Bucharest - BNR Mugur Isarescu has gone public with his intention of recommending that the BNR Board of Administration approve, at the start of the first quarter of 2003, the Euro become the reference currency of the official rate of exchange in Romania, said the Governor, “The ROL’s standing to the dollar will reflect the ROL-Euro rate. If the European currency continues its appreciation internationally, I dare say that the Romanian currency, the Leu (ROL) will fall less than it has done this year and such an evaluation should draw the attention of exporters”.
BNR intervention in the monetary-financial market may be redirected to pursue interest rate reductions rather than hard-currency purchases in the forex market. “The international reserve of the National Bank of Romania has reached a very high peak, being equivalent to 16% of the country’s gross domestic product” - Isarescu declared. And further, “We will concentrate more on inflation, taking yet another stride ahead on this path and the rate of exchange may help us do so”. He went on saying that banks should have greater trust in the inflation roll-back process and that interest rates will be trimmed down significantly...

bucharest - E Van Wijk business holding opened on Friday its Bucharest office, a store and a servicing shop for DAF trucks, all on an investment of 2.5 M Euro. This is the second DAF auto centre in Romania, in continuation of the Cluj centre inaugurated six years ago. The Bucharest centre is located on the ring road of the Bucharest-Pitesti highway and has been operational since this spring.
The new office block of EVW Holding in Bucharest is spread over 2,800 square meters, 1,500 square meters of which are taken by the servicing shop, and the remaining space is divided in two stories which include a warehouse for spareparts, a show room, offices, a conference hall and a training hall....

The World Bank could grant Romania a loan of around 100 M USD for reforming the public administration, justice and for fighting corruption, as Ziad Alahdad, chief of World Bank Delegation in Romania, declared.
According to Alahdad, the project, called Programmatic Adjustment Loan (PAL), will include a segment addressing fiscal deregulation and one addressing external audit.
The official of the World Bank mentioned that the project would round the economic programs which the international financial institution develop in Romania, such as PSAL II. He considered that Romania has made progress as regards its structural reforms and the economic evolution as against 1998 - 1999, when it was undergoing a period of crisis.
“Inflation was close to 100%, economy was dropping, and the foreign exchange reserves amounted to only 700 M USD. At present, the economy is in the third year of growth, the inflation, although high, is decreasing. The international reserves amount to almost 7 bn USD, even if imports have grown”, Alahdad outlined.
He added that the Romanian authorities should make good use of the favourable international context derived from Romania being invited to join...

Bucharest - The acquisition of the major stake in Romvag by Karsdorfer Eisenbahngessellschaft could be the first step with regards to the participation of the German operator in the activities related to person transportation on railways, in Romania, as Bernhard von Engelen, chairman of Karsdorfer, declared on Friday. “We shall decide whether we shall perform railway person transportation in Romania. We need a licence which, according to the legislation, provides the obligation as the operator to own repair stations in Romania. We fulfill this term by taking over Romvag”, van Engelen mentioned.
He specified that the free access in the field of railway transportation is provided in the legislation of all EU member states, and Romania is prepared to meet the requirements of the EU in the field.
The German company took 59.9% of Romvag Caracal equity capital, the total value of the transaction being 2.55 M Euro and 816,000 USD, representing the price paid for shares, investments in the development of the company and in relation to the environment. “We shall invest, mainly, in the technological sector, in settling the environment issues and in infrastructure (...) With a...

Bucharest - The Privatization Authority (APAPS) has sold its control interest at 30 enterprises listed in the Private Structure Adjustment Loan program (PSAL I ) and purring up for sale by December 31, 2002 thirteen, more enterprises including Roman Brasov, Electroputere Craiova and ARO Campulung - APAPS announced.
PSAL I was agreed by the government of Romania and the World Bank in 1999. The program stipulates privatization of 63 enterprises (commercial companies) through the agency of investment banks or privatization agents.
Commercial companies where the state sold its control interest to private investors include SIDEX Steels of Galati, the Social Steels Combine (COS) of Targoviste, the Constanta shipyards and the aluminum factory ALRO of Slatina. Sale-purchase contracts on the latest sales - Romvag Caracal, Biosin Calafat and Bicapa Tirnaveni - were signed on November 22. Negotiations have been in progress between APAPS and firms interested in buying the state-held stock of other ten PSAL 1-listed enterprises: Tractorul Brasov, Rulmentul Brasov, Terom Iasi, Vulcan Bucharest, Alprom Slatina, NITRAMONIA Fagaras, the sodium factory of Govora-Rimnicul Valcea and Urbis...

