ECO-BUS WEEKLY DIGEST May 24-30. Most important Economy & Business news by IPN
●MONDAY, May 24
Volume of released loans reached October 2014 record
This May, the banks operating in the Republic of Moldova, after the crisis of 2014 caused by the bank fraud, managed to reach again the historical high of released loans of October 2014. The volume of granted loans amounted to 47.9 billion lei, as opposed to 48 billion lei in October 2014. The loans released in the whole banking system, which includes the nonbanking system, so far came to almost 59 billion lei. But the value of the leu is yet different now, said expert of the Institute for Development send Social Initiatives “Viitorul” Veaceslav Ioniță. The real situation of 2014, when the loans in the banking system represented 37% of the GDP, will be reached in two-three years in the best case. In the program “Economic analyses with Veaceslav Ioniță”, the economist said that after 2014, during three years and a half, the volume of released loans declined continuously on account of business entities, by almost 18 billion lei. The loans provided to legal entities now increased in volume slightly, but didn’t compensate for the serious decline in the volume of loans released to business entities. After February 2018, of the 15.8 billion lei that represented the rise in the bank loan portfolio during three years and a half, 10 billion lei were provided to private individuals, while 5.8 billion lei to legal entities.
Oleg Tofilat wins contest to fill post of CFM administrator
Adviser to the Prime Minister on transport and infrastructure Oleg Tofilat became the winner of the contest to fill the vacancy of administrator of the state-run enterprise “Moldova’s Railways” (CFM). The Agency announced the contest on March 18. On April 24, the time limit for submissions was extended as none of the five lodged files met the contest regulations. The second stage to choose an administrator for the CFM was held on May 21. Alongside Oleg Tofilat, six more applicants contended for this post. Moldova’s Railways has faced financial problems for many months and has large salary arrears. The situation at the enterprise was discussed by the Supreme Security Council. President Maia Sandu said then that the administration of the CFM consciously led the company to bankruptcy by schemes of corruption, rigged public procurement procedures and appropriation. Corruption and defective management also led to salary arrears.
●THURSDAY, May 27
There is political protection behind rise in fuel prices, statement
Energy export Sergiu Tofilat, ex-presidential adviser, said the unprecedented rises in fuel prices witnessed in the recent past are based on political protection, while the Competition Council acts in collusion with oil sellers. For his part, Deputy Parliament Speaker Alexandru Slusari said a report by the Competition Council that was kept secret confirms the fact that oil sellers act concertedly.“The problem resides not only in the fact that oil sellers reach agreements between them, but also in the fact that they act in collusion with the Competition Council and enjoy political protection. In February 2020, Dodon met with three of the main oil sellers. In the meeting of the parliamentary commission, oil sellers admitted that they agreed not to change the prices until the presidential elections. It is a serious violation. The Penal Code envisions liability in the case of cartel agreements,” Sergiu Tofilat stated in the talk show “Secrets of the Power” on JurnalTV channel.
Alexandru Slusari in the same program said the head of the Competition Council Marcel Răducan presented a report on the recent activity of oil sellers to the parliamentary commission on economist, budget and finance. The report was kept secret, but this confirms that oil sellers act concertedly and increase fuel prices unjustifiably.
PAS councilors seek revision of property tax
The councilors of the Party of Action and Solidarity (PAS) ask to urgently call a meeting of the Chisinau Municipal Council so as to review the rise in the property tax and the “luxury costs” for such projects as the fountains and others. In reply, mayor of Chisinau Ion Ceban said the PAS group campaigns and does not know what problems the citizens actually face. In a news conference, the head of the PAS group on the CMC Vasile Grădinaru said the inhabitants of the municipality received “congratulatory letters” from the mayor of Chisinau and from the “PSRM-Shor coalition”. The previous years the sums paid as property tax were at least two times lower. The inhabitants who last year paid 250 lei in property tax this year will pay 500 lei, while those who paid 350 lei, will now pay 700 lei. So, the tax was raised twice.
Insurers paid lower volume of insurance in 2020
In the course of last year, the insurance companies paid about 600 million lei insurance, a decrease of over 57 million lei compared with 2019. The ratio of insurance to insurance premiums was of 41%, an increase of 0.81 percentage points compared with 2019. This shows the insurance paid for 100 subscribed lei is 41.05 lei. The insurers faced the effects of turnover compression generated by the pandemic crisis, especially as regards policy subscription. The gross subscribed premiums that increased relatively constantly the last few years in 2020 decreased, primarily those coming from the sale of Green Card certificates.
