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Romania’s ruling coalition inks final draft of bill on increasing public-sector salaries

Asked On: April 12, 2017

Question: Hello, what have you heard about a recent official commenting the possibility of nationalisation of the private pension system please? also, for the wage bill, if i read your article correctly then the additional increase of 1.25% of GDP would take the deficit to over 4% of GDP? last question, could you confirm how much is the under management by the private pension funds in % of GDP and how much are the annual inflows transferred to them? thank you

Answers: To start with, finance ministry Viorel Stefan denied allegations about planned nationalisation of the IInd pillar of the pension system, on April 12. The allegations were circulated (in rather general terms) by the largest pension fund manager, NN, which issued a newsletter to its customers on April 11. On April 12, MP Serban Nicolae (PSD, senior ruling party) summoned head of the financial markets supervisory body ASF, Misu Negritoiu, to explain the situation. This comes in the context of Negritoiu being proposed for dismissal last year after the crisis in the insurance system. Some MPs might attempt to resume the procedures for the replacement of Negritoiu. In any case, both Negritoiu and finance ministry Stefan firmly denied such plans, stressing that such an option was not discussed. Indeed the recent developments [or rather the public debates] related to the fiscal policies in Romania deserve attention. Summing up: the ruling coalition has passed a series of wage hikes (and other social benefits, plus cutting some non-fiscal fees), inked a problematic public wage bill (this is not sent yet to Parliament) and, more recently, announced broad reforms on the fiscal system. This latest move (the “household income tax” that would allow households to deduct certain expenditures like for education) is the most puzzling, but at least the senior ruling party did not published a draft of it. Nonetheless, PSD still claims the revised fiscal system would be enacted as of January 2018 -- which is highly unrealistic, not to mention the vagueness of the concept of “household” mentioned by the ruling coalition officials (including finance minister Stefan). Now about the nationalisation of the IInd pillar of the pension system. Indeed, the largest fund manager (NN, formerly ING Nederlanden) informed its customers about “public debates on this topic”. NN also informed its recipients that “their rights could be impacted by diminishing (or cutting to zero) the share of the social security contributions earmarked to the IInd pillar”. NN promises “to take all the necessary steps in order to defend contributors’ rights”. It was not a formal warning about the imminence of such a step taken by the government. However, such information can create panic instantly. Even if the nationalisation in itself can be carried in totally fair manner. The term is given a particular negative meaning in Eastern Europe, where the communist regime in fact took assets from wealthy persons with no fair compensation (actually no compensation at all) calling this nationalisation. It is hard to explain that the IInd pillar can be transferred back to state with all the necessary regularisation of contributors’ rights. This is exactly why such a nationalisation will most likely not take place. The fund managers (defending their interests) could easily generate panic and mass protests. But NN’s newsletter was not issued with no grounds. On April 1, MP Catalin Predoiu (opposition) accused the ruling coalition about plans to nationalise the IInd pillar. At a very private level, among members of the ruling coalition, the option might have been discussed in the context of similar moves in countries in the region. In any case, Predoiu’s comment prompted speculations from mass media. This seems to have triggered NN’s warning, unless NN officials have inside information from the government. Based on existing public information, it is very early to say whether the government will have to rely on extreme measures such as the nationalisation of the IInd pillar. Freezing or cutting the contributions to IInd pillar would be an intermediary step., indeed possible. In fact, it would not be for the first time, since the percentage contribution to IInd pillar was increased at a slower rate than initially planned. The contribution to IInd pillar was maintained at 5.1% (of gross wage) in 2017, for the second year in row (it was 5% in 2015). Government promised to rise the ratio to 6%, in 2018. Technically, the state transfers part of the contributions to the private managers with no change on the overall taxation. As regards the 1.25% part of question, it is assumed that the wage hikes will take place since 2018 (and not this year). It is premature to estimate the impact of the public wage bill, in fact it is possible that the ruling coalition gives up the idea completely within several days. But the logic of the 1.25% was that next year (versus 2017) the public payroll will increase by 1.25% 9of the current GDP and indeed roughly of next year’s GDP). But the deficit is driven by many factors. It is better to think in terms of public payroll. It is estimated to rise from under 8% currently to some 12% in 2022, according to the fiscal council. This puts 4% of GDP pressure on budget. But revenues-to-GDP can increase and other expenditures can be cut.  Furthermore, the discussions related to the bill go further than the impact on the budget and having it submitted to parliament next week seems unrealistic. By the law, any bill (not to mention this one) ought to have a section dedicated to the impact on the budget. This one does not have.

