on the economy

• Romania’s car market, down 26.2% in first 11 months (APIA): The Romanian car market decreased by 26.2% in the first 11 months of the current year, compared to the same period in 2019, although in the last three months car sales returned to a upward trend, reveals the data published on Monday by the Association of Car Makers and Importers (APIA). According to APIA, most car purchases are still made by legal entities, which cover 54% of the total.
• Romania’s public external debt up 28% in Jan-Oct: Romania’s gross external debt increased by EUR 9.2 billion in the first ten months of the year, to a total of EUR 118.9 bln (nearly 60% of GDP). Out of the total, the public debt amounts to EUR 50.7 bln, 28.6% more compared to the end of last year. The increase in the direct public debt was prompted by the bonds issued by the Finance Ministry worth about EUR 9 bln, and the net loans contracted in the amount of EUR 548 mln, Romania’s National Bank (BNR) says in a report.
• RO betting group Superbet targets unicorn position in five years: Romanian sports bets and gambling group Superbet, with a turnover of more than EUR 250 million in 2019, has set the ambitious target of becoming Romania’s second unicorn (after UiPath) within five years. The company was already evaluated at around EUR 700 mln upon a EUR 175 mln capital injection operated by the US fund Blackstone Tactical Opportunities (BTO) fund, part of the American Blackstone group, in May 2019. “We want to make Superbet a global player with the best proprietary software this industry has ever had. It would be the coronation of the most successful business story that started in Romania,” said Johnny Hartnett, CEO of Superbet Group, in an interview given to Business Magazin.
• US tech group Redis Labs will open R&D center in Bucharest in partnership with local firm: US-based tech group Redis Labs, which develops database management system software, will open a research and development (R&D) center in Bucharest in partnership with Romanian firm Tellence.
• Romanian e-fulfillment startup Frisbo expands into five new countries: Romanian startup Frisbo, a smart e-fulfillment platform that takes over the storage, processing, and delivery of orders for online stores, announces that it is expanding its operations in five new countries: Moldova and Bulgaria – where they recently started operations, and Spain, Italy, and Belgium, which are in the process of warehouse integration.
• Romanian start-ups raise 60% less financing in 2020: The total funding raised by Romanian startups decreased by 60% in 2020, to EUR 225 mln. The financing volume will continue to drop dramatically in 2021, shows an EY analysis, quoted by Ziarul Financiar. However, the total financing rounds and the total amount of local capital attracted this year rose by 27% and 20% compared to 2019, thanks to the Seedblink crowdfunding platform, more active angel investors, and local investment funds’ involvement.
• RO entrepreneur launches full-online bank in Czech Republic: The Romanian-Czech bank Octobank, a neobank – meaning a bank that operates only online – founded by Romanian entrepreneur Bogdan Atanasiu, is preparing to launch operations, Profit.ro reported.  It will aim to attract SME customers from the online retail area. The private bank, based in Prague and with the main focus on online stores and merchants in the Eastern and Central Europe (ECE) region, will initially operate on the Czech market to later expand in Romania, Poland, and Hungary.
• Romanian tech entrepreneur takes over and rebrands small local bank: Romanian tech entrepreneur Vasile Olimpiu Balas, a programmer who has over 20 years of experience in developing software for the local banking industry, has taken over a 64.6% stake in local lender Banca Comerciala Feroviara. The bank was founded by local businessman Valer Blidar, who owns the biggest passenger wagon factory in Romania, to support the local industry. The new owner plans to turn the bank into one dedicated to local tech startups. Thus, the bank will change its name to Techventures Bank.
• Profit of RO banking system shrinks by 22.5% yoy in Q3: The aggregated net profit of the Romanian banking system contracted by 22.5% in the third quarter of 2020 compared to the same period last year, to EUR 363 million, according to calculations based on data released by Romania’s National Bank (BNR). On the upside, the non-performing loan (NPL) ratio dropped to 4.1% at the end of September, from 4.4% three months earlier and 4.6% at the end of September 2019. The capital adequacy rate (22.8%) remains at historic high levels and well above the requirements.
• FinMin Citu: Industrial sector recovery, clear proof in 2021 Romania can have an increase above expectations: The dynamics of the industrial sector became positive in October 2020, and the recovery of this sector is clear proof that in 2021 Romania can have an economic growth above expectations, the acting Minister of Finance, Florin Citu, wrote Tuesday on his Facebook page, according to AGERPRES. According to data published on Monday by the National Institute of Statistics (INS), in October 2020, industrial production (gross series) was higher than the previous month by 3.2 pct, as a result of the increases recorded by the three industrial sectors: production and supply of electricity and heat, gas, hot water and air conditioning (+4.8 pct), manufacturing (+3 pct) and extractive industry (+1.4 pct).
• Skiing in Romania: Sinaia opens Cota 2000 slopes this weekend: Sinaia will open this weekend the slopes located at 2,000 meters altitude, mayor Vlad Oprea announced. Two new routes will open this season, as will a ski lift at Valea Soarelui, the mayor said. Several measures were introduced to prevent the spread of the coronavirus. As such, the gondola will be used at only half of its capacity.

Situation of COVID-19 cases in Romania (14.12.2020)

• Romania registers 3,252 new Covid cases in the last 24 hours out of 8,000 tests. Number of patients in ICUs still concerning: Romania has reported 3,252 new cases of coronavirus in the last 24 hours, out of 8,059 processed tests. According to the latest report, 1,289 patients are in a more serious condition and they are admitted in intensive care units, while 109 Romanians infected with SARS-CoV-2 have died in the past 24 hours.

 

Political and regulatory

 

• Romanian centre-right parties fail to agree on joint PM candidate: The National Liberal Party (PNL) and the reformist block USR-PLUS will each present president Klaus Iohannis separate candidates for the prime minister seat after the negotiations between the two future coalition partners ended with no results on December 13. The Liberal candidate is finance minister Florin Citu. Meanwhile, USR-PLUS insists its co-president Dacian Ciolos should get this position unless its other co-president, Dan Barna, gets the top position in the Chamber of Deputies, a seat also targeted by PNL leader Ludovic Orban, Digi24 reported. On Monday, December 14, the two parties met with president Klaus Iohannis, who is supposed to nominate a prime minister-designate – but has no involvement in appointing the Chamber of Deputies speaker. Consultations started at 11:00 hrs, with PSD going first. President Iohannis is expected to make a press statement at the end of the consultations with all parties. During discussions held on Saturday, the negotiation teams of the PNL, USR PLUS and UDMR established the structure of the governing program, according to a joint press release of the chairs of PNL, USR PLUS and UDMR.
  • Comment: Both USR leader Dan Barna and PNL leader Ludovic Orban, who won deputy seats, want the chairmanship of the Chamber of Deputies, as holding this top position would go a long way towards remaining the leaders of their parties after being disputed from within. Ludovic Orban suggested as a solution for both of them to run for this position and the issue be decided at the vote in the Chamber of Deputies, yet Barna rejected this option because they lack the votes considering that PSD will have its own candidate, Marcel Ciolacu, and will be at a disadvantage. Negotiations also stalled for the PM proposal and PNL will go to the consultations with Florin Citu, while USR will go with Dacian Ciolos. Asides from this there are multiple impasses related to wanting the same major ministries (USR wants at least one major ministry, in order to hold their weight in the coalition), dividing or not dividing certain ministries with multiple portfolios (PNL would not want to split the Ministry of Economy, Energy and Business Environment, and keep Minister Popescu overseeing them all just like before), the share of ministers or positions relevant to Plus (Plus wants to be treated as equal while USR sees this ratio at 80%-20%, and might even feel threatened of the mere prospect that Plus’ ambitions would extending to the USR through a power grab). The only results of the negotiations would have been over the digitalization chapter in the governing program (imposed by USR) and a pact on preventing party switching (imposed by UDMR, so that PNL would not change its number of deputies and senators by convincing others from the opposition to join them; USR backed this proposal but PNL was not pleased). The negotiations are unusual because despite the fitting center-right rhetoric, not so long ago USR was PNL’s biggest critic and competitor, and PNL is aware and wants to keep all the secrets and all the power, especially as there is little trust between the two as could be observed at the local elections and soon after that. For PNL it is clear that it wants to avoid a hostage/blackmail situation by its partners, for USR-Plus and UDMR it clear that they do not want to be a “ride along”/spectator partner, although declaratively they all aim for “fair sharing among partners based on voting results”. Therefore they either have a binding “prenup” (governing program), fixing even the smallest of details, or they complicate things so much so that everything becomes intertwined and each party is indispensable (awarding compensatory positions in decision-making bodies anywhere possible; splitting important ministries, for example a standalone Ministry of Communications, or a reestablishment of old ones such as  the Ministry of Tourism). For now however, they are at an impasse and are going to President Iohannis, for a “Solomon”-like judgement. If the deadlock maintains, it is a good opportunity for the business environment affected by the crisis to make its voice heard with useful suggestions.
• Orban: I presented PNL proposals – Citu as PM, Chamber of Deputies Speaker for Liberals: The leader of the National Liberal Party (PNL), Ludovic Orban, said on Monday that he presented to President Klaus Iohannis the proposal for Prime Minister, Florin Citu, and that he was proposed to take over the role of Speaker of the Chamber of Deputies. He said that PNL does not agree with PSD’s presence in the government. PNL President Ludovic Orban claims that President Klaus Iohannis will announce the prime minister’s proposal at an appropriate constitutional moment. The PNL delegation was composed of the leader of the formation, Ludovic Orban, their candidate, Florin Citu, first deputy chairs Raluca Turcan and Rares Bogdan, as well as PNL Prahova branch chair, Iulian Dumitrescu.
  • Comment: PNL seems to gear up for lengthier negotiations and will not compromise for now. There are thus five plausible and less plausible scenarios according to Digi 24: 1. The President postpones the appointment of the Prime Minister; 2. a PNL-USR PLUS-UDMR government with Florin Cîțu prime minister; 3. PNL forces a minority government; 4. the Cîțu government does not gather a majority and Iohannis proposes Nicolae Ciucă as prime minister; 5. PSD receives the mandate and tries to gather a majority for a minority or national union government. Interestingly, interim PM Nicolae Ciuca was not part of the negotiation team, but was called at the party headquarters after the consultations concluded at Cotroceni. Speculations might thus resurface over Nicolae Ciuca remaining an option for PM, yet so far this is a last possible scenario next to the PSD forming a government of national union and any random combinations. There is also a zero-sum game scenario of forcing early elections, currently dismissed by both Dan Barna and Dacian Ciolos. However, the most plausible is that the President could announce the name of the future prime minister only after the establishment of the new Parliament (on December 21) in order to give the PNL, USR PLUS and UDMR more time to formally form a governing coalition and complete the negotiations. Meanwhile, AUR leader George Simion candidly commented on what he understood from the talks to which they formally participated: “(The president) told us that there is no government majority, neither on the left nor on the right, it seems that we at AUR have messed up a lot of the calculations and we are happy about that,” said George Simion.
• Ciolacu, on discussions with president: We spoke only about national union Government option: The Chairman of the Social Democratic Party (PSD), Marcel Ciolacu, declared on Monday that he proposed, at the meeting at the Cotroceni Presidential Palace, a Government of national union with Alexandru Rafila as Prime Minister, according to AGERPRES. According to Ciolacu, President Klaus Iohannis mentioned that the PSD’s proposal for prime minister in the person of Alexandru Rafila is an “honorable one”.
• Aurescu: Romania has been and will remain active member involved in proper functioning of the UN: Romania has been and will remain an active member of the United Nations, involved in the proper functioning of the United Nations, demonstrating a genuine and lasting commitment at all levels: maintaining international peace and security, sustainable development and the promotion of human rights, democracy and the rule of law, says the Minister of Foreign Affairs, Bogdan Aurescu, at the celebration of the organization’s 75th anniversary and the 65th anniversary of Romania’s membership in the UN, according to AGERPRES.
• AUR’s Simion: We won’t make alliance with anyone; we revolutionize political class: The co-chair of the Alliance for the Union of Romanians (AUR), George Simion, stated, on Sunday, in the center of Craiova, Dolj County, in a public meeting with members and sympathizers of the party, that AUR will revolutionize the Romanian political class and won’t make an alliance or a coalition “neither with the left, nor the right.” Simion told his party colleagues that they will keep in touch directly and urged them to shut down their TVs, because, he claims, the TV stations ignored AUR during the entire campaign. “We have Facebook, we have direct connections, we’re revolutionizing the Romanian political class,” Simon said hinting that they will be less communicative over traditional media channels.
• The Central Electoral Bureau completed the procedure for distributing parliamentary seats based on the final results, after appeals: After redistributions, PSD obtained 157 seats (47 Senate, 110 Chamber of Deputies), PNL – 134 (41 Senate, 93 Chamber of Deputies), USR-PLUS – 80 (25 Senate, 55 Chamber of Deputies), AUR – 47 (14 Senate, 33 Chamber of Deputies), UDMR – 30 (9 Senate, 21 Chamber of Deputies), Minorities – 17 (Chamber of Deputies). Draft lists: Senators, Deputies, interactive.

