Regional Update CEE Covid-19 & Political Overview - 3 November - 1 December 2021 - CEC Group
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Regional Update CEE Covid-19 & Political Overview 3 November – 1 December 2021
Table of Contents
CROATIA ................................................................................................................................ 3
CZECHIA ................................................................................................................................ 5
HUNGARY .............................................................................................................................. 8
POLAND ............................................................................................................................... 10
ROMANIA............................................................................................................................. 12
SLOVAKIA ............................................................................................................................ 16
2CROATIA
(prepared by CEC's Croatian partner - Vlahovic Group)
COVID-19:
• As of November 16, COVID certificates have become mandatory for both government and
public services employees as well as for visitors to their premises. Since COVID certificates
have become mandatory for both government and public services employees as well as for
visitors, vaccinations have accelerated, and so have public protests against the measures. A
couple of protests against COVID-19 certificates have been organized in Croatia, with the
biggest organized in Zagreb on November 21 gathering thousands of citizens. Prime Minister
Plenkovic recently announced legislative changes and the introduction of sanctions for citizens
defying the COVID-19 certificate mandate and inciting protests, describing protests against
mandatory testing as unusual. Envisaged fines will range between €4,000 and €6,700 for the
responsible persons who fail to respect the relevant rules regarding COVID-19 certificates. So
far, 63.6% of the adult population have been vaccinated with 1 dose of vaccine and 56.7% with
2 doses. The European Center for Disease Prevention and Control (ECDC) announced on
November 12 that it has put Croatia on a list of ten countries with a 'very worrying'
epidemiological situation along with Belgium, Poland, the Netherlands, Bulgaria, the Czech
Republic, Estonia, Greece, Hungary and Slovenia
Business and economy:
• On November 26 Prime Minister Plenkovic held a press conference announcing the GDP
growth of 15.8% - by far the highest GDP growth rate in the Q3 among the 21 EU member
states for which we know the details so far. Growth in Croatia is three times higher than the
EU average. “When we look at it, we have 10.7% GDP growth in the first 10 months. We have
the highest growth in the history of Croatia. This shows a really fast, strong and extremely
high-quality and, I would say, comprehensive recovery of the Croatian economy", said PM
Plenkovic.
• The Fitch Ratings Agency has raised Croatia's credit rating by one level, from 'BBB minus' to
'BBB', with a positive outlook on November 13, which is the highest credit rating in Croatia’s
history. "The key and anchor of our economic course, as a result of which the European
Commission, rating agencies and international financial institutions have increasing confidence
in our policy, is accession to the euro area”, said PM Andrej Plenkovic while commenting on
the news.
Politics and legislation:
• French President Emmanuel Macron visited Croatia on November 24 and 25, which was the
first official visit of a French president to Croatia since gaining independence. President
Macron met with Croatian President Zoran Milanovic where they discussed, among other
things, the importance of purchasing military aircraft and the strategic agreement between the
two countries. Further, the French President then met with the Croatian Prime Minister Andrej
Plenkovic and following the meeting a strategic agreement was signed between France and
3Croatia, as well as an agreement on the procurement of French Rafale fighter aircrafts worth
nearly €1 billion. The agreement on the procurement was signed by the defence ministers of
the two countries, Mario Banozic and Florence Parly. Finally, President Macron expressed
clear support for Croatia's accession to the Schengen area.
• On November 24, the European Commission approved Croatia's new map for granting regional
aid from 1 January 2022 to 31 December 2027 which will enable much higher co-financing for
all regions, including the most developed one, the City of Zagreb. Therefore, as of 1 January
Croatia will have four NUTS2 regions - Pannonian Croatia, North Croatia, Adriatic Croatia
and the City of Zagreb, as opposed to two it had before.
4CZECHIA
(prepared by the CEC Government Relations office in Prague)
COVID-19:
• 277 978 active cases, 1 860 920 recovered, 33 186 deceased (as of December 1)
• The Czech Republic continues to experience an uncontrolled increase in the number of
COVID-19 cases, despite continued vaccination (6.34 million people have completed
vaccination), even with the third dose of the vaccine. The number of people who have received
at least one dose of the vaccine has exceeded 61%, but this is still below the European average.