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Russia's Polymetal could buy country's largest silver mine

Asked On: March 31, 2017

Question: Does the Russian government have plans to auction off more mining licenses in the near future? Any idea what they still control? There are a very small number of junior miners operating in what is such a massive, resource-rich land expanse (namely Siberia and Far East).

Answers: Thank you for you question. The next auction announced by the state natural resources agency RosNedra will take place on May 16. Exploration and extraction licence on eight mines in the Yakutia Republic will be auctioned at a starting price of RUB168mn, not including the participation fee.Link to the announcement (in Russian): The full list of all mines approved for auctioning in 2017 can be found here (in Russian): The information on all the state auctions can be found on the website of RosNedra [] and state procurement database [] Kind Regards, bne IntelliNews team  

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Bulgaria’s GERB wins early general elections

Asked On: March 27, 2017

Question: just out of curiosity, how did Kadiev do in the election? I believe he was running as an independent for a parliamentary seat...

Answers: Kadiev won 2,270 votes or 0.06%.

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European Commission gives Poland two more months to solve constitutional court crisis

Asked On: January 3, 2017

Question: recent opinion polls pls for Poland?

Answers: Thank you for this question. Polls are largely unchanged, with the ruling Law and Justice (PiS) leading at an average of 34% (that's the average from December polls by six pollsters). Liberal opposition Nowoczesna (Modern) is second at an average of 18.8% - thanks to a surprise result of 24% in a poll carried out on december 22 by Millward Brown. Another liberal opposition party and the previous ruling party, Civic Platform (PO) is third at an average of 16.5%. The only other party that is above the 5% threshold above which parties win parliamentary seats in Poland is populist/nationalist Kukiz'15 at an average of 8.7%. Other parties - including two leftist groups SLD and Razem, as well as PO's former coalition partner PSL - are below 5% in recent polls, although SLD is just below the line at 4.6%.

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Hungary reportedly planning more VAT reductions for 2018

Asked On: January 3, 2017

Question: recent opinion polls pls?

Answers: Hello, You can find regular opinion poll updates here:,-kutatasok.aspx or here: The latest opinion poll released by Republikon on December 27 shows the following results: Support for political parties in December (% of population):Fidesz: 31%; Jobbik: 12%; MSZP: 11%; DK: 3%; LMP: 2%; Egyutt: 1%; PM: 1%; Undecided: 39% Support for political parties in December (% of decided voters): ​Fidesz: 50%; Jobbik: 19%; MSZP: 18%; DK: 5%; LMP: 3%; Egyutt: 2%; Liberalisok: 1%; PM: 1%; Other parties: 1%

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Russia missing from Trump's defence priorities memo

Asked On: December 21, 2016

Question: I'm sorry, but if this is in reference to the story found here: then this article is a woefully inaccurate and misleading summary. And it's particularly egregiously bad because the full source document is linked in the Foreign Policy article.

Answers: hi thanks for point this out. our story was sourced from Russian press and I think that sense got lost in translation a bit. but now we gone to the original source and linked to the memo. so shoudl be fixed.  best regards ben aris  editor   

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New Romanian party USR runner-up in latest poll

Asked On: November 25, 2016

Question: Hi - what is the policy plan of USR and do you think they will accept to be in a coalition with PNL?

