A break-up of the eurozone would lead to faster growth and spare weaker members of the single currency decades of depression and deflation, one of the UK’s leading forecasting groups said today. Capital Economics said that, far from being a potential disaster that would result in economic chaos, the return of national currencies would enable Europe to break out of a prolonged period of weak expansion. Christopher Smallwood, the author of the report, quoted by ‘The Guardian,’ said the problem was that Germany refused to expand its demand to help countries such as Greece and Portugal grow their way out of difficulty.

“The eurozone with Germany at its core operates as a system with a strong deflationary bias – one in which the whole burden of adjustment falls on deficit countries obliged to take strong deflationary action. As long as the eurozone continues to play by these rules, there is no alternative to many years of economic pain,” he said.

Greece, Spain, Portugal and Ireland have all announced austerity packages to cut their budget deficits and to stimulate export-led growth. Smallwood, formerly an economic adviser to Barclays, said that Portugal, Italy,...

June inflation fell to 4.3-4.4 per cent, from 4.42 per cent in the previous month yet, it will climb to about 7 per cent this month, although the rise to 24 per cent of the Value Added Tax is yet to reach its full effect, experts say, according to Mediafax. The National Statistics Institute is expected to publish today the monthly consumer price index. “June prices remained relatively unchanged, with no significant changes being noted, and therefore the consumer price index only showed a slight increase, of 0.2 per cent, from last month.

The RON depreciation, 1.6 per cent, has partially been offset by lower prices charged for some fixed telephony services,” UniCredit Tiriac Bank Chief Economist Rozalia Pal said, who forecasts June inflation at 4.4 per cent, up to 6.6 per cent this month, and to peak at 8.5 per cent in August, given the gradual effect of the VAT rise, only to fall to 7.7 per cent late this year. ING Bank Romania Chief Economist Nicolae Chidesciuc puts June year-on-year inflation at 4.3, and 0.1 per cent per cent against May’s, given the negative influence played by the RON depreciation and fuel prices, but also the positive role of such seasonal factors...

Romanian President Traian Basescu declared himself against changing the 16 pc flat tax. “I believe the flat tax must be neither decreased, nor increased,” the president recently said on TV. The president’s reaction comes after Economy Minister Adriean Videanu was quoted by daily ‘Gandul’ as saying that the ruling Democrat Liberals (PDL) discussed the idea of decreasing the flat tax to 10 pc. Later, Videanu said he made no such formal statement and sent the press to talking with the Finance minister about the issue.

Finance Minister Sebastian Vladescu last week began talks with members of the ruling coalition and employers’ organisations about future changes of the Fiscal Code. Mircea Cosea, president of the Foundation for Prognosis and Economic Strategy, attended the talks at the Finance Ministry and said the income tax system will be left untouched this year, ‘Evenimentul Zilei’ reports. “There are talks and a decision must be made, because the flat tax pretty much lived its life and it has some negative effects, like the polarisation of the society,” he said. Leaving the 16 pc tax in effect by the end of 2010 was also confirmed by the Finance minister’s image...

Donations made to the state budget, in view of mitigating the effects of economic downturn, amount to a total of RON 729,055, the Ministry of Public Finance (MFP) announced on Friday, quoted by Mediafax. Only the names of a few state secretaries were disclosed to the public, as having donated the money they earned as Administration Board members or representatives in General Shareholders’ Assemblies (AGA).

All other donors are confidential. Furthermore, if Finance Minister Sebastian Vladescu claimed, upon opening the Solidarity Fund, that this is the opportunity for people to support the state in times of economic crisis, now the purpose changed. “The solidarity account is for each civil servant to donate the money made from Administration Boards,” the minister explained.

The net incomes earned by dignitaries of the Finance Ministry for their positions in Boards or AGA of companies where the state is shareholder go from RON 40 to RON 35,700. None of them made proof of “solidarity.” Average Romanians however made, including a detainee who donated RON 400. Nobody made it clear what will be done with the money gathered in the solidarity account. The only...

