fbpx Modifica setari cookieuri


Public debt relative to GDP advanced in July as much as throughout the entire Q2, when pandemic reached its peak. Implications

The public debt officially measured by the Ministry of Finance based on the European methodology advanced only in July 2020 almost as much as in… Mai mult

Infrastructure development mega-plan – mega-business for neighbours: Romania must import 1.8 million tons of bitumen

Romania’s big re-launch plan for the next decade places transport infrastructure at the centre of investments, with an allocation of 60% of the total amount.… Mai mult

Budget implementation on S1 2020 – a comparative approach related to 2019

The general consolidated budget registered in the first half of the current year a deficit of about RON 45 billion, equivalent to 4.2% of the… Mai mult

Siegfried Muresan: The EU is considering the possibility to introduce several types of taxes. The only one on which there is agreement is the one on plastic

At the European level, there is an agreement to introduce a “modest” tax on disposable plastic, a first source of income to support the repayment… Mai mult

Long-term interest rate fell below 4%. However, a courageous change of economic vision would be required

Long-term interest rate for Romania fell by almost one percentage point in just two months, according to data released by Eurostat. After increasing up to… Mai mult

Beware of financing costs! Quick and sharp decline of confidence in Romanian securities

de Marin Pana 7.2.2017


Yields of the Romanian securities have rapidly increased following the political chaos, the reaction of the society and the uncertainties underlying the budget that marked the last week.

A rising level of the yields indicates a decreasing confidence in the economic outlook and leads to increasing financing costs for the public debt, according to the data available on the specialized website Investing.com.

The yields of government bonds with a ten-year maturity are currently approaching 4% per year, while in October 2016 was below 2.7% per year and 3.51% at the beginning of the year. Securities with a maturity of three years had last month an increase from 1.648% on 3 January 2017 to 1.878% on 1 February.

It is noteworthy that changes in the last 12 months have reached very important levels, namely +20.04% for the ten-year bonds and + 60.71% for those with the maturity after three years. In these circumstances, despite a relatively low public debt, somewhere around 37% of GDP, the costs of interest on this debt will significantly increase in 2017.

We note that these costs incurred to just maintain the public debt at the same level and not to pay something from the amounts actually owed, reached in 2016 about 1.3% of GDP or about 10 billion lei. Significant coincidence, this is the exact amount that allegedly represented a hole in the budget execution last year.

Each increase in interest costs of only 10% means an additional one billion in the budget expenditure that already went up to the threshold of 3% of GDP allowed by the Maastricht criteria of macroeconomic stability. If we keep going like that, a potential 80% increase in the financing costs is entirely possible, which would mean an additional deficit of 1% of GDP.


  • Yield evolution of the Romanian securities
  • Romania – 10 years
  • Romania – 3 years
  • Investing.com, 2 February 2017, 8:00


The consequences of a socio-political slippage will immediately be noticeable and have long-term consequences.

For reference, we present the effects for the next decade, following the recent decisions, of some specific problems that will have been long forgotten by the population at the time when people pay for interests rather than benefit from schools, hospitals or modern roads.


  • Yields on 10-year securities


Essentially, after other important countries in the region, such as Poland and Hungary, have undergone political problems related to the democracy and so forth, Romania was an island of the rule of law stability and benefited from more favourable financing conditions than them.

Now it is no longer the case and we lost, in a silly way, an important image asset to potential investors.

Mergeți în homepage ›

Publicat la data de 7.2.2017

Lăsați un comentariu


New Renault boss: “Dacia is a miracle. It's time for the brand to flourish"

Luca de Meo (foto), the new general manager (CEO) of Renault group, considers that Dacia project proved to be a miracle and that no one… Mai mult

Pentagon transforms Campia Turzii unit into a NATO air hub at the Black Sea

A former Soviet airbase in central Romania could become a hub for US Air Force operations in south-eastern Europe, where the Pentagon is seeking to… Mai mult

Nuclearelectrica shareholders approved to terminate negotiations with Chinese for building reactors 3 and 4 from Cernavoda

Nuclearelectrica's Board of Directors has been mandated to initiate proceedings to terminate negotiations with China General Nuclear Power Group (CGN), as well as legal effects… Mai mult

Renault holds expansion of its plant in Romania, 15,000 jobs cancelled at global level

"Putting capacity growth projects planned in Morocco and Romania on hold" - is one of the measures included in the draft plan of Renault Group… Mai mult

Romania is a net importer of electricity in 2020 as well

Romania imported an amount of electricity of almost 796 GWh in the first month of this year, by more than 36% above what it exported… Mai mult

Shareholders of Galati steel plant promise investments of one billion euros

GFG Alliance has committed to invest one billion euros to upgrade Galati steel plant in order to reduce emissions and increase production. Another EUR 1… Mai mult

Transport Ministry announces it has sent to Brussels the financing request for Sibiu - Pitesti highway

The Transport Ministry, as the Intermediate Body in Transport, approved the financing request for the project "Construction of Sibiu - Pitesti highway", Sections 1, 4… Mai mult

Romania and Juncker Plan: EUR 720 million attracted, of which 35% by Transgaz for BRUA

(The map of investment financed through Juncker Plan, by GDP share. Darker colours mean higher shares) The operator of national natural gas pipelines, Transgaz (TGN)… Mai mult

Top 3 reasons why young people leave Romania

Lack of trust in authorities, corruption and low living standards are the main reasons why young people leave Romania. The data is part of a… Mai mult

IMM Invest Romania – program implementing rules have been published

The Ministry of Public Finance announces that it has issued the methodological norms for the implementation of the Program for supporting small and medium-sized enterprises… Mai mult

Pollution import and car park expansion: comparisons with the other EU states

Romania is the EU country with the fewest cars in terms of the number of inhabitants, according to data recently published by Eurostat. We appear… Mai mult

Government is trying to save budget deficit: reductions in public administration system, cancellation of bonus for harmful conditions, excise duty on soft drinks

The Government is preparing the public for the first measures aimed at avoiding the budget slippage, which would be applied by the PSD-ALDE government. News… Mai mult

Laura Codruta Kovesi remains alone in the race for European Chief Prosecutor

French Prosecutor Jean-Francois Bohnert will be appointed as head of the European Financial Prosecutor's Office, a position for which he was heard on Thursday, 11… Mai mult

Romania - EU country with highest risk of dying in a road accident, Bulgaria is quickly decreasing number of victims since it built motorways

Romania recorded the highest road deaths in the EU also last year, with 96 deaths per one million inhabitants in 2018, almost double the EU… Mai mult

Latest developments in progress at Health Ministry: Differentiated wages based on performance, competitions organised at a regional level not by hospitals

Sorina Pintea announced on Thursday further new changes that will be brought to the functioning of the health care system, including new rules for employment… Mai mult

ANAF changes selection procedure for liquidators. Main changes

The new order on approval and selection procedures for insolvency practitioners is an important step to a very good direction, industry experts say. ANAF is… Mai mult