Answers: Hello, in brief, the policy plan is reforming public administration and finding best experts to appoint in key position and manage them transparently. There are good chances that USR accepts PNL's invitation, but only as part of a three-party constructions having PM Ciolos as partner. The scenario is feasible given the disarray within PNL that allows USR promote much smoothly planned reforms. USR will probably avoid being the junior partner of a ruling coalition that would nominate a PNL member for the PM seat. USR is a new party with good, yet very vague, intentions. It focuses on moral values and transparency. It is fair to assume that they have no hidden agenda, but it is still unclear what is the structure and credibility of the regional organisations set up quickly over the summer. Though their good intentions cannot be challenged, their capacity to pursue reforms, particularly in partnership with another, more experienced party, must be proven. Under the optimistic scenario, USR-PNL coalition would stimulate the much-needed internal reforms within PNL. Under the pessimistic scenario, the coalition (assuming the two parties form the majority) would not function and lead to political crisis, eventually the formation of an alternative PSD-led majority. We have in the past the example of 1996-2000 term, when idealistic Conventia Democrata has formed the ruling coalition with the Democrat Party and failed to run smoothly – yet setting grounds for healthy economic developments after 2000. USR must join forces with other parties, most likely PNL, if they want to be part of a ruling coalition. As opposed to USR, PNL has a history of debatable political coalitions (in terms of own ideology), questionable decisions (in terms of rule of law) and performance, as part of a ruling coalition. There were also many PNL leaders indicted and condemned for corruption, though Social Democrats lead by far in this regard. This does not fit the profile of USR’s ideal partner. But this complicated history of Liberals (a party with much longer history, dating since before the communist regime) also comes with a robust network of regional organisations, hands-on approach of elections (compared to the rather idealistic approach of USR) and an “inertial” support enjoyed in some parts of the country and among certain social categories. At first sight, the two parties might be complimentary – but this is the optimistic version of the story, or the full half of the glass. The empty half is i. PNL not being in its best favourable stage of its history, and ii. possible conflicts generated by the very different profiles of the two parties. PNL faces major problems since it broke the coalition with leftist PSD – though it should have on the contrary allow the party to gain credibility and strengthen its centre-right identity. Klaus Iohannis winning the presidential elections in November 2014 should have further help PNL pursue internal reforms. But the merger with Liberal Democrat Party (PLD) of former President Basescu was not yet completed at local level, it generates tensions and the incumbent party leadership lacks vision and strategy. Supporting PM Ciolos was the sole strategy in this electoral campaign and it is unclear whether this was a winning strategy. Coming back to USR, the party also adhered to the also very vague platform Romania 100 of PM Dacian Ciolos. USR has own programme, but it is equally vague. As an extra-parliamentary party, USR did not have to express views on the wage hikes or fiscal policies. In fact, USR’s rhetoric focuses on moral values and transparency and on reforming the public administration. In fact, this would indeed unleash the growth potential, but the public administration is likely to oppose resistance. In brief, USR wants to fight corruption and find the best experts for defining very specific strategies like fiscal strategy, energy strategy, industrial strategy. Just like Romania 100, USR’s programme includes common sense statements. The political plan was having both PNL and USR running in the parliamentary elections under the umbrella of Romania 100 platform. But this strategy seems to have failed and the lack of coherence between the two parties becomes increasingly visible. There are rumours being circulated about Liberals’ disappointment with their scores in the polls. USR’s strongest point is its youth -- the new party was set up this year members with no involvement in politics or controversial businesses so far. And yet, controversies related to party’s financing have already occurred. Such allegations are however politically biased and not particularly credible. We see threats to party’s credibility Since it is very young, it is not clear what is the profile of the regional organisations, whether they are as credible as the central leadership.  

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Bulgarian parliament committee approves last-minute electoral code changes

Asked On: October 20, 2016

Question: Goodmornig, as far as I have understood, by accepting the amendments to the election code, the “do not support anyone” will be counted as valid in forthcoming presidential elections. Thus, they won't be excluded when calculating the candidate who gathered the highest amount of votes at the first round (as far as I know, previously, parties wanted to consider this vote only for the turnout). In this case, what happens if the “do not support anyone” obtains the 50%+1 of the votes? Thank you

Answers: Thank you for the question. According to the electoral code, president (and the respective vice-president) is elected in the first round in case he/she has received more than half of the valid votes and the turnout exceeded 50%. The counting of “do not support anyone” votes will indeed make achieving such a result more difficult. The code also says that in case no candidate receives such a support, there will be a runoff within seven days. Then, the voters will choose between the two candidates that had the best and second best performance in the first round.   However, in the runoff there is no requirement for receiving more than half of the votes. Instead, the code says that the elected candidate is the one who received the most votes. The counting of “do not support anyone” hence does not prevent the election of the president.

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PNL to hold rally on November 5 to support PM Dacian Ciolos

Asked On: October 19, 2016

Question: Thanks for this article. Can you provide more details about what is proposed in the Romania 100 Platform?