Sinaia - The construction companies from Romania have low participation in the tenders organized by Ministry of Public Works, Transports and Housing (MLPTL), a fact which cannot lead to proper competition in the field, as Ileana Tureanu, State Secretary of MLPTL, declared on Friday, during the works of the National Conference of Romanian Construction Entrepreneurs Association (ARACO). “I came here (at the conference - our note) to try to understand why the construction companies have such a low participation in the tenders organized by MLPTL and which are the reasons because of which these companies do not promote new technologies. We want to have an increased competition in the accomplishment of the projects developed by the Ministry”, Tureanu said.
The official of MLPTL affirmed that the institution she was representing intended to propose a normative draft for the certification of construction companies, a document meant to eliminate middlemen. “The construction companies will have to bring evidence for their technical and material capacities, and those which do not have these basic requirements, would not participate in tenders. We want to eliminate the middlemen from the...

bucharest - National Bank of Romania (BNR) encourages mergers and acquisitions among commercial banks, since the solidarity of a bank is much more important than the number of banks in the system, Mugur Isarescu, BNR Governor, declared.
“I have said this and I repeat: it is not the number of banks that counts for BNR, it is their strength. Despite the low level of agency operations, I believe that the banking system has every prerequisite, being clean and having a sound capitalization, to undertake the major task for financial agency in economy”, Isarescu affirmed.
BNR Vice-Governor, Mihai Bogza, considers that in the next years, a concentration will take place in the banking system, in order to meet the competitiveness requirements.
“The banks which do not have enough strength will understand that size counts also”, Bogza said, who added that the emergence of specialized banks and complex banking products should be expected.
BNR Vice - Governor, who coordinates the banking surveillance in the central bank, added that the warning system, in due time, of the issues from banks have been substantially improved.
Thus, the inspection cycle was reduced by year, and the...

Bucharest - Romanian - American Enterprise Fund (RAEF) and the company specialized in energy services EnergyServ intend to setup an investment vehicle to be used for projects in the field of energy efficiency and in the field of co-generation, for which they could allot, together, 3 M Euro, to which a loan provided by the European Bank for Reconstruction and Development (EBRD) adds, worth 11 M Euro, as Mihai Catuneanu, investment officer at RAEF, declared. “We concluded a general agreement, in this respect, with EBRD, to be discussed in the board of the crediting institution on December 3. According to an optimistic expectation, we hope the project to start in February or March 2003”, Catuneanu added.
The investment tool, to be called Romanian Industrial Energy Efficiency Company (RIEEC) will address, primarily, the provision of funds to industrial companies active in the private sector, having financial reliability. “We shall not address large CET (heating plants), but small production units located near the consumer. In fact, this is the trend worldwide in the field, considering the beneficial impact on environment”, RAEF representative underlined.
According to EBRD, the...

BUCHAREST - The Administration Board of Banca Romana de Dezvoltare (BRD) - Groupe Societe Generale (BRD-GSG) on Friday decided to postpone the general shareholders’ meeting on capital increase that was to be held on November 29 due to some legal incertitudes over the definitions of registration and reference dates.
The notion of registration date is raising a problem of compatibility with the preemptive rights of each shareholder, which is defined as the right of any shareholder to priority subscription to the share capital of the company in proportion to the number of shares offered to the public.
On November 13, BRD published the note in which an extraordinary general shareholders’ meeting was convened, including the agenda. The note had been previously been submitted to the National Securities Commission (CNVM) and the Bucharest Stock Exchange (BVB).
Both institutions of the capital market had no objection and the note was further submitted to Monitorul oficial for publication and also to three leading newspapers, BRD reports.
On November 19, CNVM ordered BVB to suspend the BRD stock from trade. One day later, CNVM sent BRD a notification about the trade suspension...