788 000 inhabitants have received the booster jab. It is now open to all citizens over 60 years
of age and those chronically ill after five months from completing the previous vaccination.
Others - regardless of age or illness - are eligible after six months of vaccination. Interest in
vaccination is still high, and the seven-day vaccination average is on the rise. Nevertheless,
demonstrations by vaccine opponents are also common. On top of that, a new variant of the
highly-infected Omicron virus has been confirmed in the Czech Republic recently.
• The regions with the highest vaccination rates are Prague (88%) and the South Moravian
Region (60%), while the lowest vaccination rate is in the Olomouc Region (52%). While almost
half of the population in some regions has not received any vaccination doses, the future Health
Minister Válek has already warned of the need for a fourth dose in the future.
• The outgoing government, despite longstanding reluctance, declared a state of emergency for
30 days from November 26, under which it again announced restrictive measures. Cancellation
of Christmas markets, early closure of bars and restaurants (from 10 pm), reduction of the
maximum number of participants in sporting (1000 persons) and cultural (100 persons) events,
all subject to vaccination or illness proof (the so-called O-N model). PCR and antigen tests are
no longer accepted. The Ministry of Health also promotes mandatory vaccination for certain
professions and age groups (60+) from March 2022. With the new measures, the government
also reintroduced compensation bonuses for businesses.
• Some of the measures are opposed by the incoming government coalition, which has presented
its own plan, including the reintroduction of testing as possible proof of Covid negativity, the
reintroduction of the eRouška tracking app or the obligation to test even the vaccinated in case
of risky contact. The future Health Minister Válek encourages the debate on the possibility of
antibodies recognition as proof of Covid negativity while opposing mandatory vaccination.
• Recently, Health Minister Adam Vojtěch (ANO) and Czech President Miloš Zeman have also
been infected with the COVID-19 disease, forcing Zeman to appoint a new Prime Minister
Fiala (ODS) in an alternative form, subject to exceptional anti-epidemic measures.
Business and economy:
• Price growth in the Czech Republic is still accelerating. In October, prices jumped by 5.8%,
the most since 2008. The Czech National Bank raised interest rates to 2.75% in early
November. This is the most significant rate increase since 1997. However, the CNB's interest
rate hikes will not take effect for another year at the earliest, and inflation could hit 7% until
then, according to Governor Jiří Rusnok. The National Bank expects the Czech economy to
return to its pre-crisis level by the end of 2022.
5• The CNB has also made mortgages more difficult to access, setting the Loan to Value ratio to
90%, from April 2022 to 80%, Debt to Income ratio to 8.5 and Debt Service to Income ratio to
45%. Due to the new measures, a tenth of people who would have obtained a mortgage under
the aforementioned conditions will not be able to get a mortgage now.
• Confidence in the Czech economy has been continuously falling lately. The decline is mainly
due to a fall in consumer confidence, while the view of the economy has improved among
businesses. Compared to November 2020, however, confidence is higher, both overall and
among individual consumer and business groups.
• The total debt of the Czech population reached CZK 2.87 trillion (EUR 112.1 billion) at the
end of the third quarter and increased by CZK 314 billion (EUR 12.3 billion) year-on-year.
Debt from consumer loans rose by CZK 7 billion (EUR 273.5 million) year-on-year and
exceeded CZK half a trillion (EUR 19.5 billion) for the first time. At the same time, the number
of people who are unable to repay their loans has fallen.
• The unemployment rate in the Czech Republic continues to fall. With 10,500 jobseekers in
October finding new jobs, it fell to 3.4%. On the other hand, job vacancies are declining too.
• Hubáčková (KDU-ČSL), a candidate for environment minister, said she would like to stop coal
mining earlier than the initially set 2038 deadline, and she would also like to stop its use as
soon as possible. She would consider it a success if this happened in 2030, while she considers
2033 to be realistic. In this context, the Czech Republic could also benefit from the EU's
inclusion of nuclear and gas as sustainable technologies, according to Jaroslav Míl, a former
government commissioner for atomic energy. For the Czech Republic, nuclear power plants
are the only stable, emission-free source.
