The best month in agriculture... for protests

The political scene in our country was awakened to reality, from the sweet sleep it had fallen into during the winter holidays, on January 9, when hundreds of farmers began to move to the Capital, dissatisfied with the fiscal measures imposed by the Government at the end of last year and the generalization, starting January 1, 2024, of the Ro e-Invoice and Ro e-Transport digital reporting systems, but also the increase in fuel excises and RCA tariffs. Because in the first days of the protest, the central authorities chose to ignore the farmers, they were joined by the transporters who took over part of the demands of the agricultural producers, and the protest gradually expanded to 22 counties of the country, in which several roads were blocked, traffic was difficult.

Confronted with this situation that tended to degenerate, especially since the entrances to the Port of Constanţa were also blocked by protesters, thus compromising the transit of Ukrainian grain, Prime Minister Marcel Ciolacu, Minister of Finance Marcel Boloş and Florin Barbu, Minister of Agriculture and Rural Development they chose to act as a firefighter and make decisions under the pressure of those on the street, amending several normative acts in two weeks and setting up working groups to amend other normative acts in February and March. When the members of the Government thought, after the meetings of January 11 and 18, that they succeeded in quelling the protest, the farmers and transporters presented them with a list of 76 demands for which Prime Minister Marcel Ciolacu and his colleagues had to assume new deadlines solution.

Prior to the respective protests, the Government had to intervene in order to solve an acute problem in the health system which is facing a serious staffing crisis and ordered by memorandum to exempt this sector from the provisions of the emergency ordinances issued last autumn by which established the ban on new employment in the budget sector.

Practically through all the measures taken in the first month of the year, the Ciolacu Cabinet mitigated part of the fiscal changes ordered at the end of last year and suspended part of the reform of the budget system proposed by Marcel Boloş, the Minister of Finance, a fact that may have a negative effect on the budget execution for the first quarter of 2024, which will show us whether the Government will manage to maintain at the end of the year the budget deficit target approved by the European Commission.

The budget execution for 2023, presented by the Ministry of Finance on January 31, 2024, shows that it is difficult to reach the deficit targets, proof of this being the deficit of 5.68% of GDP recorded last year, i.e. a budget hole of 89, 9 billion lei.

In this context, the decision of January 12 of the Board of Directors of the National Bank of Romania by which the reference interest rate was maintained at 7%, the interest rate for the credit facility (Lombard) at 8% and the interest rate related to the facility at 6% of deposit, no longer surprised anyone.

However, the warning regarding the new fiscal-budgetary year was given by the Government which decided to increase the maximum state debt ceiling by contracting medium-term loans from 62 billion euros to 68 billion euros, which shows the need for the Executive to continue to finance the current budget deficit. Especially since, since the beginning of the year, pensions have been increased by 13.8%, and in September a new substantial increase will follow, after the recalculation of pensions for millions of taxpayers.

The financial instability at the level of the state budget is not the only problem of the Executive. In the last days of last month, the Chamber of Deputies and the National Directorate for Cyber Security were subjected to a powerful cyber attack. If at DNSC the attack failed, at the Chamber of Deputies it was crowned with success for hackers who accessed personal documents of parliamentarians, including the identity card of Prime Minister Marcel Ciolacu, who following this action announced that he had to request the release of a new document of identity.

• Hospitals without doctors

The first month of the year began with a major scandal in Health, where several hospitals in the country found themselves unable to hire either doctors or auxiliary staff, because the Government had established at the end of last year the blocking of employment competitions in the budgetary sector . Thus, in the first government meeting, on January 4, Prime Minister Marcel Ciolacu had to announce that the Ministry of Finance, the Ministry of Health and the Ministry of Development must find solutions for the urgent employment of 4,500 doctors.

Following the request of the Head of Government, the Executive adopted in the next meeting (January 11) a memorandum on the basis of which employment was unlocked for 1,055 doctor positions, 928 medical assistants, 700 positions for medical-sanitary specialist personnel and auxiliary-sanitary personnel, as well as 365 positions in the ambulance services.

