The Week in Review (12-18 April 2020)

A roundup of the main stories in Romania this week.

Mihai Pelin, 18.04.2020, 13:15

State of
emergency is extended by another month

Romania’s
president Klaus Iohannis on Tuesday issued a decree to extend by another thirty
days the state of emergency declared as a result of the coronavirus outbreak, which
has caused the death of over 400 people in Romania so far. Current restrictions
remain in place, said the president, because this is not the time to let our
guard down. He said there was no sign the pandemic was slowing and that the danger
had not passed. The president listed the main measures contained in the decree:

Schools will stay closed and all teaching activities involving
a physical presence in schools are suspended, with as much teaching as possible
to take place online. The decree I have issued also stipulates that the
government will take all necessary measures to ensure food security for the
population by continuing to ensure supplies needed in the production,
processing, transport and distribution to the population of essential goods. The
price of medicines and medical equipment, essential goods and public utility
services such as electricity and thermal energy, gas, water supply, sanitation
and fuel supply may be capped during the state of emergency.

The presidential decree also explicitly states the
possibility that the management of public sanitary institutions may be taken
over by employees of defence and national security institutions. The decree was
debated and voted on by Parliament on Thursday in an online session, following the
approval of parliamentary specialist committees a day earlier. Under the Constitution,
the state of emergency may be extended as often as needed, but only with the approval
of Parliament, which must vote on any extension within five days of its
publication in the Official Gazette.

Government makes first budget adjustment this year

The government has made its first budget adjustment
this year, taking into account the new economic data in the context of the
crisis triggered by the coronavirus outbreak, namely a deficit of 6.7% and a
reduction in the size of the economy of 1.9%. The largest amount of funds was channelled
to the labour ministry and the health ministry to cover medical leave, technical
unemployment in the private sector and other types of allowances. Other
beneficiaries of additional funds are the ministries of finance, home affairs,
transports, agriculture and public works.

The authorities say the technical unemployment scheme
will also cover some categories of self-employed persons. The budget adjustment
also aims to support small and medium sized businesses, severely hit by the
coronavirus crisis. A mechanism has also been put in place allowing these
businesses to contract state-guaranteed bank loans to finance working capital and
investments with 100% subsidised interest rates and no commission.

Romanian economy to shrink by 5% this year, according to International Monetary Fund forecast

The Romanian economy is projected to shrink by 5% this
year, according to the International Monetary Fund. This is a significant fall considering
that the Fund’s previous forecast estimated a growth rate of 3.5%. International
experts expect the Romanian economy to recover next year, when a growth rate of
3.9% is projected. The Fund’s latest forecast is much more pessimistic than that
of the World Bank, which last week estimated that Romania would see its economy
shrink by 0.3% this year.

The latest forecast by the International Monetary Fund
also points to a dramatic rise in unemployment in Romania, from 3.9% last year
to 10.1% this year, before decreasing to 6% next year. The Fund has also
revised its estimates for Romania’s current account deficit for this year to
5.5% of GDP, up from 5.2% last autumn. The International Monetary Fund also forecasts
that the world economy will shrink by 3% this year, indicating a much more
serious decline than that seen during the financial crisis of 2008-2009.

Transport ministry
regulates movement of seasonal workers

Romania has imposed
a series of conditions that must be respected by its citizens who travel abroad
for seasonal work, especially to Europe, which is severely hit by the coronavirus
outbreak. The new regulations are part of an order issued by the transport ministry
and stipulate that charter flights carrying Romanian seasonal workers must depart
at within a minimum of four hours of each other. The new order also obliges
recruitment agencies to provide workers with protective equipment, face masks
and gloves and to organise the workers’ transport only after receiving approval
from the departure airport. Moreover, recruitment agencies must assign a staff
member to airports to provide assistance to passengers, including in cases
where the flight is delayed or cancelled.

The new regulation
is intended to prevent the occurrence of irregularities such as those seen last
weekend at the airport in Cluj Napoca, in the north-western part of the country,
when almost 1,500 seasonal workers were crowded in front of the airport, in breach
of the physical distancing rules introduced by the military decrees issued in
the context of the coronavirus pandemic. (CM)