Politics and legislation:
• After weeks of negotiations, the ministers of the future government, which will include ODS,
TOP 09, KDU-ČSL, STAN, and the Pirates, were introduced. The Pirates, who voted about
joining the government at their internal party forum, were the most uncertain of all the parties.
In the end, however, the support for joining the government was more than 80%. Eighteen seats
will be filled in the government - three new ministerial posts will be created: for legislation,
European affairs, and science, research, and innovation. Individual ministers have yet to be
appointed by the President. The main goals of the new government, besides fighting covid,
include responsible budget policy (they want to reduce the deficit below CZK 300 billion),
digitalisation and tax cuts for certain groups of the population.
• Markéta Pekarová Adamová (TOP09) was elected to chair the Chamber of Deputies. Karel
Havlíček (ANO), Minister of Industry and Minister of Transport of the current government,
also wanted to run for the post of Chairman, but this was eventually rejected due to
incompatibility of his functions. Olga Richterová, who was the coalition's pre-agreed candidate
for vice-chair, was elected only for the second time.
• Last month we reported on a complaint by the Pirates and STAN about the invalidity of elected
candidates. Eventually, the composition of the House will not change as the court rejected the
petition.
• Even before his appointment, STAN's candidate for Industry and Trade Minister Věslav
Michalik was forced to give up his nomination in favour of Jozef Síkela (STAN). It was found
that Michalik's former company had borrowed at least EUR 4.6 million in the past through the
Cypriot company Lowfield Investments. Michalik did not want to explain to the media who
was behind the company from the tax haven or the origin of the money. He also built two solar
6power plants, which he sold and bought an investment fund in which he and his wife own part
of the shares. If he were to become Minister of Industry, which includes energy and possible
subsidies, there would most likely be a conflict of interest. His replacement, Jozef Síkela, is
known as a longstanding member of Erste Group management and investor.
• Miloš Zeman's health has improved so much in recent days that he has decided to leave the
hospital and return to Lány, despite the advice of his doctors. However, the same day he left
the hospital, he returned to the hospital for a positive coronavirus test. He left the hospital again
the next day to appoint Petr Fiala as Prime Minister on Sunday, November 28, while observing
anti-epidemic measures that looked rather bizarre (President Zeman was closed behind a plastic
screen to ensure safety). Zeman's consultations with all the ministerial candidates began the
next day and should last until December 13. Zeman is said to have reservations about one of
the proposed ministers, which could be Jan Lipavský, the candidate for Foreign Minister. Fiala
insists on the ministers, however, and in the event of a dispute, he could file a competency
lawsuit with the Constitutional Court.
• There are further uncertainties regarding the health care of the President of the Czech Republic,
and police suspect those around President Miloš Zeman of possibly committing three crimes.
Police are looking into whether his inner circle underestimated his deteriorating health. They
are also investigating whether someone in Zeman's circle forged a signature on a document
Zeman used to convene a new Chamber of Deputies on November 8 from the hospital. And
the police are also checking whether this was a usurpation of the powers of the presidency.
Vratislav Mynář and other employees of the presidential office have testified to the police in
this matter over the course of the month.
• Outgoing Czech Prime Minister Andrej Babiš (ANO) could be handed over for prosecution.
Babiš's prosecution in the Čapí hnízdo case has been suspended since he regained his
parliamentary seat and thus immunity in the parliamentary elections in early October. A new
Chamber of Deputies will now have to decide on his handover. In the meantime, Babiš also
admitted his possible presidential candidacy in the 2023 elections, which would grant him
immunity again in case of winning.
7HUNGARY
(prepared by the CEC Government Relations office in Budapest)
COVID-19:
• There have been 27830 newly identified cases over the past weekend; Deceased: 460. Case
numbers continue to remain very high, therefore the government re-introduced further
protective measures.