In the same meeting, the Government also approved the employment of another 1,510 required doctor positions (including dentists), as well as 1,847 positions for auxiliary medical personnel (nurses, midwives, nurses), 345 positions for specialized personnel (physiotherapist, chemist, biologist, psychologist, laboratory technician, medical technician, psychopedagogue, pharmacist, etc.) and 853 positions for auxiliary staff (social worker, jurist, engineer, economist, inspector, etc.), in all the counties of the country, including the city of Bucharest.

All these employments also involve a commensurate budgetary effort, right for which, in order to cover the new expenses, but also to finance others due to the budget deficit, the Government decided on the same day to amend HG 1264/2010 for the approval of the framework program of emissions of government securities "Medium Term Notes", increasing the ceiling from 62 billion euros to 68 billion euros.

In practice, we are talking about a requirement for this year of 10 billion euros, bearing in mind that until the issuance of the new government decision, the value of the obligations issued and outstanding under the Medium Term Notes Program was 59.4 billion euros.

• Three weeks of protest, 76 demands

Before the Government solved the problems facing the public health system, the farmers decided to take to the streets on January 9, when a column of hundreds of tractors started moving from the counties of Moldova to the Capital. On the road, they were joined by the freight carriers, who took to the streets with their trucks. The protesters were initially dissatisfied with the lack of funds needed to support farmers affected by the war in Ukraine and the transit of grain from the neighboring state through our country to the Port of Constanţa, the generalization of the Ro e-Invoice and Ro e-Transport systems, the increase in fuel prices and of the increase in rates for RCA policies.

Later, as the number of protesters increased, as well as the blocking of access roads to the main cities, customs points to Ukraine and the port of Constanţa, ten days after the initiation of the movements, 76 demands were entered on the list sent to the Government, of which the main 10 referred to:

- the recognition of road transport as a strategic economic sector and the development of measures to support this economic sector in order to remain competitive and continue to bring direct revenues to the state budget;

- reducing the RCA to 5,000 lei at a technically permissible maximum mass of 40 tons and introducing the traction and national/international assistance into the RCA policy;

- the possibility of recovering a percentage of the fuel excise for licensed transport companies directly from the pump;

- the introduction of a non-taxable food allowance for posted workers, in the amount of 60 euros/day, to be added to the maximum ceiling of 87.5 euros/day within which the posting allowance can be granted and the increase of the non-taxable ceiling from three to four basic salaries;

- shortening border crossing times by amending OG 43 and complying with European Regulation 1100/2008 on customs controls (which provides for the elimination of mass and size controls at border crossing points to streamline traffic across borders);

- moving the controls of the rovinette, the scale and the measurement of the gauge on the national territory at least 15 kilometers from the border crossing point;

- the cancellation of Law 370/2022 which changes the ceiling for determining the type of taxation for micro-enterprises from 1,000,000 euros to 500,000 euros and returning to the same ceiling of 1,000,000 euros, according to the old law;

- the granting of APIA subsidies related to the current year until the end of January of the following year, including for farmers in the classic control sample and through remote sensing, as well as the acceleration of the processes for financial compensations associated with the other direct payment schemes (eco-schemes, measures of agro-environment, etc.);

- regulating trade in markets by prioritizing local trade, eliminating fake producers;

- simplifying the granting of agricultural aid by de-bureaucratizing the way of submitting single applications.

