The European Commission removes Romania from under the incidence of the procedure for macroeconomic disequilibrium
President Klaus Iohannis declared on Friday in Brussels that he salutes the decision of the European Commission to remove Romania from under the incidence of the procedure for macroeconomic disequilibrium, which was implemented by EU officials in February 2015. The meeting of the European Council also discussed the question of the 2016 European Semester, which represents a cycle for co-ordinating EU economic and budgetary policies. Romania was included in the list at the end of February 2015, along with fifteen other countries, on the grounds of “macroeconomic disequilibrium that requires monitoring and action at the political level.” The Commission decided in November last year that thorough analysis is necessary for eighteen member states in order to evaluate whether they are facing macroeconomic disequilibrium and if so, how severe it is. The Commission reached the conclusion that six countries, including Romania, are not facing disequilibrium within the framework of the procedures for macroeconomic disequilibrium.
Isărescu, Cioloș, NBR officials, ministers and investors on acute economic problems
Romania’s indicators are looking good at the moment. After years of austerity, Romania has one of the highest rates of economic growth in the EU and fulfils the conditions for joining the euro zone, says NBR governor Mugur Isărescu. Nevertheless, Romania’s financial and economic stability is threatened by the “dation in payment” act and by the growth of the budget deficit above sustainable levels, warned Isărescu at the opening of the first day of the Growth Forum Conference—Romania’s Development Strategy and Convergence with the Euro, organised by Profit.ro at the NBR. “Personally, in the last twenty years I have never seen so many dangers to Romania’s economic and financial stability”, said Isărescu, also referring to the danger that the budget deficit might reach four per cent of GDP in 2017, above the three per cent limit laid down by European treaties, in which case it will lead to an increase in public debt. Prime Minister Dacian Cioloș argued that the Government supports the wise resolution of the problems generated by the proposed resolution agency act and he urged those involved to display solidarity, avoiding benefits to speculators and erosion of trust in the state because of the retroactive change to the rules. He said that such a retroactive change to the rules might affect the younger generation wishing to buy homes on credit.
Fighting unfair competition
The Government has set up a Cross-Institutional Council to combat unfair competition. The Cross-Institutional Council will ensure the transparency and implementation of public policies in markets where fair competition needs to be maintained, according to a government press release. The Council will include two representatives from each of the following institutions: Ministry of Public Finance, the Council of Competition, the National Audio-Visual Board, the National Authority for Consumer Protection, the State Patents Office, and the Romanian Copyright Office.
Infrastructure through emergency ordinance
The Government has passed an Emergency Ordinance to accelerate the process of building transport infrastructure. The emergency ordinance sets forth a series of measures to accelerate the implementation of trans-European transport infrastructure projects with the aim of adopting regulations aimed at shortening deadlines and simplifying the process for authorising construction works and implicitly eliminating blockages in the implementation of projects to ensure interconnectivity between the national/regional and European transport network. “The law has in view, when realising trans-European infrastructure projects, simplification of the process of issuing construction permits by shortening the deadlines for issuing approvals or, according to the case, the location approvals stipulated in planning certificates and by simplifying the procedures for removing pieces of land situated on the expropriation corridor from the agricultural/forestry circuit”, states a communiqué issued by the Gouverment.
Form 088 to be modified in around a week
Modification of Form 088 for VAT purposes will take place within a week, since it is excessive and deals only with the effects of tax evasion, rather than the cause, declared Gabriel Biriș, Secretary of State in the Ministry of Public Finances. He declared that he supports the introduction of a similar form, which Romania needs, but “I didn’t think of 088. I didn’t think that we would go from nothing to too much.” Biriș does not view the form as the main culprit for the rise in VAT evasion, bur rather “the cause lies elsewhere, in the way in which VAT works in Europe.” At the same time, Biriș believes that the rise in VAT evasion, which since Romania joined the EU has risen to four to six billion euros a year, can be eliminated through inverse taxation.
Pollution Tax back to citizens
The pollution tax paid between 2007 and 2013 will be fully reimbursed by the state. An ordinance to this effect has already been published in the Official Gazette. Applications for reimbursement of the tax can be submitted to ANAF, after publication of the norms for application. But don’t rejoice too soon, because the money will be paid back in five years. Go to ANAF and submit your tax receipt. Fill in a form and present your vehicle documents. The state will then transfer the money to an account. Applications will be processed within forty-five days, and reimbursement of the tax plus interest will be staggered over five years.
Foreign investors complain about excessive bureaucracy yet again
“Romania’s system of taxation is uncompetitive in comparison with other countries’ and this is due in large part to the excessive bureaucracy faced by companies in their relations with the tax authorities,” believe foreign investors, according to a press release. The Foreign Investors Council (FIC) publishes a biannual Index of its members’ perceptions of the business sector. The results of the most recent FIC Index show that the majority of members (60%) expect growth in 2016 and just 15% except shrinkage of their businesses. Despite the expectation of growth, FIC members report that they are confronted with a series of all-too-familiar problems: ninety per cent say that bureaucracy is excessive compared with other countries in the region; eighty-five per cent believe that the country’s infrastructure is uncompetitive; and seventy-five per cent encounter problems connected with the unpredictability of local legislation. Romania’s well-trained workforce remains a strong point and competitive advantage (75%). Because they predict economic growth, almost half of those questioned plan to take on additional staff in 2016 (43%) and a third (34%) will make significant capital investments. More than half (55%) expect significant growth in exports in 2016.
