Situation of COVID-19 in Romania, 30.06.2020

Situation of COVID-19 cases in Romania

• 388 new cases of coronavirus in the past 24 hours: 388 new cases of coronavirus have been reported in the past 24 hours, with the total number of COVID-19 cases in Romania mounting to 26,970 according to the official report released on Tuesday, at 13:00. According to the latest report by the Strategic Communication Group, 17 people have died after being infected in the past day, while the death toll surged to 1,651. Among the total number of people testing positive for COVID-19, 20,141 were discharged: 19,050 recovered and 1,091 patients showed no symptoms at all. 205 patients are currently in intensive care in Romania. To date, 710,112 tests have been processed at national level.

Political and regulatory

• Restaurants in RO remain closed as Govt. defers new relaxation measures: The group of experts who help manage the COVID-19 pandemic in Romania decided on Monday morning, June 29, to defer the new relaxation measures expected as of July 1. The opening of indoor restaurants was the most acute demand expressed by investors. Health minister Nelu Tataru confirmed the decision for Ziarul Financiar daily. The relaxation measures will be considered if the sanitary conditions improve at the next weekly evaluation. A meeting of the emergency committee CNSU, chaired by prime minister Ludovic Orban, was scheduled for Monday afternoon.
• Ruling and reformist RO parties fail to nominate joint candidates for Bucharest district mayors: Prime minister Ludovic Orban, the head of the National Liberal Party (PNL), expressed his disappointment that the Save Romania Union (USR) – PLUS alliance nominated candidates for district mayors in Bucharest before joint consultations with PNL, G4media.ro reported. The three parties support independent Nicusor Dan for Bucharest mayor – but only after PNL appointed Dan as own candidate and the reformist parties had to accept him, as he is also a founding member of USR. Thus, the relationship between PNL and the reformist parties, supposed to form a ruling coalition after the parliamentary elections, remains tense. The USR – PLUS alliance announced, on Sunday, June 28, during a press conference, the candidates for the district city halls in Bucharest: Clotilde Armand – District 1, Radu Mihaiu – District 2, Ana Ciceală – District 3, Simona Spătaru – District 4, Alex Dimitriu – District 5, and Alexandru Gâdiuţă – District 6.
• RO could get bigger slice of the Just Transition Fund to close its coal-fired plants: The funds earmarked for Romania under the Just Transition Fund, aimed at helping European Union countries cut the CO2 emissions by 50% by 2030, went up significantly from EUR 700 million to EUR 4.4 billion, as the total size of the fund was increased by EUR 7.5 billion to EUR 40 billion. Romanian minister of economy and energy Virgil Popescu mentioned Romania needs significant investments to cut the CO2 emissions.
• Another EU country restricts Romanians’ access as number of coronavirus cases remains high: Romania was not included on Slovenia’s list of countries whose nationals can cross its borders without restrictions, Digi24.ro reported. Slovenia is the fifth EU country that restricts the circulation of Romanians as the number of coronavirus cases reported over the past week remained high. Malta, Slovakia, Denmark, and Estonia currently limit the access of Romanian citizens on their territory.
• FinMin Citu: Expenditures directly related to coronavirus crisis – 3.1bn lei in 5 months: Expenditures directly related to the crisis caused by coronavirus amount to 3.1 billion lei, at 5 months, and the impact of the pandemic, in the middle of the year, is about 10 billion lei, Finance Minister Florin Citu said on Monday.
• Parliament ordinary session ending today, Lower House to meet in extraordinary session as of July 1: This year’s first ordinary session of Parliament is coming to end this Tuesday, as the Chamber of Deputies and the Senate are holding today their final sittings of the February-June ordinary session.
• After year’s deadlock, USR’s ‘No convicts in public offices’ initiative enters Parliament for debate: After a year of deadlock, the citizens’ initiative to revise the Constitution called “No convicts in public offices” will reach the Chamber of Deputies for a debate at an extraordinary session of the first half of July, Save the Romania Union (USR) reported on Monday, asking for the initiative not to be merged with other drafts of the Social Democratic Party (PSD) or the National Liberal Party (PNL).
• RO lawmakers draft bigger budget for car and appliance scrappage programs: The Social Democrat lawmakers have proposed increasing the budget of the scrappage schemes for cars and household appliances in Romania. Such measures would have a financial impact of RON 780 million (EUR 160 mln), which should come from the Government’s reserve fund, according to the MPs. According to PSD’s proposal, the budget of the car scrappage scheme, known as “Rabla,” would double, Profit.ro reported. The initiators also propose a special bonus for those replacing old cars with locally produced automobiles.
• Ponta: PNL and Orban cling to flat tax system to defend interests of the rich and privileged: Pro Romania leader Victor Ponta claims that the introduction of progressive taxation is a necessary change after 15 years of flat tax, stating that Prime Minister Ludovic Orban and the National Liberal Party (PNL) “cling to the flat tax to defend the interests of those very rich and privileged, who are their current sponsors”. On Monday, Prime Minister Ludovic Orban said that the PNL defends the flat tax and will not give it up in any way. “PNL defends the flat tax. It is one of the most important Liberal measures, which has had extremely favorable effects for Romania and there’s no way that we give it up,” Orban said.
• Chiritoiu: Afraid Gov’t will be tempted to see 5G as cash cow; I hope we can resist temptation: President of the Competition Council Bogdan Chiritoiu told a specialist video conference on Tuesday that the economic situation is difficult, as it has always been, and voiced his fears that the government will be tempted to see the 5G technology as a cash cow. The president of the Competition authority also pointed out that, in terms of 5G technology, it is very important that there is strong competition between operators on the market, so that the both the quality of services and prices are good.
