The business review 2015

On August 22 the Fitch credit rating agency reaffirmed Romania's government long-term debt rating at BBB minus for hard-currency and at BBB for local currency, with a stable outlook. In a statement, the agency said the affirmation of Romania's rating and stable outlook was supported by the very good situation of its public finances, which seemed to compare positively with "BBB" range peers". The budget deficit forecast for 2015 was 1.8% of the GDP, which is below the 2.5% level reported in other states with a BBB rating, while public debt was 40.6% of the GDP, below the 43.1% level in the case of other states with the same rating. Another factor supporting the affirmation of Romania's rating and stable outlook was the positive expectations regarding the economic growth rate for the next three years, Fitch Ratings also said in its statement.

On August 28, the Starwood Hotels and Resorts Worldwide chain officially entered the Romanian market through their Sheraton brand. The company signed a franchise agreement for at least 20 years with Grand Plaza Hotel, the holder of the former Howard Johnson hotel in Bucharest. The Grand Plaza Hotel company, which owns the building, has invested around 6 million euros to turn the 4-star hotel into a 5-star hotel and meet the Sheraton standards. Furthermore, the hotel now has 270 rooms, from 280 before, and 300 employees.

A new fiscal code came into force in Romania on January 1 2016, having been already signed into law by president Klaus Iohannis on September 7 2015. The main provisions of the code refer to the reduction of the VAT from 24% to 20% this year and again to 19% next year; the elimination of the building tax for agricultural structures beginning on January 1 this year and for other types of structures as of next year; as well as the elimination of the additional duty on fuels as of January 1, 2017.

On September 16, the Romanian Government adopted the National Competition Strategy for the 2015-2020 period. The strategy identifies 10 economic sectors with a competitive potential corresponding to the araes of intelligent specialisation laid down in the National Strategy for Research, Development and Innovation for the 2014-2020 period. The economic sectors with a competitive potential are: tourism and eco-tourism, textiles and leatherworking, wood and furniture, the creative industries, the car and parts industry, IT and communications technology, food and drinks processing, healthcare and pharmaceuticals, energy and environment management, bio-economy including agriculture, forestry, fisheries and aquaculture, as well as bio-pharmacy and bio-technologies.

On October 8, the shareholders in Transilvania Bank approved the merger through absorption with Volksbank Romania. The integration of Volksbank Romania within Transilvania Bank started in April and ended on December 31, 2015. Transilvania Bank is one of Romania's three largest banks in terms of shares. The bank's strategy is supported by international shareholders such as the European Bank for Reconstruction and Development and the World Bank.

On October 14, the companies Lukoil, PanAtlantic and Romgaz discovered an important gas deposit on Romania's continental Black Sea shelf. The deposit, which is yet to be confirmed through assessment drilling, may exceed 30 billion cubic metres of gas.

On November 9, 2015 the Nuclearelectrica company and China General Nuclear Power Corporation initialled a memorandum of understanding regarding the development, construction, operation and decommissioning of Unit 3 and 4 of the Cernavoda Nuclear Power Plant, in the south east of Romania. The new company will be a joint venture in which China General Nuclear Power Corporation holds at least 51% of the share capital. The project of the Cernavoda Units 3 and 4 involves the construction of another two reactors of the CANDU 6 type, each having a power of 700 MWh and an operating life of 30 years, with the possibly to extend it by another 25 years.

On November 17, the city of Ghimbav, in Brasov county, central Romania, saw the start of building works of an AIRBUS Helicopters Industries factory, an investment of almost 40 million euros. The Ghimbav factory will produce between 15 to 20 helicopters a year. The new H-125 model is expected to be built in 2017.

On November 19, the American Group Timken, a global manufacturer of bearings, announced plans to build a new factory in Ploiesti, in the south of Romania, their second in this country. Works on the new factory are to start in the first quarter of 2016 and production in the early 2017.

On December 9, 2015 the daily Ziarul Financial announced that the Bill and Melinda Gates Foundation, the world's largest philanthropic organisation with assets of 43 billion dollars, some of which were donated by Warren Buffett, is a shareholder in Fondul Proprietatea. Translating as "The Ownership Fund", this was created by the Romanian state in order to provide compensation to people whose property was abusively confiscated by the Romanian state during the communist regime and who can no longer receive in-kind restitution. The Bill Gates foundation has 66 million shares in Fondul Proprietatea, which accounts for 0.6% of the fund's capital.

On December 12, Moody's rating agency said it improved Romania's rating from stable to positive and affirmed its sovereign rating to Baa3, which is an investment rating. The rating reflects the significant progress made by Romania in addressing macroeconomic imbalances and making its economy less vulnerable to external shocks, thus creating the premise for solid economic growth.