Answers: Hello, thank you for the question on this topic. The “platform” Romania 100 launched by PM Dacian Ciolos is essentially a political vehicle that helps National Liberal Party (PNL), Save Romania Union (USR), President Klaus Iohannis and its author – PM Ciolos, joint together under same umbrella without breaching the Constitution and without hurting the political egos (or ambitions) of the two political actors in the group (PNL and USR), ahead of the parliamentary elections. Indeed, the platform was backed by both PNL and USR, which expect to boost their combined scores and change the political balance that at this moment, according to the polls, indicate Social Democrat Party (PSD) would form the majority with its ally ALDE. We believe such a performance (changing the balance) is not unlikely, particularly as ALDE leader (also Senate’s leader) turned radical against anticorruption directorate DNA. Making anticorruption the core electoral debate helps new parties like USR or new political entities such as Ciolos’ platform. In fact, this might be another aim of the platform – diluting the identity of PNL as an “old” party, by the addition of USR and technocrats. PM Ciolos said that the platform is for the use of any party winning the elections. This was another good marketing move. Social Democrat Party (PSD) accused Ciolos of plagiarism, claiming that all the strategies included in the platform are copy/paste from PSD programmes. And PSD leader Liviu Dragnea might be right, with the note that the general ideas expressed by Ciolos can be found in all the political strategies expressed in Romania over the past 25 year.  Structurally, the platform is designed in three layers: the first layer is for the marketing of the product, a series of ten “beliefs” expressed by Ciolos. They are designed to be strong statements (sort of political Decalogue), but some believe they are a bit excessive particularly in contrast to the "current" performance of the government of technocrats headed by PM Ciolos [the real performance of the government is likely to be measured with a lag]. The second layer describes what PM Ciolos would do as PM in the first 100 days of his new term: change the structure of the government, reduce bureaucracy and use IT extensively in public administration. Prioritisation of public investments and best use of EU funds. The third layer outlines the main national projects that, according to PM Ciolos, should be pursued by any government. This means broader public administration reform, unification of the wage system in the public sector and the enforcement of the anticorruption strategy. Among the national projects there is a document drafted by the ministry of economy (Competitive Romania 2016). There are no radical ideas included (such as questioning the role of FDI, or renewable energy above certain threshold, or protectionism). Ideologically, the economic programme is rather of neo-liberal extraction, in line with IFIs recommendations. Follows a translation of the platform (fast forward; if any clarification needed, please do not hesitate) Layer I: the Decalogue 1.       I support a corruption-free Romania 2.       I support a Romania with a responsible political class 3.       I support a Romania governed in good faith 4.       I support a Romania where everyone works and receives fair payment 5.       I support a Romania without poverty 6.       I support a Romania with a competitive economy 7.       I support a truly educated Romania 8.       I support a healthy Romania 9.       I support a Romania that has a voice as EU and NATO member 10.   I support a Romania of all Romanians   Layer II: actions for first 100 days Government must rethink ministerial-level functionality with a Cabinet formed by a handful of ministers, ministries merged with the principle of cluster development and a reduced number of implementing agencies and regulators.     Restructuring central government by amending Law 90/2001 sanctioned by law on the organization and functioning of the Government, to include a model of internal organization for each ministry, explaining powers to eliminate the risk of duplication of tasks.     Governance is built on cross-sectoral objectives, clearly assumed the benefit of citizens (eg coordinated investment, reduce poverty, reduce bureaucracy, administration digitization, modern infrastructure, etc.).     #ComisiadeTaiatHartii 2.0 (paper-cutting committee 2.0) becomes an independent institution within the Government Chancellery reduce bureaucracy and continue their mission in support of the citizens, entrepreneurs and simplify inter-institutional relations.     Institutionalizes government #GovITHub and Information Technology Coordinator. These institutions aim to ensure that IT investments of public institutions be made effective as a strategy and in the interests of citizens.     Government strategies, public policies and legislative projects undergo an initial assessment of their impact when adopting or once every 3 years. Those who fail the test the effectiveness and impact ceases automatically.     Consolidation of all national and European funds earmarked for development and a real multi-annual approach to their use. Budgetary funds which distributes money based on political clientelism without the basis of projects or plans for development and control mechanisms must be abolished.     Clearly prioritized public expenditure, impact assessment. Be operationalized and strengthened the Chancellery institutional assessment unit public investment. All government investments pass through this filter.   Layer III: broad national projects Public administration reform: amending Law 188/1999 regarding the status of public introduction of new criteria for recruitment, evaluation and their incentive. The objective is to create a public administration professional, competent, integrity, transparency, both at central and local level.     Changing the Framework Law 284/2010 on the unitary pay of personnel paid from public funds to eliminate discrepancies and discrimination between different sectors of the public sector.     Operationalization of the National Anticorruption Strategy, strengthening the National Agency for Administration of Goods seized (ANAB), Covenant multiannual financing and strengthening the judiciary.     Assuming and operationalization of the 17 chapters of Romania Competitive Strategy.     Creating a national program to support entrepreneurship as an engine of Romanian economy. Each dollar invested in public funds should support sustainable economic growth, quality, creating jobs and attracting private capital.     Continued anti-poverty package with budget allocation, legislative changes, deadlines for fulfilling commitments annually.     Legislative proposal to establish a multiannual financial framework, to ensure continuity of major investments in the economy by hiring multiannual budgetary resources. Romania's budget will be prepared to follow the program and objective, not the need for institutions to justify their existence.     Establishing a portfolio of investment projects of national interest, which benefit from European funds and national budget in health, education, infrastructure sea.     Prioritization of applied research, development and innovation as elements of growth of value added in the economy.     Encouraging the participation of the Diaspora in the economy through approaches such as "RePatriot" and follow-Diaspora Start-Up.     Review of legislation and creation of national forests program for the conservation and sustainable exploitation of them.     Reorganization of State Domains Agency in a structure that allows the purchase of agricultural land, land consolidation and reselling them to young farmers, so as to support local agricultural development, strengthen family farm, the associative forms and the middle class in the countryside.     A legislative package to encourage agricultural production and marketing (including export) of added value, the branch association and organization in agriculture and establishment of Agricultural Chambers as independent agricultural advisory structures and support for farmers, coordinated by them.     Continued investment in the cadastre of the country, especially for agricultural land.     Continuation and improvement of the program of prevention and risk management of earthquake and other natural disasters.     Continuing the change of perspective in the implementation of EU programs, with an emphasis on simplification, increased quality and impact of projects that they have funded programs in economics. Initiated development of innovative financial instruments using European funds.     Implementation of strategies for Integrated Territorial Investment from EU funds and national budget in the Danube Delta, the Jiu Valley, Moldavia, Rosia Montana-Western and identify other areas that require integrated intervention packages of public and private funds.     Training in optimal conditions Romanian Presidency of the EU Council in 2019.     Development of Bulgaria-Romania-Hungary pipeline Austria (BRUA) continuing the energy interconnection and strengthen the independence and energy security of the country.     Multi-annual approach to upgrading of the national historical and cultural heritage.     Supporting sports performance and development of a national program to promote mass sports.