 

 

Impact on the economy

• Foreign direct investment down by 62.46% in the first 10 months: Foreign direct investment decreased in the first 10 months of 2020 by 62.46% compared to the same period last year, to 1.75 billion euros, according to data published on Monday by the National Bank of Romania (BNR).
• Current account deficit drops 3.71 pct in first ten months of 2020: The current account of the balance of payments has recorded a deficit of 8.778 billion euro, in the first ten months of 2020, a drop of 3.71 pct compared to the similar period of 2019, from 9.117 billion euro, according to a release of the National Bank of Romania (BNR) sent, on Monday.
• Trade Register: Over 41,000 companies were deregistered in the first ten months of 2020: The number of companies deregistered nationwide decreased by almost 54% in the first ten months of 2020 compared to the same period last year, to 41,119 deregistrations, shows the statistical data of the National Trade Register Office (ONRC), according to AGERPRES.
• INS: Industrial production down 11% in Romania, after ten months: Romania’s industrial production (gross series) decreased by 11% in the first ten months of the year, compared to the same period in 2019, respectively by 11.5% as a series adjusted for working days and seasonality, according to data from the National Institute of Statistics (INS) published on Monday, as reported by AGERPRES.
• Moody’s upgrades rating of deposits in three RO banks in line with debt rating: International rating agency Moody’s has upgraded the foreign currency (FC) deposit ratings of ten banks in the region, including three Romanian banks: BRD – Groupe Societe Generale, Banca Comerciala Romana (BCR), and Raiffeisen Bank, Economica.net reported.
• Fitch: elections fail to alleviate fiscal uncertainty in Romania: Romania’s general election result points to continued political uncertainty and hence a still-challenging policy-making environment, Fitch Ratings says in a statement. The need to pass a 2021 budget will be a near-term test of the next administration’s cohesion and will indicate likely fiscal policy settings, the rating agency stresses.
• EconMin: Romania will have freedom to choose how it reaches its environment targets until 2030: The European Union will take into account the energy specifics of each country, and Romania will have the freedom to choose how it will reach the environment targets until 2030, wrote, on Friday, the Minister of Economy, Energy and the Business Environment, Virgil Popescu, on his Facebook page. He mentioned that Romania will have at its disposal European funds to help especially mining areas, dependent on coal, such as the Jiu River Valley, and 30 pct of all European funds in the next seven years will be used for projects that contribute to the reduction of carbon emissions.

Situation of COVID-19 cases in Romania (11.12.2020)

• Romania registers over 6,400 new cases of COVID-19 in the last 24 hours: Romania registered 6,460 coronavirus cases in the past 24 hours, bringing the total to 545,567 on Friday, December 11, the authorities announced. The new cases were reported out of 30,246 tests. Most new cases in the last 24 hours were registered in Bucharest – 1,867, followed by the counties of Constanta – 453, Cluj – 331, Ilfov – 326, Timis – 319, Iasi – 318, and Brasov – 310. The death toll reached 13,116 after 168 coronavirus patients died in the past 24 hours. The number of patients in intensive care peaked at 1,299. The highest incidence rate per 1,000 capita is registered in Bucharest – 7.04, followed by Constanta County – 6.88, and Ilfov (6.77).
• PSD’s proposal for PM Alexandru Rafila tests positive for COVID-19: Alexandru Rafila,  the PSD candidate proposed for the PM seat, Romania’s representative to the World Health Organization, confirmed he is infected with COVID-19.

 

Political and regulatory

 

