The Week in Review, February 11-16

A look at the most important events of the past week.

Bogdan Matei, 16.02.2019, 14:15

2019 budget

It’s the middle of February and Romania finally has a state budget for 2019. The government majority formed by the Social Democratic Party and the Alliance of Liberals and Democrats, with the support of the Democratic Union of Ethnic Hungarians in Romania, on Friday passed the budget bill proposed by the government without major changes. The budget is based on an economic growth rate of 5.5%, a deficit level of 2.76% and a GDP of over 1,000 billion lei (the equivalent of more than 200 billion euros). The government says healthcare, education and investments are the privileged areas. President Klaus Iohannis says, however, that the budget was created in a hurry and is based on unrealistic economic estimates. He warned that this should not be the budget of the Social Democrat leadership, but of Romania, and has denounced in particular the diminution of the budgets of national security institutions, a move he has described as irresponsible.

Economic statistics

Romania’s economic growth rate slowed down in 2018 to 4.1% from 7% in the previous year, according to estimates published on Thursday by the National Institute of Statistics. The figures point to a lower GDP growth than the estimates of the National Commission for Prognosis, which indicated a 4.5% growth rate for the Romanian economy in 2018. The European Commission has recently shown in its winter economic forecasts that the economic boom that began in Romania in 2017 slowed down in 2018. The real growth of the GDP decreased from 7% in 2017 to an estimated 4% in 2018, said the European Commission.

Polemic between Parliament and the National Bank of Romania

The governor of the National Bank of Romania Mugur Isarescu has given assurances there is no deviation from the ROBOR indicator at the real level of the market. At Tuesday’s hearings before the economic and budget and finances committees, he explained that at the moment, the ROBOR level — the main indicator based on which the variable interest rates for loans in the national currency are calculated — can only vary between 1.5 and 3.5%, as these are the values at which the National Bank can attract banks’ deposits. The chair of the senate’s economic committee, the Liberal Democrat Daniel Zamfir, has said that the banking sector in Romania has the lowest level of financial intermediation in the European Union while its profitability is double the European average. The disputes between Zamfir and Isarescu intensified after the national currency, the leu, reached historically low exchange rates against the euro for several consecutive days in January. At the same time, the ROBOR indicator went up to almost 3%, thus placing additional burden on people with bank loans.

Politics and anticorruption

President Klaus Iohannis has requested the department investigating crimes in the judiciary to clarify as soon as possible the situation of the case opened against the former chief of the National Anticorruption Directorate, Laura Codruta Kovesi. The president says this department should not be a political instrument of investigation and intimidation of magistrates and prosecutors. The opposition has described the case as an example of political policing orchestrated by the power in Bucharest. Kovesi was cited in the case on suspicion of abuse of office, bribe taking and false testimony. She said she was innocent and that it was no coincidence that she was cited precisely before going to Brussels to appear before MEPs for an interview for occupying the position of European chief prosecutor, for which the media see her as a favourite. The person who denounced her is the former Social Democrat MP Sebastian Ghita, the protagonist of several corruption cases and currently a fugitive from justice in the neighbouring Serbia.

The Romanian presidency of the Council of the EU

The EU member states pledged on Tuesday to consolidate the framework for the supervision of financial institutions to find the best solutions to combat money laundering. The Romanian presidency of the Council of the European Union was invited to initiate, as soon as possible, negotiations with the European Parliament on the entire legislative package on this theme. According to Radio Romania’s correspondent in Brussels, the finance minister Eugen Teodorovici, who chaired the ECOFIN meeting, emphasised that the rules for combating money laundering would be fully implemented in all EU member states.

Tennis

The Romanian women’s tennis team went up three places and are now in the fifth position in the Fed Cup ranking published by the International Federation (ITF). The climb comes after an away win over the Czech Republic, the current holders of the trophy and who will maintain their top position. France, Romania’s next opponents, defeated the Czech Republic 3-2 thanks to the points obtained by Simona Halep, who won both of her singles matches, and the pair Irina Begu and Monica Niculescu. Mihaela Buzarnescu lost her two singles matches. Romania will face France away, on the 20th and 21st of April, this being their second presence in the higher stages of the competition since 1973.