The Government did not earmark funds for full payment of the more than RON 900 M that it owes to Bechtel for building the Brasov-Bors highway, as a consequence of completing the final 10 kilometres of the Campia Turzii – Gilau section is uncertain although works are continuing, Mediafax informs. The Government decided to earmark RON 977.1 M for the works scheduled this year while the debts the National Highway Company (CNADNR) owes to Bechtel alone stood at RON 903 M last year. The state budget is currently the only source of funding for the Brasov-Cluj-Bors highway. “In this context, for the time being no state budget funds have been earmarked for the full payment of debts owed to Bechtel, the latter repeatedly notifying CNADNR of a slowdown and of possible layoffs. Construction works on the final 10 kilometres of section 2B (Campia Turzii – Gilau) are nevertheless continuing however there is no certainty about the date on which they will be completed,” a Transport Ministry document written in June reads. The Campia Turzii – Gilau section has a length of 55 kilometres, 42 of which were built last year....

In the first six months of the year Renault’s Logan sales in Russia grew by 16 per cent to 29,626 units, according to the Auto Manufacturers’ Commission from within the Association of European Businesses in the Russian Federation. The model came 6th among the best-sold cars after ranking 5th in the January-May period on a market that grew by 3 per cent to 790,517 units, Mediafax informs. In June, Logan sales stagnated at 5,466 units with the model dropping to 6th place after ranking 5th in May. The model ranked below Ford which reported a sales growth of 181 per cent to 7,565 units.

The Sandero model was the 24th best-sold car with 6,128 units sold in the first half of the year. In June, Sandero was the 21st best-sold car with 1,469 units sold. The report contained no data on Sandero for the similar period last year. In June the Russian auto market grew by 45 per cent to 174,838 units. Logan and Sandero are the only Renault models included in the standings.

In other developments, car prices dropped by more than 10 per cent last year in Romania, placing the country among the markets that reported the steepest drops. According to a European Commission report,...

Four months have passed since the state launched the new stage of the ‘First Home’ programme, which allows Romanians to build houses on state-guaranteed credits. Yet since then, no such credits have been granted. In fact, state and banks have not completed all legal steps needed in view of this programme, Realitatea.net reports.

“Banks did not give us their operating norms, so far, and we must sign the conventions between us and them, and they are still thinking, because these are complicated things,” said Aurel Saramet, president of the Guaranteeing Fund. Clients can only wait for the banks to issue their norms and sign the conventions with the state. In turn, the state delayed by three months publishing these conventions in the Official Gazette. Those who dream to build a dwelling through the ‘First Home’ programme may keep on dreaming, because the state did not hurry to issue the required legislation, nor did banks rush to put pressure on authorities, so they can give such loans. The good news, if it can be called that, is that only 5 pc of Romanians say they plan to take a bank loan this year. Those interested to take a state-guaranteed loan for the construction of a...

According to a Government strategy announced by the Economy Ministry, regulating lobbying activities and bringing a new modification to the public procurement legislation are among the urgent measures that should be adopted in order to improve the business environment, a press communiqué informs. The Government strategy on improving and developing the business environment was devised by a consortium consisting of Italy’s Archidata and Eurecna consultancy companies and Romania’s Euro In Consulting company as part of a project that the Ministry of Economy, Commerce and Business Environment (MECMA) ran with European funds. The project’s total value stands at RON 3 M without VAT, RON 2.58 M of which represents non-reimbursable European funds.

The strategy has four goals that will be attained by implementing 18 measures that translate into 62 Government actions for which a budget of EUR 40.7 M (EUR 27.85 M from European funds) will be earmarked. Most of the sums will be earmarked for supporting economic growth through investments and for easing access to business development support.

The strategy also contains a series of measures that should be implemented in order...

Bucharest heads the top of a study issued by The Oxford Economics about the economic development and employment growth, with estimated growth of 7.2 per cent, while Sofia has ranked second, followed by Warsaw and Prague. According to forecasts, in the period 2010 to 2015 Bucharest will grow by average 7.2%. Romania’s Capital ranks first in the forecast for the increase of jobs numbers - with an expected increase of 3.7% a year.