BUCHAREST - “The Government’s decisions regulating the distribution of concessions to exporters will be approved by the end of this year,” Secretary General of the National Association of Romanian Exporters and Importers (ANEIR) Mihai Ionescu said on Friday. “The drafts of most of the decisions to be taken to this end have been drawn up following talks with 11 ministries,” said Ionescu.
Under Law 414/2002 on income taxation, the tax rates to be levied on incomes derived from export activities will go up to 12.5% in 2003, from a current 6%, and established at a flat 25% as from 2004. In order to compensate the increase, the Government decided to grant public incentives to exporters. “We asked that the surplus in Government’s revenues be extended to exporters,” said Ionescu.
According to the ANEIR official, export bonuses of ROL 200 bn are among the instruments to assist exporters. These bonuses will increase to ROL 400 bn in 2004. The Romanian Government will also provide ROL 170 bn to projects designed to increase competitiveness of Romanian farm and industry products. These projects will be aimed at product quality and the Government will contribute half of the funds needed...

The major shareholder in Sidex Galati, concern LNM Holdings, will sign an agreement with the European Bank for Reconstruction and Development (EBRD), on a loan of 100 M USD needed for financing the working capital required in the metallurgical plant.
The managing director of ISPAT - Sidex, Narendra Chaudary, declared that the loan would be pledged with tangible and intangible assets owned by the plant. “This type of collateral is a normal one and it was accepted by EBRD. Similar collateral was asked by Sidex for a loan asked by ISPAT for the plant Karmet from Kazakstan. The amount is not so high as to be a risk for the plant”, Narendra Chaudary declared. The manager from Sidex estimates that the plant will recover economically, and its turnover will exceed 1 bn...

What does the invitation to join NATO mean from economic point of view?
The invitation addressed to Romania to join NATO means several projects, but it also means credibility, more safety, it means more investments being made by Romania for its own security, in the medium- and short-term. But I believe this moment, which is a historic one, represents a beginning for Romania, the beginning of business people’s confidence in our country and these effects will certainly become obvious in the long term.
For the time being, what we know for sure is that Romania’s participation in various missions alongside NATO costs MApN half, or even more than half its budget. Do you believe this money might come from an increased confidence of international institutions, such as the World Bank (WB) or the IMF?
The budget of MApN is a budget that was well defined and agreed with our partners within the Alliance, i.e. the state budget will allot, every year, 2.38% of the GDP to the Ministry of National Defence, both for combat missions and for restructuring and investments. As our economy will grow - and our forecasts show this will happen - 2.38% will mean an ever higher sum. It is very...

“The invitation to Romania to accede to NATO might bring a surplus of capital to Romania’s domestic market, which will entail costs until efficient investments are identified,” Governor of Romania’s Central Bank (BNR) Mugur Isarescu recently stated.
“Success itself has a price. Now, viable projects need to be identified, along with capable managers,” said Isarescu. Most of the foreign remittances having entered Romania of late are from Romanian workers abroad, said Isarescu, voicing hope that these remittances will be overpassed in value by foreign investments now that the invitation to enter NATO was made. BNR Vice-Governor Mihai Bogza showed that the rise in private credit should take into account the fact that the level of inter-company debt and public debt arrears is high. Thus, BNR is limiting the cash with banks through sterilisation, that is attracting the cash surplus from the market. These amounts could be used by banks in the absence of BNR’s intervention and to the benefit of the real economy.
According to Isarescu, the rise in private credit will out-pace economic restructuring, which might lead to a surge in bad loans. In this context, BNR will continue to mop...

