28 December, 2016

Parliament majority to propose new PM; Business expected to drop in Romania

Ştefan Stoica, 28.12.2016, 11:59

PRIME MINISTER — The coalition that dominates the newly elected legislative assembly in Romania, made up by the Social Democratic Party and the Alliance of Liberals and Democrats, announced they would make another proposal for head of government by Thursday night. This comes after the head of state, Klaus Iohannis, refused to endorse their initial proposal. The Social Democrats have scheduled a session of their National Executive Bureau today. Social Democratic leader Liviu Dragnea said that one of the options would be to impeach the head of state, accusing him of attempting to trigger a political crisis. The Union of Ethnic Hungarians in Romania, which has an arrangement of support with the majority coalition, supports the idea that the Social Democrats should make another proposal. The National Liberal Party and the Save Romania Union welcomed the presidents turning down the nomination of Sevil Shhaideh as prime minister. The latter, a former Minister of Development, was proposed by the Social Democrats right before the holidays. According to the Constitution, if an understanding is not reached the parties can have a prime minister imposed on them, which they can vote down in Parliament twice. This may result in the President dissolving Parliament and calling for early elections.

BUSINESS — The business environment will be worsening in Romania in the next 12 months, with the national currency, the Leu, dropping in value against the Euro. This is the conclusion of the latest poll run by the Romanian Association of internationally certified financial analysts. Tax consolidation, needed after salary hikes, tax cuts and the drop in the VAT, as well as the fact that Romania will no longer have the same economic growth, given that the peak of the economic cycle has already been reached, will have an effect on investment, the poll shows. At the same time, Romania is a small and open economy, affected by the macroeconomic worsening of conditions globally. At the same time, it is expected that the leu will drop against the Euro in the next 12 months. The CFA shows that the increase in interest rates in the US has caused a rearrangement of exchange rates in all emerging countries, depreciating the local currency. The CFA Romania Macroeconomic Confidence Indicator was launched in May 2011, representing the forecasts of financial analysts in terms of Romanian economic activity for a year.

EARTHQUAKE — Romania has not sustained damage from the 5.3 magnitude earthquake that occurred last night in the Vrancea seismic region, at a depth of around 100 km. The National Earth Physics Institute revised twice the magnitude after the quake, which was also felt in the south east of Romania, the Republic of Moldova, Bulgaria, and the west of Turkey. The last tremor of this size occurred on September 24, felt all across the country, as well as in the Republic of Moldova. According to the National Earth Physics Institute, the strongest earthquake in the last few years occurred on the 22nd of November, 2014, with a magnitude of 5.7 on the Richter scale.

WEATHER — The weather is cooling in Romania. Skies are mostly cloudy, with snow dropping in most of the north, center and east. In the rest of the country, skies are mostly overcast. Winds are intensifying in the mountains, with maximums between minus 3 and minus 6 degrees. A code yellow alert is in place until Thursday in all mountain areas, with heavier snow forecast. A sharp drop in temperature is expected starting on December 29th, mostly in the north and center of the country.

CRASH — The Tupolev 154 Russian aircraft that crashed in the Black Sea most likely did so because of a fault in the flaps, the Russian press quotes investigators as saying. The Russian security services said there were no indications to support the possibility of a terrorist act. The aircraft had landed on Sunday at Sochi for refueling, after taking off from Shkalovski airport near Moscow, heading for Latakia, Syria. It vanished off radar screens after 20 minutes. 92 people were on board, 83 of them passengers, most of them members of the military orchestra Aleksandrov, along with a number of journalists. They were scheduled to hold a holiday show on the Syrian base at Khmeimim. There were no survivors.