The Week in Review 8-12 September

A look at the headline-making events this week

România Internațional, 13.09.2014, 12:29

Corina Cretu is the new European Commissioner for Regional Policy

Newly elected head of the EU’s executive Jean-Claude Junker, introduced his line-up of commissioners for 2014-2019. Romania holds the regional policy portfolio in the person of MEP Corina Cretu. Her office has a budget of 350 billion Euros, focusing on economic growth and job creation, which Jean-Claude Junker announced as policy priorities during his term. He said that the new commission has an extraordinary opportunity and an obligation to draw a new beginning for Europe, to rectify a difficult geopolitical situation, and to fix the economy of the European Union. He added that he wished to offer jobs and provide economic growth. Prime Minister Victor Ponta said that taking over management of regional policies is a success for Romania.

New sanctions against Russia

President Barack Obama said that the US stands alongside the EU in imposing tougher sanctions against Russia after is meddling in Ukraine, sanctions aimed against the defense sector, finances and energy. Obama said that the new sanctions will further isolate Moscow and will harm Russia’s economy. Starting on September 12, the EU has implemented new sanctions against Russia. They restrict access to the capital market for Russian oil and defense companies. In retaliation, Moscow has announced sanctions of its own. Recently, PM Dmitri Medvedev said that Russia will answer the new sanctions asymmetrically, including the possible restriction of western flights over its airspace. Other countermeasures may include restricting car and light industry imports.

New legislation with social impact

The Draft law slashing the social insurance contributions by employers passed this week in the lower chamber of Parliament. Finance Minister Ioana Petrescu said there were resources to compensate the losses incurred by the budget in this way, for both this year and the next. In July, Traian Basescu announced he was in favor of this measure, but sent the bill back to Parliament for reconsideration, since he doubted it was sustainable. Another bill passed, providing amnesty for mothers, pensioners and state employees who got undue amounts of money by clerical error. The Ministry of Labor estimates we are talking about around 20,000 mothers, 50,000 pensioners and 25,000 state employees, and the law will start being enforced on the first day of 2015. The amounts will be returned in equal installments over 5 years. Even though the opposition described the measure as an election maneuver, it voted in favor of the bill.

The evolution of the Romanian economy

Romania’s economic performance proves that it is a spearhead in the European economic recovery, being better than expected. According to a risk study by Coface, the GDP grew by 3.5% in 2013, with prospects for still growing in 2014, significant contributions came from the farming sector and from the industrial sector, especially in car manufacturing, which dominated by its exports. According to the study, the real GDP growth in Romania exceeded expectations, growing at its highest by 5.1% in the last quarter. The main factor for growth last year were exports, which registered a strong growth of 13.5%, especially in terms of farming products and automobiles. At the same time, in 2013 Romanian agriculture made products worth 17 billion Euros, making up almost 5% of the EU agricultural production, according to Coface analysts. The expectations for farming output in 2014 are uncertain, but the most realistic scenario is that it will be smaller than in 2013. Exports will continue to be driven by the demand for new cars, which would have a significant contribution to the yield in Romanian industry. Domestic demand also looks like it is improving, with growth in the appliance sector, which is still cramped by a low volume of personal loans.

Possible dismissal of President Traian Basescu

The president of the Romanian Senate, Calin Popescu Tariceanu, has initiated impeachment procedures against President Traian Basescu. He introduced a proposal in Parliament, and proposed a timeline for it. On 23 September Parliament is to vote on the impeachment, while the referendum that would actually suspend the president would be set for 2 November, coinciding with the first round of presidential elections. According to Calin Popescu Tariceanu, the president overstepped the bounds of constitutionality in his open political partisanship manifested during an election campaign.