Dr Neil Blake, the director of Economic Analysis at Oxford Economics, said: “Central European cities are forecast to grow faster than their western European neighbors, much as they have done over the past decade, as they benefit from strong underlying national growth rates and further development of private service industries. But job creation in these cities is unlikely to compare as favorably as weak demographics and restructuring in employment-intensive industries constrain growth potential.” For Sofia analysts expect growth for the period by average 6.3% a year. Warsaw’s growth has been predicted to be 5.7%, Prague’s - 4.2% and Helsinki’s - 3.7%. Stockholm, Budapest, London, Brussels and Oslo come in the tenth...

RON slips to a reference exchange rate of 4.2375 lei/euro

Central bank settled a reference level of 4.2375 lei per euro on Friday, 0.21 percent up from the previous session, as the national currency declined gradually on the inter-bank market, after the increases reported in the previous days. BNR posted an exchange rate of 4.2285 lei per euro on Thursday. The national currency depreciated gradually from 4.2290 to 4.2425 per euro at opening bell and at 1:05 p.m. the euro was sold for 4.2375 lei. For the U.S. dollar, BNR’s reference level grew 0.21 percent to 3.3485 lei per dollar, from 3.3414 in the previous session. On the international market, the dollar decreased from 1.2670 to 1.2722 versus the euro and then soared to 1.2663 per euro. Overnight interests on the monetary market maintained below the interest rate of 6.25 percent a year. BNR posted an average inter-bank bid rate (ROBID) of 2.29 percent a year, up from 2.27 percent in the previous session, and an inter-bank offer rate for overnight deposits (ROBOR) of 2.79 percent, above the previous 2.77 percent.

Tower Center International, near insolvency

Tower Center...

Key euro-priced bank-to-bank lending rates hit their highest levels in 10 months on Friday, a day after the European Central Bank kept its interest rates on hold at 1.0 percent. The three-month Euribor rate - traditionally the main gauge of interbank euro lending and a mix of interest rate expectations and banks’ appetite for lending - climbed to 0.822 percent from 0.810 percent the previous day, the highest level since early September. Shorter-term one-week rates rose to 0.491 percent from 0.478 percent, six-month rates increased to 1.081 percent from 1.070 percent, and one-year rates inched up to 1.351 percent from 1.340 percent.

Banks paid back 442 billion euros worth of one-year loans to the ECB last week and reborrowed less in shorter-term maturities, reducing the overall amount of liquidity in the system. Interbank rates have been rising in the wake of the euro zone debt crisis as confidence about the health of some parts of the banking sector has crumbled. Euribor rates are fixed daily by the Banking Federation of the European Union (FBE) shortly after 09:00 GMT. The European Central Bank successfully weaned banks off 442 billion euros of one-year emergency funds...

According to the Association of European Airlines, Tarom carried 728,900 passengers in the first five months of the year, a figure that is 32.6 per cent lower than the one reported for the same period last year, Mediafax informs. In January-May, the company reported a passenger load factor of 57 per cent, up by 10.4 per cent compared to the same period last year. In May, Tarom carried 171,500 passengers, up by 34.4 per cent and had a passenger load factor of 59.5 per cent, up by 9 per cent.

At European level the number of passengers carried dropped by approximately 2 per cent to over 97 million, with the passenger load factor growing by 2 per cent to 65.6 per cent. Lufthansa, Air France and British Airways were the biggest airlines when ordered by number of passengers. In the first five months Lufthansa carried 20.8 million passengers, reporting a slight growth over the previous year. During the aforementioned period its passenger load factor grew to 76.7 per cent.

Second-ranked Air France carried 17.9 million passengers, down by 4.8 per cent, and reported a passenger load factor of 78.4 per cent, up by 2.5 per cent. British Airways carried 10.9 million...

The Bucharest Airports National Company organised on Saturday the Day of Open Gates at the Henri Coanda Airport of Bucharest. The public was invited to visit the airport platform and board pleasure flights. The Day of Open Gates programme is part of a series of actions organised by the Bucharest Airports National Company, dedicated to the Vlaicu - Coanda centennial. Its purpose is to recollect significant moments of the history of Romanian and world aviation. The Bucharest Airports National Company announced that the Henri Coanda Airport will host, on July 17, “a spectacular aviation event” - the OTOPENI AIR SHOW 2010 - that will feature over 60 aircraft and famous Romanian and foreign...