Business and economy:
• According to the Central Statistical Office (KSH), the Hungarian economy grew by 6,1%
in the third quarter: According to raw, seasonally and calendar-adjusted and balanced data,
Hungary's gross domestic product (GDP) in the third quarter grew by 6.1% compared to a year
earlier. Economic performance improved by 0.7% compared to the previous quarter. Both
quarterly and annual growth are below expectations. The expected growth was 1.1% compared
to the second quarter and 7.4% compared to the previous year. Similar to other countries, the
economy is increasingly constrained by supply problems. The supply chain is stalling and
commodity prices are becoming more and more expensive. Previous statistics have already
shown that the industry is underperforming and growth in the construction industry has not
been overwhelming either. Particularly, output volumes in the automotive and electronics
sectors have fallen sharply. Finance Minister Mihály Varga welcomed the quarterly figures,
saying it indicates that the economy is on a dynamic growth path. The third-quarter growth is
the second highest ever and, according to the available data, exceeds the EU average. It is
already very likely that the government will refund the personal income tax paid in 2020 to
families raising children in February 2021, a measure which was previously announced subject
to the condition of a 5.5% annual GDP growth by the government.
• Hungary’s inflation was 6,5 % in October: In October 2021, consumer prices in Hungary
were 6.5% higher than a year ago, the highest level in nine years. Inflation is mostly driven by
the drastically increased fuel prices (30.7% spike), and spirit and tobacco prices (11.3%
increase).
Politics and legislation:
• Coronavirus related government measures: As of 20 November, the government decided to
reintroduce mandatory mask-wearing in enclosed public spaces. According to the detailed
government decree, masks will be mandatory at performing arts events, at indoor music and
dance events, in shops, shopping centres, cinemas, museums, libraries, archives, public cultural
institutions, archives and public administration offices. Only employees are required to wear
masks at sporting events, gyms, swimming pools, spas, ice rinks, hotels and restaurants. The
rules on wearing masks in nurseries and schools shall be set by the director, and they are not
enforced in religious ceremonies either. With the exception of these places, the employer shall
decide on the rules for wearing masks at work, with the proviso that voluntary mask-wearing
cannot be prohibited by the employer. Children under six, people with psychosocial disabilities,
and people with autism spectrum disorder do not need to wear masks.
8• Another measure is that health workers cannot quit and are obliged to take the third vaccination
if at least 180 days have passed since the second jab.
• Government caps petrol and diesel prices at HUF 480 starting on 15 November: The
government has decided to put a cap on petrol and diesel prices at HUF 480 starting on 15
November. This means that the price of petrol and diesel can be lower, but they cannot be more
expensive than that. The decision only concerns 95-octane petrol and diesel, which matters for
98% of society, according to the cabinet. The price cap does not cover premium fuel and 100-
octane petrol. The latest data show that the average price of 95 petrol is HUF 506 per litre, and
that of diesel is HUF 512. The government’s goal with capping fuel prices is to help overcome
the energy crisis in the economy and to contribute to reducing inflation. The measure was
introduced for three months; the government will assess the situation at the end of February.
The tax content of fuel prices remains unchanged; fuel retailers’ price margins will decrease.
The retailers will not be compensated.
9POLAND
(prepared by the CEC Government Relations office in Warsaw)
COVID-19:
• The government announced that certain COVID-19 restrictions will be reintroduced between
1 and 17 December. Health Minister Adam Niedzielski argued that the pandemic situation in
Poland has begun to stabilise. As the daily infection rates in most affected voivodships are in
decline, the government believes that Poland has just reached the peak of the fourth wave.
However, Niedzielski stressed the fact the new COVID-19 Omicron variant could become a
gamechanger and reset months of progress in the fight against the virus. As a result, a new set
of restrictions is meant to reduce the current number of infections and prepare the country for
a potentially more challenging next wave in 3 or 4 months as the government expects.
• The following restrictions will be introduced as of 1 December 2021:
o Catering, Hotels, Cultural and entertainment facilities (cinemas, theatres, operas,
philharmonics, community centres) - 50% occupancy;
o Sports facilities (pools, aqua parks etc.) - 50% occupancy of premises;
o Family gatherings (weddings, communions, receptions) - max. 100 persons per venue;
o Nightclubs, events, discos - max. 100 persons per venue;
o Shops, gyms, fitness clubs and centres, casinos, museums, art galleries, fairs,
exhibitions, congresses, conferences - 1 person per 15m2.
o All the above limits do not apply to vaccinated persons.
