XPRIMM News No. 155, May 6th, 2010

An indisputable power

by alex.rosca@mxp.ro

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Interview with Mihail TECAU
President of the Directorate
BCR Asigurari

by mihai.cracea@mxp.ro

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Mihail TECAU
President of the Directorate
BCR Asigurari

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NBR cuts key interest rate to record low
The National Bank of Romania lowered its benchmark interest rate to 6.25%, the lowest level since the introduction of the current monetary policy.
In its fourth rate-setting session of 2010, the policy-making committee of the central bank decided to continue its series of gradual rate cuts. In January, the central bank lowered key rate from 8% to 7.5%, to 7% in February and to 6.50% in March.
The current level of the key rate, used by NBR in repo operations, reverse repo and market liquidity adjustment, is the lowest since the introduction of the current monetary policy in the early 2000, in line with ECB (European Central Bank) standards.
Consequently, starting Wednesday, May 5, the rate on deposit facility will be lowered to 2.25% per annum from 2.5% and the rate of lending facility (Lombard) will be 10.25% per annum versus 10.5%.
The central bank has also decided to keep reserve required ratio at 15% for RON-denominated liabilities and at 25% for foreign denominated liabilities, and affirmed its commitment to pursue an adequate management of liquidity in the banking system.
The board of NBR examined and approved the quarterly inflation report that will be made public in a press conference scheduled for May 6, 2010.
by wall-street, 5.05.2010

IMF urges cabinet to raise flat tax and VAT, sources
According to media sources, IMF asked government to raise the flat tax from 16 to 20 pc and the VAT from 19 to 25 pc. Officials avoided commenting on such a drastic move, saying there are several possible scenarios on the table. The yet unconfirmed information raised a wave of criticism and worries over the state of economy, Bucharest Stock Exchange fell by 4 pc.
The government and the International Monetary Fund mission are discussing several options to cut public deficit, including raising taxes.
Despite Finance Minister Sebastian VLADESCU's assurances the Value Added Tax (VAT) won't go up, government sources said the International Monetary Fund (IMF) wants it increased, Realitatea.net reports.
The Fund has taken an inflexible stand during ongoing talks with government, calling for the flat tax rate and VAT being raised to 20 per cent and 25 per cent respectively, the sources said.
The Ministry of Finance rejected the information, saying there was no mention of raising the VAT and the flat tax during yesterday's meeting with the IMF team.
The government and Fund representatives are discussing several options, including the possibility of raising taxes, but no proposal has been made to raise the VAT from 19 to 25 per cent, Minister VLADESCU said on Tuesday, quoted by MEDIAFAX. Economic analysts expect this evaluation mission to be harsher than earlier ones.
According to FINANCIARUL, IMF representative in Romania Jeffrey FRANKS said on Monday that taxes will certainly not increase in the next months. Therefore the news came as a blow for the frail Romanian economy and raised worries in the business sector. The rumoured tax rise stirred a wave of criticism from the opposition and also economic analysts, who say the move represents proof that the cabinet did nothing to help economy recover.
The Stock Exchange in Bucharest reacted to the news falling 4 per cent at the end of the session, according to Realitatea.net.
In a meeting with the IMF mission in Bucharest yesterday, trade union officials emphasized some aspects related to the need of imposing a progressive tax regime, and firmly opposed increasing the VAT and instating the co-payment of medical services.
The leader of Cartel Alfa trade unions confederation, Bogdan HOSSU said the tax policy is wrong and trade unions would prefer a differentiated approach, especially concerning the VAT. According to the union leader, the current fiscal policy brings prejudice and poverty especially to underprivileged social categories, living on very small incomes. "It is abnormal to pay the same VAT for bread and luxury goods", HOSSU explained.
The Cartel Alfa leader also described as unacceptable the way pensions are being calculated now, saying this will further decrease the living standards of senior citizens. Unionists also informed the IMF and the World Bank about the problems caused by special pensions, which need to be sorted out soon.
"We said everybody should be covered by a blanket pension system, and certain special categories should have an extra system of occupational pensions, based on a contribution mechanism, like those (who work) in Justice, Army and Police", said the president of the National Trade Unions Block, Dumitru COSTIN.
At the end of yesterday's meeting with the IMF delegation, National Trade Unions Block president COSTIN announced that a multinational expert team will be formed, within two months at latest, to improve the mechanisms of drawing European funds, MEDIAFAX reports. The IMF agreed to the team and assured unions they will insist upon this idea in their talks with the government, COSTIN added.
by nineoclock.ro, 4.05.2010

Romania's pavilion in Shanghai visited by about 20,000 people
Romania's pavilion in the Shanghai Exhibition, Greenopolis, was opened to the public on Saturday. The general commissioner for world exhibitions, Ferdinand NAGY, said he expected six months of intense promotion in China, on two important levels, cultural and economic, according to a press release remitted to our newsroom. NAGY underlined that Romania's participation in Expo 2010 and building "Romania's home in Shanghai" represent an important step in this direction. He added that 14 county chambers of commerce and industry in Romania expressed their willingness to join the Romanian pavilion in the months to come. The commissioner added that he hoped these missions would also include representatives of the local government, so that they could initiate discussions of those projects which may be followed through, within a partnership, at a local level. He explained he envisaged infrastructure projects at local level, linked with water supply and county roads.
Romania attends, between May 1 and October 31, the World Exhibition in Shanghai, China, under the headline "A better city, a better life". Romania's national pavilion - Greenopolis - "The Green Megalopolis" - offers a topical vision of present-day Romania. The main exhibition site is dedicated to presenting urban civilisation, culture and traditions, and Romania's natural potential. The exhibition also includes a Romanian cuisine restaurant. Expo 2010 organisers expect over 200 countries and international organisations and about 70 million visitors to attend. In the first two days since the opening, the Romanian pavilion has been visited by approximately 20,000 people.
The secretary general of the International Bureau for Exhibitions (BIE), Vicente Gonzalez LOSCERTALES, also visited Romania's national pavilion. "The first pavilion I've visited at the Expo was Romania's pavilion. You've managed to create a special space and visitors are particularly drawn to what they find here. I congratulate you on this achievement, everything is wonderful", the secretary general said.
by nineoclock.ro, 4.05.2010

Duster - the 4x4 revelation
The head of the RENAULT-NISSAN Group, Carlos GHOSN, holds DACIA Duster as a real success story. "With Duster, DACIA will turn the 4x4 market upside down. Less than one month since its launch on the market, we have 10,000 orders already posted in France. And I can tell you we haven't seen such high showroom attendance since the launch of the Renault Scenic 2, in 2003", AutoInfos quoted GHOSN as saying. He also said 2010 remains a difficult year nonetheless, with the company focusing on maintaining a positive cash flow. Referring to car launches, the RENAULT boss said two convertible models, Megan Coupe Cabriolet and the new Wind Roadster, are in the pipeline. He made the point cars enter a new era. "We need to invest more into developing an extended technological range: electrical batteries and cars, hybrid vehicles, better performing engines", GHOSN said. "At the same time, we must set out making both small and family cars, 4x4s, the whole range", the RENAULT top executive official said, outlining RENAULT-NISSAN being resolute about cracking not only the European markets, but also those in the US, Japan or emergent countries. Also, RENAULT-NISSAN will sell in India, starting 2012, a small-size car model priced at USD 2,500, in partnership with a local market, MEDIAFAX reports. RENAULT agreed with Indian auto partner BAJAJ for the car to be sold for USD 2,500 to directly compete against Tata-built Nano model, held as the most inexpensive car worldwide.
by nineoclock.ro, 5.05.2010

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