Because the protest that had covered 22 counties was at risk of spreading throughout the country and blocking economic activity, from January 12 until the end of last month the Minister of Transport, Sorin Grindeanu, the Minister of Agriculture, Florin Barbu, the Minister of Finance - Marcel Boloş, the ANAF management , the leadership of the Financial Supervision Authority and Prime Minister Marcel Ciolacu had several rounds of negotiations with the leaders of farmers and transporters, negotiations following which they adopted several normative acts by which they established the following measures:

- granting a direct support of 100 euros per hectare to growers in the vegetable sector, to compensate for the losses suffered due to the war in Ukraine, support that will be granted to 162,640 beneficiaries;

- the equivalence of the car license to categories B and B1 to drive tractors;

- exceptions from registration and periodic technical inspection in the category of slow vehicles;

- RAR will be able to perform the ITP on agricultural or forestry vehicles with mobile laboratories right at the premises of the farms;

- carrying out the periodic technical inspection of slow vehicles and the professional attestation of specialized road transport personnel;

- the compensation limit in the case of the national contract according to the model of an internationally recognized convention, CMR;

- examination of persons intending to obtain the initial attestation for drivers transporting people or transporting goods.

- sustainable insurance price (9000 lei for a 40-ton truck in the B0 category), including for small carriers, as well as the installment payment of RCA and the possibility of suspending the policy while the truck is parked for a certain period for various reasons.

The respective measures were adopted by the Government in the meetings of January 18 and 25, 2024, when a state aid scheme was also established for animal breeders affected by the war in Ukraine, a scheme aimed at granting 100 euros/head of beef cattle and 100 euros/head of buffalo, the estimated value of the aid scheme being 79.4 million lei, the equivalent of 16.1 million euros, and the estimated number of potential beneficiaries is 6,000, with an estimated herd of 150,000 beef cattle , respectively 11,000 buffalo heads.

Also, under the reign of protests, the Government approved a similar ordinance for pig and poultry breeders, the maximum total value of the state aid scheme being 126.7 million lei, the equivalent of 25.6 million euros for the pig sector and 151.9 million lei, the equivalent of 30.7 million euros for the poultry sector.

In order to satisfy the demands of transporters in the meeting of January 25, the Government modified some provisions regarding the application of the tariff for the use of the national road network (rovinieta), for the period up to January 1, 2026. Thus, for small cars and those with a larger mass less than 3.5 tons, the 7-day and 90-day vignettes disappear and the 1-day, 10-day, and 60-day vignettes have been introduced. For example, for a car, the wreckage fee will be 2.5 euros for one day, 5.3 euros for 30 days, respectively 28 euros for a year, and for a transport vehicle with a weight of less than 3 .5 tons, the fee will be 8.6 euros for one day, 18.2 euros for 30 days, respectively 96 euros for a year. For goods transport vehicles weighing between 3.5 tons and 7.5 tons, the toll fee will be 4 euros for one day, 32 euros for 30 days, respectively 320 euros for 12 months. For goods transport vehicles weighing between 7.5 tons and 12 tons, the fee will be 7 euros for one day, 56 euros for 30 days, respectively 560 euros for a year. For passenger vehicles with more than 9 seats but a maximum of 23 seats, the fee will be 4 euros for one day, 32 euros for 30 days, respectively 320 euros for a year, and for passenger vehicles with more of 23 seats, the fee will be 7 euros for one day, 56 euros for 30 days, respectively 560 euros for 12 months.

The other requests of the farmers and transporters are to be resolved through normative acts during the first quarter, with working groups being established in this regard at the level of the Government, a decision which led to the extinguishing of the protests, after three weeks, on February 2, following the agreement signed by the protestors' leaders with Prime Minister Marcel Ciolacu.

• Ceiling of commercial allowance extended by 60 days

On January 31, the Government approved an emergency ordinance by which it decided to extend the measure of capping the commercial addition to 14 basic foods, a measure established for 90 days by GEO 67/2023 and then extended for another 90 days at the end of October of the year last.

The normative act approved at the end of January, establishes for the agriculture and food industry sector, the temporary measure to combat the excessive increase in prices of some agricultural and food products for a period of 60 days, from the date of its entry into force. Through the new emergency ordinance, the ceiling for rice, cozonac, tomato broth, margarine, yeast, minced meat was removed and were added the butter up to 250 grams and the butter up to 350 grams.