Business and Economy:
• PM Mateusz Morawiecki and Minister of State Assets Jacek Sasin announced the assumptions
of the so-called Anti-Inflation Shield - the government's response to inflation and high
fuel prices. The Shield is supposed to lower certain taxes on fuels and energy and introduce a
special Shield Benefit to support the poorest citizens. The main measures assumed by the
Shield, valued at PLN 10 billion, include:
o From 20 December 2021 for 5 months - reduction of fuel prices (retail): lowering excise
tax to EU minimum; emission fees waved.
§ From January 2022 for 5 months, fuels not subject to retail sales tax
o From January 2022 for 3 months – reduction of VAT on gas from 23% to 8%
o From January 2022 for 3 months – reduction of energy prices: 0% excise tax for
households (reductions for other recipients), reduction of VAT on energy from 23% to
5%, postulate to change ETS rules.
o Shield Benefit: PLN 400-1150 allowance (depending on household size and income),
paid in two instalments in 2022. Available to approx. 5.2 million households.
o Savings in public administration – creation of new positions restricted; review of public
expenditures; restriction on special-purpose funds.
• The Polish Deal tax reform was passed by the Sejm on 29 October and was signed into law by
President Andrzej Duda on 16 November. The amendment act of 29 October 2021 on Personal
Income Tax, Corporate Income Tax and certain other laws, implementing the tax reform, has
been published in the Official Journal of Laws. The tax reform is one of the main pillars of the
PiS party's Polish Deal development programme. The primary intention of the upcoming
10changes is to improve the financial situation of the poorest Poles. Additionally, the government
has introduced further measures sealing the tax system for both natural persons and businesses.
However, commentators argue that the changes will have a negative effect on many
entrepreneurs as well as the middle-class taxpayers and the richest citizens. Most importantly,
experts underline that the new legislation will become effective as of 1 January 2022, leaving
taxpayers little time to adjust.
Politics and legislation:
• The European Commission addressed warning letters to the Polish and Hungarian authorities,
pointing out possible severe infringements concerning the application of the rule of law. The
EC suggested that the irregularities might affect the EU funds management process in Poland
and Hungary. In the letter addressed to the Polish government, the EC raised concerns
regarding the recent Constitutional Tribunal ruling on the supremacy of national law over that
of the EU. In the case of Hungary, the EC's doubts concern possible conflicts of interest and
corruption. Poland and Hungary will now have two months to reply to the letters and clarify
how they plan to protect European funds, considering the nature of the concerns raised against
them.
• In response to the ongoing migration crisis on Poland's border with Belarus, PM Mateusz
Morawiecki engaged in an international diplomatic offensive. Over the past week, PM
Morawiecki, amongst others, met with French President Emmanuel Macron, UK PM Boris
Johnson, Germany's Chancellor Angela Merkel and her successor Olaf Scholz, as well as
leaders of Baltic states and those of the Visegrad Group. In total, the PM visited 11
countries. In talks with European leaders, PM Morawiecki rallied support for Poland's efforts
to contain the crisis and discussed international efforts and engagement in resolving the
situation. The diplomatic offensive was supposed to be proof of Poland's cooperation with its
partners and a show of force to the Lukashenko regime. Meetings with European leaders and
statements of solidarity have also countered some of the early criticisms that other EU member
states negatively assessed Poland's approach to the crisis.
11ROMANIA
(prepared by CEC's Romanian partner - Serban & Musneci Associates)
COVID-19:
• COVID-19 situation improves in November: Romania dropped from some 11,000 new cases
at the beginning of the month (on November 2) and a national average of 9.57 with all counties
in the red area, to under 2,000 on November 26 and even slightly over 1,000 and a national
incidence of 1.87 with most counties in the green and only one county slightly above the
red ceiling on November 29. However, the vaccination rate, boosted by the introduction of
the green pass, also declined as the incidence was no longer concerning, albeit the authorities
are expecting a new 5th wave in mid-January, early Feb. 2022. The new South African strain
was not yet detected in Romania but it is already raising concerns so moderate restrictions
(mask-wearing, limited attendance to events of just the vaccinated and the green pass) are being
so far maintained. The new government will also strive to enforce the green pass at work but it
is also reserving this measure for a potential 5th wave and redrafting it to have a temporary
incidence-based validity.
