Romania is a sovereign country and, if the Romanian government thinks the country is better off without the IMF, each can choose to walk its own way, the head of the IMF mission, Jeffrey Franks, stated, quoted by Mediafax, after talks with trade unions, patronages and entrepreneurs. The latter were hoping for concrete proposals for emerging out of the financial crisis, but the head of the delegation explained that the IMF has no such prerogatives. “We do not come up with measures. The Government takes measures and we support the Government’s plan for action,” Jeffrey Franks stated, in response to criticism.

Moreover, the latter argued that “Romania is a sovereign country, which may decide to put an end to the agreement with the IMF, but the Government does not consider it should renounce the agreement. The Government thinks we are playing an important part, and our intention is to assist in any way we can so that Romania may emerge out of the recession.” These statements come in response to those made by the businessman Dinu Patriciu, to the effect that representatives of the IMF “live in a theoretical world” and know nothing of Romanian economy, and that the Romanian...

The incomes resulting from copyright fees will be included in the category of those obtained from independent activities, so income tax and mandatory welfare contributions (CAS) will not be recalculated and jointly paid by the payer and the beneficiary of these incomes, Mediafax announces. The Finance Ministry made public the enforcement norms of the Government Ordinance regarding welfare contributions paid by those who earn copyright incomes, which will be included among the changes to the Fiscal Code. Emergency Ordinance 58/2010 rules that “any incomes of a professional nature, others than salaries, are to be subject to the income tax quota” of 16 pc. Those who earn such sums must also pay “the individual contributions of social insurances, health social insurances and unemployment insurances.” On the other hand, full-time employees who occasionally receive copyright fees - such as for writing a book - will not pay the CAS for the money they receive as copyright income, the Government decided. The example given to illustrate this concept is that of a professor working full time in an education institution, who receives a copyright fee for writing a book and must not pay the CAS...

The London branch of Gazprom is interested to purchase surplus carbon credits (the so-called AAUs / Assigned Amount Units) sold by Romania, Economy Minister Adriean Videanu announced, quoted by HotNews. According to the minister, several companies are interested to buy AAUs, including Mitsui, Sumitomo, Vitol, Nomura and Gazprom London. During Wednesday’s meeting, the Government passed the state contract “as basis of negotiation for the sale (of AAUs).” The minister of economy met representatives of the IMF, EC and WB, for talks over the income and expense budgets of companies controlled by the ministry, the targets set to curbing arrears and losses, privatisations and the sale of CO2 emissions. Referring to privatisations, he said that, besides selling its minority stakes, the state also wants to privatise a number of companies: Avioane Craiova, IOR, the Mangalia Shipyards, Cuprumin and Moldomin. On the other hand, Videanu opened yesterday the construction works of the Cosmesti-Marasesti Dam on the Siret River, Agerpres reports. The dam will have a dual purpose: while generating electricity, it will also protect downstream areas against floods....

Finance Ministry wants to borrow RON 4.6 bln in August

The Public Finance Ministry (MFP) wants to borrow from banks a total RON 4.6 bln (EUR 1.1 bln) in August, via state bond issues, similar to the value scheduled for July, but far above the sum actually attracted this month, Mediafax reports. In July, the Ministry only borrowed RON 1.38 bln through state bond issues, much under the initial target of RON 4.65 bln, as the Treasury tried to keep the average yield under 7 pc a year. The first bid of the month is set for the 2nd of August, when the state will try to sell bonds worth RON 800 M maturing in a year.

GE Garanti Bank wins Global Finance award

GE Garanti Bank was appointed “The bank offering the best Internet banking services for individuals in Romania in 2010,” during the annual award gala organised by the prestigious Global Finance magazine. The award was granted based on a complex study conducted by the Global Finance editing team and took into account several criteria: web design and the complexity of functions on offer, the rising number of clients for the service, the degree of use, as well as the efficiency of strategies to...

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...