RSM Romania_Business Brief_21-25.03.2016

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THE BUSINESS WEEK IN ROMANIA
21-25 March 2016

MACRO:
• Budget surplus
The general consolidated budget finished the first two
months of the year with a surplus of 0.8 billion lei, 0.1%
of GDP, compared with 2.3 billion lei, 0.33% of GDP,
for the same period of 2015, according to the figures
released on Friday by the Ministry of Public Finance,
reports Agerpress.
At the end of January 2016 the budget surplus was 4.7
billion lei, 0.63% of GDP. The revenues of the general
consolidated budget, to the sum of 35.4 billion lei, 4.7%
of GDP, were 4.6% larger at face value than for the
same period of the previous year. Compared with the
same period of the previous year there were significant
increases in tax on profit paid into the budget (+39%),
in tax on the use of goods (+20.3%), in social insurance
contributions (+9.5%), excises (+5.9%), and in VAT
(+4%). The expenditures of the general consolidated
budget, to the sum of 34.6 billion lei, increased in
nominal terms by 9.9% compared with the same period
of the previous year and by 0.2 points as a percentage
of GDP.
At the beginning of the year, the European Commission
estimated that in 2016 the budget deficit would
increase in ESA terms to three per cent of GDP, the limit
stipulated in the Maastricht Treaty. The state budget is
built on a deficit of 2.95% of GDP.
• Budget implementation below the deficit target in the
first quarter
Budget implementation in the first quarter will see a
deficit below the established target, at 0.9% of GDP,
given a level in March similar to that in February, at 0.5
to 0.6% of GDP, and the situation in the first two months
shows that the Government is attempting more even
implementation, declared the chief economist of ING
Bank, Ciprian Dascălu on Friday for news.ro. “Usually,
we need at least a quarter to be able to see the
evolution. In theory, we would expect the government,
which does not necessarily have political targets, to
have a budget implementation much closer to the plans
announced,” added the economist.
Dascălu stated that given that the deficit target
for the first quarter is less than 0.9% of GDP, there
was still enough room in March, considering that the
implementation would be below target. “We expect
there will continue to be strong consumption, and VAT
receipts, given the way the first two months look, will
still be positive. There is room for accommodation and
perhaps for unexpected measures from Parliament,
which might be taken in an electoral year, and so we
don’t see any risk to the deficit this year,” said Dascălu.
• The single currency in Romania perhaps in ten years
The deputy governor of the National Bank of Romania
(BNR), Bogdan Olteanu, declared on Thursday, at a
press conference in Sibiu, that Romania could be ready
to introduce the single currency in about ten years, if
steps are begun in the autumn of this year. “To finish
a process you first have to begin it, and Romania has
not yet begun preparations to move to the euro. If
we began in the autumn of this year, let’s say, then
from the technical standpoint we would probably
be reasonably prepared in seven to ten years,” said
Bogdan Olteanu when asked when Romania might
adopt the euro. “Romania has committed herself to
join the euro. It’s written in the Constitution and we
voted for it in a referendum. It’s not written when
this will happen, however. There are countries where
politics reckons the later the better. For example, in
Hungary, the Government has decided that when
Hungary reaches a standard of living that is, let’s say,
ninety per cent of the EU average, then it will be time
to think about joining. From what we have seen in the
countries that have joined, two third of the standard
of living is a reasonable level to be able to get there
without difficulties,” declared the deputy governor of
the BNR. He gave Slovenia as an example: “a country
which is now doing well, the economy is more and more
competitive and people are earning more and more.”
• Major change on the ghișeul.ro online platform
Individual taxpayers can obtain online access data in
the system in order to pay fines, taxes and local taxes
over the internet. You no longer have to go to the local
tax office in order to obtain access data for the system.
From Friday 25 March, access data can be obtained
within a few minutes by entering your CNP and the
details of your bank card. A user name and password
are sent to the e-mail address you provide, after which
you can see what taxes you have to pay and, of course,
pay them online.
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MACRO:
• Following an investigation by hotnews.ro, the Romanian
Electronic Payments Association (APERO), which
developed and dealt with maintenance of the ghișeul.
ro platform at zero costs for the Romanian State, made
a number of harsh accusations against the authorities.
According to APERO, for more than a year and a half
the ghișeul.ro platform has been ready to interconnect
with ANAF in order to start collecting fines, imposts
and taxes from individual taxpayers, authorised
freelancers, and legal entities. Moreover, since January
2014, APERO proposed to the authorities a reduction in
the commission for transactions on ghișeul.ro, from the
present two per cent or maximum 30 lei to one per cent
or a maximum of 20 lei. Not only did this not happen,
but now the Ministry of Finance wants to pay for a new
IT system to pay all taxes online.
• Cybernetic security law a matter of urgency
The Minister of Communications and for an IT Society,
Marius Bostan, said at a conference on Friday that
he will urgently request that Parliament debate a
proposed cybernetic security law. “As a public official
I will request an urgent debate of the proposed law
in Parliament. The issue is already being discussed at
the highest level. At the same time, it is obvious that
in the next few years we will have to start from the
bottom, from educating schoolchildren. The inclusion
of cybernetic security in school curricula, with basic
information, is very important. We think it is a good
thing that such information be made known, for the
sake of personal protection and dignity. I can tell you
that at the moment we are working on these things,”
said Marius Bostan. On Friday, the minister said that the
proposed law could be approved within the Ministry of
Communications next week, after which the document
would be passed to the other ministries, before being
adopted by the Government and then Parliament.