Romania’s accession to NATO will lead to an increased interest by foreign investors in setting up businesses in our country, as well as to an improvement in ratings for various legal and economic entities, the president of the Romanian Commercial Bank, Nicolae Danila, stated Wednesday.
Another argument is that, as of 2004, as a result of the European Union enlargement, Romania will become the main attraction spot of the entire geographic region, in terms of economic and business prospects, the president of the most important commercial bank in Romania believes.
All these will gradually lead to an increase in positive economic effects, and implicitly in banking activity in Romania. In addition, rating agencies are likely to raise the ratings of Romania and Romanian economic entities, provided the ascending trend of macroeconomic results is preserved, which will in turn trigger a new reduction in the cost of attracting international funds to support investments, Danila explained.
Also, Romania’s accession to NATO would increase the value of investments already carried out in Romania. The security provided by the Alliance can be translated into a plus of added value for each...

Encouraging news about the U.S. employment picture continued to spill over onto financial markets on Monday, lifting world stocks on hopes that a slip back into recession could be avoided. The mood continued despite a relatively gloomy outlook from Olivier Blanchard, chief economist at the International Monetary Fund, who told France’s Le Figaro he expected weak growth in both the United States and Europe. Some investors, particularly in Asia, were catching up with Friday’s U.S. jobs data, which was not as bad as some had feared. The slowing of the U.S. economy has been one of the major factors holding investors back over recent months. MSCI’s all-country world stock index and its Thomson Reuters counterpart were up more than half a percent after a nearly 3.7 percent gains for the MSCI last week. Europe’s FTSEurofirst 300 gained around 0.3 percent while Japan’s Nikkei earlier closed up 2.05 percent. The latest corporate earnings season has been relatively strong in both the United States and Europe while merger and acquisition activity in August was the most robust for the month since 1999. U.S. markets were closed for the Labour Day holiday.

US President Obama was due to...

The incoming Minister of Finance, Gheorghe Ialomitianu, has made the announcement that people paying royalties and those working under civil agreements would not have to submit income statements and pay associated contributions. ‘People who get an income from royalties and those working under civil agreements do no longer have to submit the statement and make the payment themselves. The legislation will be changed and the money will be withheld at the source, meaning that the payer will have the duty to sent the contribution to the budget; it is the most efficient way to do it, I mean it is a faster and the least expensive method’, Ialomitianu said in his first interview in his new capacity with ‘Gandul’ daily. ‘The change will be operated also by an emergency ordinance, our deadline is to debate the changes in the Government and pass the changes on Wednesday’, the minister added. Gheorghe Ialomitianu said employers would be criminally liable if they do not make the payments. During the interview, the minister of finance was asked about who should withhold the contributions in the case of oriental music singers, for example, who make thousands of Euro every month from their...

A self-employed earner will pay the Romanian state at least 25.36 per cent of their income in accumulated social contributions. Given a regular Romanian employee pays social contributions equal to 16.5 per cent of their monthly pay and intellectual property rights will be as of January 1, 2011 subject to a tax of 25.36 per cent makes the intellectual property contract useless, according to ‘Adevarul’ daily newspaper.

The employer will remain the sole party to reap the advantage of this form of income payment staying in place, as they are exempted from the paying such contributions. The pension contribution would rise from 10 per cent to 24.43 per cent, health contribution, from 5 per cent to 8.35 per cent, and unemployment contribution from 0.5 per cent to 0.78 per cent respectively. Further more, the bill stipulates contributions for sick leave and health social insurance allowances of 0.85 per cent and another contribution, 0.15 per cent to 0.85 per cent, for work accidents and professional diseases. Not only that, employer Christmas, Easter or March 8 gifts to employees exceeding 150 RON will be subject to social insurance contributions, under the draft ordinance...

According to a National Statistics Institute (INS) communiqué, the net average nominal salary stood at RON 1,355 in July, down by RON 67 (4.7 per cent) compared to June, Agerpres informs. In the same month the gross average nominal salary stood at RON 1,868, 4.3 per cent lower than the level reported the month before. The highest value of the net average nominal salary was reported in the financial intermediations’ sector (RON 3,436), while the lowest was reported in the hotels and restaurants sector (RON 799).