During the same meeting, the Government approved the continuation of the "New House" program in 2024, with a total guarantee ceiling of 1 billion lei. Support is granted in lei, for the purchase of a single home, and the maximum amount of credit that applicants can access is

66,500 euros - for homes whose price is a maximum of 70,000 euros, the requested advance being 5% - and 119,000 euros - for homes whose price is a maximum of 140,000 euros, in this case the requested advance is 15%. The program is intended for natural persons who wish to buy a home through a state-guaranteed bank loan. In 2023, 1,940 guarantees were granted in the total amount of 245.7 million lei, with a value of loans of approximately 485 million lei.

• Hackers storm the Chamber of Deputies

On January 30, the state institutions are on the alert after finding out the vulnerability of the Parliament to cyber attacks, attacks that managed to break the databases of the Chamber of Deputies and copy 316 files, among which were the personal data of the parliamentarians , including contracts or medical records. The Minister of Digitization, Bogdan Ivan stated that following the cyber attack on the Chamber of Deputies, 316 files were copied by hackers, of which 190 documents were scanned and 36 were editable, the total volume of data accessed being 300 Megabytes.

Following the attack, the hackers posted some of the documents on the Internet, including the identity card of Prime Minister Marcel Ciolacu. Because of this, the head of the Government announced that he will request the issuance of a new identity card, an action that other fellow deputies whose documents were accessed following the cyber attack will also do.

Following this cyber attack, DIICOT opened a criminal file in which it is currently investigating the facts and will then identify the criminals.

The unpleasant security incident at the Chamber of Deputies was followed by a cyber attack on the website of the National Directorate of Cyber Security (DNSC) on the night of January 30 to 31, when 18,000 hits per second were recorded in the time slot 1: 00-7:00. Fortunately, perhaps thanks to DNSC's modern data protection system, the site has not suffered any security breaches, unlike the Chamber of Deputies.

• 5 million invoices uploaded to e-Invoice in the first 10 days of the year

In the context of the mandatory implementation of the RO e-Invoice system from January 1, 2024 in the business-to-business (B2B) relationship, the Ministry of Finance announced on January 11 that over 5 million invoices were successfully sent in the e-Invoice system, in a total amount of 25 billion lei, given that the system is designed to receive 5 million invoices daily.

Regarding the identification of possible improvements to ensure the synergy of the invoicing platforms provided by the companies that offer accounting services with the e-Invoice system, the experts of the Ministry of Finance invited the representatives of these companies to collaborate in order to optimize the technical solutions, so that the adaptation to system to be as fluid and efficient as possible. We remind you that the decision regarding the extension of the national RO e-Invoice System to the B2B relationship was instituted by the Government in order to provide conditions that contribute to increasing the level of collection of taxes, duties and VAT. The collection of this data would allow the tax authorities to check the consistency between the VAT declared and the VAT due in a timely and automatic manner. Such automatic verification will significantly improve the analytical skills of ANAF. In addition, the introduction of mandatory e-invoicing is a tool for real-time tracking of VAT fraud chains, allowing immediate measures to be taken to identify and stop taxable persons from participating in such fraudulent activities.

It seems that the Ministry of Finance is not willing to wait for the results of the digital reporting systems that it is forcing the business environment to implement, and this is evident from the fact that on January 15 the public authority issued the second edition of the 2024 Treasury bond program with attractive annual interest rates of 6.10% and 7% respectively and maturities of 1 and 3 years. State securities have a nominal value of 1 leu and are in dematerialized form. According to the press release issued by the Ministry of Finance on that date, the funds obtained from the issuance of government bonds will be used to finance the budget deficit and refinance the public debt.

On January 31, the Ministry of Finance published the execution of the consolidated general budget for last year, which shows a deficit of 89.9 billion lei, respectively 5.68% of GDP, with total revenues of 521.4 billion lei while expenses totals stood at 611.35 billion lei.