• Romanian Govt. extends state of alert by 30 days and keeps all restrictions: The state of alert will be extended by another 30 days, announced the head of the National Committee for Emergency Situations (CNSU), Raed Arafat. All the measures previously imposed during the alert state remain in force, except for the decision to close the food markets (which was recently lifted), Arafat said. An additional measure aims at organizing and carrying out the cable transport on the ski slopes, in the sense that the mode of operation will be regulated by the Ministry of Economy. “Basically it will be decided how to carry out the cable transport, probably if a cabin has a capacity of 20 people, it will transport only 10,” Arafat explained, quoted by G4media.ro. The Government Decision that will include the proposals drafted by CNSU will be approved on Friday, Arafat announced.
• Ciuca: We’ll have to analyze increase in number of cases in the Capital: Interim Prime Minister Nicolae Ciuca said on Friday, at the beginning of the Government meeting, that the increase in the number of COVID-19 cases in the Capital needed to be analyzed, according to AGERPRES. “Although we have a constant number of positive cases, however, from the discussion and analysis we had related to this topic, we have an increase of up to 35 quarantined localities and we also have a situation that we will also have to discuss and analyze, regarding the increase in the number of positive cases in the Capital,” he said. “Mr. Secretary of State Raed Arafat explained last night at the press conference that there are no modifications since the previous decision. The only exception is related to the regulation of the manner in which people should travel by cable cars, through a common order of the two ministries (Health and Economy). Thus, today, at the government meeting, we will analyze the government decision draft prolonging the state of alert. We are basically denying the fake news announcing a new lockdown,” Ciuca said at Friday’s government meeting. The interim Prime Minister also said on Friday that he requested a coordination of the activity of the National Sanitary Veterinary and Food Safety Authority (ANSVSA) and that of the structures of the Interior Ministry, in order to monitor the activity in markets, to limit novel coronavirus spread, according to AGERPRES.
• CNSU updates list of countries with high epidemiological risk: A number of 30 countries remain in the yellow zone, which means that people who return to Romania from these countries, including Bulgaria, Hungary, Italy and the United States, will have to quarantine at home for 14 days, according to AGERPRES.
• Iohannis, on unblocking EU budget, economic recovery package: Romania ready to use these funds: President Klaus Iohannis said on Twitter on Thursday evening about the unblocking of the future budget of the European Union and the economic recovery package after the COVID-19 pandemic, that “Romania is ready to use these funds to reforms and investments in key sectors”, according to AGERPRES. “Important agreement today by unblocking the future budget of the European Union and the economic recovery package. Romania is ready to use these funds for reforms and investments in key sectors, for the benefit of all Romanians,” the head of state wrote on Twitter. “Important agreement today by unblocking the future budget of the European Union and the economic recovery package. Romania is ready to use these funds for reforms and investments in key sectors, for the benefit of all Romanians,” the head of state wrote on Twitter.
• Iohannis: I welcome agreement on 2030 climate goal; Romania makes sure its interests covered: President Klaus Iohannis stated in a message posted on Twitter that he welcomed the agreement on the 2030 climate goal and stressed that Romania’s interests were covered in this area, according to AGERPRES. “I welcome the agreement on the 2030 climate target. The decision will allow the modernization of the European Union’s economies and the improvement of the lives of European citizens,” the head of state wrote on Friday on the social platform. He added that “Romania has made sure that its interests are covered, including by maintaining the decision on the national energy mix and the use of gas in the transition process.” Klaus Iohannis attends the European Council meeting in Brussels. Some of the objectives of this meeting were to reach an agreement on setting a new, more ambitious target for reducing greenhouse gas emissions by 2030, by ‘at least 55%’ compared to 1990.
• BEC rejects PMP requests to recount votes, cancel the elections in some polling stations: The Central Electoral Bureau (BEC) on Thursday evening informed that it rejected 45 requests to recount votes and cancel the elections filed by the People’s Movement Party (PMP) and other parties or individuals, which targeted polling stations in several counties, Bucharest and the diaspora, according to AGERPRES. BEC rejected the requests of some PMP branches to recount the votes in the polling stations in Braila and Hunedoara counties and in the diaspora, but also to cancel the elections in the polling stations in Bucharest and Alba, Arad, Brasov, Caras-Severin, Hunedoara, Mures, Prahova, Timis, Suceava, Valcea and the diaspora, according to a BEC press release sent to AGERPRES.
• Alexandru Rafila – validated by National Political Council of PSD to be proposed Prime Minister: Doctor Alexandru Rafila was voted by the National Political Council to be proposed by the Social Democrats for Prime Minister. “We put to vote so that on Monday we go to Cotroceni [Presidential Palace] with Professor Alexandru Rafila, the PSD [the Social Democratic Party]’s proposal for the position of Prime Minister. (…) The most fair thing from President Iohannis would be to accept a minority government led by Mr. Rafila, or a national union government,” said the PSD’s chair, Marcel Ciolacu, in a press conference. He added that on Monday, in the consultations at the Cotroceni Palace, Rafila will not be present as he is still under self-isolation.
• JusMin Predoiu: National strategy to combat organized crime finalized; to be put in public debate shortly: The Minister of Justice, Catalin Predoiu, announced on Wednesday that the working group coordinated by the Justice Ministry together with the Ministry of the Interior has finalized the national strategy to combat organized crime, which will be put shortly in public debate. The Justice Minister participated, on Thursday, in the signing of cooperation agreements between the National Agency Against Trafficking in Persons (ANTIP) and the Romanian Orthodox Church, and the Bucharest City Hall, respectively, to combat human trafficking and protect its victims.
• Orban: Governing coalition will hold chairmanship of Chamber of Deputies and Senate, that’s normal: The chairman of the National Liberal Party (PNL), Ludovic Orban, said on Thursday that it’s normal for the new governing coalition to hold both leadership positions of Parliament – the speakership of the Chamber of Deputies and the chairmanship of the Senate, mentioning that there is ‘no risk’ for them to belong to the Social Democratic Party (PSD), according to AGERPRES. Regarding information that the USR PLUS will not accept for the PNL to propose both the Prime Minister and the Speaker of the Chamber of Deputies, Orban said he would not comment on rumors. He also said that these aspects were not discussed with the coalition partners. “We did not discuss these aspects. There have been no discussions, neither about portfolios, nor about attributing positions. There is only the agreement to form a center-right parliamentary majority to form the government. We will discuss on Saturday, starting with 9 AM,” said Orban.
• AUR’s Simion: Unless PSD suspends President Iohannis, we will do it: Alliance for the Unity of Romanians (AUR) co-chair George Simion said on Thursday that if Social Democratic Party (PSD) does not initiate the procedure for suspending President Klaus Iohannis from office, his party will do so, according to AGERPRES. “PSD makes huge mistakes, does not tax at all the unconstitutional slippages of the president (…) If PSD does not do it [initiation of the suspension of President Iohannis], we will do it and we will go to every locality in this country, because the current president has unfortunately become a political actor,” Simion told public TV station TVR 1. The leader of the PSD deputies, Alfred Simonis, declared on Wednesday that President Klaus Iohannis deserves to be suspended for what he did in the last year, specifying that such a variant cannot be definitively excluded, but, at this moment, a political crisis is not necessary.
  • Comment: AUR does not have the votes to initiate such a procedure by itself. The initiation of a proposal for the suspension of the President can only be initiated by at least one third of the deputies and senators per the Romanian Constitution, while a decision on the suspension requires a majority vote and the consulting of the Romanian Constitutional Court. It thus needs the PSD, which is currently not considering it, while initiating and passing this procedure are totally different matters. If passed, then a referendum is held within 30 days, which needs a 30% turnout and is approved with minimum 25% of the votes of the total population with right to vote, however the Constitution stipulates no implementation deadline if passed. Therefore, a complicated procedure, especially during the pandemic. Moreover, for PSD there are no image benefits in associating with an anti-systemic party such as AUR and especially for this endeavor.
• Negotiation rumors: PNL might prefer Finance over Justice portfolio: PNL might be willing to give up the Justice portfolio in the future Executive in favor of USR-PLUS, but not Finance, party sources told News.ro. Also other ministries that the Liberals would like are Defense, Foreign Affairs, Economy, Internal Affairs, Development and Transport. Among the ministries that PNL would like to hold are the Ministry of Finance, Defense, Transport, Interior, Economy and Energy and Foreign Affairs. At the same time, in the context in which PNL has 1,500 mayors, it would like to hold the Ministry of Development, added the quoted sources. Instead, the liberals would be willing to give the Ministry of Justice to USR-PLUS, although Cătălin Predoiu wants to continue to hold this portfolio, PNL sources also told News.ro. MEP Rareş Bogdan could be willing to accept the Internal Affairs portfolio, if necessary. Ludovic Orban is aiming for the presidency of the Chamber of Deputies, but if USR-PLUS pushes for Dan Barna to take over the leadership of the Chamber, then the PNL leader could propose to him the position of deputy prime minister in the new Government plus possibly to give the head of the Senate to Radu Mihail, the mentioned sources also specified. The PNL would also be willing to give up Health, if the USR-PLUS Alliance insistently wants this portfolio for Vlad Voiculescu, as well as the Ministry of Labor, the Ministry of Sports, the Ministry of Education, the Ministry of Agriculture and the Ministry of Culture. USR would like Dan Barna to be president of the Chamber of Deputies or deputy prime minister, party sources told News.ro. Also, the party does not exclude the leadership of the Senate to be taken over by the current head of the USR senators, Radu Mihail. The USR-PLUS alliance is not very happy with the idea of ​​having only 5-6 ministries in the future Executive and will insist on having at least one advisory ministry – Justice, Finance, European Funds or Development. UDMR representatives would like to have 2 or 3 ministries in the future Executive, party sources told News.ro. The Union will also discuss the amendment of the Resilience and Recovery Plan to include measures for the development of Transylvania, in the sense of developing the railway and road infrastructure, as well as the development of the rural area, added the quoted sources. UDMR will also insist on environmental priorities and support for farmers. The leader of the UDMR group in the Senate, Cseke Attila, stated on Thursday, on Antena 3, that the ethnic Hungarians do not go to the negotiations with PNL and USR PLUS for the formation of the Government to “accept ministries”, but go to “ask for ministries”. In the media it is rumored that UDMR will have 2-3 ministries in the future Government, among the rumored versions being the portfolios for Health, Environment, Culture. Negotiations between PNL, USR PLUS and UDMR over the governing program and positions will start this weekend.
• Resignation at the top of UDMR: executive chairman leaves: Porcsalmi Bálint, UDMR’s executive chairman, announces his resignation from party, a position he held since 2017. “On December 6, my term ended. According to my plans, after the negotiations for the formation of the government, I will give up the mandate of executive president” wrote Porcsalmi Bálint on the Facebook account of UDMR. Furthermore, at the meeting of the Permanent Council of UDMR on December 9, it was decided that due to the unsatisfactory results of the local elections to dismiss the presidents of the territorial branches from Timiș, Brașov, Baia Mare and Sighetu Marmației.
• Independent candidate Valeriu Nicolae, only 17 votes to reach the electoral threshold: Independent candidate Valeriu Nicolae said on Friday that he had filed 28 complaints as he has suspicions that some of the votes he got had not been correctly accounted. Nicolae said he is just 17 votes away from reaching the electoral threshold and obtain a deputy seat in the future Parliament and that through the complaints previously filed he had managed to recover 29 votes.

