The Business Week in Romania 04.04. - 08.04.2016



  • Warnings from the Governor of the National Bank

As part of the Financial Stability Report, Governor Mugur Isărescu has made four warnings on serious threats that might easily materialise. One of the most serious warnings concerns a possible recession (a possibility that surpasses fifty per cent, according to the Report) in the event that the deficit is exceeded as a result of public debt reaching the danger level. “Given the probable dynamic of events—the separation of the European Union into two conceptually different areas—decisions to join the common currency will be required earlier than has previously been estimated,” says the Report, published by the National Bank on Thursday. The second warning: Inasmuch as 2016 is an electoral year, the probability of initiatives similar to the commissioning payments credit conversion plans appearing is very high. The third: The budget deficit will approach four per cent of GDP in 2017, which will cause Romania to re-enter the excessive deficit procedure. The risk at the domestic level of a return
to pro-cyclic fiscal policies is growing, having already partly materialised in the adoption of a budget for 2016 with a deficit of three per cent of GDP, more than twice that achieved in 2015. The fourth: Stimulate drivers of growth other than consumption!

  • Public wage increases from dividends distributed by state owned companies

Public wage increases will be covered in large part from dividends to be paid into the budget from state companies. To this end, the government has taken into account the increase in the obligatory quota of money that state companies have to pay to shareholders, from the current level of fifty per cent to seventy percent of profits. Public wages are due to increase from 1 August, payable in September, with large increases, of up to twenty per cent, but only for employees poorly paid at present, such as social workers, who account for around half of the public sector workers, with rises of just one per cent in other cases. The financial impact has been calculated at five hundred million lei for this year and at 2.3 billion lei gross (1.5 billion lei net) for next year.

  • Stable rating for Romania

Standard and Poor’s (S & P) has confirmed Romania’s long- and short-term foreign and local currency debt ratings as “BBB minus/A-3), with the outlook being stable, according to a press release quoted by Agerpress. “BBB minus” is the first rating in the investment grade category. Romania enjoys a “Baa3” rating from Moody’s and a “BBB minus” rating from Fitch. Standard and Poor’s state that maintenance of the ratings granted to Romania is due to the moderate level of foreign debt, against the background of prospects for stable economic growth. On the other hand, S & P believes that Romania’s ratings are constrained by the low quality of governance,
despite recent efforts to reduce corruption, and also by the low level of per capita GDP reported by states in this category (estimated at 9,300 dollars in 2016). As regards the stable outlook that goes hand in hand with the rating accorded to Romania, S & P points out that it reflects a balance between the likelihood of an increased deficit, on the one hand, and the low level of government and foreign debt, on the other. “We might increase Romania’s ratings if the process of fiscal consolidation continues, restructuring of state companies is successfully implemented, and net government debt kept firmly on a downward trajectory,” say Standard and Poor’s.

  • Re-examination of the supra-government lawOn

Friday, President Klaus Iohannis sent to Parliament a request for re-examination of the Law on Macroprudential Supervision of the National Financial System. The Head of State argued in his request: “Some of the provisions of the Law on Macroprudential Supervision of the National Financial System are lacking in predictability and clarity, for which reason their re-analysis by Parliament is necessary.” The law sent for re-examination stipulates that the Governor of the National Bank, Mugur Isărescu, will become head of a new institution, the National Committee for Macroprudential Supervision, which can recommend that the Government take measures to maintain financial stability, and the Government “must adopt measures accordingly.” In his request, Klaus Iohannis stresses: “In both the Romanian and the European system, recommendation does not engender an obligation to act accordingly.” The proposed law was put forward last year by the Minister of Finance and accepted by the Ponta Government, which submitted it for debate in Parliament.




  • Banca Transilvania knocks the Proprietatea Fund from third place

Banca Transilvania has become the third most valuable company on the Bucharest bourse, toppling the Proprietatea Fund from that position. The bank’s rise occurs in the context of a dramatic 45% rise in the value of its shares over the past year, whereas the Proprietatea Fund’s capital and shares have reported a decrease. Only twenty million lei separate Banca Transilvania, in third place by assets in the banking system, from the Proprietatea Fund on the bourse. The capitalisation of Banca Transilvania, calculated as the product of share price and total number of shares, yesterday reached the value of 8.35 billion lei. By way of comparison, the Fund’s capitalisation was 8.33 billion lei, equivalent to fourth place in the table of the most valuable companies on the bourse. Fifth place is held by BRD, with a capitalisation of around seven billion lei. BRD has greater assets than BT, at around two billion lei, but on the bourse investors regard BT as the more valuable company. The rise of BT to a place among the most valuable companies listed on the bourse is all the more notable in that the bank is one of the few private issuers, having been started as a private business in 1994.

