Press Review - December 19, 2017

12.19.2017 By Oana Gavrila

Hundreds Of Magistrates Protest In Bucharest Against Proposed Judicial Overhaul

Approximately 500 magistrates within Romania’s National Institute of Magistracy on Monday rallied in front of the Bucharest Court of Appeal against the ruling PSD – ALDE coalition’s plan to overhaul the judiciary.

Magistrates held their robes on their arms and some of them had Romania’s Constitution upon them.

Magistrates also lit the torches of their phones, as a sign of invitation to dialogue so that lawmakers don’t pass the bills from a unilateral perspective.

Several judges and prosecutors have been posting on Facebook in the past few days messages explaining the consequences of the amendments to the legal codes in a series of posts titled “Why the criminal code amendments impact you.”

The ruling party’s latest proposed changes to the judiciary concern the criminal code, which critics have said it will hinder criminal inquiries. One proposed change would force prosecutors, shortly after the registration of a complaint regarding a person, to inform that person and allow their participation to procedures, while another change would allow the suspect or defendant to assist in witness hearings.

Video recordings might also be banned as evidence during inquiries.

EC Looks Into Aid for Romanian Rail Freight Operator CFR Marfa

The European Commission has opened an in-depth investigation to assess whether debt write-offs by the Romanian state in favor of rail freight operator CFR Marfa, and the failure to collect debts from the company, have given the company an unfair advantage in breach of EU state aid rules.

CFR Marfa is the incumbent in this market in Romania and has benefited from the cancellation of public debts and the failure of public creditors to collect debts owed by it. We need to check whether a private investor would have acted in the same way as the public authorities did here and, if not, to assess whether these measures are compatible with EU State aid rules,” said EU Commissioner Margrethe Vestager, in charge of competition policy.

The Commission's investigation will be looking at a number of state support measures in favor of CFR Marfa concerning a debt-to-equity swap amounting to RON1,669 million (around EUR360 million) in 2013, and the failure to collect, since at least 2010, of social security debts and outstanding taxes of CFR Marfa, and of debts towards CFR Infrastructure.

Most Romanian Companies Couldn't Cover a ROBOR Rate of 4%

Companies will start to feel the recent rise in the ROBOR rate in January 2018, when banks start updating interest rates on loans with variable interests.

Local businesses are not ready to handle a rise in interests, as more than half the companies with loans in lei and euros would be significantly affected by an interest hike of 3 percentage points, according to a poll conducted by the central bank in September.

In other words, a ROBOR rate of 4% would prove catastrophic for investments and would render most private companies insolvent.

The three-month ROBOR rate stood at 2.1% Monday.

President Signs Child Rearing Benefit Cap into Law

Romanian President Klaus Iohannis on Monday signed into law a bill that caps child rearing benefits at RON8,500.

The monthly indemnity for parental leave is 85% of the parent’s previous average net income for the past 12 months before the child was born. The minimum cap currently stands at RON1,233 and will be hiked starting January 1, 2018 to RON1,250.

Romania currently has 160,807 beneficiaries of child rearing benefits, of which around 1,100 had indemnities exceeding RON9,000.