Impact on the economy

• INS: Average gross salary up 38 lei in Romania, in October: The average gross nominal salary increased in Romania by 38 lei, in October, compared to the previous month, to 5,452 lei, show the data released by the National Institute of Statistics (INS) on Friday, according to AGERPRES.
• Annual inflation rate, down to 2.1% in November: The annual inflation rate fell to 2.1% in November this year, from 2.2% in October, given that food prices rose by 3.81%, services by 2.77%, and non-food goods by 0.78%, according to data the National Institute of Statistics (INS) published on Friday, as reported by AGERPRES. “Consumer prices in November 2020 compared to November 2019 increased by 2.1%. The annual rate calculated on the basis of the harmonized index of consumer prices (HICP) is 1.7%. The average rate of consumer prices in the last 12 months (December 2019 – November 2020) compared to the previous 12 months (December 2018 – November 2019), calculated on the basis of the CPI, is 2.8%. Determined on the basis of the HICP, the average rate is 2.5%,” the INS release reads. The National Bank of Romania (BNR) estimates inflation at 2.1% at the end of this year, down 0.6 percentage points from the previous forecast, and 2% in the third quarter of 2022, according to the Inflation Report.
• New orders in processing industry decrease by 7.1% in 10 months: New orders in the processing industry decreased by 7.1% in the first ten months of the year, compared to the same period of the previous year, but increased by 6% in October 2020 from October 2019, according to data published on Friday by the National Institute of Statistics (INS).
• INS: 5.1pct drop in final electricity consumption in Romania, Oct 31: The final electricity consumption in Romania was 43.687 billion kWh January through October this year, 5.1 per cent lower than the similar period in 2019, while primary energy resources decreased by 11.9 per cent and electricity resources were lower by 2.2 per cent, according to the National Institute of Statistics (INS), as reported by AGERPRES.
• Industry turnover down by almost 9pct Jan-Oct: The overall industry turnover (internal market and external market), decreased by 8.6 per cent, in nominal terms, in the first 10 months of the current year, compared to the same period in 2019, but it increased by 1.6 per cent in October compared to the previous month, according to data the National Institute of Statistics (INS) published on Friday, as reported by AGERPRES.
• Romanian power grid operator Transelectrica plans EUR 1.2 bln investments by 2029: Romania’s energy market regulator ANRE approved on December 10 the 2020-2029 Development Plan for the electricity transmission network drafted by Transelectrica, the transport system operator and electricity market operator (through OPCOM). The total value of the investment plan for the period 2020-2029 is RON 5.67 billion (EUR 1.2 bln), out of which EUR 300 million would be financed from the European Union’s grants.
• Romania’s gas transport operator Transgaz gets harsh fine for past procurement: Romania’s competition body Consiliul Concurentei ruled that the natural gas transport system operator Transgaz must pay a RON 34.2 million (EUR 7 mln) fine, representing 1.85% of the company’s 2019 turnover, for irregularities found in connection to procurement procedures carried in 2011. Transgaz explained that the fine is related to its activity in 2009-2011, before it adopted corporate management principles in line with the government emergency ordinance OUG 109/2011.
• Romanian fintech expands to Serbia after EUR 750,000 financing round: Instant Factoring, the first Romanian fintech to offer online factoring to Romanian entrepreneurs, has closed a round of equity financing worth EUR 750,000. The round was subscribed by Instant Factoring’s current shareholders to fuel its fast expansion.
• Romanian online retailer eMAG launches venture fund for tech startups: The biggest Romanian online retailer, eMAG, has launched an acceleration program for tech startups. With this program, called eMAG Ventures, the group aims to use the expertise gained during the development and expansion of various projects. eMAG Ventures will focus on technology companies that bring innovations in products and services directly or indirectly to end customers. In addition to financing, eMAG will provide selected companies with the know-how gained in over 19 years of activity in the most dynamic tech sector of the moment, stimulating the digital economy.
• Romania’s exports keep firming in October: Romania’s exports decreased by 1.1% year-on-year to EUR 6.26 billion in October. The annual dynamics deteriorated marginally from -0.5% in September but remained in the range that is consistent with the stabilization of the foreign trade activity under the difficult circumstances. The lower grain crop and subsequent smaller exports alone can explain the decrease in September and October – meaning that the exports have actually increased in annual terms after filtering out the impact of the subdued output in agriculture.
• Turkish VC firm buys stake in Romanian form-building startup to help it boost presence in the US: Turkish venture capital firm 212 will buy a stake in Romanian online form-building software startup 123 Form Builder, founded by local entrepreneur Florin Cornianu, for an undisclosed sum. The new shareholder will also hold a seat on the Romanian company’s board. 212 will join existing shareholders Catalyst Romania and Adrian Gheara, as the startup looks to solidify its presence in the US with the opening of a new office. 123 Form Builder says it has become a revenue positive, profitable company this year as its revenues increased significantly since the start of the COVID-19 pandemic.
• Romanian refurbished phone retailer fenix.eco starts selling to companies with new B2B unit: Romanian startup fenix.eco, a retailer of refurbished brand phones, has also launched a B2B unit. The startup’s first corporate client is BNP Paribas Personal Finance – Bucharest Branch. Through this new unit, fenix.eco offers local enterprises the possibility to buy for their employees refurbished Apple, Samsung, Sony, and Huawei smartphones up to 50% cheaper than new ones. The refurbished phones also come with new accessories and a 12-month guarantee.
• Ministry of Finance informs the business community that it has reopened the State aid scheme for wage expenditures for new investments, with over 100 jobs: The business community can apply for funding under a State aid scheme to support new investments, which promotes regional development by creating jobs. The scheme finances the salary expenses registered for a period of 2 consecutive years, as a result of the creation of new jobs. Amounts are granted in the form of grants, from the state budget, for eligible expenses in the nature of salary costs. In 2020, for both state aid schemes administered by the Ministry of Public Finance (established on the basis of G.D. no. 332/2014 and G.D. no. 807/2014) a budget of 1.5 billion lei was allocated. In August, by Government Decision no. 588/2020, this scheme was revised, in order to increase the companies’ accessibility to finance state aid investments.
• ANAF introduces important changes in the procedure for the fiscal inspection report: An order of the President of ANAF, now published in the Official Gazette, brings important changes regarding the procedures for drawing up the fiscal inspection report. ANAF introduces a single procedure for drawing up, and approving the fiscal inspection report, making the procedure transparent and regulating mechanisms for correcting certain situations.
• Cimpean (CERT-RO): EU Cyber Center in Bucharest, hub of innovation, research, collaboration in cybersecurity for Member States: The EU’s Cyber Center in Bucharest will initiate and run numerous European-funded programs and projects and will be a catalyst for cybersecurity innovation, research and collaboration for member states, Dan Cimpean, General Director of Romanian National Computer Security Incident Response Team (CERT-RO). Romania will host, in Bucharest, the European Cybersecurity Competence Center, being the first structure of the European Union (EU) to be based in our country, the Ministry of Foreign Affairs (MAE) announced on Thursday. Interim Prime Minister Nicolae Ciuca hailed the hosting by Romania of its first structure of the European Union – the European Cybersecurity Competence Center, emphasizing that this represents a powerful signal of trust and recognition of our country’s contribution to the development of cybersecurity in Europe and the world, according to Agerpres.

 

Situation of COVID-19 cases in Romania (09.12.2020)

• Romania continues to register over 7,000 new cases of COVID-19: Romanian officials reported 7,365 new coronavirus cases in the past 24 hours, out of 29,151 tests, according to the official daily report released on Wednesday. 161 deaths were reported in the last 24 hours, while the number of COVID-19 patients treated in intensive care units reached to 1,271. Most new cases reported in the last 24 hours were registered in Bucharest -1,946, followed by Constanta  – 520, Cluj – 366, Brasov – 341, Iasi – 328, Ilfov – 322 and Timis – 306.  Constanta take first place among the counties with the highest incidence rates, with 7.09, followed by Bucharest – 6.77, and Ilfov – 6.14.  Bucharest General Mayor, Nicușor Dan, gave assurances on Tuesday evening that Bucharest would not enter quarantine.

 

Political and regulatory

 

