November 3-9

A selection of the week's highlights in Romania

Roxana Vasile, 09.11.2013, 12:30

IMF, the European Commission and Romania’s economic development

Romania has met all economic performance criteria for September: the budget deficit target was met, and inflation dropped more than originally estimated. The announcement was made in Bucharest on Wednesday by the head of the IMF delegation, Andrea Schaechter, at the end of the first assessment of the new stand-by agreement signed this autumn. According to the IMF official, there has also been some progress in the absorption of European funds and structural reforms.

The good agricultural yield and exports prompted the IMF to improve Romania’s economic growth forecast from 2 to 2.2% for this year. In fact, the European Commission forecasts made public this week also indicate that Romania will achieve the third-highest growth rate in the Union this year, after Latvia and Lithuania. In terms of privatization, there are both positive and negative elements. According to the IMF, the initial public offer for 15% of the stock of Romgaz was a success. At the opposite pole, the failure of the attempt to sell the Freight Division of the Romanian Railway Corporation was a setback, but Bucharest stands by its commitment to continue the privatization process. Also under the “weaknesses” heading are the still low domestic demand and the budget revenues below the estimated level.

The state budget for 2014 — a test for the government

The public budget of Romania, as laid down in a bill by the Government, needs additional funds, given that 2014 will be a year with more expenses than usual, such as a planned increase of the national minimum wages, an adjustment of pension benefits and possibly the 5% lowering of contributions to the social security budget for employers.

So, at least in a first stage, next year royalties due to the state will be raised, new taxes will be introduced for certain types of buildings, and the petrol and diesel prices will increase. Although the business community fear that an increase in fuel prices will push all prices up, the National Bank estimates this will have a limited effect on inflation, which will not go up by more than 0.2%. On Thursday, the central bank significantly lowered its inflation forecast for this year, from 3.1 to 1.8%. The National Bank inflation forecast for next year was also lowered from 3.1 to 3%.

Teaching staff protests

Unhappy with the funds earmarked for education, thousands of teaching staff have this week taken to the streets to demand the allocation of at least 6% of the GDP and an increase in personnel expenses. The protesters also want the National Education Act amended to the effect that the quality of education and the involvement of teaching staff in decision-making should improve.

Teachers mention that EU countries earmark an average of 5.2% of their GDP to education, almost double the figure reported in Romania. Moreover, according to a Europe-wide survey, only secondary school teachers in Bulgaria are paid less than the ones in Romania. This is not the first time that teachers take to the street to express their discontent with the under-funding of the system. However, this time they threaten to resort to extreme measures, including a possible all-out strike.

Radio Romania, celebrated by the National Bank

The events occasioned by the celebration of 85 years since the establishment of Romania’s public radio station continued this week. On Monday the National Bank head offices hosted the launch of an anniversary package containing a medal for 85 years of the Public Radio Broadcasting Corporation, an anniversary philatelic album on Romania’s Golden Tape Library, and a CD with recordings of famous voices on Radio Romania. The governor of the National Bank, Mugur Isarescu, emphasized that the special ties between Radio Romania and the central bank go way back, and said, quote, “the public radio is a national asset and must continue to belong to the country.”

Success for Romanian tennis

Simona Halep, who has won six tournaments this year, is the best performing athlete of the year, said the Minister of Youth and Sports, Nicolae Banicioiu, after last Sunday the 22-year-old tennis player won the Tournament of Champions in Sofia and went up to the 11th position in WTA rankings. This prompted former champion Ilie Nastase to say that what Simona Halep has achieved it quite a performance.

Ion Tiriac, another great Romanian former tennis player said, in his turn, that “for the time being Simona Halep is only a very good tennis player. She hasn’t won the Wimbledon, the Roland Garros or the US Open. Will she? It’s possible, moreover, it’s very likely, if she remains focused,” Ion Tiriac said.