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STOLYPIN: Late Putinism – between limbo and the lightning bolt

Asked On: October 12, 2016

Question: What is the latest on the missiles repositioning close to the Polish border?

Answers: Thank you for your question. The latest official Russian comments on the movement of the Iskander-M missiles to the Kaliningrad region of Russia that borders with Poland and Lithuania came on October 8. Major General Igor Konashenkov of the Ministry of Defence told reporters that the deployment of this particular missile systems in the region has happened in the past and will continue in the future as part of Russia's scheduled military exercises. No timeline for future exercises was provided. Earlier unnamed sources told Reuters that Iskander-M missiles were already transferred to Kaliningrad region during exercises in 2014. Meanwhile, Polish defence chief Witold Waszczykowsky on October 10 called the Russian actions an "inappropriate response to what NATO does". There has been no further Russian response that we are aware of. Best regards,bne IntelliNews team

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Turkey, Russia sign key pipeline deal as ties improve

Asked On: October 11, 2016

Question: what are the real chances of building of the second pipeline branch whose aim is to sell gas to Europe through Turkey? Has Gazprom the money to pursue in parallel all the projects it has announced (Nord Stream 2, Turkish Stream, Russia-China pipelines)? What would be the benefit of the second branch of the pipeline for Turkey since it would increase its energy dependence from Russia?

