November 8, 2017 UPDATE

The left wing government in Bucharest has adopted significant fiscal amendments contested by the opposition, employers associations and trade unions

Newsroom, 08.11.2017, 20:00

FISCAL AMENDMENTS -The Romanian Government on Wednesday
adopted a series of amendments to the Fiscal Code. Finance minister Ionut Misa
claims the amendments bring significant benefits to both citizens and
companies, such as a cut from 16 to 10% in the tax on income, that is salaries,
pensions, rents, interest rates, copyrights and others. There will also be a 2%
cut in social contributions, which will be transferred from employers to employees.
According to Misa, all these measures will have as main effect an increase in
the employee’s net income, without the employer’s paying more to the state
budget. In exchange, the right wing opposition has vehemently criticised the
amendments promoted by the government. The leader of the National Liberal
Party, Ludovic Orban, deemed them a calamity and announced his party will
initiate and table a censure motion against the Tudose cabinet. He also added
the National Liberal Party will make use of all legal and constitutional forms
of protest to prevent the implementation of those fiscal aberrations, which run
the risk of ruining the Romanian economy. The big trade confederations have
repeatedly said that the amendments will actually reduce the employees’ incomes
and announced that protests will continue at national level, and might
culminate with an all-out strike.

CURRENCY -
The national currency, the leu, on Wednesday continued to lose ground against
the Euro, plummeting to the lowest level in the past five years. The leu also depreciated significantly on
the inter-banking market against the USD and other currencies in the region,
amid growing uncertainty caused by the government’s adoption of amendments to
the fiscal code, harshly criticised by trade unions, employers’ associations
and economic analysts.

EBRD – Romania’s economy could report a 5.3% economic growth,
which is estimated to go down to 4.2% in 2018, reads the latest forecast issued
by the European Bank for Reconstruction and Development (EBRD). Previous
estimates pointed to a 4% growth for 2017 and 3.5% for 2018. The National
Forecast Committee last week also revised its economic growth forecast to 6.1%
in 2017 as compared to the previous estimate of 5.6%. In October the IMF upgraded
its economic growth forecast for Romania from 4.2% to 5.5%.

DEFENCE – Security in the Black Sea area and
Romanian-American military cooperation in Afghanistan were the focal points of
the talks held in Brussels on Wednesday by Romanian defence minister Mihai
Fifor and his American counterpart, James Mattis. Relative to the bilateral
Strategic Partnership, Fifor said he talked with the US defence secretary about
consolidating NATO’s advanced presence on the eastern flank, laying emphasis on
the United States’ participation in the Black Sea region initiatives. The two officials held talks on the sidelines of the meeting of the NATO defence ministers.

THE KING – King Mihai I of Romania is in grave
condition at his house in Switzerland, which is why no event will be held to
mark his name day on the feast day of Saint Archangels Michael and Gabriel. On
Tuesday Mihai was administered the Holy Eucharist, after on Monday the Royal
House announced his condition had taken a turn for the worse. Aged 96, the King
is suffering from two forms of cancer. Ascending the throne in 1940, Mihai I
was forced to abdicate and go into exile in 1947 by the new communist
authorities. Mihai I returned to Romania only after the anti-communist
revolution of 1989, when he regained Romanian citizenship and part of the
estates seized by communist authorities.

ENERGY – Romania has stepped up its negotiations with China with a
view to building reactors 3 and 4 at the Cernavoda nuclear power plant and a
new black coal unit at the Rovinari thermal power plant, Energy Minister Toma
Petcu said on the sidelines of a ministerial conference held in Bucharest,
attended by a Chinese delegation. In turn, Foreign Minister Teodor Melescanu
expressed Romania’s interest to taking part in projects fostered as part of the
new Silk Road project in China. Melescanu highlighted Romania’s strengths in
this respect, its geographic position and its transport facilities, the port of
Constanta, the Danube and the Danube-Black Sea canal.

EUROSTAT – 25.8% of Romania’s population was
employed in agriculture in 2015, placing the country on the top position at EU
level, against a community average of 4.4%, reads the latest report made public
by Eurostat. In 2015 some 10 million EU citizens worked in agriculture, of
which 7.5 in Romania, Poland, Italy, France, Spain, Bulgaria and Germany.
According to Eurostat, the rate of completing higher education studies varies
between 1.6% in Romania and 25% in the UK amongst agriculture workers. Finally,
Romania has the lowest rate at EU level, 1.5%, in terms of full-time
agriculture workers, as compared to the EU average of 16.4%.

THE POPE – Pope Francis has accepted an
invitation to become honorary member of the Romanian Academy, extended by an
official delegation of the Academy at the Vatican on Wednesday. The Pope
accepted the distinction, underlying his friendly relations with Romania. The
award will be sent to the Holy See by the Apostolic Nunciature in Bucharest.
Pope Francis is the second pope to be named honorary member of the Romanian
Academy, after John Paul II, who became a member in 2001.

CATALONIA – Spain’s Constitutional Court on
Wednesday officially revoked the unilateral declaration of independence adopted
on October 27 by Catalonia’s Regional Parliament. According to pundits, the
decision was an expected step to be taken by the Madrid authorities, after the
secessionist move had already been suspended in court. Trade unions in the region called an all-out
strike on Wednesday, to protest against the actions taken by the Spanish
justice against the former Catalan government. Radio Romania’s correspondent in
Spain says roads have been blocked, railway traffic has been brought to a halt
and all activities in schools and institutions have been suspended. One Tuesday
some 200 Catalan mayors and pro-independence MEPs met in Brussels with the
former Catalan leader Carles Puigdemont, which faces harsh accusations levelled
by Spain, after having favoured the organisation of the so-called
pro-independence referendum. Although he is being prosecuted, Puigdemont has
made public his acceptance to be the main candidate of his party in the future
span ballot called for December 21, by the Spanish government.

FOOTBALL -
On Thursday Romania’s national football team is playing Turkey at home in Cluj
Napoca, central Romania, and will next play the Netherlands on November 14.
Both games are friendly. Coach Cosmin Contra has called up 30 players, of whom
17 play for clubs abroad. The two games are bound to prepare preparations for
the 2020 European Cup preliminaries. Romania failed to qualify to the 2018
World Cup to be hosted by Russia, after a subpar campaign with German Christoph
Daum at its helm. We recall Romanian Mircea Lucescu is currently Turkey’s
headcoach.