January 3, 2025 UPDATE
A roundup of local and international news.
Newsroom, 03.01.2025, 19:50
Budget. Romanian finance minister Tanczos Barna said the state budget for next year will be drafted within the following three weeks. He explained that the next budget will be based on a 7% deficit of GDP, as agreed with the European Union, with no other fiscal measures. For 2025, he estimated an economic growth rate 2.5% and an inflation rate of 5% and added that the new government will not raise the VAT this year. Despite the high deficit, he says the money will be covered by better tax collection.
Salaries. Employees in agriculture and the Romanian food industry will lose money and compensating for the salary cuts will lead to higher food prices, Sindalimenta, the national federation of trade unions in the field has warned, after the government passed an emergency order to reduce budget spending. Representatives of the food industry point out that the elimination of tax incentives in their field and in agriculture will mean substantial salary cuts for employees, who will look for work in other, better-paid sectors. To keep the staff, employers will have to compensate for the reduction in incomes, something that will be reflected in the price of products on the shelf and which will ultimately be covered by all consumers. The federation also points out that the substantial increase in the price of Romanian food products will make them much more difficult to sell compared to similar imported products, which will have lower prices. In addition, the elimination of tax incentives will lead to the bankruptcy of companies unable to withstand the impact and to an increase in the number of unemployed people, leading to further budget expenses.
Energy. Energy Minister Sebastian Burduja says Romania is exporting electricity and natural gas to the Republic of Moldova on a commercial basis and only after covering national needs. He mentioned that Nuclearelectrica has concluded a contract for the supply of energy to neighbouring Moldova and that discussions are underway with OMV Petrom and the Oltenia Energy Complex. In total, the technical capacity for exporting electricity from Romania to the Republic of Moldova is 430 megawatts, Burduja said. In the natural gas sector, Chisinau can cover all its domestic needs from Romania, the Minister explained. These clarifications come in the context in which Russian gas supplies to Europe, through Ukraine ceased on January 1, when a transit agreement between the two countries expired. The Republic of Moldova used to receive a significant part of its energy supply through the Cuciurgan power plant, in the pro-Moscow separatist region of Transdniester, which operated exclusively on gas from Russia.
President. The Romanian President Klaus Iohannis made 22 official trips by private jet in 2024, to 11 countries in Europe, Asia and North America, 7 fewer than in 2023, according to the Bucharest media. The number of flights for these visits was 51, compared to 90 in 2023. The president’s office rented planes for these trips from only two private companies, one of which was Romanian. The total amount paid for President Iohannis’ official trips remains unknown. The president’s office refuses to make these data public, although Prime Minister Marcel Ciolacu announced in October 2024 that he would declassify them. According to experts, the president’s most expensive trips were the visit to South Korea in April and the three trips he made to the United States in May, July and September.
