Press Review - December 21, 2018

12.21.2018 By Oana Gavrila

Bucharest Stocks Continue Dive Thursday

Romanian shares ended Thursday's session with a 1.91% drop in its main index, after massive falls on Wednesday.

Romgaz (-6.91%) and Fondul Proprietatea (-4.09%) were among the hardest hit Thursday.

On Tuesday, the finance minister announced plans to lower private pension fund management fees and to allow contributors to claim their retirement money early. Nearly 20% of pension funds' assets are in stocks.

Emergency Decree On Fiscal Measures To Be Passed On Friday

The package of fiscal measures announced on Tuesday by the government will be passed in Friday’s Government meeting, Social Democrat Party leader Liviu Dragnea said Thursday.

The government had planned to pass the decree Thursday but the Economic and Social Council gave it a negative review. The review is, however, only advisory and non-binding.

Romania’s finance minister presented on Tuesday a package of new fiscal measures, including a tax on banking assets depending on the ROBOR rate, a cap for internal natural gas prices for the next three years and new taxes for electricity, energy and gambling operators.

Other measures also see a reduction in private pension fund management fees, while allowing contributors to withdraw from the mandatory private pensions funds after contributing for five years.

The measures caused the Bucharest Stock Exchange to lose its whole year’s gains in Wednesday’s session, with a slight loss also registered on Thursday at midday, due to concern over the measures' effects.

President: Cabinet Meeting Subjects Are Entirely Up To Prime Minister

Romanian President Klaus Iohannis said, at the beginning of Thursday’s cabinet meeting, that his presence is guaranteed by his constitutional attributions, and that Prime Minister Viorica Dancila has the final say on the subjects in the meeting’s agenda.

“There is a Constitutional Court decision from 2007 which clearly states the President of Romania can take part anytime at any government meeting,” said the President, in his opening message during the cabinet meeting.

“Just so that there will be no interpretations which do not have institutional support, I want it to be known that when I am taking part at Government meetings I preside them. The decision on the subjects discussed in the Government meeting belongs to the Government, more explicitly to the prime minister. Taking all this into account, I think we can have a correct institutional meeting,” said Iohannis.

However, Dancila continued to say in her speech that the president can take part in Cabinet meetings on matters of defense, public safety and foreign affairs. She also announced that meeting would be split in two parts, the first containing discussions on these subjects, and the second to discuss “economic measures”, hinting that the president will only be present for the first part.

The Romanian head of state left the Cabinet meeting after one hour.