XPRIMM News No. 154, April 22nd, 2010

Central and Eastern Europe: risky exposure or potential?

by mihaela.circu@mxp.ro

up

Interview with Alexandru APOSTOL
General Manager
MAXYGO Broker de Asigurare, Ploiesti, Prahova County

by mihai.cracea@mxp.ro

up

Alexandru APOSTOL
General Manager
MAXYGO Broker de Asigurare, Ploiesti, Prahova County

up

up

IMF: Romania will have highest economic growth in EU, next year
The IMF announced it revised downwards its estimation of Romania's economic growth this year, from 1.3 percent to 0.8 percent, but for 2011 it anticipates a 5.1 percent increase of the GDP, the highest in the European Union, reads the World Economic Outlook report, quoted by MEDIAFAX. Romanian authorities will discuss the new forecast with an IMF mission that will visit Bucharest at the end of April.
According to the same report, the Fund also revised up by 0.4 percent points, to 4%, the estimation of average annual increase of consumer prices in Romania during 2010. For 2011, the International Monetary Fund forecasts a price hike of 3.1%. Across the emerging Europe - the region that includes Romania - economic growth prospects are very different from one country to another. Some countries, like Poland, were successful in withstanding the global economic downturn, while others, though hard hit, will be fast to recover. Such an example is Turkey, where market confidence picked up fast after the initial shock coming from abroad. On the other hand, economies that experienced unsustainable growth rates and a high current account deficit, will take longer to recover. This is the case with Bulgaria, Latvia and Lithuania, but the countries with vulnerable public and private financial sectors - Romania, Hungary and the Baltic States - will also pick up slower.
by nineoclock.ro, 22.04.2010

International Monetary Fund might allow higher deficit for Romania
Any discussion on raising budget deficit has to be placed in the context of Romania's continuing efforts at structural reform, the Romanian representative at the IMF, Mihai TANASESCU said quoted by Realitatea.net. The International Monetary Fund will analyze the possibility of accepting a budget deficit higher then 5.9 percent of the GDP for Romania, in the context in which the estimated economic growth ebbed from 1.3 to 0.8 percent, TANASESCU said. "It is obvious that, at the moment, a reassessment of the downward trend of Romanian economy may lead to a type of analysis meant to adapt the budget to new conditions. It is vital, though, to maintain the downward trend of the budget deficit, even if there is a slight growth, because that sends an important signal to external markets", TANASESCU claimed.
"An analysis in this respect should start from the whole picture. It is clear that the budget will have to be adapted to the new conditions, staring from an economic growth of only 0.8 percent. Things should be analyzed thoroughly: what the level of public debt, of investments and current expenses is", the IMF representative explained.
by nineoclock.ro, 22.04.2010

No major flight disruption across Romania, as traffic gets unrestricted
Romanian air traffic was fully restored yesterday, with only a small number of flights cancelled, in spite of a second ash cloud from Iceland's Eyjafjallajokull volcano reaching national territory at 9 a.m. The second cloud is smaller and flies lower than the first one, posing no problems for flights and no particular pollution risks, officials said.
The issue was also discussed in yesterday's cabinet meeting, with Environment Minister Laszlo BORBELY and Transport Minister Radu BERCEANU giving assurances that no new flight restrictions would be necessary.
BERCEANU told PM Emil BOC that air traffic was also resumed in most parts of Europe. "Last night, we checked some planes that had returned from Amsterdam and gone through part of the ash cloud. We found nothing when checking their engines", BERCEANU explained.
In turn, BOC voiced conviction that a solution would be found to allow planes to fly safely through volcanic ash, drawing a parallel with tanks in Iraq, adapted to go on sand. "I am confident we will find solutions. Just like the army did, so that tanks could go on sand, there will be solutions for planes to fly through volcanic ash particles", BOC said, quoted by AGERPRES.
But in spite of BERCEANU's assurances that flights were perfectly safe, central daily ADEVARUL reported yesterday that a Boeing 737 owned by state carrier TAROM was contaminated with volcanic ash after going through the cloud when returning from Amsterdam. The plane landed on Bucharest's OTOPENI Airport at around 6:30 p.m. on Tuesday, May 20, 2010 and a team of Transport Ministry specialists, led by State Secretary Marin ANTON started checks on the aircraft, the publication said. During checks, it was found that ash particles had reached the plane's engines. More detailed checks will follow.
The first cloud, which has caused traffic chaos in Romania and all across Europe since last Thursday, was set to completely leave national territory by 9 p.m. May 21, 2010. But even if the second cloud is smaller, it is possible to change direction and require total or partial closure of national airspace if it changes direction, meteorologists explained. The head of the National Meteorology Administration, Ion SANDU, told MEDIAFAX news agency that new air traffic restrictions would be necessary if three consecutive forecasts show flights would be dangerous. He said forecasts, coming from Britain's MET Office, are updated every six hours.
No major flight disruptions were reported yesterday across the country. A spokesperson for Henri COANDA International Airport, Valentin IORDACHE, said 40 out of 205 flights on Otopeni and four out of 75 on BANEASA were canceled yesterday. From the 40 flights called off on OTOPENI, half were heading to Germany and half to destinations such as Paris, London, Helsinki, Riga and Chisinau. On BANEASA, two flights heading to and coming from Paris and Dortmund were canceled. Sibiu and Cluj Napoca airports also canceled flights to various German destinations.
by nineoclock.ro, 22.04.2010

