The Week in Review, June 8-15

A roundup of the week's main stories.

România Internațional, 14.06.2014, 14:26

IMF postpones assessment of the stand-by agreement with Romania

The IMF postponed to November the assessment of the stand-by loan agreement signed with Romania last autumn, to give Bucharest some time to decide on new fiscal measures and to draw up the budget bill for next year, PM Victor Ponta has announced. A news release issued by the IMF on Thursday reads that “the teams have had constructive discussions with the Romanian authorities on how to ensure further progress and have reached agreement on important policies in this regard. However, some issues remain outstanding.” One of them is the Government’s plan to slash social security contributions by 5% as of July 1st, which the international financial institutions did not agree with. Victor Ponta announced that next week the Government will send the bill concerning this change to Parliament, and promised that Bucharest will respect all macroeconomic targets agreed on with the international lenders.

World Bank, optimistic as regards the Romanian economy

The World Bank has improved its forecast of Romania’s economic growth this year from 2.5% in January to 2.8%, while the GDP growth next year is expected to be even higher, around 3.2%. Similar figures have been announced for the entire regional and at a global level. According to the report, the stronger foreign demand will lead to an improvement with regard to Romania’s employment and consumption levels. At the same time, the low inflation will enable the National Bank to support economic growth through its monetary policy. The government and the IMF expect a GDP increase between 2.2 and 2.5% this year and around 2.5% next year. In turn, the European Commission estimates 2.5% and 2.6% economic growth rates for Romania in 2014 and 2015 respectively.

Facilities for Romanian entrepreneurs

Romanians of any age, who have not had their own companies before, may set up a micro-enterprise free of charge, thanks to a law aimed at encouraging the development of small enterprises passed by the Chamber of Deputies on Wednesday. The law also exempts employers from payment of social security contributions for a maximum of four full-time employees with open-end employment contracts, and from the payment of registration fees charged by the Trade Registry offices. Entrepreneurs may also receive non-reimbursable funding of up to 10,000 euros, to cover 50% of the total amount of eligible expenses stipulated in their business plan and for which they prove they have co-funding sources.

Over 50% of Electrica shares to be listed

The Government seeks to obtain at least 435 million euros in exchange of 51% of the shares of Electrica, which it will have listed with the Stock Exchange. Preparations for the listing should be completed by June 26th, and the trading of Electrica shares is scheduled to begin on July 3rd. PM Victor Ponta is confident that the operation will be successful and says the revenues will be used for investments. The Minister Delegate for Energy, Razvan Nicolescu, announced this is the largest listing operation in the Romanian stock market, and the price per share will range between 11 and 13.5 lei. Large investors will be able to buy up to 85% of the shares for sale, while the remaining 15% will be offered to small investors. If the demand is higher, the percentage allotted to small investors may be raised to 22%. All investors will also benefit from discounts. In another move, as of July 1st all natural gas producers will have to trade part of their output in the commodity market, and the same measure will apply to natural gas providers starting next year.

Statements by EC President in Chisinau

The President of the European Commission, Jose Manuel Barroso, is confident in the European future of the Republic of Moldova, and says the country’s signing the EU Association Agreement on June 27th was not intended to affect its economic relations with Russia. While in Chisinau, the EC official explained that the agreement was meant to improve Moldova’s international relations, rather than influence its relations with any other country, Russia included. In turn, Moldovan PM Iurie Leanca appreciated the financial, technical and political support given so far to the Republic of Moldova, and said his cabinet would do its best to shorten as much as possible the period of Moldova’s EU integration.

Medals for Romania in the European Fencing Championships in Strasbourg

Romania’s women’s epee team won the gold on Thursday, defeating Russia, 38-34 in the final of the European Fencing Championship in Strasbourg, France. Ana-Maria Branza, Simona Pop, Maria Udrea and Simona Gherman (the latter also winner of the bronze medal in the individual event in Strasbourg) defeated Ukraine in the quarter-final and Italy in the semi-final.