• Romania’s acting PM Ciuca may get nomination for full term: Romania’s defense minister, retired general Nicolae Ciuca, currently acting prime minister, is most likely to be nominated as prime minister-designate for a full term by president Klaus Iohannis after the round of negotiations with all political parties, G4Media reported. One of the would-be ruling partners, the reformist block USR-Plus, has already expressed concerns with the nomination of a retired general for the prime minister seat. “The military solutions are not long-term solutions since Romania is a European democratic state,” USR president and co-president of the block, Dan Barna, commented. He said that each party would come up with its own candidate, and president Iohannis will have to choose one. USR-Plus has been promoting Plus president Dacian Ciolos (co-president of the reformist block), a former EU Commissioner for Agriculture and former prime minister in 2016, as its candidate for the prime minister position.
• Romanian reformist block USR-Plus wants national recovery plan rewritten: Romanian reformist block USR-Plus, which will be part of the center-right coalition to rule the country after the December 6 elections, will ask to lead a key minister in the next Government, such as the Finance Ministry or Justice Ministry, sources familiar with the negotiations told G4Media.ro, Bursa.ro reported. The two ministries are essential because they endorse all acts adopted by the Government. USR-Plus will also demand a thorough reorganization of the EU Funds Ministry, maybe even its removal followed by the transfer of its functions to the prime minister’s office, G4media reports. Another major objective of USR-Plus in the negotiations with the National Liberal Party (PNL) is the radical rewriting of the National Recovery and Resilience Program (PNRR), the plan launched by the Government of prime minister Ludovic Orban and president Klaus Iohannis during the electoral campaign. The plan outlines the major projects that Romania should finance in the next four years from the EUR 30 billion that will be disbursed under the European Commission’s Next Generation EU program.
• Liberals say they have a comfortable majority with USR-PLUS and UDMR, first rumors about portfolios, first complaints: First vice-president of the National Liberal Party, Rares Bogdan has announced on Tuesday afternoon that a “comfortable majority” of 244 deputies and senators is being shaped, together with USR-PLUS and UDMR, to which another 16 MPs from the minorities group is added, so that a new Cabinet will be made till Christmas. He voiced hope that USR-PLUS will accept as much as possible from their resilience plan, adding that there has been no talk yet about ministries, but the future PM will want to have several major ministries such as the Justice, Finance, Interior and the EU funds ones. PNL also would want the Chamber of Deputies speaker for the resigning PM Ludovic Orban, leaving the Senate speaker seat for USR-PLUS. As for the portfolios in the future Cabinet, PNL is to take 8 ministries and will give 5 ministries to USR-PLUS and 3 to UDMR. The sources revealed that indeed PNL wants such portfolios as Internal Affairs, Justice, Economy, Finance, Transports, Development and EU Funds, and are willing to give in the Education and Health ministries to USR-PLUS. PNL’s proposals for the next PM allegedly are: Nicolae Ciucă, Ilie Bolojan and Florin Cîțu, but sources said that President Iohannis had clearly told Liberals he want Nicolae Ciuca at the helm of the government. Rumours about the PNL’s plans on the ministries are not pleasing USR-PLUS. The first discontent raised in the Barna-Ciolos team is related to the position of Chamber speaker, which USR-PLUS would want for Dan Barna, while the Liberals eye it for Ludovic Orban. As for the Senate speaker, it seems it is not a stake for USR-PLUS. At the same time, USR-PLUS would want either the Justice or the Finance ministries, mostly counting on the Justice portfolio, considering that PNL will not give up the Finance one. Also, USR-PLUS would not want the Education ministry.
• Liberals to validate proposal of prime minister Wednesday: National Liberal Party (PNL) First Deputy Chairman Rares Bogdan announced that the Liberals will validate the prime minister proposal at a meeting of the National Political Bureau (BPN) on Wednesday, according to AGERPRES. “We will discuss tomorrow [the proposals of prime minister]. We will validate in the evening, probably in the BPN meeting around 19.00 or 20.00, after we talk about the proposals at noon. (…) All names are PNL members, they were PNL members, they will be PNL members,” said Rares Bogdan at the party headquarters. He said that Nicolae Ciuca, the interim prime minister, is one of the three or four names considered for the position of prime minister.
• PSD’s Ciolacu: We will never vote for anyone else as Prime Minister besides Rafila: The Social Democratic Party (PSD) will not vote for any other government than the one led by its proposal for Prime Minister – Alexandru Rafila, this party’s leader, Marcel Ciolacu, stated on Tuesday evening, according to AGERPRES. He said that if PSD is not the first party invited to the Cotroceni Presidential Palace for consultations, as the winner of the parliamentary elections, it is possible that the Social Democrats refuse to come to the meeting with the head of state. Asked if he had a dialogue with President Klaus Iohannis after the election, Marcel Ciolacu replied: “We did not have any institutional discussion.” He ruled out a collaboration with the PNL (National Liberal Party). In this sense, Ciolacu maintained that the only executive option, for PSD, is one with Alexandru Rafila as Prime Minister. Marcel Ciolacu underscored that his party will not vote for any other government.
• Iohannis: It is absolutely fundamental for health of state, society to firmly fight corruption: President Klaus Iohannis sent a message on Wednesday on the occasion of the International Anticorruption Day, stressing that the phenomenon of corruption must be fought “firmly” by the institutions responsible for the “health of the state and society”, according to AGERPRES. He said he would continue to work for a “legislative and institutional construction that would be a catalyst for a developed Romania, built on integrity, honesty and common sense.”
• Dragos Condrea appointed Gov’t Secretary General: The head of the Legal Department of the government’s Secretariat General Dragos Condrea was appointed today Secretary General of the government with the rank of minister, by a decision of interim Prime Minister Nicolae Ciuca, the government announced. Condrea replaces in office Antonel Tanase, who tendered his resignation earlier in the day. On his first day in office, interim PM Nicolae Ciuca removed three key people of Ludovic Orban from the government and, according to some political sources, others are following. On Tuesday, Ciucă dismissed Antonel Tănase, the Secretary General of the Government, Mădălina Ileana Simion, the Prime Minister’s Office Director, and Virgil Guran, State Councilor for Public Order and Citizen Safety. According to some political sources, the same fate would befall other people at the top of the Government, including Ionel Dancă, the head of the Chancellery of the Prime Minister, and the state councilor Andi Manciu, the head of the Strategic Communication Group.
  • Comment: This suggests that Nicolae Ciuca prepares to see to his main objectives of managing the pandemic  with a team of his choice and not that of the former PM, but also that he is preparing for a nomination for a full mandate. This might give birth to interpretations, that a career military man, a non-long-standing (recent) member of the PNL, loyal and who gets along well with the President, would be the preferred liaison between the President and the future PNL-led coalition, in the context in which Orban’s position at the helm of the PNL on medium-term might be put to a tests at the next party congress, due to dissatisfactions within the party, or even earlier through a resignation. One thing to note is that this is also potentially perceived as aggressive in the PNL, and some party members would feel threatened, especially as Ciuca is basically an outsider, with unknown intensions, ordering resignations, and thus they might rally behind this thesis. They might also not be too fond of the President’s intervention in internal party affairs either. However there is also the possibility that Nicolae Ciuca will be tasked for a limited (shorter-term) mandate for the sole purpose of managing the healthcare crisis but also issues of foreign policy which complement the President’s duties. For example, this morning his first official meeting was with Adrian Zuckerman, Ambassador of the United States of America to Bucharest, Kimberly Reed, President of the US Import-Export Bank, and Aleshia Duncan, with the US Department of Energy, at the end of which an agreement was signed on nuclear energy investments. Yet the other parties expressed concerns in advance over Nicolae Ciuca’s potential nomination for a full term, and should he be nominated by the PNL on Wednesday, the debates will become more heated, including among PNL’s electoral partners. In this logic, USR’s nominee Dacian Ciolos would potentially be offered the Deputy Prime Minister position, and later a fully-fledged politician from PNL or USR elected as PM with the support of the parliamentary majority.  Speculations aside, PNL is short of better proposals (or volunteers) and it is unlikely that they would concede now this important position to the USR, but nevertheless if rejected by alliance partners they would have to resolve the deadlock and come up with a different proposal. As things stand, having a new government invested by Christmas is optimistic, yet the longer they take, the more time the opposition has to derail the process. AUR for example flaunted the idea of starting the procedure to impeach the President if PSD does not do it in “a week or two”, because their electorate demanded it. Moreover, they did not exclude the possibility of a governing alliance, even with the PSD. And although unlikely, they might trick the PSD into thinking it is an idea they might rally behind.  AUR is taunting the PSD also because as they said their (untapped) electorate potential is 30%, and thus it is not excluded that they might be willing to go after PSD’s traditional electorate too.  It is an opportunistic party, with a first great achievement, but the rush with which they intend to grow, the methods they employ and the people they attract will gear them up for many scandals. It could be a short-lived party like others before that lacked coherence and noteworthy figures, but for now, the pandemic represents “a goldmine” for them. It is the party that best exploited heated topics and made best use of modern means of instantly spreading the message. The Romanian Orthodox Church has just now delimited itself of any involvement in a political campaign (for AUR), but pointed out that “the involvement in defending Christian values is a duty that brings great honor to anyone”.  It is however expected that their voice will overshadow the opposition in frequency, in strength and be more on point. For example, they requested the reopening of schools, highlighting the effects of their closure. This because, as they admitted, they are listening and taking over the people’s complaints (and use this to craft better messages).
• Rareş Bogdan: We do not want scandal between palaces / One of the names did not appear in the media: The Liberals will have the National Political Bureau on Wednesday evening to validate the prime minister proposal, and before this meeting Ludovic Orban will go to Cotroceni to discuss with Klaus Iohannis about the three proposals for the position of prime minister, said first vice-president of the PNL Rareș Bogdan, who added that the liberals will not “scandal between palaces” (between the Government and the Presidency), but a prime minister who “will work perfectly with the president”. He said that the liberals have 3 proposals for the prime minister – Nicolae Ciucă, another name circulated in the media and “a name that the press missed”. Referring to Nicolae Ciuca, Rareș Bogdan said that the fact that he was chief of staff and coordinated armies in Afghanistan and Iraq does not mean that he will militarize Romania. He also said that in the negotiations with USR-PLUS and UDMR the liberals will go with the proposal to have 10 or 11 ministers, USR-PLUS – 5-6, UDMR – 2. The proposal of prime minister of the liberals would be validated in the National Political Bureau of the PNL on Wednesday evening, following Orban’s meeting with Iohannis, which would take place at 14:00 at Cotroceni. Rares Bogdan also pointed out that the Liberals have a say in front of President Klaus Iohannis regarding the formation of the new Executive. “Even if some want to give the impression that PNL would not decide anything alone, I assure you that PNL is a party that has an extremely clear position in a partnership assumed with the President of Romania. We are neither councilors in Cotroceni nor people who do not have the strength to impose certain things “, said Rares Bogdan. He also justified the eligibility of Nicolae Ciuca as head of government. “Nicolae Ciuca is a former chief of staff, a man who coordinated no less than 12 nations in Iraq and Afghanistan and did extremely well. Nobody militarizes Romania, Mr. Ciucă is a senator elected in Dolj County with 25%, he is an extremely rational, extremely determined man, a pro-Western and pro-American, a great patriot who collaborates perfectly with President Klaus Iohannis and the president PNL. If it becomes the solution for this country, I do not consider that someone wants to cancel civil rights or democracy in Romania and transform it “, said Bogdan. He denied the information that he would be one of the options considered for the head of government. Digi24 goes on further as to speculate that, Ludovic Orban would be very dissatisfied of the outlook of a military prime minister, and people close to him claim he is contemplating resigning from the helm of PNL, as President Iohannis proposed him to stay only because the party cannot be without a leader before the negotiations for a new government.
• Ludovic Orban entered, on Wednesday, in consultations with the President Klaus Iohannis with several proposals from the PNL for the position of prime minister: Sources inside the party told HotNews.ro that in addition to the interim prime minister Nicolae Ciuca, Orban has four other names on the list. These are two ministers of the current Cabinet Florin Cîțu from Finance and Marcel Boloș from European Funds. Two other names on the president’s table are related to the activity in Brussels: MEPs Siegfried Mureșan and Dan Motreanu, say the quoted sources. However, liberal sources claim that neither Siegfried Mureșan nor Florin Cîțu want the position, the former being involved in projects in Brussels, the latter opting for the Minister of Finance. Ilie Bolojan did not want to be nominated by the party because he wants to continue his activity at the County Council.
• Official partial results of general election: PSD-29%, PNL around 25%, USR-15%, PMP still under the electoral threshold: PSD ranks first in the general election after centralizing the votes in over 99% of the polling stations, with around 29%, followed by PNL-around 25% and USR-15%. PMP is still below the electoral threshold and is not entering Parliament. PMP’s (People’s Movement Party) Eugen Tomac on Wednesday announced he resigned as chair of this political party following the results recorded in the parliamentary election, as reported by AGERPRES. The interim leadership of the party will be taken over by the executive chair of PMP, Marius Pascan, according to Tomac. He added that consultations will follow at the party, related to the organisation of a Congress. According to him, PMP obtained a score of 4.94 per cent in the parliamentary election, which result the part does not want “to question,” although there were 1,090 challenges filed with the Central Electoral Bureau and the county electoral bureaus.

 

Impact on the economy

• Talks with US officials / Romgaz, in negotiations to take over Exxon’s stake in the Black Sea project: Virgil Popescu, Minister of Economy, Energy and Business Environment, had a work meeting on Wednesday with a delegation from Eximbank USA, led by the President of Eximbank USA, Kimberly Reed. This meeting was also attended by Adrian Zuckerman, US Ambassador to Bucharest and Adrian Constantin Volintiru, CEO of Romgaz. The meeting discussed the support that Romania can receive to start extracting natural gas from the Black Sea. Romgaz is in negotiations to take over Exxon’s stake and, once the investments in the Black Sea are unblocked, Romania has chances to become the largest producer of natural gas and energy in Europe, informs the Ministry of Economy.
• Romania falls six places in the Climate Change Performance Index: Romania ranks 30th in the Climate Change Performance Index (CCPI) 2021 developed by Germanwatch, NewClimate Institute, and Climate Action Network. Last year, Romania was at number 24. The CCPI currently evaluates and compares the climate protection performance of 57 countries and of the European Union (EU), which are together responsible for more than 90% of global greenhouse gas (GHG) emissions. It assesses countries’ performance in four categories: greenhouse gas emissions, renewable energy, energy use, and climate policy.

Situation of COVID-19 cases in Romania (08.12.2020)

• Romania registers over 7,000 new cases in the last 24 hours: Romanian officials reported 7,439 new coronavirus cases in the past 24 hours, out of 29,151 tests, according to the official daily report released on Tuesday. 213 deaths were reported in the last 24 hours, the highest number so far, while the number of COVID-19 patients treated in intensive care units reached to 1,276. Most new cases reported in the last 24 hours were registered in Bucharest -1,946, followed by Cluj – 464, Iasi – 353, Constanta – 281, Timis – 244 and Ilfov – 223.  Ilfov continues to rank first among the counties with the highest incidence rates, with 7.32, followed by Constanta – 7.13 cases per thousand inhabitants, Bucharest (6.56) and Cluj (6.59).