Natural gas pipeline linking Romania and Hungary to become operational in July

Transgaz (TGN) and FGSZ (the natural gas distribution division of Hungary’s MOL Group) will open this month a natural gas pipeline with a capacity of 1.75 billion cubic meters per year. The pipeline, stretching from Arad to Szeged, will link the two countries’ natural gas grids. The pipeline will become operational on July 20, a FGSZ release informs. “Its 150-meter cross-border section is still under construction. Natural gas deliveries will start as of July 20,” FGSZ points out. In January 2008 Transgaz and FGSZ signed a letter of intent on linking the two countries’ natural gas grids in order to improve the security of natural gas supplies. The pipeline was initially scheduled to become operational in mid-2010 however the Hungarian elections that took place in April delayed the project since the construction of the cross-border section called for an inter-governmental agreement. Bucharest and Budapest signed the agreement on May 12, with the construction works resuming on June 26. The natural gas pipeline will supply Romania at first; however its flow can be reversed if necessary. The...

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...

Renault Group yesterday opened its largest car part centre based outside of France at Oarja. The new centre will distribute spare parts and accessories for the Dacia, Renault and Nissan brands in Romania, Agerpres informs. Situated at km number 102 on the Bucharest-Pitesti motorway, close to the Dacia plant and to the industrial suppliers’ area, the centre stands on a total of 65,000 sq m, being the fourth largest in the Renault world network made up of 29 such facilities. The spare part warehouse manages 70,000 car parts for the Dacia, Renault and Nissan brands, from 369 different suppliers – 206 from Romania and 163 for abroad – and delivers to a total of 110 clients in Romania and to clients based in 33 other countries. Nearly 40 per cent of the centre’s activity consists of export, with main destinations being France, Russia and Turkey, and most important parts being oil filters and rims. Renault Group Post-Sale Services Division Director General Jacques Daniel says the availability rate for car parts for the three automotive brands at the Oarja spare part centre is 95 per cent. The new centre was developed during a year, after Renault Group’s 2008 strategic decision to expand...

Forex reserves continue decline to EUR 31.55 bln

The country’s foreign exchange reserves held by the National Bank of Romania (BNR) suffered a slight negative correction in August for the fourth consecutive month, from EUR 31.58 bln to EUR 31.55 bln, of which EUR 733 bln were inflows and EUR 759 bln were outflows, central bank data shows. The gold reserve stayed at 103.7 tonnes, but its value rose to EUR 3.24 bln in the context of growing international prices. Official international reserves (foreign exchange and gold) at the end of August were EUR 34.79 bln, slightly up from the EUR 34.57 bln at the end of the previous month. Payments servicing external public debt (direct or guaranteed by the Ministry of Finance) and falling due in September amounted to EUR 78.7 M.

BCR launches real estate portal

Banca Comerciala Romana (BCR) yesterday launched Romania’s first property portal managed by a bank. Apart from the complex supply of residential properties in all of the country’s counties, the portal also provides information on procedures to follow when buying a home. The portal includes advice and recommendations on preparing property...

EximBank initiated a project of collaboration with the Management Authorities involved in the management of structural funds, which is meant to help companies interested in acceding European funds obtain access to information.

“The absorption of European funds is essential for economic recovery, and greater transparency and a more active communication are the main solutions to draw European funds more effectively. That is why we are trying, by this project of collaboration with the Management Authorities, to jointly promote ways of accessing European funds and banking products offered by EximBank to support trading companies and public authorities in their endeavour to accede to funds offered by the European Union,” Ionut Costea, the president of EximBank, stated.

In setting up this project, EximBank approached 17 Management Authorities and intermediating bodies (units meant to implement operational programmes at a regional level), with a view to initiating partnerships which will allow for joint action to expedite the absorption of European funds.