The net average salary reported the following drops in the public system: education system (-22.6 per cent), health and social assistance (-19.8 per cent), public administration (-14.4 per cent). The 25 per cent salary cut applied within the public sector was the reason behind the drop in the net average salary there.

In July the Romanians’ incomes were sensibly eroded by inflation, so that the real salary income index stood at 92.9 per cent compared to June, INS informs. The Institute points out that the real salary income index was calculated as a ratio between the net nominal salary index and the consumer prices index. According to the INS, average...

Franklin Templeton takes over FP asset management

The general meeting of shareholders (AGA) of the Proprietatea Fund (FP) yesterday approved the appointment of Franklin Templeton Investment of Britain as single manager of the fund, Mediafax reports. The company will take over the fund management after publication of AGA resolutions in the Official Journal. The Proprietatea Fund assets total some RON 11 bln. The Proprietatea Fund could be listed on the London Stock Exchange at the end of next year, Franklin Templeton Chairman and CEO Mark Mobius said yesterday. ‘The London Exchange listing will be, in my view, sometime at the end of next year, because preparations take 6 to 8 months. We need to organise road shows to explain investors in the US, China and other countries where Romania lies’, Mobius said.

EUR 4 bln for Nabucco project

The European Investment Bank (EIB), together with the European Bank for Reconstruction and Development (EBRD) and World Bank’s International Financial Corporation (IFC) signed an agreement that will potentially ensure financing of up to EUR 4 billion for the Nabucco pipeline project on Monday, Mediafax...

President Traian Basescu yesterday met at Cotroceni Palace with Jeffrey Franks, the head of the International Monetary Fund (IMF) Mission in Romania. The head of state availed himself of this opportunity to suggest the need for an extension of the ongoing accord between Romania and the IMF or the conclusion of a precautionary type agreement. ‘I’m glad to see you again, and I’m looking forward to the October visit, not an anniversary one, but an assessment of the difficulties we are facing. At any rate, my proposal is that, during the visit in October, we should look into the next agreement between Romania and the IMF to see which is the right solution, to extend the current accord or conclude a precautionary type agreement.

A fiscal area is needed for the absorption of European funds,’ Agerpres cited the Romanian president as saying. In Romania to attend the anniversary celebration of the National Bank of Romania (BNR), Jeffrey Franks stressed the need for no red tape stumbling blocks to get in the way of European funding, which are imperative for infrastructure, and saw removing public sector obstructions, which slow down money absorption, as the chief issue at stake....

The National Bank of Romania (BNR) Saturday celebrated its 130th anniversary. Throughout this year, there have been several scientific and cultural events including conferences and seminars on the history of banking, as well as exhibits, stamp and coin issues, but also events under the aegis “The Cultural days of the BNR”.

For the event Governor Mugur Isarescu invited in Bucharest financial figures linked to the recent history of the Romanian central bank, among whom, Zdenek Tuma, former governor of the National Bank of the Czech Republic; Alex Cukierman, professor at the University of Tel-Aviv; Jean Pisani-Ferry, the director of the Brussels-based Breugel, as well as Gian Maria Milesi-Ferretti, assistant director at the Research Department of the International Monetary Fund (IMF). Also attending the event were Aaron Tornell, professor at the Economic Department of the University of California, Los Angeles (UCLA); Maxwell Watson, freelance professor at Wolfson College Oxford; Daniel Daianu, professor at the School of Political and Administrative Studies in Bucharest, and Neven Mates, the chief adviser of the governor of the National Bank of Croatia. Isarescu’s speech...

