Press Review - July 19, 2018

07.19.2018 By Oana Gavrila

Three-Month Money Market Rate Rises Slightly To 3.37%

The 3-month money market interest rate used to calculate interests for consumer loans in lei increased slightly on Wednesday, at 3.37% a year, from 3.35% a year on Tuesday, central bank data showed.

The six-month money market rate, which is used to calculate interests on leu-denominated mortgage loans, stayed at Tuesday’s level of 3.48%.

The nine-month interbank rate, which is used to calculate interests on loans in lei attracted by commercial banks from other commercial banks for a nine-month period, remained unchanged at 3.52%.

The twelve-month index rose to 3.57%.

Eurostat: Romania Posts Highest Annual Inflation Rate In EU In June

Romania ranks first in the European Union regarding the annual inflation rate in June 2018, seeing an increase of 4.7% in the Harmonized Index of Consumer Prices (HICP), Eurostat, the statistical office of the European Union, said on Wednesday.

Eurostat considers the HICP, thus, the cited report shows an inflation rate of 4.7% in Romania in April 2018, instead of 5.4% reached by the Consumer Price Index (CPI).

The lowest annual rates were registered in Ireland (0.7%), Greece (1.0%) and Denmark (1.1%). The highest annual rates were recorded in Romania (4.7%), Estonia (3.9%) and Hungary (3.2%). Compared with May 2018, annual inflation fell in three member states, remained stable in two and rose in twenty-two.

Government Says President-PM Meeting Tackled EU Council Presidency

Prime Minister Viorica Dancila and President Klaus Iohannis discussed preparations for the country's takeover of the EU Council presidency as of January 2019 at their meeting Wednesday, the government said in a statement.

The two discussed the status of preparations for the presidency in regards to themes and technical and infrastructure aspects, according to a statement issued by the government on Wednesday.

“The priorities included in the whitepaper of the Romanian EU Council Presidency were reviewed and the timetable of the activities which the Government aims to organize in the first of half of next years were also discussed,” the government said.

The statement made no remark about a rumored emergency decree regarding amnesty and pardoning, which was widely thought to be the reason for which President Klaus Iohannis called the meeting on Tuesday.

Constitutional Court Decides Sovereign Investment Fund Bill Is Unconstitutional

Romania’s Constitutional Court on Wednesday admitted multiple challenges made by opposition parties and President Klaus Iohannis against the bill which establishes a Sovereign Investments and Development Fund (FSDI), judging that such a fund can only be established by government decree.

The court decided that the Romanian Parliament does not have the ability to establish a fund managing shares from state-owned companies through a legislative act, and that it would need to be established through an act issued by the central administration.

It also admitted challenges from opposition parties, who claimed that there were significant differences between the forms passed by the two parliamentary chambers, with the deciding Lower Chamber adding ten economic entities under the fund’s management which were not present in the version passed by the Senate.

Romanian President Klaus Iohannis challenged the bill at the Constitutional Court on July 4th, claiming the Parliament does not have the right to establish the fund and that law is unclear in regards to how its performance would be monitored.

Romania’s Parliament passed on June 7 a bill that sets up the Sovereign Development and Investment Fund, with a share capital of RON9 billion. The fund’s portfolio includes majority or minority stakes in 33 state companies from the pharmaceutical, transport and energy fields, such as electricity provider Electrica, natural gas provider Romgaz SA and pharmaceutical company Unifarm SA.