FITCH revises Bucharest outlook to stable
FITCH Ratings has revised Bucharest's outlook to stable from negative and affirmed its long-term foreign currency rating at "BB+". Bucharest's long-term foreign and local currency ratings have been affirmed at "BB+" and "BBB+" respectively.
The revision in Outlook from Negative to Stable reflects a similar rating action on Romania's Outlooks. The ratings of the city are underpinned by Bucharest's role as the economic and political capital, its still satisfactory budgetary performance and manageable debt level.
The ratings take into account the significant foreign currency debt exposure and, potentially, refinancing risks as well as economic contraction at the national and city levels.
The ratings could benefit from a positive change in the sovereign ratings as long as budgetary performance and debt remain at the current levels. A negative rating action could be triggered by deterioration in the operating performance and debt exceeding 150% of operating revenues.
FITCH estimates the city's debt have increased to 80% of current revenue in 2009, before declining by 2012. Although liquidity has been strong, this is expected to decline as the municipality undertakes new capital expenditure.
FITCH also noted that Bucharest is exposed to currency fluctuations and refinancing risks as most of the debt is contracted in euro and unhedged.
by wall-street.ro, 21.04.2010

Public-private partnerships worth EUR 3 billion in energy sector
European energy companies (RWE, ENEL, GDF SUEZ and CEZ) as well as Asian energy companies (Japan's ITOCHU and a Chinese company) are interested in being part of public-private partnerships in Romania for projects worth EUR 3 billion, Economy Minister Adriean VIDEANU told a press conference yesterday. Thus, EUR 1.7 billion will be used by ELECTRA, the future national energy company, to build two energy groups with a capacity of 500 MW each, while HIDROENERGETICA will invest EUR 133 million in hydropower plants located along Olt River, EUR 754 million in hydropower plants along Somesul Mare River, EUR 245 million in hydropower plants along Aries River and EUR 324 million in hydropower plants along Buzau River, MEDIAFAX informs. Likewise, the Economy Ministry will remain an OMV Petrom (SNP) shareholder with over 8 percent of PETROM's capital, transferring from it the part employees are lawfully entitled to, he added.
The minister added that there is a need to clarify information concerning the Romanian Investment Fund. "The idea of CEC and BNR involvement does not come from us, it's an absurdity rumored in certain circles. We want this account to be fueled with good assets and with shares owned within national companies", VIDEANU underlined. The state's new investment instrument will be dubbed the "Romanian Investment Fund" and its portfolio will include, two months after the Fund's creation, the state's minority share packages.
by nineoclock.ro, 22.04.2010

up

THE EDITORIAL STAFF:

President: Sergiu COSTACHE CEO: Adriana PANCIU
Business Development Director: Alexandru D. CIUNCAN

Editor in Chief: Mihaela CIRCU
Scientific Advisor: Daniela GHETU
International Column Coordinator: Andreea IONETE
Senior Editors: Vlad PANCIU, Oleg DORONCEANU
Editors: Vlad BOLDIJAR, Oana RADU, Mihai CRACEA, Andreea STATE
General Secretary: Lidia POP

Accounts Manager: Georgiana OPREA
IT Department: Octavian GRIGOR, Dorin PALADE, Cosmin ARMASESCU

e-mail: xprimm@primm.ro

PUBLISHED BY: Media XPRIMM

Reproduction or use without permission of editorial or graphic content, in any manner, is prohibited. The Editorial Staff is not responsible for the truthfulness or the accuracy of the presented data. The Editorial Staff has the right to present the data in it's own manner. In what concerns the use, in any manner, of the information contained in this e-mail, Romanian laws apply.

Copyright©2010 MEDIA XPRIMM