THE WEEK IN REVIEW

November 7-11 2022

Roxana Vasile, 15.11.2022, 00:52

President Klaus Iohannis in Egypt

Romania will get a loan worth 3 billion dollars to design and finalize units 3 and 4 of the nuclear plant in Cernavoda, in the south east of the country. Attending this week in Egypt the Sharm el-Sheikh UN Conference on climate change, Romanian President Klaus Iohannis took part in the event for handing out the letters of intent for the loan from Exim Bank. In that context, he expressed his support for continuing Romanian-American collaboration in promoting energy security, in parallel with reaching goals in terms of climate change, developing renewable energy and nuclear energy as key elements in achieving green transition. At the UN conference on climate change, President Iohannis said that Bucharest supports fully the role of leadership that the EU took on regarding climate change. He said that we have to ensure an orderly climate transition, with multiple benefits, investments in research, development, innovation, and development in green energy, and creating new jobs.

The laws on justice declared constitutional

Romanias Constitutional Court on Wednesday rejected the filings from opposition parties USR and AUR, as well as the Peoples Advocate, against the three justice related bills recently passed by Parliament. These are aimed at the status of judges and prosecutors, judicial organization, and the Higher Council of Magistrates. The interim president of the Senate, Alina Gorghiu, said that the court decision was right and was natural, recalling that right now, Romanias aim is to lift the Mechanism of Cooperation and Verification, through which Brussels has been monitoring the rule of law in Romania since its admission into the EU as far back as 2007. The lifting of this mechanism is paramount in Romanias joining the Schengen space. In response, the opposition called on President Klaus Iohannis to not endorse the justice bills, even though they have been declared constitutional, and to await a decision from the Venice Commission.

Raise in reference interest rates

On Tuesday, Romanias National Bank made a few major decision. It lifted the reference interest rate from 6.25 to 6.75% per year. It also lifted the interest rate for loan facilities, as well as the interest rate for deposit facilities. The central bank also decided to keep a firm grip ion liquidity on the monetary market, and to maintain the present level of obligatory minimal reserves for assets in the local and foreign currency for loaning institutions. Early this year, the key interest rate was at 2% per year. This raise is explained by the fact that more and more expensive energy and food prices are raising inflation, which in September reached almost 16%. Experts expect inflation to go up towards the end of the year, then start sloping down to under 10% in the first quarter of 2024.

Agreement on setting a ceiling on energy prices

After much debate, the leaders of the governing coalition parties, the Liberals, Social Democrats, and the UDMR reached an agreement this week on setting a ceiling on energy prices. The provisions, which come into force next year, regard mainly customers that consume more than 255 kWh per month, who are now faced with huge bills. As such, starting on January 1, consumers that go over the ceiling of 255 kWh, along with large companies, will have a set price of 1.30 lei per kWh, about 26 Eurocents. Also, SMEs, the food and drug industry, as well as places of worship, will pay 1 leu per kWh, about 20 Eurocents. As for natural gas, prices stay the same. Home consumers would pay about 6 Eurocents per kWh, and non-home consumers would pay about 7 Eurocents.

Electricity for the Republic of Moldova

The EU is to offer the Republic of Moldova support worth 250 million Euro in the context of the energy crisis, of which 50 million to subsidize bills. This announcement was made on Thursday by EC President Ursula von der Leyen in Chisinau, in a gesture of support for the small country that has been hit hard by the consequences of the Russian war in Ukraine. Moldova is facing an unprecedented energy crisis after the Russian energy giant Gazprom cut off supplies to a large extent. The country was left without the electricity it was purchasing from Ukraine and the breakaway pro-Russian region of Transdnestr, so that right now it imports over 90% of its power from Romania. According to Romanian Foreign Minister Bogdan Aurescu, Romania also aided Moldova in purchasing fuel oil and cord wood. The Romanian government approved the export of 130,000 cubic meters of firewood at Chisinaus request.

A new customs point between Romania and Ukraine

Romanian PM Nicolae Ciuca on Thursday joined his Ukrainian counterpart, Denis Shmyal, for the opening of a new customs point between their countries at Vicovu de Sus and Krasnoylsk. This is the first customs opened since 1999 between Ukraine and an EU member state after the beginning of the Russian military aggression against Ukraine. This point of passage would facilitate the transit of people and goods between Ukraine and Romania, and further to the other EU countries.