Business and economy:
• Enel to downsize investment in Romania after Govt. endorses 'cap and subsidy' plan;
announces it might sue the Romanian government: Italian utility group Enel had planned to
invest EUR 2 bln in Romania but is now reconsidering its plans after the Government decided
to cap energy prices and levy a windfall revenue tax, including in the segment of renewable
energy generation. The Italian group warns that the volume of investments will be downsized
if the measures remain in place. "We believe that the measures imposed by the authorities in
Romania are incorrect, discourage investors, create instability, do not solve structural problems
and need to be changed, as happened with the measures taken by other governments in Europe.
I think it is a mistake, we will try to oppose these measures legally and we will try to see if the
government is open to finding other ways to resolve this situation, without directly affecting
the basic rules of the markets. We will do this with all possible attention and understanding,
but certainly, the measures are a blow to the confidence of investors in Romania", said Enel
Group CEO, Francesco Starace, speaking at the annual Enel Capital Markets Day event,
Economica.net reported. "When we made the business plan, Romania was an attractive
country, and we planned to invest more than EUR 2 bln to massively develop renewable energy
projects and networks. Obviously, if these measures remain in force, the yields will decrease,
so we will have to revise our investments in Romania downwards," Alberto de Paoli, CFO of
Enel, said on the same topic.
• Annual inflation rate up 7.9pct in October: The annual inflation rate rose to 7.9% in October
2021, from 6.3% in September, with prices for non-food goods rising by 11.39%, food goods
prices increasing by 5.25%, and those of services by 3.96%, according to data published on
Wednesday, Nov. 10, by the National Institute of Statistics (INS). The annual CPI inflation
rate is projected at 7.5% in December 2021 and is forecast to lower to 5.9% by the end of next
year, according to the Inflation Report of Romania's National Bank (BNR). The upward
revision of the inflation trajectory puts pressure on the payrolls earmarked by the private
companies in Romania for 2022, according to the second part of the PayWell 2021
12study conducted by PwC Romania. While the companies previously estimated an average
increase of wages of 7%, the rate should be revised upwards by 2-3 percentage points, to
compensate for the loss of purchasing power, according to the study. By the end of the year,
inflation is expected to exceed 7%, which could lead to a revision of the payroll, PwC said in
its report.
Politics and legislation:
• Ciuca Cabinet gets the Parliament’s green light. Ministers swore in at Cotroceni,
Iohannis: Many egos overridden: The Nicolae Ciuca Cabinet has been voted in Parliament
by a comfortable majority of 318 votes, more by 80 than the minimum needed of 234 votes.
USR and AUR lawmakers voted against it. Senators and deputies met in a joint plenary session
to vote the investiture for the government proposed by Prime Minister-designate Nicolae
Ciuca. All the ministers proposed by Nicolae Ciucă received a favourable opinion at
Wednesday’s hearings from the specialized parliamentary commissions. Prime Minister-
designate Nicolae Ciuca told Parliament's sitting on Thursday that the Government will ensure
observance of the rule of law and the independence of the judiciary, and, externally, will have
as strategic objective Romania's accession to the Schengen Area and consolidation of the
regional security pillar profile in NATO and the role in the EU. PM designate Ciuca stated that
this government can provide stability. "(...) We are determined to carry out this program.
We show that we put the interest of Romanians first. Our common goal is to modernize
Romania and that is why we will allocate 7% of GDP to investments. An essential
program for the development of the country is the Anghel Saligny program. The National
Recovery and Resilience Plan is the main axis in achieving our objectives. Citizen safety
is a priority. We cannot afford the luxury of political animosities that can generate new
crises. Increased attention should be paid to the family institution. We want to encourage
population growth. Our goal is to ensure the development and prosperity of our country,”
the PM designate pointed out. Ciuca also announced that a government sitting will be held
on Friday to discuss budget rectification and the budget deficit, while assuring there will be
financial resources to pay pensions and salaries, as well as funds “for the needs of the Ministry
of Health” in the context of the pandemic. PSD chair Marcel Ciolacu said that his
party’s (social) measures must be enforced from day one. After securing the Parliament’s vote,
the members of Ciuca Cabinet went to Cotroceni Presidential Palace to be sworn in office. In
his speech, President Klaus Iohannis said that many egos had been overridden to have this
Cabinet. European Commission President Ursula von der Leyen took to Twitter on Thursday
to congratulate Nicolae Ciuca on his investiture as Prime Minister of Romania. PNL
president Florin Cîțu, states that the discussion on the division of the positions of prefects,
secretaries of state and heads of agencies is postponed. Regarding the positions in the second
and third echelons of the Government, the new governing partners agreed as follows: out of
the 80 secretaries of state in the Government, PSD will appoint 42, while PNL will have 34,
and UDMR - 8, according to weight in Parliament. The positions in the territory too were
divided between the three parties. These are the positions of prefects, sub-prefects, heads of
agencies. Out of the 42 positions of prefect, PSD e will appoint 21 people, while PNL will have
17 and UDMR - 4 prefects.