EximBank offers to companies and public authorities running projects financed out of structural funds a...

The 25 per cent wage cuts of National Bank of Romania (BNR) employees will remain in force, after the Government modified the law which imposed the cuts, Mediafax reports. However, the money resulting from the cuts will no longer be allotted to the state budget, but will remain instead at the disposal of the central bank, contributing to boost the bank’s statutory reserves, a Government spokesperson, Ioana Muntean (photo), stated.

The Government debated, on Monday, an emergency ordinance to modify the law by which BNR employees’ wages, alongside public sector wages, were cut by 25 per cent, to fend off potential sanctions from the European Commission (EC). The European Central Bank (ECB) issued a warning related to the emergency ordinance to modify the said law so that the saved amounts remain in the bank’s accounts, underlining this wouldn’t solve the problem of the central bank’s autonomy.

Thus, the Government has to return the money transferred to the state budget following the wage cuts, to prevent the violation of European Union Treaty provisions.

“Article II in the emergency ordinance bill stipulates that the amounts derived from the reduction of...

Romanian companies manufacturing goods for the local market announce layoffs, whereas multinationals are hiring more employees, according to a survey by “Gandul” daily newspaper. Microsoft, Amazon, Oracle, Ford and Dacia are among the top companies recruiting employees. “Foreign companies are more upbeat given business gets better. They are already readying for next year, when they expect things to go even better. We should say this only applies to foreign companies working for customers from countries where economy picked up. It is normal for them to hire more people given the rising orders,” said George Butunoiu, a human resources expert. The auto industry will be one of the chief employers in Romania, given investments made by Ford and Renault. Ford workforce will top 3,500, and 7,000 in the upcoming years. Amazon, the world’s biggest online retailer, will employ 12 more software experts at its new development centre. The work force, circa 30 so far, will double over the next two to three years, local company officials say. In early spring, Microsoft too announced it needed 70 more employees by year’s end, in addition to the 300-plus workforce in place. HP too is among the...

The results of American European Marketing & Enterprises (AEM&E), a company which reported, for 2009, at the Registry of Trade, a RON 15.47 bln-turnover and the same amount of profit, were not included when adding up the GDP and are “aberrant figures,” according to the National Institute of Statistics (INS), Mediafax reports. The institute explains that, following investigations, it emerged that the economic and financial results of American European Marketing & Enterprises were not included in the Gross Domestic Product, neither in 2009, nor in 2010, as a consequence of the fact that the company is not featured in the operating economic agents’ poll database used by INS in the calculation of macroeconomic indicators.

According to INS investigations, the company in question is not to be found in the city where it is supposed to operate, so that the Ministry of Public Finance was notified of this case, for supplementary checks. “To conclude, reiterating that this company’s economic and financial results did not influence the level and dynamics of macroeconomic indicators as calculated by the National Institute of Statistics, we cannot say, until these investigations are...

ECB President in Bucharest

Jean Claude Trichet, president of the European Central Bank (ECB), will arrive to Bucharest on September 4, HotNews.ro informs. He will attend manifestations which mark 130 years since the founding of the National Bank of Romania (BNR). Trichet will remain only 24 hours in Romania, as he is due back in Frankfurt on the following morning. According to organisers, the conference proceedings will be held in English, but will not be broadcast live.

Notaries forced to reduce property transaction fee by 10 pc

The Bucharest Chamber of Notaries Public is cutting real estate transaction fees by 10 per cent in Bucharest and in a few other counties, the measure being applicable as of today, in the context of the negative trend of the property market in the first seven months of the year. The counties that will benefit from reduced fees are Calarasi, Giurgiu, Ialomita, Ilfov and Teleorman, Mediafax informs. This year’s grid used by notaries to calculate minimum fees and taxes on apartment transactions in Bucharest was set at 30-40 per cent smaller values, the adjustment being called for by the decline of the property market...

Disgruntled about salary cuts, the blanket salary law and government’s offer over the minimum salary, teachers, police, medical staff and other public sector employees are readying for a new round of protests, Antena 3 reports. Farmers too threaten street protests against the Boc government’s lack of policies to address their discontent.

