Press Review - April 17, 2018

04.17.2018 By Oana Gavrila

Three-Month ROBOR Rises To 2.13%

The three-month ROBOR index, used to calculate interests on loans in lei with variable interest, rose to 2.13% on Monday, from 2.07% previously, according to central bank data.

The six-month ROBOR index, which is used to calculate interests on leu-denominated mortgage loans, grew to 2.46% on Monday, from 2.41%.

President Refuses Govt Call to Dismiss Chief Anticorruption Prosecutor

Romanian President Klaus Iohannis on Monday rejected the proposal made by the justice minister to dismiss chief anticorruption prosecutor Laura Codruta Kovesi.

The president said that justice minister Tudorel Toader’s arguments did not “convince” him.

Iohannis also mentioned the negative non-binding stance issued by top judicial watchdog Superior Council of Magistracy, which at end-February rejected Toader’s proposition. He said the stance "cannot be ignored", despite it being non-binding.

Toader said he would challenge the president’s decision at the Constitutional Court.

Toader on February 22 called for the dismissal of Kovesi citing facts and actions which are “intolerable to the rule of law”. Kovesi has been chief anti-graft prosecutor since 2013.

The minister’s proposal led to thousands of people rallying across Romania after the announcement to support Kovesi and the European Commission said it might reassess the Cooperation and Verification Mechanism (CVM) report on Romania following the minister’s call. The latest CVM report, released on November 15, concluded that Romania has made progress, but that challenges related to judicial independence have been “a persistent source of concern”.

Transgaz Starts Works On BRUA Project

Romanian natural gas transmission company Transgaz (TGN.RO) on Monday said it will start works on three natural gas compressor stations at Podisor, Bibesti and Jupa within the first phase of the BRUA project.

The investment in the three compressor units reaches RON288 million, net of VAT. The contract on the construction of the three gas compressor stations was awarded to a consortium of Romanian companies led by INSPET SA Ploiesti.

The total estimated costs related to Phase 1 amount to EUR478.6 million. The European Union covers EUR179.3 million through a second grant representing 40% of estimated eligible costs.

BRUA Phase 1 is deemed a regional priority project. It is included in the CESEC (Central East South Europe Gas Connectivity) list to play a significant role in the increase in the security of gas supply and regional interconnectivity.

Romania Had Fastest Post-Crisis Economic Growth in 2017

The central bank's board noted Romania's 2017 economic growth recorded the fastest post-crisis pace but its significant acceleration was accompanied by the notable expansion of the current account and structural deficits.

According to the minutes of the central bank's monetary policy meeting of April 4,  Board members observed that the annual inflation rate had stood at 3.32% at end-2017, i.e. inside the ± 1 percentage point variation band of the 2.5% target. It had increased to 4.32% in January and 4.72% in February, significantly above the upper bound of the band, but slightly below the forecast. It was shown that behind the upward path had stood mainly supply-side factors and mention was made of the contributions from the base effects associated with cutting/scrapping of indirect taxes and non-tax fees and charges implemented in the same year-earlier period as well as from the recent hikes in the prices of electricity, natural gas and heating and the costlier fuels amid higher oil prices.

Board members noted that the economic expansion had confirmed the expectations of a slowdown in 2017 Q4 – after having accelerated for four consecutive quarters –, its annual dynamics remaining, however, robust at 6.9%, in the context of the exceptionally high level of 8.8% in the previous quarter, which was a post-crisis peak.