Labour Minister Ioan Botis has stated that the draft emergency ordinance increasing by up to 35 per cent the social contributions from self-employed activities was given its first reading, with no decision taken as of yet, Mediafax reports. The newly-appointed minister also said government will take into account the proposals to be made at the upcoming public debate. While saying he is not aware of any Tax Code law amendment aimed at rising starting the next year the social contributions by the self-employed, Democratic Union of Hungarians in Romania (UDMR) leader Marko Bela said there is now way he would accept such increase, Realitatea.net. reports. “What we are seeking now is to scrap the red tape surrounding self-employed statements, so that the employer takes the paperwork upon himself. We won’t accept any other changes, either now or in the future,” Marko said.

Having met with PM Emil Boc, Finance Minister Gheorghe Ialomiteanu said the amendments to OUG 58/2010 and its application norms, which were among the topics discussed with the premier, will be finalised after being debated by the Social and Economic Council, and are going to be up for passage at government’s...

Public sector restructuring must continue in the following years even if there is no longer a need for sudden fiscal consolidation, so that the reforms will render the economy more efficient and competitive, Jeffrey Franks, head of the IMF mission to Romania, recently stated, Mediafax informs. “I believe public sector restructuring must continue and I believe we are currently seeing some initiatives, meaning there is the pension reform, the second round of salary reform, there will be a continuation of public sector cuts, there are initiatives to work on the social benefits’ system,” Franks said. He stated that the government reshuffle will not affect the loan that the IMF gave to Romania, nor the release of the next disbursement or Romania’s external financing costs. Asked about a future loan, Franks stated that “I am aware of this intention, however it is premature to discuss this issue,” Agerpres informs.

On the other hand, the IMF is very worried about the issue of public sector arrears, the latter affecting both the private sector and economic recovery, Jeffrey Franks added. “We will work very carefully in order to make sure there is a sufficient buffer,” Franks...

Accounting profession under debate at CECCAR Congress

The works of the 18th Congress of the Accounting Profession in Romania, organised by the Board of Expert and Authorised Accountants in Romania (CECCAR) opened Friday before an attendance of 1,500 expert accountants, according to Agerpres. Guests to the two-day event included Robert Bunting, president of the International Federation of Accountants. The expert accountants present debated the chief issues their profession is facing, as well as the major role the accounting profession has in the current economic context. Radu Moraru and CECCAR president Marin Toma opened the first session of papers. It was followed by two roundtable discussions involving reputed accountants, Romanian and foreign.

Blue Air business stays afloat thanks to Bacau-London flights

Low-cost airline Blue Coast, held by businessman Nelu Iordache appears to stay in business only thanks to company-operated flights from Bacau to London, Bergamo and Turin respectively, according to ‘Gandul’ daily newspaper. This recession-dominated economic context led to some of the company’s 780 employees going to be laid off. The...

Catalina Stan, president and CEO of BDR Associates – named on European Excellence Awards international jury fourth time

Catalina Stan, president and CEO of the strategic communication agency BDR Associate, exclusive associate in Romanian of Hill&Knowlton, was invited for the fourth consecutive time, on the jury appraising the PR projects coming from various European countries, running in the European Excellence Awards annual competition, a release remitted to our editing office informs. “European Excellence Awards is on its fourth edition and is a competition initiated by ‘Communication Director’, a prestigious European communication and public relations magazine. Bringing together the most valuable PR projects and campaigns, European Excellence Awards confirms the importance of PR in the development of campaigns and celebrates creativity and exceptional achievements on various markets, Romania included, as Romanian PR agencies are, every year, among the winners,” Stan stated. The annual evaluation process is closed by a final deliberation, deciding who the most important awards, such as the Best PR Campaign or the European Agency of the Year, should go...

With tractors or just with bottles of milk, 15,000 farmers, members of the Agrostar federation and of 10 other professional organisations, picketed the prefectures of 23 counties yesterday.

“Thousands of farmers have taken to the streets not to beg, but to demand their rights. We demand the urgent dismissal of the Minister of Agriculture, Mihail Dumitru, who is identified with the bleakest period in the entire history of Romanian agriculture. If our demands are not granted, on September 9 we will hold a rally in Victoria Square in Bucharest,” Agrostar Federation President Nicolae Stefan said, according to Agerpres. Protesters in Arges County hooted and chanted ‘Down with the government!’ and ‘Thieves,’ holding placards reading ‘Stupidity brings greed,’ ‘No more tax evasion in agriculture,’ and ‘Subsidies- no, taxes-yes.’

