Fresh News

Tuesday, 19 April 2022

Prime Minister Nicolae –Ionel Ciucă’s participation in the Investment Forum, organized by the Foreign Investors Council(FIC) in partnership with the Romanian Government

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Nicolae Ciucă: Good afternoon, ladies and gentlemen, chairman of the Foreign Investors Council, dear representatives of the business milieu. Allow me to start by thanking you for organizing this event and in particular, for everything you are doing for the Romanian economy to be balanced and make us confident in its big growth potential. The figures already presented by the Foreign Investors Chairman speak a lot about what means the relevance of foreign investment in our country. This activity is a good opportunity to continue our consultations regarding the set of government – business sector joint activities so that we have real data from the economy to be able to properly manage investments. As stated previously, there is only one medicine for an economy facing a crisis: investments.

My presence alongside the most important foreign investors in Romania is practically the reconfirmation of the Romanian Government's openness to foreign investors. To overcome, as I said, the difficult context we are going through, we need two key elements: trust in the Romanian economy and the cooperation between the private milieu and the Romanian state. Here are two very important issues. Together we relaunch and develop Romania, together we invest and build. I sent this signal of confidence each time I met the representatives of the business sector, and I also want to outline that this endeavour of us all was somehow rewarded by the ratings of the international financial institutions, Standard &Poor's and Fitch Ratings and last but not least, reflected by the economic figures. In the first two months of this year, we could notice the increase in foreign investment by 10% compared to the same period last year, exceeding the figure of 900 million euros.

Confidence in Romania's economy is based on the unprecedented volume of national and European funds that will be invested in all strategic areas: industry, agriculture, energy, environment, digitalization, but also on governmental development policies.

I think it is very important to underline that at present, political stability offers the guarantee of predictability for the economy, the investment and also the legislative framework necessary for you to perform your activities.

Not long ago, I launched along with the other members of the government, the package of measures "Support for Romania". It may not seem too much, but it is a package that was examined and approved at the level of the coalition, a financial instrument worth 17.3 billion lei, 60% is intended for the business milieu and 40% for social measures, as we need to protect the vulnerable population. 60 percent of the value of this mix of solutions is intended for public and private investments and for ensuring the stability and economic development of the country. We have already started implementing these measures at the level of the Government.

Last week, we approved the emergency ordinance whereby 1.7 billion lei – funds from the state budget ensure the price difference in building materials, workforce, at everything which means maintaining and continuing the development projects at the level of the infrastructure and construction.

Basically, the support of the public administrations that started these projects and we make sure that they are completed, on the one hand. On the other hand, we keep construction companies operational. It is very important because we are talking about financial packages that we will benefit from in the next period and we need these instruments, these companies, to have the capacity to ensure the development of these projects in very good conditions. They need to maintain their workforce in the country, a workforce that we all know very well how much is needed. The difference is up to 5.2 billion, Minister Boloș is here and we discussed with him and in a very short time we will come up with another emergency ordinance that will complete the regulatory framework, so that this money, 3.5 billion, can be accessed from available European funds and in this way we manage to reduce the pressure on the state budget.

Minister Câciu is reassured that we can manage these funds, that money exists, which is very important. At this moment, there is no issue of making a decision, establishing a package of measures that is not secure from the point of view of financial allocations. In the next period, the Government will approve the state aid scheme to stimulate investment of over a million euros, with a major impact on the economy. It is basically a scheme that continues. It was reactivated and thus, we can, through your investments or the investments made by the others that see opportunities in the Romanian economy, we will be able to stimulate and make sure these investments secure jobs, ensure healthy development, so much waited by each of Romanians. We provided 200 million euros for this scheme. It is basically a mechanism that meets your expectations, the expectations of the economy, with significant benefits for the processing industry, constructions industry, information and communications, healthcare, HoReCa and social assistance.

We are also preparing to introduce from June 1, the aid form for SMEs that are facing difficulties because of the effects generated by the regional context. Thus, 300 million will be directed to these companies. Compensating a part of the fuel price for distributors and carriers as well as the measures to support the agricultural and food sectors are also meant to support the economy. I would like to underline the fact that we had meetings with farmers, we had meetings with agri-food industry processors. It is clear that we need re-technologization, we need to see the real potential of our country from the agricultural output perspective. Diversification of the agricultural output in our country prompts us to pay due attention to processing this production and obtaining value-added products that would essentially contribute to strengthening our economy, the state budget as added value brings more money to the budget.

Also, the creation of better-paid jobs is a central element of the Government's agenda, a topic we discussed in all our consultations and we need Romanian employees to exceed that already very usual minimum wage threshold. The minimum wage cannot be a long term solution. Through the measure that we have taken both at the level of the coalition and through the measures that we are taking at the level of the Government, our goal is for Romanians working in other countries to be attracted to the Romanian economic sector and to return home so that they can lead a normal life alongside their families. In this respect, once again, we intend to create more jobs and better-paid jobs, with the aim to reduce as much as possible the pay gap and to reach the same level of pay as Western countries.