Answers: Thank you for your question. The net cost of the Turkish Stream project is still not clear at this stage. According to unconfirmed reports, Gazprom will be responsible for financing the sea part of the Turkish Stream, with the cost of the underwater construction estimated at between $3bn and $5bn.  This makes a considerable part of the $17bn investment program that Gazprom has reportedly announced to foreign investors earlier in 2016 and together with Nord Stream II and Sila Sibiri projects could indeed be a strain on Gazprom. At the same, time an unknown share of this amount has already been invested by the company in the Southern Corridor gas pipeline infrastructure, which has trasnformed itself into Turkish Stream. Also the final discount on gas purchasing price for Turkish Botas will influence the cost of the project. Given the political significance of the Turkish Stream project, it is also very likely that Gazprom will receive indirect state support to support the investment, such as an exemption or reduction of the new 50% of IFRS net profit dividend requirement for state-controlled companies (in January-June 2016 Gazprom made roughly $10bn in net profit). The Turkish Stream will indeed increase Turkey’s dependency on Russia which is already Turkey’s largest supplier of natural gas.  But Ankara hopes to get a 10% discount on the price of natural gas it imports from Russia as part of the deal. That would help Turkey reduce its large current account deficit in due course. Ankara would also benefit from transit fees. Best regards, bne IntelliNews team

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Azerbaijani financial authorities move to stabilise troubled Bank Standard

Asked On: September 28, 2016

Question: Dear Sirs,please let me know the 10-12 banks in Azerbaijan with low capitalization or probably at risk.Thank you

Answers: Dear Mackis,   The Azerbaijani financial regulator has not made the list of at-risk lenders public. However, based on the information we have, the following banks have low capitalisation: NBC Bank (AZN51mn in Q2/2016- minimum capital requirement is AZN50mn); BTB Bank (AZN51mn in Q4/2015); Nikoil Bank (AZN34.5mn in Q4/15) and Turanbank (AZN54mn in Q2). The banks with the highest percentage of NPLs are International Bank of Azerbaijan, Bank of Baku, Unibank and Accessbank. Please note that the majority of lenders (18 out of 33) have not reported any financial results this year, though, and it is believed that they did that in order to conceal their results.  This is all the information we have available at the moment.   Best regards,

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State giants reportedly agree to carve up Raiffeisen's Polish business

Asked On: September 12, 2016

Question: Is this type of collusion legal under Polish law?

Answers: Hi and thanks for your question. No, there does not seem to be anything problematic with this. Raiffeisen Leasing is a separate entity from Raiffeisen Polbank and whoever bids for RBI's Polish businesses does not have to bid for both leasing and banking operations.

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Romania’s PSD considers breaching integrity code to allow former PM Ponta to run for parliament

Asked On: September 9, 2016

Question: Could you send me some links or some info on the policy pledges of some of the smaller parties: ALDE, the national alliance, united Romania and the union to save Romania pls? Also what is their approval rating at the moment? thank you