Farmers in Targoviste came with 20 tractors and farming machines and urged the government to quit, Mediafax informs. Similar protests were organised in Transylvania, in the Counties of Sibiu and Timis. In Sfantu Gheorghe, farmers emptied milk bottles in front of the prefecture, dissatisfied with the manner in which their sector is being treated...

The Ministry of Finance will modify, next week, the norms for the application of the Government’s Emergency Ordinance 58/ 2010 for the payment of social contributions by employees paid based on royalty contracts or civil conventions, to ensure there will be no further monthly queues to file the statements of income. Thus, the obligation of paying the contributions and filing the statements will be incumbent on the employer, rather than on the beneficiary, ‘Gandul’ reports. The announcement was made by Government spokesperson Ioana Muntean at the end of Wednesday’s Cabinet meeting. She added that these modifications will be approved in the next Cabinet meeting, scheduled for next week, because Prime Minister Emil Boc insisted that all legal steps be observed, namely, that modifications be approved, also, by the Economic and Social Council (CES), which will convene on Monday.

The fact that the statements will have to be filed by the employer, who may also be under the obligation to pay social contributions, may, again, result in chaos, a tax expert claims. “If I hire an authorised natural person (PFA) to paint my apartment, this implies I have to file her statements of...

Two years ago, Bucharest high street retail market reached the peak of profitability, especially on main boulevards. Today, rental prices fell considerably, shows a study conducted by More Real Estate company analysts. In some areas the contraction was milder (-30%) and in some other it was more “aggressive” (-50% or even more). Study findings also revealed that austerity measures will probably force the market to contract furthermore and the location remains one of the decisive factors for a successful investment. The biggest contraction occurred in the places which had very high prices, like city centre areas. Also, the lowest cuts were reported in places secondary in terms of interest and where the infrastructure was refurbished, like Lipscani. Moreover, smaller space properties continue to obtain better prices than larger ones.

Also, the vacancy rate increased from 5-6% in 2008, to 15% in 2010, reaching 25% in some areas, like Unirii Boulevard.

“As the forecast for Romanian economy remains negative and new austerity measures are expected, further 5-15% ‘adjustments’ should not surprise anyone,” More Real Estate CEO Ilias Papageorgiadis explained at a press...

Data published yesterday by the National Statistics Institute (INS) shows that investments in national economy dropped by 18.7 per cent to RON 22.48 bln in H1 of this year compared to the same period last year, most of them being reported in the industrial and commerce/services sectors. Thus, in the first six months the industrial sector drew 38.2 per cent of total investments, while the commerce/services sector drew 36.6 per cent of total investments, an INS release shows. At the opposite end were the constructions sector (17.9 per cent) and the agriculture sector (5.5 per cent). The investments that materialised in new construction works during the analysed period totaled RON 11.511 or 51.2 per cent of total investments in the construction sector, in contrast to 52.3 per cent in January-June 2009. Likewise, in the second quarter the share of equipments (including means of transportation) in total investments grew by 2.7 percentage points, while the share of investments in other expenditures grew by 0.9 per cent. The share of investments in new construction works dropped by 3.6 per cent. The same INS data shows the fact that the overall industrial production prices (both on...

Romania, among EU states with lowest economic growth in Q2

Romania is one of the states with the lowest economic growth in the EU in the second quarter, compared to the first three months of 2010, three times below the 1 per cent growth rate reported by the European Union and the euro zone, according to data presented yesterday by Eurostat, Mediafax reports. The only countries in the EU whose economic growth rate in the April-June interval, compared to the first quarter, was lower than in Romania were Spain and Portugal (0.2 per cent), Latvia (0.1 pc), Hungary (0 pc) and Greece (-1.5 pc). At the opposite end, Lithuania’s economy advanced by 3.2 per cent, Finland’s GDP rose by 3.1 per cent, and Germany advanced by 2.2 per cent. Compared to the second quarter of the preceding year, Romania is one of the six countries whose economy ebbed in the April to June interval. The steepest falls in the GDP were reported by Latvia (-3.9 per cent), Greece (-3.5 pc), Romania and Bulgaria (-1.5 pc), while Spain’s and Cyprus’s economy contracted only by 0.1 per cent, respectively, 0.2 per cent.