 

Political and regulatory

 

• Romania’s PM resigns after his party’s defeat in the parliamentary elections: Romania’s prime minister Ludovic Orban, who is also head of the National Liberal Party (PNL), announced his resignation on Monday evening, December 7, after his party’s defeat in the parliamentary elections one day earlier. He said he would not be nominated for another term as PM. President Klaus Iohannis appointed defense minister Nicolae Ciuca as interim prime minister until the new Parliament votes a new Government. Ludovic Orban said he would remain involved in forming the future ruling coalition, which will include center-right parties. PNL must now shake hands with the USR-PLUS alliance, which came third with just over 15% of the votes. USR-PLUS leaders have made it clear that they didn’t want Orban heading the coalition Government. The alliance supports former PM Dacian Ciolos for this position, but it’s unlikely that the Liberals will concede. PNL and USR-PLUS will also likely need to bring the Democrat Hungarian Union (UDMR) into their ruling coalition to secure the majority in the Parliament. Minister of National Defence Nicolae Ciuca took over, on Tuesday morning, the mandate of interim Prime Minister. Orban’s decision has been allegedly taken following a prior discussion with President Klaus Iohannis, who would have voiced his discontent of the score obtained by PNL in the Sunday’s parliamentary elections, ranking second after PSD. More Liberal leaders would have also voiced their discontent related to the way Ludovic Orban had managed both the ruling and the Covid crisis, but also the electoral campaign. Part of the Liberals would want a reform at the helm of the party, which might take place at the PNL Congress, due in April next year. The PM’s resignation means the resignation of the entire Government. After the resignation, the Cabinet will act as an interim one for the next 45 days. During the interim term, the Government has limited powers and can adopt only administrative drafts. The next Cabinet will be sworn in after the new Parliament is established, on December 20.
  • Comment: PNL, USR-Plus and PSD will go towards the end of the week for consultations with a governing program and a PM proposal. PNL’s proposal will be picked by President Iohannis from within the party (rumored names: Nicolae Ciuca, Virgil Popescu, Eduard Hellvig, Ilie Bolojan and Florin Citu) yet they will also have to accept, and so far, the closest to President Iohannis seems to be Ilie Bolojan, yet he would have refused to leave his position as president of Bihor County Council. PSD will go with a PM pick, potentially Alexandru Rafila, and a governing program, but not with a majority, as this is not necessary in the first phase (but after the parliament is invested), and probably they will wait to see what happens with the disagreements among other parties at their negotiations and then try to divide and conquer. AUR officially said it will not form an alliance with either party, but will support at the vote the parties that have the most convincing PM pick and governing program, or which resonates closer to their principles, pointing out that the current proposals are old names or former PMs which they would not accept. Both AUR and PSD are comfortably fine with being in the opposition where they expect to grow, and in PSD’s case to continue to reform itself, the latter claiming however that it owes it to its electorate to try to form a government. AUR’s strategy will be to position itself as an alternative and grow organically. The party also seems to have had an extensive online and offline campaign country-wide, with tour buses in major cities, distributing leaflets in shopping centers or filming protests at other parties’ county offices, to name a few. This went under the radar of other major parties, which did not have a traditional (more in-person) campaign due to the pandemic and stuck to online and staged TV events (with limited or no audience). Meanwhile, PMP, is still waiting for the official results and counting every vote so that it meets the electoral ceiling (still below with 96% of the votes counted). Although its chances are slim, the possibility for a surprise exists. So far, it all points to a government formed of PNL-USR-Plus-UDMR, yet not towards a speedy investment as USR said it would take its time to agree on the governing program so that things would ‘take off well from the start’. Their claims will be high, in order to have a negotiation margin. Ideally, the PM pick would also have to be seen well in Brussels, in view of future negotiations over the National Recovery and Resilience Plan.
• Romania’s president comments election result: No clear winner. A center-right coalition is quickly taking shape: The results of the parliamentary elections show no clear winner, but a center-right coalition is quickly taking shape, president Klaus Iohannis said on Monday evening, in his first public statement after the December 6 elections. He suggested that this center-right coalition will form the new Government and that the Social Democratic Party (PSD), which took the highest score in the elections (about 30% of the total votes), will not have the political decision anymore. “In just a few days, I will summon the parties in the new Parliament to consultations to find the best solution for Romania,” Iohannis said. “We must be very honest: turnout was low and it is very clear that there are many Romanians who either did not receive enough information or are dissatisfied with me, the parties, the political class, or certain measures that were taken,” Iohannis said.
• Reformist USR-Plus block extends conditional support for center-right coalition: Dan Barna, the president of Save Romania Union (USR), unveiled a document setting the ground for the negotiation of a “decent” center-right coalition of the reformist block USR-Plus with the National Liberal Party (PNL) and ethnic Hungarians’ party UDMR. USR-Plus is ready to rule together with PNL and UDMR, which “becomes indispensable“, the USR-Plus co-president Dacian Ciolos declared in his turn. The document unveiled by the two at a joint press conference includes the requirements strongly advocated by the reformist block over the past years, such as eliminating the special pensions, dismantling the special section for investigating magistrates (SIIJ), banning convicted persons from holding public seats, two-ballot local elections, and trimming down the number of MPs to 300, G4media.ro reported.
• Schools in Romania remain closed, online learning extended until the winter holidays: Pupils will attend classes in the online format until December 22, according to a decision of the National Committee for Emergency Situations (CNSU) issued on December 7. The decision was taken at the Education Ministry’s request and is motivated by the epidemiological situation and the pressure on the health care system.
• George Simion: 15,000 Romanians joined AUR in 24 hours only: As many as 15,000 Romanians joined the Alliance for the Union of Romanians (AUR), following the call launched on Monday by the leaders of this political party, AUR co-chair George Simion stated on Tuesday. “As many as 15,000 Romanians have joined AUR, which is the only patriotic, Christian and conservative force in the Romanian Parliament, in 24 hours only, after the call launched on Monday by the co-chairs of this political entity, George Simion and Claudiu Tarziu,” reads a press release of AUR sent to AGERPRES on Tuesday. AUR will have 46 Senators and Deputies in Parliament, according to the same source.
• Ludovic Orban: ‘I am convinced that after the negotiations a stable government formula will be reached’: PNL leader Ludovic Orban declared on Tuesday, at the party headquarters, that a majority can be formed in Parliament without PSD with USR-PLUS and UDMR. He pointed out that he did not express his intention to run again for PM. He also rejected the rumor that he was forced to resign by President Iohannis, but that it was an ‘honorable gesture’.
• Prime Minister Nicolae Ciucă announced his priorities for the next period: Interim Prime Minister Nicolae Ciucă claims that his priorities include the Covid-19 crisis and the country’s economic situation. “I took over the interim leadership of the Government until the formation of the new Executive. In the next period we will continue to focus the Government’s attention on the management of the COVID-19 pandemic: implementation of the vaccination strategy, we will continue the economic measures in support of those affected by the crisis, we will focus on the end of the financial year 2020 and the preparation of 2021 (budget). I wish to thank Mr Ludovic Orban for the balance he has managed to strike between the measures for COVID-19 and the economic measures. I will continue to perform the duties of Minister of National Defense”, said Nicolae Ciucă.
• Klaus Iohannis leaves for Brussels. The President had a discussion with the head of the European Council, at his request: The President of Romania, Klaus Iohannis will participate in the meeting of the European Council which will take place on December 10-11, in Brussels, Belgium. In preparation for this meeting, President Klaus Iohannis had a telephone conversation with the President of the European Council, Mr Charles Michel, at his request on Tuesday, December 8. The topics of discussion were the fight against climate change, as well as the relationship between the European Union and Turkey. Meanwhile, on his agenda for today, Klaus Iohannis will meet with PNL leaders this evening (Ludovic Orban, Deputy PM Raluca Turcan, Ministers Lucian Bode, Florin Cîţu, Virgil Popescu, MEP Rareş Bogdan, Senator Alina Gorghiu, and Deputy Florin Roman).

Impact on the economy

• Online retailer Elefant.ro signs delivery agreement with Romanian Post: The customers of the Romanian online retailer elefant.ro will have the option of having their orders delivered through the Roman Post’s offices if they want to avoid delays or unsolicited returns. “Starting December 7, elefant.ro will offer its customers the option to order their favorite products with delivery through the Romanian Post offices, following a recent partnership signed between the two companies”, the company announces. Thus, the network of delivery points available for the retailer’s over 2.5 million customers expands with 683 offices, located throughout the country.
• RO president insists housing bank customers should return subsidies received illegally: Romanian president Klaus Iohannis returned to Parliament the law aimed at exempting the housing bank customers from returning the subsidies (bonuses) received illegally from the state by 2016, under the saving-borrowing mechanism for mortgage lending, Profit.ro reported. The High Court (ICCJ) ruled that part of the customers of BCR’s and Raiffeisen Bank’s housing divisions should return the money. The Parliament passed a bill to waive the payments owed by some 300,000 customers under the ICCJ ruling. The presidency alleges a violation of the Constitution and interference in the final decisions of the ICCJ, which established that state subsidies were illegally paid to hundreds of thousands of customers of BCR-BpL and Raiffeisen BpL.
• Romanian affiliate marketing platform floats shares on Bucharest Stock Exchange: 2Performant, a Romanian IT company that has developed and manages a platform that measures the sales generated by online advertising campaigns in real-time, will list its shares on the Bucharest Stock Exchange’s AeRO market, Bursa reported. The company’s shares will start trading on Wednesday, December 9, BVB has announced.
• Romanian dairy producer Laptaria cu Caimac floats EUR 3 mln bonds: Agroserv Mariuta, the company that operates the dairy brand “Laptaria cu Caimac,” will list its bonds on the Bucharest Stock Exchange (BVB) on Tuesday, December 8, Ziarul Financiar reported. The bonds, worth EUR 3 million, are denominated in euro, with a maturity of 5 years and a coupon of 5.25%.
• Local investor begins construction of gas-fired power plant in central Romania: E-Infra group, controlled by local investors Teofil Muresan, Simion Muresan, and Marian Pantazescu, started the construction of a 13.4MW gas-fired power production facility in Campia Turzii, central Romania, Profit.ro reported. The group will develop two units of 6.7MW and extend the 20kV transmission line. The investments are estimated at EUR 7 million.
• Corporate lending in Romania takes off in October: The volume of new corporate loans denominated in the local currency surged to RON 3.9 billion (EUR 800 mln) in October, 50% more compared to the same month in 2019, according to data released by Romania’s National Bank (BNR).
• Nearly 15% of pre-crisis banks loans in Romania were deferred: Some 14.7% of loans that Romanian banks had on their balance sheets at the beginning of the crisis in March – RON 41.8 billion (EUR 8.8 bln) – are subject to the repayment moratorium that expires at the end of the year, Romania’s National Bank (BNR) deputy governor Leonardo Badea disclosed.
• 7 out of 10 companies see the issue of transfer pricing turning into a tax problem, survey says: The audit and tax consulting company PKF Finconta launches the second edition of the survey “Transfer pricing in Romania” which identifies the most important issues related to transfer pricing, as perceived by directors and managers of companies in 2020.

