Changes to the Romanian Government’s fiscal policy

The government modifies emergency orders targeting key sectors of the economy.

Leyla Cheamil, 29.03.2019, 12:33

The Romanian government on Friday
approved changes to three emergency orders, including the infamous Order no.
114 that levied more duties in important economic areas: banks,
telecommunications and energy. This piece of legislation, which divided the
political class, had been adopted by the government without consulting with the
sectors targeted by the changes and was criticised both in Romania and abroad,
in particular the European partners.

According to prime minister Viorica
Dancila, the changes to the three emergency orders are meant to reduce lending
costs for the Romanians and boost the number of Romanian companies benefitting
from advantageous loans from the banks. She added that through these changes,
the calculation of the interest rate for loans in the national currency will
also take into account an indicator that is based exclusively on interbank
transactions, which will be published on the website of the National Bank of
Romania. The Romanian
Interbank Offer Rate, known as theROBOR index, will thus no longer be
used in the calculation. As of May 2nd, the new reference index will
apply to the new loans made by the population. As a result, the new index will
also apply to the refinancing of ongoing loans.

Another change made by the
government refers to the privately-run pension fund known as Pillar II. The
prime minister says talks were held with the share-holders and managers of
private pension funds in Romania, the ministry for labour and social justice
and the Financial Supervisory Authority with the effect that the regulations
regarding the capital requirements imposed on pension fund managers will be
suspended until 31st May. She explained that the measure was
necessary to allow private pension fund managers to adjust to the new social
capital conditions on the market. The obligatory minimum social capital in the
case of a private pension fund manager, namely the equivalent in the national
currency of 4 million euros, will be applied for this period.

The energy sector also saw a series
of clarifications and regulations. According to prime minister Viorica Dancila,
these are aimed, among others, at boosting investment in the electricity sector
and developing the natural gas supply networks by introducing the possibility of
also doing so with public funds on a regional basis. Another measure is capping
the price of gas and electricity for household consumers and lifting the cap for
industrial consumers, following talks with representatives of the sector and
the European Union.