On September 2, the Agrostar Federation will mobilise trade unionists for protest rallies in each county seat. After one week of such protests, farmers are coming to Bucharest to hold a massive rally. Agrostar president Niculae Stefan says government has not met its pledges, as it failed paying subsidies to farmers, as stipulated by law. Stefan has repeatedly called on the agriculture minister to step down and announced this would be one of the protesters’ chief demands.

Trade unions announced major street protests unless the executive yields to union demand, Agerpres quoted Cartel Alfa vice-president Romulus Nita as saying.

However, Tonny Lybek, the International Monetary Fund (IMF) representative in Romania, yesterday said that salary-related spending in the public sector will be cut back to the year 2005 level of 7.4...

On August 19, Romania’s Finance Ministry filed to the European Central Bank a draft ordinance in which salary cuts applied to employees of the National Bank of Romania (BNR) were “masked,” after the previous ordinance had received a red light from the ECB, HotNews informs. ECB President Jean-Claude Trichet once again expressed his “concern” with the fact that the Finance Ministry fails to understand that it has no right to cut salaries within the central bank. According to the draft, the sums that result from cutting BNR employees’ salaries will no longer be sent to the budget and will remain within BNR instead. The calculus was simple. The resulting funds remain within BNR but then we take 80 per cent of them – the profit margin that BNR pays to the state.

Despite the diplomacy that always characterises this institution’s opinions, one can note the categorical crescendo of dissatisfaction with the attitude adopted by the draft’s authors. The ECB’s opinion is technical but still extremely clear for a specialist and it diplomatically says “please don’t try to fool us, it won’t work.” Referring to the sums resulting from salary cuts, the ECB points out that if they end up...

The index of trust in Romanian economy is on the rise in August, as consumers’ expectations rose and prospects of retail trade and constructions are more optimistic, according to a monthly poll of the European Commission. At the same time, the prospects in industry remain unchanged compared to the preceding month, and trust in the services sector dropped. Thus, the index of trust in the economy rose at 76.4 points in August, compared to 75 in July, marking the third consecutive month in which the perception of Romanian economy changed for the better.

Nonetheless, Romania ranks last but one in the European Union according to this index, taking precedence only over Greece (67.9 points). The countries boasting the highest index of trust in the economy are Sweden (115.4 points) and Germany (111.2 points).

Managers in industry were more optimistic about their order books; in particular they were upbeat about their export order books. Managers’ assessment of production observed in recent months and production and employment expectations remained unchanged. Meanwhile, managers’ assessment of their stocks of finished products worsened slightly. After the surge in July,...

The individuals who made, in the past five years, incomes from professional activities, without a work contract, will have to pay, retroactively, healthcare contributions for the past five years.

“The moment they come to file a statement of income here, citizens are asked to bring also, from the fiscal administration, a record of their financial situation for the past five years. If they haven’t paid healthcare contributions, they will be asked to do so,” officials of the National Healthcare Home stated, quoted by Money.ro.

Thus, if an individual was paid exclusively in royalties, the person in question would have had to go to the Healthcare Home to state one’s income and pay the healthcare contributions corresponding to their income. The provision refers, however, not only to those who were paid exclusively in royalties, but to all citizens who make work-based incomes, according to the Government’s Emergency Ordinance 58/ 2010, which imposes the payment of social contributions for all types of income. Officials of the institution say there is nothing new about that, given that the law instituting the obligation to pay healthcare contribution has been in force...

Activity in the processing industry and services will be characterised by a relative stability in the August-October period compared with the previous three months, company managers polled by the National Statistical Institute (INS) say. They anticipate that, in the period to come, the number of employees will continue to drop in all economic sectors end especially in small companies of less than 50 workers, Agerpres informs. On the other hand, industrial goods’ prices are expected to have a slight growth in the next three months. In the construction sector, the volume of production will decrease moderately and the stock of contracts and orders will decrease in the next three months. Construction work prices are expected to go up slightly. Retail managers in August anticipated a mild decrease of economic activity in the next three months. From a distinct point of view, over 24,000 residential building permits were issued in the first seven months of the year, more by 15.1 per cent compared to the same period last year.