Situation of COVID-19 cases in Romania (007.12.2020)

• Romania registers over 3,000 new cases in the last 24 hours: Romanian officials reported 3,660 new coronavirus cases in the past 24 hours, out of 8,791 tests, according to the official daily report released on Monday. 127 deaths were reported in the last 24 hours, while the number of COVID-19 patients treated in intensive care units reached to 1,280. Most new cases reported in the last 24 hours were registered in Bucharest -1,828, followed by Constanta – 466, Ilfov – 242 and Iasi – 214.  Ilfov takes first place among the counties with the highest incidence rates, with 7.32, followed by Constanta – 7.21 cases per thousand inhabitants, and Bucharest (6.34). Over the weekend, there have been 8,072 new cases on Saturday (at 32,441 tests) and 5,231 new cases on Sunday (at 17,530 tests).

 

Political and regulatory

 

• Social Democrats win most votes in Romania’s parliamentary elections, extremist party gets 9% – partial results; PNL-USR-Plus-UDMR expected to form majority: The Social Democratic Party (PSD) won most votes in the parliamentary elections in Romania, with a score of close to 30% (29.83% with 99.91% of the votes cast in the country counted), according to partial results centralized by the local platform Code for Romania. The ruling National Liberal Party (PNL) is second, with almost 26%, followed by the USR-PLUS alliance, with almost 16%. The PNL can still form a ruling coalition with USR-PLUS and the Democrat Hungarian Union (UDMR), which got close to 6% of the votes. The big surprise of these elections is the Alliance for Romanians’ Union (AUR), a relatively unknown party, which obtained a score of 9% with a unionistic, ultra-nationalistic, ultra-Orthodox doctrine. Pro Romania (led by ex-SocDem PM Victor Ponta)  is under the electoral threshold of 5pc, thus failing to enter Parliament. It is unclear yet for PMP, founded by former president Traian Basescu, if it has enough votes to enter Parliament, with the vote counting giving it below the electoral threshold or barely reaching to 5%. The votes in Diaspora aren’t included in these results. In Diaspora, USR-PLUS took almost 30% of the votes, followed by PNL – 25.6%, AUR – 25.2%, and PMP – 8.5%, according to partial results after 91% of the votes have been counted and centralized. The Alliance for the Romanians’ Union (AUR), a new party with ultra-nationalist rhetoric, has produced a major surprise in Romania’s parliamentary elections on Sunday, December 6. This is because the party’s candidates are relatively unknown to the general public, expect maybe for two or three of its leaders, who are known for their past initiatives. AUR was founded in September 2019 by George Simion, the founder of a platform that advocates for Romania’s union with the Republic of Moldova. The party’s co-founder is Claudiu Tarziu, one of the leaders of the Coalition for Family, which initiated the referendum to ban same-sex marriages by Constitution. The referendum, which took place in October 2018, didn’t pass due to low turnout, after more than three million people had signed the petition calling for this referendum. AUR says its doctrine is based on four pillars: family, country, faith, and freedom, according to G4Media.ro. The party also describes itself as “right wing, conservative, patriotic, and unionist,” according to Hotnews.ro. Digi 24 news channel describes the party’s orientation as “extreme right, ultra nationalistic, and anti European.” During the campaign for the elections, the party positioned itself as an “anti-system movement.” In September, the party organized a protest against masks in Bucharest’s Victoriei Square. At the same time, the party protested against other measures enforced by the authorities, such as banning pilgrimages. It’s possible that the party’s fast rise has been a result of the recent disputes between the authorities and the Romanian Orthodox Church. The partial results show that AUR scored very well in rural areas and especially in the northeastern Romania region, where the Church and traditions still have a significant influence. At the same time, AUR’s result was also largely due to the very low turnout rate, as under a third of the Romanians registered to vote went to the polls, an unprecedented situation in the national elections. According to a simulation carried out at parties’ headquarters, we will have a total of 465 senators and deputies, which means that the majority in the new Parliament will be 233 votes. Basically, if the negotiations between PNL, USR, PLUS and UDMR are successfully completed, the new alliance will be able to give the prime minister, but also the presidents of the two chambers of the Parliament. Together, those from PNL-USR-PLUS and UDMR would have 243 seats, so they would manage to constitute the majority in the new Parliament. The key role belongs to those from UDMR, they being the ones who ensure the majority. Regarding the Chamber of Deputies, PSD will have 110 seats, while the PNL-USR-PLUS-UDMR alliance would have 169 votes, which would give them the opportunity to elect their new president of the Chamber of Deputies. Also, in the Senate, PSD will have 48 senators, while the PNL-USR-PLUS-UDMR alliance would have 74 votes, so a comfortable majority that would allow them to hold the leadership of the Senate. All these calculations are made in the hypothesis of a right-wing alliance between PNL-USR-PLUS and UDMR. If this is not done, then a deadlock could be reached in Parliament. However, senator Tanczos Barna said that UDMR is interested in forming a center-right government and that it will negotiate with parties in the same family of political parties at European level, but regarding the AUR party, which was the surprise of the 2020 parliamentary elections, he considers that such a party has no place, in 2021, in the Romanian Parliament. The UDMR senator added that he hopes that AUR leaders will change their attitude towards the Hungarian community in Romania.
  • Comment: It is very likely, that even after the redistribution of votes (from parties that will not enter the parliament), PNL and USR-Plus will still not have over 50% as required to form a majority, thus needing to coopt the only alternative represented by UDMR (which showed willing for negotiations when and if invited) or in a less likely scenario some other minorities. Yet, UDMR has helped minority governments before, with professional ministers, and is likely the best choice. This also means that PNL would have to make some concessions, yet keep core ministries as well as the PM position, represented by Mr. Ludovic Orban. All in all it was not the expected win, and negotiations will be tensed. PSD also advanced a PM name, Mr. Alexandru Rafila, yet it is unlikely to find governing partners, with UDMR and AUR being at the extremes. However, the results are balanced in terms of the power/opposition score, and a tipping point can exist at any time throughout the 4-year mandate. Thus Orban’s potential mandate is not sealed and secured and the threat of censorship motions, reshuffles, party switching and failed legal initiatives would exist throughout the entire mandate. Despite the low turnout and thus the representativeness of the parliament, PSD will still try to make the best of its high score. Marcel Ciolacu warned in a post-election speech that the Orban government lacks legitimacy (which suggests that he would contest Ludovic Orban as PM at the validation in parliament and is thinking that others will do too), yet before that his approach was balanced saying that he expects the final results and for the President to observe the constitutional steps, thus hinting that he is also looking into the slim option of gaining some percentages at redistribution and then look at his options for the negotiations. PSD will present itself in parliament with a team of professionals and a governing program, Marcel Ciolacu assured. It is not excluded that they will look into AUR, which appears to have the Romanian Church’s endorsement. Yet, he has avoided making any speculations in regards to this party, suggesting that it is new and unknown even to the PSD and that they did not have time to assess it. Nevertheless, despite the heated speeches after the elections, it is equally important to have the final results (75.10% currently officially counted) . Then, at the following steps there might be several government versions before a final one is invested, even if a center-right wing government is the favorite. The intent is to have a speedy investment so as to vote the budget and attend to pressing healthcare issues, considering that the current mandate expires on Dec. 18, yet this will not be a simple task if deadlocks appear in the negotiations. USR no longer has the upper hand following its results and is very likely to get what is offered and not (or not entirely) what it claims, while UDMR is essential for closing the gap and will likely have its pick of one or several ministries. Meanwhile, another aspect to consider is that USR leader Dan Barna will be contested from within the party for the poor results, even more so as he refused to take any responsibility. AUR leader, George Simion is invited on Monday at HotNews.ro interviews from 16:00 and will continue to be in the media spotlight in the coming days. It will be interesting to see how he will position himself: if and with whom he will be willing to work with. USR and UDMR predictably have ruled out any collaboration with PSD and AUR.  As for the redistribution of votes, these are about 10%, as the partial results show so far. They will be divided proportionally to the parties that have crossed the 5% threshold. For example, as PSD took about 30% of the votes, the Social Democratic party will get the same percentage of these votes, i.e. 3%.
• Political reactions:
  • Turcan: We will build government without PSD: The leader of the National Liberal Party (PNL) Sibiu county organization, Raluca Turcan, announced that the Liberals will build a government without Social Democratic Party (PSD), according to AGERPRES. Also, Raluca Turcan stated that PNL won by a landslide the parliamentary elections in Sibiu County, but did not mention the results of the parallel count yet. Raluca Turcan ran for the Chamber of Deputies, being the first on the PNL Sibiu list.
  • Ciolos: I assume position of prime minister if President entrusts me with this responsibility: Dacian Ciolos, co-chairman of Save Romania Union – Party of Liberty, Unity and Solidarity (USR PLUS) Alliance, declared on Sunday evening that he would assume the position of prime minister, if President Klaus Iohannis entrusts him with this responsibility, but for the alliance it will be important to set the government objectives, according to AGERPRES. “We will start the discussion on the government program and the government commitments and only after that we will discuss the structure of the government and the distribution of portfolios. I am very clearly committed to assume this responsibility [of prime minister] if the president of Romania grants me this responsibility, to form a government,” Ciolos told public TV station TVR. For his part, Dan Barna, co-chair of USR PLUS, said that during the consultations convened by President Klaus Iohannis, the alliance will nominate Dacian Ciolos as prime minister. On the other hand, he specified that the alliance is determined to sit “at the negotiating table, as long as it is necessary,” in order to establish the calendar of the government’s objectives.
  • Barna: Absenteeism never brings solutions: Save Romania Union – Party of Liberty, Unity and Solidarity Alliance (USR PLUS) Alliance co-chair Dan Barna considers it “a sad thing” that only three out of ten Romanians went to the polls in the parliamentary elections, stating that the very low turnout leads to “strange results.” The USR PLUS leader rejected the hypothesis that the electorate would have taxed the Alliance because it did not join the government. Dan Barna on Monday ruled out the possibility of a collaboration with the Alliance for the Union of Romanians (AUR) political party, within a government coalition, as this party promotes “an extreme conservatism.”
  • Tariceanu: President to respect Constitution; prime minister’s proposal, from party with highest score: Senator Calin Popescu-Tariceanu (former leader of the Alliance of Liberals and Democrats, ALDE) considers that the prime minister’s proposal “normally” has to come from the party that obtained the highest score, and President Klaus Iohannis has to respect the Constitution and the vote of the citizens in this sense, pointing out that the head of state “does not have the discretionary right to appoint the prime minister he likes for various reasons.” The former ALDE leader appreciated that “the results of the exit polls are promising” and pointed out that the “complicated phase” of vote count follows.
  • Orban: We’re waiting for result; our goal is over 32%; not to negotiate with PSD: The Chairman of the National Liberal Party (PNL), PM Ludovic Orban, said that, based on internal evaluations, the PNL won the parliamentary elections, with a score that may exceed 32%, but expects the result of the vote count, stressing that for the formation of a parliamentary majority the liberals will not negotiate with the Social Democratic Party (PSD). He said he did not rely on polls and exit polls in terms of political scores. According to him, the PNL’s goal is to obtain over 32%.
  • Marcel Ciolacu rules out possibility of PSD-PNL government; waiting for Orban to resign: Chairman of the Social Democratic Party (PSD) Marcel Ciolacu ruled out the possibility of forming a PSD-PNL (National Liberal Party) government, adding that he is “waiting for Ludovic Orban to resign” as prime minister, because “Romanians have requested this by vote”. Asked on private broadcaster Romania TV whether there is a possibility of forming a PSD-PNL government, Ciolacu stated: “I announced in the election campaign that we rule out a government with PNL. The vote of Romanians is very clear. Romania is entering a new stage.” A possible agreement with PNL could be reached only in a government of national union, Ciolacu added. He specified that he is waiting to see the percentages with which each party enters Parliament. Asked if the PSD possibly has a proposal for the prime minister office, Ciolacu said there are four proposals. “There have been about four proposals so far. I will decide together with my colleagues, as it is fair, as it is written in the party’s statutes. I enumerated Sorin Grindeanu, Mr Vasile Dincu, and Mihai Tudose, and, more recently, we also have Mr Alexandru Rafila,” Ciolacu told Antena 3 private television broadcaster.
  • Kelemen Hunor: Romania needs center-right government and budget for next year: Chairman of the Hungarian Democratic Union of Romania (UDMR) Kelemen Hunor declared on Sunday, after the announcement of the exit poll results, that he is satisfied with the electoral score obtained by his party and that the priority is the formation of a center-right government that will quickly prepare the budget for next year. “I can tell you what I have said before, not only in the election campaign, that Romania would need – and from our point of view this would be desirable – a stable government with a solid center-right parliamentary majority,” said Kelemen Hunor. He added that he has not yet received a request from any party, but that the future government should have at least 60% parliamentary support. According to the UDMR leader, the new government should be formed as soon as possible, so that the 2021 budget law be adopted by the end of the year.
  • Earlier statements: Earlier on Sunday, former President Traian Basescu said the People’s Movement Party (PMP) had crossed the electoral threshold and “not just in any way”, anticipating that it would have 7 percent, “without redistribution”. According to Basescu, this election with the lowest turnout will pose major problems in maintaining legitimacy for four years. Pro Romania President Victor Ponta also had similar expectations. USR President Dan Barna also over estimated his score. The co-leader of the USR PLUS alliance remarked that the low turnout shows how difficult it is for Romania to get out of a “PSD-centered logic”. “Today’s victory and USR PLUS’ result of today is an important step we pledge to take further in Parliament and in the government,” he assured. Barna joined online into the USR PLUS press conference because he is in self-isolation, following his infection with the novel coronavirus. Ludovic Orban voiced his confidence that the PNL would be able to form a parliamentary majority alongside democratic parties. Dacian Ciolos, co-chair of the Save Romania Union – Freedom, Unity and Solidarity Party (USR PLUS), said after polls’ closing, that the alliance has proved to be a mature political force that can resist and grow in competition with the old parties. Social Democratic Party (PSD) Chairman Marcel Ciolacu said that through the vote on Sunday Romanians showed a change is needed.
• Romania to vaccinate 60%-70% of population in 6 months: Some 60-70% of Romania’s population could be vaccinated in the first six months after the vaccine becomes available in the country, setting the ground for ending the pandemic, said Valeriu Gheorghita, head of the vaccination campaign unveiling the Sars-CoV-2 vaccination strategy on Friday, December 4, quoted by Mediafax. To achieve its purpose and objectives, vaccination against COVID-19 in Romania will be free and voluntary and will follow several stages, taking into account the priority groups.