• Romanian Govt. passes budget revision: there’s enough money for pensions,
wages: Romania’s new Government on November 26 endorsed the second budget revision, in
13line with the draft published the day before. The deficit to GDP ratio is preserved at 7.13% of
GDP - which allowed the Executive to increase the deficit in nominal terms by RON 1.1 bln
(EUR 220 mln) and, also backed by robust revenues, earmark supplementary funds, including
RON 2.2 bln (EUR 440 mln) to the ministry of labour and social assistance, News.ro reported.
This allowed finance minister Adrian Caciu to assure the public pension recipients, as well as
the employees in the budgetary system, that their pensions/wages would be paid in time. In its
November 26 opinion on the second budget revision, the Fiscal Council didn't repeat the
warning about possible slippage above the deficit target (7.13% of GDP) but implied that the
Government could have used windfall revenues to compress the deficit more. Former prime
minister Florin Citu said that his Liberal Government was going to bring the public deficit
somewhere in between 5% of GDP and 7% of GDP this year and claimed that he left a budget
planning for next year with a target of 5.84%-of-GDP deficit, News.ro reported.
• Governing program/Energy priorities - nuclear agreement with U.S., Black Sea gas,
energy investment fund: Developing a nuclear program based on U.S. technology,
unblocking the Black Sea gas projects and setting up an energy investment fund are some of
the goals set out in the Energy chapter of the 2021-2024 Governing Program pledged by the
PNL-PSD-UDMR coalition. "Decarbonising the energy supply in line with the EU target of
cutting greenhouse gas emissions by at least 40% from 1990 levels can only be achieved by
increasing the nuclear production capacity," the document states. To this effect, one of the
strategic objectives is promoting energy investments, particularly in the field of clean energies,
such as completing Cernavoda reactors 3 and 4, upgrading Cernavoda Unit 1 and introducing
advanced nuclear technologies in the context of the Romania - U.S. intergovernmental
partnership. The Romanian and U.S. delegations, headed by strategic affairs senior official Dan
Neculaescu and Assistant Secretary of State for European and Eurasian Affairs Karen
Donfried, signed a joint statement at the end of the seventh round of the Strategic
Dialogue between Romania and the US, mentioning security, investment and energy among
the areas deemed of strategic importance to the two countries. The locations of the small-sized
nuclear reactors in Romania will be decided under a study that started last year, but some of
them may coincide with the coal-fired power plants that were closed or are going to be closed,
confirmed Teodor Chirica - CEO of Romanian nuclear company Nuclearelectrica, which
recently sealed with the US peer NuScale a memorandum for the development of such power
generation units across the country.
• Romania expects first EUR 1.8 bln Resilience Plan money within two months: Florin Citu,
in his (last) capacity of interim minister of European Funds, signed on Thursday, November
25, the financing agreement between Romania and the European Commission for the Recovery
and Resilience Plan (PNRR), sources familiar with the developments told Digi24.ro. It was the
last document signed by Liberal Party (PNL) leader and former prime minister Florin Citu as
interim minister. The first tranche, of EUR 1.8 bln, will be disbursed within two months,
according to the sources. Dan Vilceanu, the new minister of European projects and
investments, announced on Wednesday that an advance payment of EUR 3.9 bln will be
disbursed in December. The other tranches are pending bi-annual evaluations of the progress
along with the calendar of reforms attached to the EUR 29 bln financing package. Florin Citu
pointed out that the renegotiation of the National Recovery and Resilience Plan (PNRR) is not
possible. "It is not possible. Only in 2023 can we make small adjustments, but if we look at the
progress on certain chapters and if the progress is not the desired one, then we can discuss, but
very little, with the Commission. Any discussion about PNRR, about renegotiation, would
mean taking everything from scratch and it would mean losing money, just today we signed
14the last document to receive the 1.8 billion euros and Romania cannot afford to take it from
scratch. [This money] I think it will come in the following weeks, they should enter the
accounts in Romania," Citu said on Thursday evening on TVR1 when asked about the Social
Democratic Party (PSD) idea of renegotiating PNRR.
