One of the goals the Ministry of European Affairs has is to hike the rate of contracting European funds from 59 per cent to at least 90 per cent by t+he end of 2012, European Affairs Minister Leonard Orban stated during a press conference yesterday, hotnews.ro informs. The payments will be made by the end of 2015. Likewise, Orban pointed out that the absorption rate target will grow from 3.7 per cent now to 20 per cent by the end of next year. In case that target is not reached there is a risk of seeing EUR 1.9 bln disengaged from European funds in 2012. However, the highest risk of disengagement will be seen in 2013.
In what concerns the contracting rate, Leonard Orban said that “unless we contract at least 90 per cent of the funds by the end of next year we will simply be unable to spend these funds.” Orban added that the absorption of European funds is rendered difficult by the years of delay in managing reimbursement requests.
According to him, the Ministry will ask each authority that manages reimbursement requests to post on its website their status and deadlines.
Moreover, the Minister stated that there is the risk the authorities in Brussels will formally suspend for six months the payments for projects financed from European funds. However, that could happen only if certain measures are not adopted by October 31, namely: reforming the public procurement system and simplifying fund absorption procedures.
Orban also announced that the government decided on Wednesday to set up a working group that would come up with a code of behavior meant to prevent conflicts of interest and incompatibilities in the European fund management process. “There are situations we believe should be managed not just from a juridical and legal standpoint, but from a moral standpoint too. That is why we will ask those that manage European funds, especially those that hold very important offices, to abstain from certain things even if they are not illegal,” the Minister stated.
The European Affairs Minister also stated that the new Common Agricultural Policy will create “great difficulties” for Romania. “There are elements with which the Romanian side is not comfortable at all, such as the process of evening-out the level of direct payments in new member states with that of direct payments in older member states. The second element consists of putting an upper limit to direct payments. Irrespective of the farm’s size, the maximum sum will be EUR 300,000, something that could lead to a process of division. It will create serious problems for large Romanian farms,” European Affairs Minister Leonard Orban stated. According to him, Romania will fight in order to change this proposal.
When asked about a potential transfer of management authorities under the authority of the ministry he represents, Orban replied: “It was not possible to transfer all the management authorities under the same umbrella. It won’t be possible to do it in 2013 either, as it would block the funds for six to eight months”.
Attending the event, Radu Gratian Ghetea, the president of CEC Bank, stated that the bank had lent funding to over 9,100 projects running on European funds, referring to loans granted through such a programme. He voiced his optimism as regards the drawing of EU funds, arguing there are a lot of young people interested in putting these funds to use.
Lower bank interests, vital for reviving consumption, analysts say
Analysts and entrepreneurs voiced their surprise at the statements made by Central Bank (BNR) officials that decreasing the key interest rate would not contribute to reviving consumption. “We would be an exception from the rules of market economy,” analysts say, quoted by Ziarul Financiar. By cutting the key interest rate, the National Bank of Romania would help the state take cheaper loans and, implicitly, would also support the economy, but BNR took a different approach that other central banks and is more concerned with defending the exchange rate than stimulating the economy, which badly needs an encouraging signal, many analysts believe. “I find it strange to say there is no connection. The Central Bank is more concerned with defending the exchange rate than stimulating the economy. This strategy worked very well when the economy was on the increase, but is useless now, when it must recover,” comments Radu Craciun, the investment manager of Eureko Pensii and a former bank analyst. Businesspeople consider that a lower key interest rate would help the economy recover faster from the crisis. Lorand Szarvadi, CEO and shareholder of electronic and electric appliances retailer Domo believes that such a decision would have long-term effects. Some analysts doubt BNR’s courage to cut the key interest before the end of this year, given the strong fears about tensions abroad that resurfaced these weeks. “I don’t think BNR will cut the key interest rate before a solution to the crisis of sovereign debts in the euro-zone starts taking shape. Most likely, the first decrease of the key interest rate will occur in the first quarter of next year,” considers Dan Bucsa, the chief-economist of UniCredit Tiriac Bank.
The Belgians of KBC are terminating the operations of Romstal Leasing
The Belgians of KBC decided to stop making new leasing contracts in Romania through Romstal Leasing and to honor the existing leasing contracts until the current portfolio of contracts will end, wall-street.ro reports. The direct shareholders in Romstal Leasing are KBC Lease Holding NV (majority), and KBC Autolease NV. The Belgian financial group has announced as early as 2009 that it might renounce its Romanian operations, as a consequence of a restructuring plan, and the recent announcement shows this is what it will do.
Arval – 5 years on Romanian market
The end of September marked Arval’s 5th anniversary in Romania, a communiqué remitted to the editorial office shows. Arval is a member of BNP Paribas, a leading company in multi-brand operational leasing and in the management of auto fleets. Arval’s business in Romania grew gradually, being third on the operational leasing market and reporting a turnover of EUR 21 M, 40 per cent higher than the one reported in 2009 (figures relevant for fiscal year 2010). Moreover, the investments estimated for this year top EUR 16 M.