Impact on the economy

• RO Govt extends and raises kurzarbeit allowances: Romanian companies will be eligible for subsidies from the Government under the kurzarbeit program if they reduce the working hours by up to 80% – compared to 50% previously, under a government ordinance aimed at extending the kurzarbeit subsidies by mid-2021, Agerpres reported. Under the program, the employer can claim from the Government 75% of the gross wage paid to the employee for the period when the employee stays home due to subdued economic activity. The ordinance comes after the European Commission disbursed EUR 3 billion out of the EUR 4.1 bln promised to Romania for labor market support under the SURE program.
• RO Govt. to subsidise rents of shopping malls’ tenants closed during pandemic: Romania’s Government will provide subsidies to the tenants in the shopping malls that were closed during the state of emergency between March 15 and June 15, Economica.net reported. Recipients will receive half of the rent paid over the three months, not to exceed EUR 800,000 per recipient. The program’s budget is RON 160 million (EUR 33 mln), and applications are accepted on a first-come-first-served base. Through this state aid scheme, the Government will award grants to an estimated 3,000 firms.
• French banks finance BSOG’s Midia offshore project in Romania: French groups Societe Generale and Credit Agricole have financed the operations carried out by Black Sea Oil & Gas (BSOG) in the Midia gas perimeter in the Romanian Black Sea section. BSOG, which is indirectly controlled by the American asset management group Carlyle with the European Bank for Reconstruction and Development (EBRD) holding a minority stake of about 10%, expects to start production in the second half of 2021. Societe Generale’s London division together with its Romanian subsidiary BRD, Credit Agricole’s investment banking arm, and the EBRD, are among the original arrangers and lenders of a revolving multiple credit facility contract concluded with BSOG at the end of last year, according to an official document consulted by Profit.ro. The source reveals that the facility’s value is EUR 200 million and is intended, among others, to finance the costs of drilling, development, construction, testing, production, operation, management, and maintenance of the Ana and Doina gas wells in the Midia perimeter.
• Exim Bank US president to visit Romania’s nuke plant Cernavoda: The president of the Export-Import Bank of the United States (EXIM), Kimberly Reed, comes to Romania on Monday, December 7. She will pay a visit to the Cernavoda nuclear power plant, where a consortium headed by the US company Aecom plans to build two new reactors and refurbish the existing ones under a project estimates at USD 8-9 billion.
• Romanian authorities to organise 5G auction in Q2 of 2021: Romania’s telecom market regulator (ANCOM) published on December 4 for public consultation its action plan for 2021. According to the document, it wants to organize the auction for 5G frequency bands in the second quarter of 2021, News.ro reported. The auction was initially supposed to take place this year but was delayed mainly due to legislation issues as the US has been pressing to remove Chinese groups from the list of potential technology suppliers. The minimum amount estimated to be cashed by the Government was EUR 580 million for all the frequency bands.
• Troubles faced by British fashion retailers hit Romanian producers: Romanian clothing factories producing for big British fashion brands like Debenhams, Topshop, Dorothy Perkins, or Wallis face an uncertain future after their main customers announced the closure of stores and solvency problems. Some factories in Romania work exclusively with British groups. In total, more than 50 local clothing and shoe factories risk running out of orders, and 10,000 employees could lose their jobs due to a lack of orders, Ziarul Financiar daily estimates.
• Romanian investors return to mutual funds after March-April panic: During October 2020, the number of investors in Romanian open-end investment funds increased by almost 6,000 to about 341,580, reaching the highest level since February, according to calculations made by Ziarul Financiar based on the latest data from the Association of Fund Managers (AAF). Thus, the number of investors in mutual funds rose in October for the fifth consecutive month and reached the highest level since the coronavirus crisis hit the economy.
• Romanian Govt. beefs up buffer, but might still need BNR’s support in 2021: The buffer held by Romania’s Treasury will rise to 5.5% of GDP, or RON 57.8 billion (EUR 11.9 bln) at the end of this year, according to Profit.ro calculations based on the documents of the third budget revision. The figure, the highest in the past decade, exceeds the target of four months of public financing needs because the financing needs are estimated at 13.6% of GDP this year and will likely drop in 2021.
• S&P affirms Romania’s BBB- rating and negative outlook: S&P is the third of the three major rating companies that affirmed Romania’s sovereign rating (BBB-/negative) at the bottom of the investment-grade area, giving the Government time to settle the complicated fiscal slippage issue. “Romania’s complex political dynamics continue to obscure its future policy direction and the reliability of policy execution,” the rating agency said a couple of days before the December 6 general elections. EU funds absorption will be vital in aiding economic rebalancing, although implementation risks remain. Romania’s EU membership is “an important policy anchor” that largely explains the rating agency’s confidence in the Romanian economy’s rebalancing. Should the funds be fully deployed and successfully absorbed, they would help sustain Romania’s growth prospects, facilitating the budgetary rebalancing that we envision in our base case for 2021-2023, S&P reasons. Under its base-case scenario, S&P expects that the incoming Government will take firm steps toward a viable fiscal consolidation during its term. The rating agency says it could lower its ratings on Romania if fiscal and external imbalances remain elevated “for longer than we currently anticipate,” for instance, because of challenges to fiscal policy design after the upcoming elections.

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