THE WEEK IN REVIEW

October 30- November 3

Ştefan Stoica, 04.11.2023, 17:58

Romanian hostages in Gaza

The Ministry of Foreign Affairs from Bucharest came out, this week, with worrying news: three more people with dual citizenship, Israeli and Romanian, residing in Israel, are hostages of the terrorist group Hamas in the Gaza Strip. The number of Romanian-Israeli hostages thus reached four. On the other hand, in the middle of this week, thanks to the negotiations carried out by Israel and Egypt, the Rafah border crossing between the Gaza Strip and Egypt was opened. According to the MFA, to start with, border transit was allowed for officials of international organizations, medical cases, and citizens from states with small communities in the Gaza Strip. The Ministry of Foreign Affairs remains in close contact with the Israeli and Egyptian authorities for the evacuation of Romanian citizens and their families. About 260 Romanians have requested evacuation so far.

The draft of the future pension law under public debate

The draft of the new pension law entered public debate this week, and the Social-Liberal governing coalition set an ambitious deadline, November 20, for its adoption. The law would enter into force on January 1, when all pensions will be increased by almost 14 percent. Another increase in pensions, the result of the recalculation that will be done based on the new law, would take place on September 1 next year. According to the project, the minimum period of contributions in order to benefit from a pension will be 15 years, and, in order to retire early, 35 years of contributions will be required. By 2035, the retirement age will equalize at 65 for men and women. However, women who have raised children will be able to benefit from the reduction of the standard retirement age, depending on their number. Non-permanent contributory increments, such as hourly pay, the thirteenth salary, or bonuses, will be calculated at the time of retirement. The initiators of the new law claim that they aimed to eliminate the inequities in the system, which allowed employees with the same seniority and identical positions to benefit from different pensions. Prime Minister Marcel Ciolacu assured that, following the recalculation, no pension will be lower than the amount being paid today.

The new fiscal-budgetary measures come into force on November 1

Harshly criticized by the business environment and contested by the opposition, without success, in the Constitutional Court, the measures from the fiscal-budgetary package for which the cabinet from Bucharest assumed responsibility entered into force on November 1. Micro-enterprises will pay 1% tax on revenues of up to 60,000 euros per year, and 3% if revenues exceed this amount. Large companies with turnover of more than €50m will pay a minimum tax of 1% on turnover, and banks an additional tax of 2% on turnover in 2024 and 2025, to return to a tax of 1% over 3 years. Oil and gas companies with business worth over 50 million euros will pay an additional tax of 0.5%. The IT tax exemption is maintained only for incomes under 10,000 lei, the equivalent of 2,000 euros. Employees in construction, agriculture, and the food industry will no longer be exempt from paying the health contribution. In order for the incomes of employees in these sectors, which strongly contribute to the GDP, to not be affected, the executive increased, in their case, the minimum wage this week, . More than 400,000 employees from construction and 170,000 from the agro-food industry will benefit from the measure. The entry into force did not exempt the fiscal-budgetary package from the criticism of businessmen. They say that the new taxes will reduce foreign investments and will have an effect contrary to the one estimated in terms of reducing the deficit, which could rise to 20 billion euros. According to the business environment, the measures should have been primarily aimed at combating tax evasion, improving revenue collection, and making the work of the tax authorities more efficient, not at affecting the business environment by increasing taxation.

Union protests

The employees of the National Health Insurance House and the county houses started, on Thursday, protests for an indefinite period. Work with the public will be blocked, and the employees will protest in their offices until they receive higher salaries, announced the National Trade Union Bloc, which represents them. The NTUB claims that, since 2018, these employees have not benefited from any salary increase, and that financial resources for increases exist. The protest of the employees of the health insurance companies affects the settlement of the expenses of medical service providers, and the provision of medicines and sanitary materials from the national health programs for patients with chronic diseases. The Minister of Health, Alexandru Rafila, conveyed that the interruption of the provision of medical services cannot be accepted, and that he hopes that there will be a dialogue between the management of the National House and the employees. He also said that, although NHIS has the largest budget in Romania, there is a contribution problem, as only 5 million people contribute to the insurance fund, while 19 million benefit from medical services.

Věra Jourová in Bucharest

The mechanism of the rule of law, the fight against disinformation, and the digital transition dominated the discussions that the vice-president of the European Commission, Věra Jourová, had in Bucharest with the Romanian officials. She stated that Romania is doing well in terms of justice, but added that other legal regulations are needed so that citizens have access to a well-prepared judicial system. Regarding digitization, Věra Jourová opined that Romania has a special potential, and recalled that, in the Recovery and Resilience Plan, 5 billion euros are allocated to business digitization, the 5G network, as well as education and e-government. The Minister of Justice, Alina Gorghiu, assured that Bucharest will continue to modernize the judicial system, adopt predictable legislation, and intensify the activity of the Anti-corruption Directorate and organized crime directorate on important issues such as drug and human trafficking.