15SLOVAKIA
(prepared by the CEC Government Relations office in Bratislava)
COVID-19:
• 22,057 conducted PCR tests (7,069 positive); 3,444 hospitalized; 17,722 inoculated (5,380,726
vaccines used in total) (daily update as of 30 November).
• The epidemiological situation in Slovakia is on the brink of a humanitarian crisis. In the
face of the dire situation, Slovakia entered an all-out lockdown that will last until at least
9 December. The curfew is in place (between 5:00 and 1:00 the next day); exemptions
apply. Only essential shops and services may remain open (incl. grocery stores, drug stores,
pharmacies, healthcare providers), and their opening hours are limited between 5:00 and
20:00.
• Commuting to and from the workplace is permitted but home office is highly recommended,
and workplace entry conditions apply – employees must present either a vaccination certificate,
proof of recovery from the COVID- 19 or a negative test result not older than 7 days. Employers
are obliged to offer tests (AG self-tests performed under the supervision of an authorized
person are acceptable), but the expenses should be repaid by the Government
• The Public Health Authority adopted the first steps to react to the Omicron variant – on top of
testing people returning from risk countries, as of 1 December, people coming to Slovakia from
South Africa, Botswana, Namibia, Lesotho, Eswatini, Mozambique, Zimbabwe, Israel,
Hongkong and Seychelles will have to self-isolate regardless of their vaccination status.
Business and economy:
• In October, the registered unemployment rate fell below 7% for the first time since May 2020
to 6.79%. At the same time, it fell to below 20% in all districts of the Slovak Republic for the
first time since last November.
• The year-on-year inflation rate in October reached 5.1% – the highest value since October
2008.
• Fitch Ratings has revised Slovakia's Outlook to Stable from Negative and affirmed the Long-
Term Foreign-Currency Issuer Default Rating at “A”. Fitch's projections for public finances
have improved amid robust revenue growth and greater confidence in the economic
recovery. On top of that, S&P Global Ratings affirmed Slovakia's debt grade at A+.
Politics and legislation:
• The Government approved an increase in state contributions to maintain employment for
employers and self-employed for November and December 2021. In the last two months of
the year, the current “First Aid” will shit to “First Aid Plus”. Thus, the state will reimburse
80% of the total labour costs instead of 80% of the gross salary. Self-employed will receive a
contribution between €270 and €810 depending on the decline in sales (increase from €180-
€540 range of the “First Aid”). The contribution for self-employed and single-member limited
liability companies that do not have business income will increase from €210 to €315.
16• Transport Ministry announced a new “de minimis” state aid scheme for operators of
international regular/occasional bus services. The maximum amount of the cumulative
contribution is up to €200,000.
• Transport Ministry extended the large aid scheme for tourism and gastronomy for April and
May 2021. Entrepreneurs can apply for up to €200,000 for this period. Eligible applicants the
companies that have been affected by the COVID-19 measures reported more than a 40% drop
in their net turnovers and generated a loss during this period.
• The Government approved a deferral of payment of social security contributions for November
2021 until 30 September 2024. The deferral applies to employers and self-employed
individuals reporting a decline in net turnover or income from business or self-employed
activities of 40% and more.
• Economy Ministry plans to launch a new round of rent subsidies in early December. The state
should contribute (retroactively as well) to the rent of entrepreneurs who have leased premises
for their operations but closed due to pandemic restrictions. The terms will remain unchanged
from the previous call. The state’s contribution will equal the discount provided by the landlord
(up to 50% of the rent).
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