Berceanu: CFR Freight privatisation over by mid-2011

Transport...

Data of the National Statistical Institute (INS) confirm estimates published a few weeks ago. According to a release, the economy grew by 0.3 per cent in Q2 compared to Q1 of the year. On the other hand, economy was unable to recuperate enough on a year-on-year basis, reregistering a minus of 0.5 per cent. In fact, Romania has been in recession since Q3 of 2008, when the GDP started going down. In Q2 this year, the economy gained some strength, mainly thanks to export. Romania-made cars and telephones sold well, therefore the entire sector grew by over 20 per cent in H1 this year compared to H1 of last year.

According to INS, in Q2 of 2010, the industry grew by 5.9 per cent and compensated for the 8.3 per cent decrease suffered by the construction sector. Compared to Q2 of 2009, slight volume growth was also reported in Agriculture, hunting and forestry, fishing and fisheries (+0.7 per cent) and in financial activities, real estate activities, rentals and services for companies (+0.8 per cent). At the other end, activity volumes dropped in retail, automobile and home appliance repairs, hotels and restaurants, transport and telecom (-4.2 per cent) and in other activities...

The home consumption of fast-moving consumer goods in H1 dropped by 4 per cent in national currency from a year earlier, being the first decrease recorded in the last ten years, with personal care products and home cleaning goods being the most affected, a GfK press release issued yesterday states. Among the categories with the steepest volume falls the ones that stand out are deodorants (-21 per cent), universal cleaning products (-19 per cent), chocolate tablets (-18 per cent), the decrease being primarily due to the fact that they were purchased by fewer consumers. Total market shares in terms of value at a national level of the various forms of retail remained relatively constant in H1 of 2010 on a year-on-year basis. According to GfK, hypermarkets’ market share in the first half of the year was 21 per cent compared to 20 per cent the year earlier, supermarkets – 13 per cent compared to 12 per cent, discount stores – 8 per cent compared to 10 per cent and cash&carry stores kept their 2 per cent market share....

Financial analysts claim that renewing the agreement with international financiers is a must. Most consider this is the advisable strategy, ‘Adevarul’ reports. The idea of a new agreement for a loan is already being accredited in the public sphere. Some economists argue this is not the best approach. “The present agreement is still in progress, yet, at Cabinet level, the idea of a new agreement is already explored. Or, the focus should be on restructuring expenses, otherwise, the effect on investors may be the exact opposite,” investment consultant Doru Lionachescu, managing partner at Capital Partners, says. Economic analyst Ilie Serbanescu is persuaded the new agreement will not be a precautionary one, but yet another stand-by agreement. “The state is bankrupt, pensions and wages are paid out of loans. More than half of the loan will have to be paid by the selfsame state. Where are they going to find the money, under present market conditions?” the analyst wonders. Economist Aurelian Dochia argues that, in the present international context, it is hard to believe that an economy as the Romanian one is will be able to recover without external support. At the same time, Dochia...

Government will amend ordinance 58/2010 on the payment of social contributions corresponding to intellectual property activities. The amendments shall first receive the nod from the Economic and Social Council, Environment Minister Laszlo Borbely told Agerpres yesterday. He made the point it was Fin Min Sebastian Vladescu who came up with the changes, first read at Wednesday’s government session. Minister Borbely made the point the changes refer to the employer, and not the employee, going to submit the social contribution statements on intellectual property and other self-employed activities. Ordinance 58/201 sparked a heated controversy after thousands of people stood in endless lines to pay their contributions last...