THE WEEK IN REVIEW

19-23 August, 2024

Roxana Vasile, 24.08.2024, 13:41

Elections are coming

The government in Bucharest established, this week, the calendar of the parliamentary elections scheduled for December 1, right on the National Day of Romania. The electoral campaign will start on November 1, and will end in the morning of November 30. In the country, Romanians will be able to vote on December 1, between 7:00 and 21:00, and in the diaspora, voting will begin on November 30, at 7:00 local time and will end on December 1, at 21:00 local time. As the presidential elections will take place in Romania towards the end of the year, the list of candidates is gradually starting to take shape. One of the aspirants to the highest office in the state is Social-Democratic Prime Minister Marcel Ciolacu, who recently announced that he will enter the presidential race. The President of the Senate, Liberal Nicolae Ciucă, said he was convinced that he would reach the second round with the PSD leader. Among those who have so far announced their intention to run are USR president Elena Lasconi, AUR leader George Simion, and MEP Diana Iovanovici Şoşoacă.

Who does Romania propose for the European Commission?

Prime Minister Marcel Ciolacu announced that he will propose for European Commissioner from Romania the social democrat Victor Negrescu, vice-president of the European Parliament and chief negotiator of the Parliament regarding the Union budget for 2025. The announcement was made in Brussels, where the Prime Minister had a meeting with the head of the European Commission, Ursula von der Leyen, who is in full negotiations with the European political groups for the configuration of the future community executive, and for those who will occupy the positions of commissioners. Marcel Ciolacu stated that he is leaning towards a relevant economic portfolio in the future configuration of the Commission. The Prime Minister also discussed with the President of the European Commission about the renegotiation of the PNRR, as well as the future agreement on the reduction of the budget deficit.

Increased pensions, but not too much

Retirees from the public pension system in Romania have started, since Monday, to receive the decisions to recalculate their pensions based on a new law that is intended to be reparative and fair. In most cases, people will receive higher pensions from September. But there will also be retirees whose pensions will decrease, but – the government promises – only on paper, because they will continue to collect the same money as before. To make things clear, in the coming days, an official document will be sent to pensioners from the public system informing them that, whatever the calculation is on paper, the pension paid will not be lower than before. Hundreds of pensioners complained about the recalculation decisions they received, which, in their opinion, did not reflect the real value of the period in which they were employed. Those who have received recalculation decisions with lower pensions must know, however, that they will remain with the current non-indexed income for a longer period of time, meaning until, after the indexation of the reference point, the recalculated pension will exceed the one they now receive.

Economic outlook in decline?

Romania could have, this year, an economic growth of 3.4%, lower than the Government’s expectations – the Fiscal Council pointed out. In its annual report, the independent institution warns, at the same time, that the budget deficit will exceed 7% of GDP at the end of the year, and that there is even a risk that it will move towards 8%, under the conditions in which the new pension law, in addition to the wage increases granted in the public sector, it will generate additional costs. The representatives of the Fiscal Council signal that there is a need for policies that support fiscal and budgetary consolidation in the medium term both in terms of revenues and increasing the level of collection.

TAROM

The national air transport company TAROM – owned by the Romanian State – last year reduced its losses to 18 million euros, from an average of 55 million euros per year in the period 2017-2022, and could turn a profit in 2024, after accumulating losses of almost 300 million euros in the last 6 years. The interim head of the company, Costin Iordache, said that the restructuring would be completed this year, after TAROM benefited, in April, from state aid approved by the European Commission. TAROM recently sold the rights to operate flights at London Heathrow airport, and is going to sell four Airbus 318 aircraft, in order to modernize its fleet by integrating the new Boeing 737 MAX 8 aircraft, scheduled to arrive in Romania next year. The recovery of the TAROM company also occurs against the background of the increase in the number of passengers registered at Romanian airports.

Romania buys American missiles

The USA has approved the sale to Romania of missiles compatible with F16 aircraft – the American diplomatic mission in Bucharest said. The initial sale is valued at approximately $180 million, with the option to purchase additional missiles. This sale contributes to the modernization effort of the Romanian Air Force. The missiles are also compatible with other NATO and American aircraft, including the F35 aircraft.