Sources: Adevărul Financiar, Hotnews, Mediafax, profit.ro, stirilePROTV.ro
The State brings back “Mindfulness”
The owners of Constantine Brancusi’s sculpture “The Mindfulness of the Earth” have accepted the Government’s offer of eleven million euros, announced Minister of Culture Vlad Alexandrescu. The Government will pay five million euros, and the Ministry of Culture will launch a national public subscription for the remainder of the sum. Last month, the Government announced that it would resume negotiations for purchase of Brancusi’s sculpture, which an auction house has valued at around twenty million euros. The Romanian State’s right of pre-emption on purchase of the work expired in 2014, but the Government decided to resume talks. Carved in 1907, The Mindfulness of the Earth was bought by engineer Gheorghe Romașcu directly from the artist in 1911, and at present, after being confiscated by the communist regime and finally retroceded in 2008, it belongs to the original purchaser’s heirs. The Mindfulness of the Earth is a national heritage object, which cannot be removed permanently from the country, and is currently kept in the Cotroceni Museum.
Tarom flying without a boss
Tarom’s board of administrators has decided to suspend the company’s general director, Edouard Heinzmann, starting 22 March, as a result of management shortcomings, announced the relevant minister, Dan Costescu. “The manager ought to have ensured the financial resources and staff to meet the company’s goals. The aeronautical authority set the deadline of 22 March; from 22 March it will no longer be possible to meet the goals. This is the first point we received from board of administrators of Tarom. (…) Lack of responsibility and management shortcomings do not seem acceptable to me. They are matters regarding failure to achieve the revenues and expenses budget, and rather than eight million in losses there were forty-one million, despite the fact that the price of aviation fuel decreased dramatically last year. Had it not been for this advantage, we would have faced disaster,” said Costescu. On Monday, 21 March the administrative board will be meeting to make a final decision regarding the company’s future. Decisions will have to be taken quickly, said Costescu. He said that Tarom will continue to operate normally. “There might be some delays, but it will not affect flight safety,” he said.
Porsche hiring engineers in Romania
Porsche is looking for engineers in Romania and has opened a branch in Cluj to this end. Porsche Engineering Group GmbH is extending its engineering activities for mobility services, and to this end it has founded Porsche Engineering Romania SRL in Cluj. “Cluj will help us to push forward car digitalisation,” announced Porsche. Porsche says that Romania and the city of Cluj are among the most innovative regions in Europe when it comes to software research and development. The first job announcements have already appeared. Porsche is looking for engineers to work on chassis, engines, quality, and closed-loop simulations.
Wizz Air adds two new services to Bucharest
Low-cost airline Wizz Air has announced that it will be expanding its services to Bucharest from London Luton, adding another two weekly flights from 20 May 2016. The weekly number of flights will increase to twenty-five. The company will be moving its service from Lübeck Airport to nearby Hamburg and will continue to offer low-fare flights to northern Germany. Because of constant financial problems at Lübeck, Wizz air will move three flights to Hamburg starting 17 April. After relocation to Hamburg, Wizz Air will continue to provide services to Gdansk, with four flights a week, and to Skopje and Kiev, with two flights a week. The low-cost company also announced a new service between Sofia and Copenhagen, which will operate three times a week, starting on 13 June.
Hauliers hold a national protest
The announcement was made by the Romanian Confederation of Authorised Operators and Transporters (COTAR), and the date set for the protest remains 18 April. It is estimated that forty thousand vehicles will take part, unless government institutions deliver a clear message by Wednesday, reports news.ro. The haulier’s main bone of contention is the rapid increase in the costs of vehicle insurance policies over the last year. Likewise, transporters are unhappy with the activity of the ASF and demand that Parliament sack its management, a decision which would halt the hauliers’ protest.
Banca Transylvania has announced the acquisition of Capital Partners
The transaction involves the takeover of the Capital Partners team and brand, with BT Securities becoming BT Capital Partners. The transaction will be finalised by the end of March this year. BT Capital Partners will assist and advise companies on their stock-market listings and on attracting new investors; it will provide brokerage and consultancy services for mergers and acquisitions, financing and structuration of complex financial operations, market research and consultancy on strategic management. Horia Ciorcilă, the president of Banca Transylvania, declared: “The entry of Banca Transylvania Financial Group into the Investment Banking market is a milestone in our development, given that it consolidates our range of products and services for large clients. BT Capital Partners will provide top-level specialised financial services to complement our banking products. ” Doru Lionăchestu, the main partner and president of Capital Partners, added: “BT Capital Partners will focus on Romanian companies with investment potential and will contribute to the consolidation of the most powerful financial pole with Romanian capital.”
Sources: Adevarul Financiar, Business Magazine, hotnews.ro, news.ro ,profit.ro, Ziarul Financiar