  • Euronext will launch a futures contract for wheat in the Black Sea basin

Euronext will create a futures contract for wheat in the Black Sea region. The futures operator thereby hopes to meet investors’ demand for one of the world’s most important producing and exporting regions, reports “Following evaluation of the demand for a  suitable mechanism to stabilise prices in the producing region in question, we are seriously analysing product design,” declared the director of the goods transactions division of Euronext, Olivier Raevel, attending a cereals conference in Geneva. He refused to provide details connected with the futures contract for wheat from the Black Sea region, which would combine with the contract for wheat for bread production in Western Europe. Euronext operates bourses in France, Holland, Belgium and Portugal.

  • Programme to replace old water networks

On Friday in the Palace Concert Hall, Apa Nova met 1,500 representatives of owners’ associations from Bucharest to discuss issues including the prices practised by the water supplier, drains services, shortcomings in water supply, and a new approach to communications with subscribers. The new Apa Nova management put forward a pilot programme to replace old water supply pipes in apartment blocks. “We want to work with Veolia and in your apartments. For owners’ associations we are thinking about a subscription that would allow us to keep a permanent check on the condition of the network. By August at the latest, on the company’s new social responsibility platform, we will choose three or four blocks and with a small co-financing from owners’ associations of ten to fifteen per cent we will replace the interior pipes, because they want to see what quality means after you replace the thirty-, forty- or fifty-year-old pipes.” declared Mădălin Mihailovici, the Director General of Apa Nova Bucharest, on Friday. Veolia Environment is the largest water distributor in the world to be listed on the stock market. Since 2000, Veolia has owned the Apa Nova distribution and drains network, via the French Veolia Water Group, jointly with the Municipality of Bucharest.

  • Philippos Karamanolis takes over the helm of Bancpost

The position of Executive President of Bancpost, the local subsidiary of Eurobank, will be taken over by Philippos Karamanolis on 16 May, replacing George Georgakopoulos, who has decided to move to pastures new outside the group and outside Romania. Philippos Karamanolis will take up the position subject to receiving authorisation from the Romanian National Bank, according to a company press release. “Philippos Karamanolis has extensive experience in the financial-banking field and a profound knowledge of the international presence of the Eurobank Group, which lends added value to our activities in Romania. We wish him great success in fulfilling his new duties within Bancpost” said Stavros Ioannou, the Deputy CEO of Eurobank Group. Philippos Karamanolis was executive vice-president of Bancpost from 2005 to 2008, going on to be Chairman of the Executive Committee of Eurobank Serbia. Bancpost is a top-ten bank, which returned to making a profit in 2015 and is now in a much
more stable position than during the financial crisis.

  • Romanian companies don’t get any help from the Romanian Government

According to the latest consolidated data for 2014, Romanian businesses in Romania accounted for 47% of the total, while the percentage of foreign businesses rose to 49%. The remaining 4% was accounted for by state companies. Of the total turnover of 1,088 billion lei for 461,000 active companies, 509 billion lei was earned by private Romanian companies (423,000 companies), with 2.4 million employees, and 536 billion lei was earned by foreign companies (38,000 companies), with 1,18 million employees. Although the foreign companies had a higher turnover, their net reported earnings (profits versus losses) was minus two billion lei. On the other hand, Romanian companies reported a positive figure, at 14 billion lei (profit of 33 billion lei, losses of 19 billion lei). Romanian entrepreneurs feel frustrated with the situation, since the Government supports foreign companies, giving them access to Victoria Palace and every public administration, while at the same time seemingly trying to place obstacles in the way of Romanian companies. The state subsidises the creation of jobs and payment of labour taxes and imposts for foreign companies, although Romanian companies are responsible for double the number of employees, filling in mountains of paperwork, only for the bureaucratic system to slam the door in their faces, telling them that one or another document is missing. For this reason, at the level of the country as a whole, multinationals were able to pay an average net wage of 1,972 lei in 2014, while Romanian companies were able to pay just 1,034 lei. This means that Romanians prefer to work for multinationals, with Romanian companies coming in third place, and state companies in first place, where the average net wage was 2,294 lei in 2014.

  • Green light for the construction of a gas pipeline under the Danube

Romania’s Transgaz and Bulgartransgaz are to sign a contract with Austria’s Habau PPS Pipeline Systems with a view to constructing a pipeline under the Danube, according to Novinite. The signing ceremony will take place on Wednesday afternoon in Sofia, according to the Bulgarian Energy Ministry. Bulgartransgaz and Transgaz are jointly implementing a project whose purpose is to diversify gas supply sources and routes. The two companies have received 8.9 million euros to finance the project, as part of the European Energy Programme for Recovery. In February, Habau won the tender to build the underwater section of the gas pipeline. The pipeline will stretch for approximately two kilometres and take 119 days to build, at a cost of 4.57 million Euros before VAT, according to

Sources:, Adevărul financiar,,


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