Sources: CursdeGuvernare.ro, economica.net,
Hotnews.ro, Mediafax.ro, news.ro, profit.ro
BUSINESS
• Privatisation to resume via BVB
The privatisation programme might resume in 2016
resume after a pause last year, with at least one
imminent listing, said the director general of the
Bucharest Stock Exchange (BVB), Ludwik Sobolewski
in an interview with Reuters, quoted by Agerpress. The
most likely candidate is salt producer Salrom, whereas
the listing of energy producer Hydroelectrica is only
a marginal possibility, as it will probably take place in
2017, declared Sobolewski. “We are waiting for the
privatisations to resume. 2015 passed without any
major privatisations, but it is important that Romania
should continue the process, since we need large
market companies,” explained Ludwik Sobolewski,
adding: “there is a chance that it (Hydroelecrica) might
be listed this year, but most likely the process will take
place next year. It would be extremely important for
the market.” In previous years, the Government floated
Romgaz, Electrica and Nuclearelectrica. In 2015 other
potential candidates for privatisation were identified,
including Bucharest and Constanța airports, but the
privatisation programme has stagnated. The Property
Fund, which owns minority shares in Salrom and
Hydroelectrica, supports the listing and is dissatisfied
with the delay. The goal of the capital market in
Romania is to graduate to the status of emerging
market in the Morgan Stanley Capital International
indices (MSCI), but there have to be at least three
companies with sufficient market capitalisation in order
to meet the requirements.
• Projects worth more than 200 million euros launched
at tIMOn
Twenty new residential projects totalling more than
1,500 homes were launched at this spring’s tIMOn. Most
of the projects are located in central and semi-central
areas and have been developed by new investors
and existing players in the residential market. The
investments involved in the projects amount to more
than two hundred million euros, with funds supplied by
both developers and banks. The new projects include
Otopeni Central Residence, a complex of villas promoted
by Alpha Group, and the Cherry Villas complex, also in
Otopeni, featuring 304 apartments, developed by
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BUSINESS
• GreenTech International. Renet presented three new
residential projects situated in attractive areas, namely
on the shore of Buftea Lake and in Otopeni: New Apple
Residence, Otopeni North Residence, and Peninsula
Residence. Also new is Citta Nusco, developed by Italian
investor Nusco, making its debut in the local residential
market after operating in the offices sector. Imoteca,
a real-estate consultancy firm with a portfolio of
two thousand apartments in Romania, is promoting
six residential projects, four of which are aimed
exclusively at the luxury segment: Vernescu Residence,
Parisian View, Downtown Apartments, and Docenților
Residence.
• Shopping City Timişoara opens on 31 March
The Shopping City Timișoara mall, developed by the
NEPI investments fund, will open on 31 March after
completion of the second phase of construction. The
people of Timișoara will have access to the largest
multiplex cinema outside Bucharest, which has thirteen
rooms equipped with 3D technology, and also a fitness
centre with a semi-Olympic swimming pool, bowling,
billiards, a casino, a food court, and a children’s play
area. The group also intends to open the country’s
first indoor ski slope. By the end of renovation work,
the total rentable surface area will be around seventy
thousand square metres and the investment will have
reached 83.8 million euros.
• Hackathon, initiated by NASA, to be held in Cluj
The NASA Space Apps Challenge Hackathon, one of
the biggest programming competitions, is to take place
in Romania for the first time, and will be organised
by the Transylvania Entrepreneurship and Innovation
Startup Centre on 23-24 April 2016. Enrolment began
on 23 March. The competition is part of NASA’s Open
Innovation Programme and is an Innovation Incubator
of the U.S. space agency. The International Space Apps
Challenge was launched in 2012. “Every year thousands
of entrants from various fields (programmers,
scientists, teachers, artists, designers, engineers,
storytellers, students and entrepreneurs), regardless
of their level of experience, work together to develop
innovative, open-source solutions to problems with
a global impact, connected both to space exploration
and Earth’s social needs, using sets of data made
available to the public by NASA,” say the organisers.
The 2015 event reached more than fourteen thousand
participants from sixty-two countries and 133 cities
all over the world. We expect that this year’s event will
be the biggest so far, since 193 cities from 72 countries
have entered. The themes for the 2016 competition are
Earth, Aeronautics, Technology, the International Space
Station, Journey to Mars, From the Solar System to
Infinity, each with its own set of challenges.
• Bucharest City App, a capital applicationThe Bucharest
City App is one of those simple things that are
guaranteed to be a success and which make you say:
“Why didn’t I think of that?” It is a complete application
for Android and iOS, designed both for Romanians
and expats and foreign tourists, a free-time app in
which can be found events, shows, parties, films:
in effect the whole of Bucharest’s cultural, artistic
and even underground life. The app not only gives
complete listings of events, but also has sections on
restaurants, cafés, clubs, spas, medical centres, tourist
attractions, and public transport routes, as well as a
metro map. Bucharest City was developed by tourist
services company Eventur, which is run by Alex Filip
and Dragoș Asaftei. The project was launched on 25
January and at present has five hundred beneficiaries:
theatres, restaurants, cafés, clubs, shops, hospitals and
pharmacies. “The app was also visible online, with the
help of one hundred and fifty blogs that presented it in
the first week. It was also present offline, on television,
radio and in the press. For two weeks the app was
present all over the place,” says Alex Filip.
Sources: Agerpres, business-adviser.ro, news.ro,
profit.ro, start-upcafe.ro, zf.ro
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