Answers: Brief comments on the small political parties in Romania ALDE [7%] – was founded by Senate’s head, high-profile politician Calin Popescu Tariceanu, formerly member (and president) of the National Liberal Party PNL. Of liberal orientation, Tariceanu advocates strongly for an alliance with the major Social Democrat Party PSD. He resigned from PNL in 2014, when PNL (at that time headed by Crin Antonescu, now quasi-retired politician) pulled out from the USL alliance with PSD. The purpose of ALDE was replacing PNL in the USL alliance with PSD. Tariceanu was perhaps the first high-profile politician to openly criticise prosecutors of the National Anticorruption Directorate (DNA) for what he called “abuses”. He is involved in several corruption scandals and other might follow, but was he is indicted so far only for perjury. Preferred political ally: PSD Will it meet 5% electoral threshold? – most likely yes PRU [-] – was founded om August 2014 by former PSD low-profile (MP) member Bogdan Diaconu. At launch, the party has expressed extreme nationalist views. But the party has remained virtually unknown until September 2016, when a large number of MPs have migrated mainly from PSD [but not only] to PRU. Part of these migrants have integrity issues, under the PSD definition, hence cannot run in the Dec 11 parliamentary elections.  The party has toned down extremist views recently, but retain a “moderate” nationalist orientation. The strong flow of new members, not necessarily sharing extreme or even nationalist views, might change the party’s image. There were rumours about former PM Victor Ponta joining the party as president or about Mircea Geoana’s PSR merging with PRU. None of the moves was confirmed. At this moment, it remains a niche party, likely to absorb the nationalist voters [left without an option after the collapse of Romania Mare party with the death of its founder Corneliu Vadim Tudor], unless it turns into something completely different by merger or by attracting a high-profile leader like Ponta. Preferred political ally: any Will it meet 5% electoral threshold? – depends on which scenario develops before Dec 11 elections. With no “strategic investor” in party’s credibility, definitely no. With Ponta heading it, definitely yes. PMP [6%] – was formed by former Romanian President Traian Basescu after his term expired in November 2014. Basescu refused to return to his party, PLD, which was absorbed (though officially was a merger) by the National Liberals (PNL).  The party’s image is dominated by the personality of former president Basescu and has no clearly defined orientation or political doctrine. PMP has also absorbed UNPR – the union for Romania’s progress of former vice-PM in the cabinet of Victor Ponta Gabriel Oprea. Notably, PMP absorbed UNPR – an organisation formed mainly by retired career officers, only after Oprea stepped down and was replaced by Valeriu Steriu – who enjoys far more credibility than Oprea. UNPR was joined by some high profile public persons before Oprea’s retirement. Oprea had developed a “doctrine” of “national security” or military extraction but now the party’s orientation remains vague. It still probably holds developed country-wide network, which is essential for the parliamentary elections. Preferred political ally [for PMP]: hard to say Will it meet 5% electoral threshold? – very likely yes USR [4%] – was founded by the NGO activist Nicusor Dan, formerly founder of USB (Save Bucharest Union). After USB performed particularly well in Bucharest with the help of entrepreneurs and NGO activists, Dan was encouraged to expand his Union country-wide. The party enjoys the support of young voters, mostly from the newly-formed middle class. It is unsure whether his party will succeed in meeting the 5% electoral threshold.   Preferred political ally: none Will it meet 5% electoral threshold? – hard to say, no hint expected before elections PSR [-] – was founded by former PSD high-profile member (and president) Mircea Geoana after the presidential elections of November 2014 when PSD candidate Victor Ponta lost in front of PNL candidate Klaus Iohannis. Will it meet 5% electoral threshold? – most likely no, unless in an alliance; Preferred political ally: aby [but none really interested in it] Scores for the parties were derived from: Avangarde poll Jul 25 – Aug 2 PSD - 38% PNL - 29% ALDE - 7% PMP - 6% UMDR - 5% USR - 4% PNȚCD - 1% PER - 1% Others - 9%

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Russia offers EU a backdoor out of gas war

Asked On: September 8, 2016

Question: Good morning, I am studying the OPAL case due to the rumours of a possible revival of the amendment to the 2009 exemption and have a few questions. It is not fully clear to me why Gazprom has never fulfilled the conditions of the 2009 100% exemption (i.e. the 3 bcm gas release), which seems a low price to pay. Secondly, the 50% revised exemption which was asked by Gazprom in 2014 would potentially create competition: why would that be in Gazprom's interest? Conversely, if in fact the latter 50%exemption would result in the fact that the 50% of the auctioned capacity would probably be almost totally won by Gazprom, how would that be in the economic/strategic interest of the EU in the current circumstances?. Finally OPAL is linked to better use of Nord Stream 1 - but what would be the impact on nord Stream 2 (i.e.would full use of NS1 decrease the case for NS2, or rather encourage NS2)? many thanks in advance