• Minister of Finance: We will not need the IMF this year, Romania will borrow from the financial markets and from the population: The Minister of Public Finance, Florin Cîţu, stated on Monday evening that Romania will not need a loan from the International Monetary Fund (IMF) and the money will come from the financial markets, Agerpres reported. Asked about the pensions hike, Florin Citu maintained that his proposal will be a 10% hike, so as to have money for child allowances and investments too. Citu estimated that Romania will register a budget deficit of 6.7% this year, with the year-end contraction expected at 2.2% for the whole year. Therefore, Romania would not enter a technical recession. The economy is expected to pick up from Q3, and Q4 might be just as good, the Finance Minister considers. The minister said that inflation rate halved this year compared to 2019, to approx. 2% and prices continue to fall. PM Orban will present alongside President Iohannis on Wednesday, July 1, the economic recovery program, with the aim of drafting all necessary bills for its implementation in maximum two months.
• PM Orban: Emergency ordinance on procurement procedures to be adopted next week: Prime Minister Ludovic Orban announced on Tuesday that an emergency ordinance on procurement procedures will be adopted next week. “The time when investment projects were running at very low speed is over. Next week we will again adopt the emergency ordinance regulating procurement procedures and especially the deadlines for each procedural step during the procurement. We can no longer tolerate what has been happening for decades, with procurement procedures lasting for years until the winner was designated,” Orban said. Prime Minister Ludovic Orban visited the construction site of the Craiova-Pitesti expressway.
• ANRE’s Bege: Deregulation of gas, electricity markets to have beneficial effects on consumers: The deregulation of the Romanian gas market, on July 1, 2020, and of the electricity market, from January 1, 2021, will have beneficial effects for household consumers and will attract investors, Zoltan Nagy-Bege, Vice President of the National Energy Regulatory Authority (ANRE), said on Tuesday. He pointed out that Romania needs investments in the energy production sector, especially in natural gas, to replace the current coal-fired power plants, which will no longer be able to meet the environmental conditions.
• Parliament levies 90% tax on suppliers that do not transfer natural gas cheapening to consumers following the liberalization: The plenum of the Chamber of Deputies, as the decision-making chamber, adopted by a majority vote the proposal of the Committee on Industries and Services to introduce an tax in the Energy Law on the additional revenues of gas suppliers resulting from the market liberalization, respectively on the difference between the RON 68/MWh cap on the purchase of natural gas intended for households and CHPs, which will be eliminated from July 1st, and the purchase price off the market, which is currently well below this regulated level. The bill will go to President Klaus Iohannis for promulgation.
• Reformist RO party accuses major parties, tobacco companies of collusion: Romanian reformist party Save Romania Union (USR) has accused the Social Democratic Party (PSD) and the National Liberal Party (PNL) of siding with the tobacco industry, Radio Europa Libera reported. USR’s reaction came after the Chamber of Deputies’ expert committees of budget, culture, and health issued negative opinions on the anti-tobacco draft law that restricts advertising and puts new tobacco products in the same category with traditional cigarettes. Gilda Lazar, Director Corporate Affairs & Communications – JTI Romania, Moldova and Bulgaria, commented that the bill was hyper-regulatory and recommended the authors to focus on the education of vulnerable groups if they wanted to cut the tobacco addiction among youngsters as declared. During the debate, an NGO, in partnership with the Academy of Economic Studies (ASE), came up with a report against the draft law, concluding that it would push down the country’s GDP and the revenues to the budget.
• Dissolution of SIIJ, rejected in the Chamber of Deputies; vote was close: the Plenum of the Chamber of Deputies rejected, on Tuesday, the project to abolish the Section for Investigating Judicial Crimes (SIIJ) within the Prosecutor’s Office with the High Court of Justice and Cassation. The bill was initiated by USR.
• Orban announces how much Romania can get back from the EU for measures taken in the fight against COVID-19: Prime Minister Ludovic Orban announced on Tuesday that Romania can reimburse from the European Union expenses of 350 million euros for measures taken in the fight against Covid-19, but also 300 million euros for economic decisions taken in the state of emergency and state of alert, such as the technical unemployment and support allowance. Ludovic Orban said on Tuesday that 20 applications have been submitted for the reimbursement of expenses to the European Union.

Impact on the economy

• BNR calls increasing global uncertainty, rapidly declining investor confidence risk to financial stability: The most important systemic risk to financial stability in Romania moving forward is the rise in global uncertainty and fast deterioration of investor sentiment towards emerging economies, according to the June 2020 Financial Stability Report released by the National Bank of Romania (BNR) on Monday.
• Romanian white goods producer Arctic defies coronavirus crisis: Romanian appliance maker Arctic, controlled by Turkish group Arcelik, reported that its sales have continued to rise in almost all European markets despite the COVID-19 pandemic. The company mainly produces refrigerators and washing machines. However, company officials are reluctant to make estimates for this year, citing market uncertainties.
• Romanian insurer Certasig goes bankrupt: Romanian small-sized insurer CertAsig went bankrupt at the request of the Financial Supervisory Authority (ASF). Its market share was under 1% in 2018.