At the same time, the average job vacancy rate in Q2 was of 0.59 per cent, down by 0.11 percentage points compared to the previous three months and by...

Five resort-like complexes will be developed on the Black Sea Coast in the Terra resort still to be developed near the 23 August commune. The new resort could attract dozens of thousands of tourists every year, especially German and Austrian ones, ‘Gandul’ daily says. The downside to it is that the state will need to invest in road infrastructure and utilities a total of EUR 7 M, because the road and the water and power supply network are provided by the local authorities. The local mayor hopes to receive the funds needed to start the project. “Every time she came to the seaside, (Tourism and Regional Development) Minister Udrea invited all the mayors in the county. She saw the plans, she was thrilled by the zoning plans, was happy about it and said it would be something nice. We asked her if she would help us and she said the money would come either from the state budget or from European funds. She told me: ‘Mugur, despite poverty, we will give it to you’. She means well,” Mayor Mugur Mitrana says. Despite the industry’s efforts, the all-inclusive regime has not been really successful in Romania, Corina Martin, President of the National Association of Tour Agencies (ANAT) said,...

Italian company CIR to develop wind turbines in Vaslui

Company Sorgenia, part of the Italian group Compagnie Industriali Riunite (CIR), is planning on building several wind turbines in Vaslui County, Romania. “At present, Sorgenia holds permits to develop wind turbines with a total capacity of 106 MW,” CIR group communication director Salvatore Rico told Mediafax. The permits obtained by Sorgenia in December 2009 and April 2010 were issued for the commune of Falciu, Vaslui County. The CIR group, established in 1976, conducts operations in the energy, media, automotive components, healthcare and financial services sectors. In its turn, CIR is under the control of Compagnia Finanziaria de Benedetti, a financial holding property of De Benedetti family.

Chinese companies slowly investing in Romania

Commerce and agriculture are two Romanian economic sectors Chinese businessmen want to invest in, ‘Adevarul’ daily writes. China has surpassed Japan to become the second-largest economy of the world after the United States. However, the three decades of impressive growth that China experienced were based exclusively on investments and exports, with...

Prime Minister Emil Boc stated, recently, at the Labour Ministry, in a meeting with representatives of the patronages that, according to official figures presented by the National Institute of Statistics (INS), in the second quarter there was positive economic growth and a growth in industrial production, but voiced a “moderate optimism,” Realitatea.net report. The Gross Domestic Product, in adjusted terms, rose by 0.3 per cent in the second quarter compared to the first, but remains considerably lower compared to the same interval in 2009, so that the economy contracted in the first six months by 1.5 per cent, according to data signal published by the INS. Moreover, Boc explained that, according to the analysis for the first seven months of the year budget expenses, as well as social assistance expenses, are dropping, as is the number of jobs in the public sector, while the state budget revenue started rising.

When asked what the economic figures for the second half of the year are, Boc pointed out this is still in progress, and that the only certainty, according to analyses made by the European Commission and the International Monetary Fund, is the fact that Romania...

The minister of Culture, Kelemen Hunor, stated, on Saturday, at the “Peninsula” Festival in Targu Mures that he disapproved of the artists’ tax strike, arguing that all incomes should be taxed, in a unified manner, and that all corresponding contributions should be paid, Mediafax reports. In the same context, Deputy Prime Minister Marko Bela stated that people who complained they had been faced with problems in filing the royalties’ statements were right, as there’s too much bureaucracy in Romania.

At the same time, the vice president of the Democratic Liberal Party (PDL), Ioan Oltean, stated, on Friday, in a press conference, that the present Government cannot afford to sanction such an important segment as that of journalists just because the latter do not support the ruling party. Moreover, Prime Minister Emil Boc stated, on the same day, that he is open to talks with the initiators of the tax strike so that the latter would understand that the Government’s Emergency Ordinance (OUG) 58/ 2010 was not aimed at genuine creators, but was meant to “eliminate” people benefiting abusively from royalties, such as drivers. At the same time, a spokesperson for the National...