Answers: Thank you for your questions. Please find the answers the below: Why Gazprom has never fulfilled the conditions of the 2009 100% exemption (i.e. the 3 bcm gas release), which seems a low price to pay. - The 2009 ruling by the EU stipulates that Gazprom is required to cap its use of OPAL at 50%, not 100%.  Secondly, the 50% revised exemption which was asked by Gazprom in 2014 would potentially create competition: why would that be in Gazprom's interest?- The formulation of your question implies that 50% limitation is in Gazprom’s interest and was initiated by the company, which is not the case. It is Gazprom’s obligation under the EU’s Third Energy Package to provide up to 50% of OPAL’s capacity to independent suppliers.  Conversely, if in fact the latter 50% exemption would result in the fact that the 50% of the auctioned capacity would probably be almost totally won by Gazprom, how would that be in the economic/strategic interest of the EU in the current circumstances?- Gazprom, as a shareholder in OPAL controlling both the supplies of gas and gas transportation, is required to provide 50% of the pipeline’s capacity to independent suppliers and cannot participate in the auctions of the freed up capacity.  Finally OPAL is linked to better use of Nord Stream 1 - but what would be the impact on Nord Stream 2 (i.e. would full use of NS1 decrease the case for NS2, or rather encourage NS2)- Nord Stream 2 is an extension of Nord Stream 1 pipeline, running parallel to it and seeking to double its annual capacity from 55bcm to 110bcm. The project is initiated by Gazprom and its European partners – Gazprom (50%), E.ON (10%), OMV (10%), Shell (10%), Wintershall (10%) and ENGIE (10%) and is planned to be brought into operation by the fourth quarter of 2019. Given that the involved parties are moving forward with the project and are actively seeking both political and financial support for it, one can assume that they see Nord Stream 2 as viable even should Nord Stream 1 operate at full capacity.  In a broad geo-political sense Nord Stream 2 is a plan of Russian energy strategy of bypassing Ukraine with European gas supplies by 2020. Consequently, the most vocal opponents of the project in EU are Poland and Slovakia, that both warn of energy security consequences and are risking to lose substantial transit fees revenues. Nord Stream 2 has not yet received EU regulatory approval, but one could make an assertion that any rule on OPAL positive for Gazprom and its German affiliates could be viewed as also favouring Nord Stream 2.Kind Regards,bne IntelliNews team

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US expands list of sanctioned Russian persons and entities

Asked On: September 5, 2016

Question: When you mention that sanctions have undermined and delayed a number of major long-term hydrocarbon projects, to which ones you specifically refer? many thanks in advance

Answers: Thank you for your question. The most notable cooperation in the hydrocarbon extraction field that was undermined by the sanctions is ExxonMobil and Rosneft’s joint ventures in the Arctic offshore shelf and the Sakhalin LNG project. Other reported cases of extraction projects compromised by the sanctions include the Rosneft deal with Norwegian offshore drilling company North Atlantic Drilling Limited (NADL). Although not directly attributed to the effect of sanctions, US oil and natural gas major ConocoPhillips also exited a joint venture with Rosneft. For further details please see bne IntelliNews stories: Thank you, bne IntelliNews team

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Kosovo sells €25mn of 12-month T-bills, yield drops

Asked On: August 18, 2016

Question: Good morning, I would like to hear from what webpage you get information regarding public debt levels? I had a website of the Ministry of Finance previously but the page has been deleted. Many thanks in advance.

Answers: Good morning, The exact URL is:,44   Starting from the finance ministry’s home page, you can go there by selecting “Departments\Treasury\Public debt\Public Debt Reports”.

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Polish banks set to loosen corporate loan terms

Asked On: August 2, 2016

Question: Do you have the actual volumes in lending for 2015 and 2016 for all segments mentioned in the note?

Answers: Thank you for your question. The volumes are as follows: in the entire corporate segment, the loans portfolio at the end of 2015 came in at PLN325.9bn (up from PLN300.9bn at the end of 2014). Out of that, the loans portfolio for large corporates amounted to PLN141.5bn (at 2014, year end - PLN125.3bn), for small and medium-sized enterprises - PLN184.5bn (at end of 2014 - PLN175.6bn). The volume of mortgages at the end of 2015 was PLN378.1bn (at end of 2014 - PLN353.5bn), while the volume of consumer loans came in at PLN126.5bn at the end of 2015 (at the end of 2014 - PLN118.4bn). This year (dat for end of May), the corporate segment's loans portfolio was at PLN339.8bn. Out of that, the loans portfolio for large corporates amounted to PLN148.9bn and for small and medium-sized enterprises to PLN190.9bn. Mortgages amounted to PLN384.8bn at the end of May, while consumer loans were at PLN130.4bn.

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EU's posted workers rules anger Eastern Europeans

Asked On: July 21, 2016

Question: HI can you send me the link to the proposal please? thank you


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Romanian lawmakers to discuss forex loans conversion

Asked On: July 21, 2016

Question: hello, when the foreign currency loan conversion bill will be discussed by parliament again?

Answers: A new round of amendments to the bill on foreign currency loans' conversion [drafted by MP Ana Birchall] will be discussed on Septemnber 5, the initiator of the amendments Catalin Zamfir announced in late June. The amendments regard conversion of the loans to local currency at the exchange rate prevailing at the time the contract was signed. There is another bill on the same issue, at an earlier stage of discussions in parliament. It also regards the conversion at the average exchange rate in the month the loan was extended.

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