Financial Press Review, January 14

Some of the newspapers comment on the results of an inside survey of the Romanian Association of Financial-Banking Analysts.

The Bursa points out that "in 2011, all survey respondents are expecting a revival of the economic growth (the average is 1.2 percent), but also a high inflation, although significantly lower than it was at the end of 2010 (4.3 percent in December 2011), but above the upper bound of the target interval set by the NBR."

The Ziarul Financiar also concludes that "most respondents tend to think Romania will fail to meet the budget deficit target set with the IMF and the EU," even though they are expecting a considerable fall in the budget deficit.

The same daily prints a detailed article entitled "Big cities brace themselves for another austerity year, after a 10 percent income cut in 2010." "In 2011, the state budget will not be too freehanded with the local councils.

" At the same time, "the new budget law that came into force on January 1st hampers the possibility for local councils to take on loans or to set up investment sites without financing," the Ziarul Financiar reminds us.

The Curierul Naţional prints an article entitled "How do we contain tax evasion in agriculture?" which reads: "The European Commission is going to back Romania's request for derogation regarding reverse charge on grain and technical plants".

The Curierul Naţional and the Bursa quote deputy Culiţă Tărâţă, one of Romania's most important farmers, who said that "reverse charge prevents VAT evasion on grain, vegetables and fruit, which amounts to about 800 million – one billion euros.

Today's newspapers also quote State Secretary at the Ministry of Agriculture Adrian Rădulescu, who considers that applying a reverse charge only on grains and not on all food products would penalise farmers.

The Curierul Naţional also mentions the opinion of National Union of Employers with Private Capital in Romania President Costel Olteanu.

He claims that "it is very important and also necessary to apply this mechanism on all food products, starting with inputs, not only on final products."

According to Biriş-Goran managing partner Gabriel Biriş, "because of the reverse charge producers and not only exporters would have to submit a refund application to the state", and they run the risk of not receiving their money on time, which would lead to a financial deadlock and, eventually, to bankruptcy.

The Ziarul Financiar opens today's issue with an article which informs us that "the world's grain giants, such as Alfred Toepfer, Cargill, Glencore and Bunge helped Romanian grain exports to reach 800 million euros, 30 percent more than in 2009," although in terms of volume, the exports experienced a small increase.

The explanation lies in "the 90 percent price rise on the international markets".

According to the newspaper, only 90 percent of total Romanian grain exports were achieved by multinational companies.

"Big exporters are traders, in general, but traders do not always export.

Romania has big treaders such as Interagro, Cerealcom Dolj and Comcereal, but they choose not to export because the VAT freeze is an obstacle for them.

Big exporters are entirely financed by their mother-company," explains Association of Agricultural Products Traders President Victor Beznea, quoted by the Ziarul Financiar.

The same daily informs us about the NBR's revision of the statistics regarding foreign direct investments made in 2009.

The truth is they registered a decrease of 63 percent instead of 48 percent.

"Foreign investors have avoided investing money in Romanian business in the last couple of years because of risky assets aversion."

Finally, almost all today's newspapers write about the beginning of the sales season. The Ziarul Financiar reads that "Merchandisers promise us discounts of up to 70 percent."

Transated by: Gabriela Lungu and Raluca Mizdrea

MA Students, MTTLC, Bucharest University