Daniel Ioniță: We will remain untired in promoting Moldova’s European course
Romania. According to the diplomat, Moldova and Romania recently celebrated 11 years of the launch of the Partnership. This period was especially fruitful. In the period, the Republic of Moldova signed the Association Agreement with the EU and its component, the DCFTA. The Moldovans have traveled visa-free in the EU for several years already and Moldova’s foreign trade is over 65% oriented to the EU market.
●FRIDAY, May 28
June 1 is working day this year
June 1, when it is celebrated International Children’s Day, will be a working day this year, the Ministry of Health, Labor and Social Protection stated for IPN, making reference to the Labor Code. In accordance with the Labor Code of the Republic of Moldova, June 1 is not a bank holiday. The previous years, except for 2020, this day was declared nonworking for public sector employees by a Government decision. The Labor Code is based on a social partnership. When amendments to this Code are proposed, consensus should be ensured between the social partners – the Government, employers and trade unions, the Ministry responded when asked if it plans to propose an amendment to the Labor Code for June 1 to be declared nonworking.
Oleg Tofilat: Changes are needed at CFM
The new manager of the state-owned enterprise Moldova’s Railways (CFM) Oleg Tofilat, who serves as an adviser to the Prime Minister, said that relevant changes are needed to overcome the crisis created at the enterprise. He developed the issue in the talk show “Space of Freedom” with Lilia Burakovski. “The situation at the enterprise is critical. The Railways can no longer be managed as earlier. Something must be changed. The situation should have been changed long ago. It would be foolish to say that it is enough to name a good manager and everything will change. This is a mandatory condition, but it is not enough,” stated Oleg Tofilat.
“Moldova’s Railways should become part of an efficient economy. But the enterprise has been seriously affected during 20 years already. Until 2010, things went badly too, but were slightly better than now. New railway carriages and locomotives were absent. There was no view as to the market and to our place between competitors – trucks, fluvial transport, etc.”
Nonbank institutions in 2020 released loans totaling over 10bn lei
The loans provided last year by the nonbank lending sector came to 10.6 billion lei. The figure is by over 275 million lei higher compared with 2019, shows a report presented by the National Commission for Financial Markets. At the end of last year, the Register of Authorized Nonbank Lending Organizations included 154 organizations authorized to provide nonbank lending services. On the same date, licenses for carrying out professional activity were held by 228 savings and loan associations of category A and B and by a Central National Association of savings and loan associations. Of the loans totaling 10.6 billion lei, the largest part (9.6bn lei) was provided by nonbank lending organizations, while the rest by savings and loan associations.
Almost 3,000 people earned over 1 million lei last year
Nearly 3,000 people last year had earnings of over 1 million lei. The oldest millionaire is 97, while the youngest one is 18. However, most of the millionaires are aged between 40 and 60. Of the 2,962 persons with incomes of over 1 million lei, 2,242 declared earnings of 1 to 3 million lei, while 117 persons earned over 11 million lei. The millionaires had together a total income of 9.694 billion lei and paid 611 million lei taxes. In a news conference, Sergey Pușcuța, director of the State Tax Service, said the number of statements presented by the citizens (private individuals who do not carry out entrepreneurial activity) for 2020 rose by 8.2% compared with a year before. The number of fast, electronic and prefilled tax returns increased more pronouncedly than the number of paper tax returns.
●SATURDAY
Secondary capital market in 2020: Volume of transactions declined by 68%
The repercussions of the pandemic crisis and the completion of the legal procedures concerning the adequacy of shareholder quality in financial-banking institutions initiated in the previous periods determined reductions on the secondary segment of the capital market. The total volume of transactions in 2020 came to 1.7 billion lei. The figure is by about 3.6 billion lei or 68% lower than in 2019. In a report, the National Commission for Financial Markets says that transactions in securities in 2020 were performed primarily on the off-exchange segment, these being directly registered with the entities that keep records of shareholders. It goes to 1.6 billion lei or 94% of the total volume of transactions performed on the secondary market. At the same time, the most accentuated reductions in volumes were witnessed on the regulated segment of the secondary capital market, the volume recorded on this trading platform totaling 69.5 million lei.
State Tax Services announces deadlines for paying property and land taxes
The citizens and farmers should pay the property tax and the land tax by June 30, 2021, in the case of property and existing land or land acquired before March 31 this year. In the case of property and land acquired after March 31 this year, the time limit is March 25 next year. Those who pay property and land taxes can no longer benefit from a reduction of 15% of the tax that is to be paid. The property and land taxes in the case of private individuals and the land tax in the case of peasant farmsteads are determined annually by the local tax collection services of mayor’s offices. The relevant tax rates are decided by each local public administration annually.