We have also taken into account a package of measures to ensure the continuation of the Kurzarbeit program and the granting of 75% of the salary to the furloughed employees. Romania's economy benefits from the positive impact of foreign investment from several perspectives, and in addition to the direct benefit, measurable in the economy and job creation, we also consider the transfer of knowledge and increased competitiveness.

I would like to emphasize, ladies and gentlemen, that at the government level, we have a responsible and balanced approach, to providing certain prospects to the business sector. The "Support for Romania" package is integrated into the pro-business vision of the Romanian Government. One of the priority areas for investors to consider before making any decision is the tax system, and I am convinced that the Minister of Finance will talk about this in a more technical and applied way. As we announced, we have decided not to raise taxes - and we have not raised taxes this year.

In our opinion, the results of government policies implemented so far, translated into predictability, stability and a low unemployment rate. We remain consistent with the economic projects undertaken through the government program, aimed at supporting investment, innovation, competitiveness and projects that bring added value. This year, we have allocated the largest investment budget in the last 30 years, 88 billion lei, through the National Recovery and Resilience Plan and other European mechanisms, with 80 billion euros available. It is a unique opportunity, as I said, to bridge the gaps existing in strategic areas. We have already sent the European Commission the partnership agreement for the 2021-2027 programming period, which puts us in a straight line for accessing the funding lines. In the meantime, we have taken steps to ensure the stability of the energy market from April 1 this year to April 1, 2023, thus introducing the package of measures to protect citizens and the economy, along with other measures dedicated to agricultural sectors, HoReCa, promoting exports to support the Romanian economy on a path of development and modernization.

During this period of stability, we are preparing investment projects to ensure Romania's energy independence. Thus, the Government focuses on investments in new renewable energy sources, making optimal use of the financial instruments offered in this regard by the European Union, through the National Recovery and Resilience Plan, as well as through the Modernization Fund.

The ruling coalition endorses the Offshore Law in Parliament, the entry into force of which will ensure stability, and predictability and unlock offshore and onshore investment. The natural gas resources in the Black Sea and the deep ones in Buzau County can be exploited so that Romania can become independent from Russian gas. The mobilization of the private sector alongside the Government is particularly important for the implementation of the economic measures included in the “Support for Romania” package and for the materialization of our ambitious digital transformation projects, those in energy, those with applicability in industrial modernization and technological innovation.

Last week, I visited two counties in Romania, Braila and Buzau, I wanted to see on the ground how the activity is performed, and the status of the biggest project in Romania on European funds, the Bridge over the Danube, a project worth almost half a billion euros which will certainly ensure the economic development of the entire region.

I had the opportunity to discuss with the employees of the companies manufacturing the wiring for the automotive industry as well as with those performing their activity in the edible oil processing sector.

It is, for me, a way of seeing the reality and finding out on the spot what the investments really mean, what the needs are and how we can, at the Government level, ensure and encourage these investments and act for their diversification

Basically, as I said, the Government can ensure predictability and, of course, provide support through the aid schemes it can make available. The economic data, the large-scale projects underway and the confidence of investors in the Romanian economy so far have shown us that we are on the right track.

The permanent consultations with the business sector, as I said, in the almost five months of government, have signalled to us in due time the real economic problems.

Together with business organizations, we have identified solutions for investment recovery and stimulation, with a particular focus on job preservation. Some of these solutions are already effective, such as the development of the national electronic invoicing system for the business-to-business relationship and the implementation of the "Goods Radar" project. I know how long these two measures have been expected by the business community. We want to actively support these consultations and facilitate them by setting up an agency that will operate at the Government level, with the aim of being the central point of communication with foreign companies interested to invest in Romania, on the one hand, and on the other, it will play the role of promoting the Romanian exports. We appreciate that this instrument at the government level will ensure credibility and open dialogue on everything that can represent business opportunities in Romania.

Before concluding, here are some facts that I discussed with Minister Bolos. Very concrete data, regarding the amounts of money that the business sector, especially the SMEs, should access in the next period. We are talking about a package of 4.7 billion as follows: digitalization - 980 million euros, microprocessors - 500 million euros, financial instruments equity - 600 million euros, financial instruments, guarantees, portfolios - 800 million euros, classic grants under the Regional Operational Program - 1.3 billion euros, grants in the context of crisis, for utilities - 300 million euros, investment grants under the Operational Program Competitiveness - 300 million euros.

These are the amounts in the package that is intended, as I said, primarily for SMEs, and there is also a very large amount in both the cohesion funds and the PNRR,  intended for the development of transport infrastructure, namely about 21 billion euros. I am convinced that Minister Boloș will give details about these sums, which, as I said, have a single purpose - to ensure the stability and economic development of the country.

In conclusion, I would like to repeat the message of confidence conveyed to the business community every time I have had the opportunity, or I will have the opportunity from now on. Romania is a safe country for investment. It offers many opportunities and is engaged on an irreversible development path.

I would like to thank you once again for organizing this event. I would like to thank you for everything you do so that we can have an economic development projection and I also express my hope that together with you, the Government of Romania, can ensure what the citizens of Romania have been waiting a long time, namely, stability, predictability and development.

Thank you very much!

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