FREE GEOPOLITICAL NEWSLETTER

romania  

For current reports go to EASY FINDER

ROMANIA


 

 

In-depth Business Intelligence

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 60,358 44,428 38,700 52
         
GNI per capita
 US $ 2,310 1,850 1,720 100
Ranking is given out of 208 nations - (data from the World Bank)

Books on Romania

REPUBLICAN REFERENCE

Area (sq.km)
237,500

Population
22,355,551 

Capital 
Bucharest 

Currency 
Leu

President 
Traian Basescu

Private sector 
% of GDP 
40%


Update No: 110 - (27/07/06)

Basescu is Best Rated Romanian Politician
Traian Basescu holds the highest approval numbers of any politician in Romania, according to a poll by the Centre for Sociologic Analyses and Investigations. 57 per cent of respondents express confidence in their president.
Basescu won the presidential run-off in December 2004 as the candidate of the Alliance for Justice and Truth (DA) with 51.23 per cent of the vote, defeating Social Democratic Party (PSD) contender Adrian Nastase. The DA encompasses the National Liberal Party (PNL) and the Democratic Party (PD).
Former prime minister and current presidential aide Theodor Stolojan-who was forced to withdraw his candidacy due to health reasons in 2004-is second on the list of trusted politicians with 39 per cent, followed by New Generation Party (PNG) leader Gigi Becali with 29 per cent, PSD leader Mircea Geoana with 28 per cent, and current prime minister Calin Popescu Tariceanu with 27 per cent.
The DA won the November 2004 parliamentary election, securing 132 seats in the 332-member Chamber of Deputies. Basescu later appointed fellow alliance member Tariceanu as prime minister.
In April 2005, the European Parliament approved the entry of Romania and Bulgaria into the European Union (EU) in 2007, but warned that both countries still need to enact reforms, eradicate corruption and fight organized crime. The accession treaty contains a clause that could force a one-year delay in case certain conditions are not met.

New crisis at home
It is eighteen months since parliamentary elections, lost by the Social Democrats under then Premier, Adrian Nastase. He has been replaced as leader and the Social Democrats are now a renewed and recharged force in politics.
Problems abound in Romania, where the public services are in disarray and teachers and others are threatening strike action. Floods and outbreaks of bird flu are taking place. Strong suspicion that constituents of the ruling coalition are corrupt is undermining its authority. There is an air of crisis in the land.
Nevertheless, on Jun. 27, Tariceanu survived a no confidence motion in the Chamber of Deputies. The PSD-sponsored proposal was supported by just 145 lawmakers. During the debate, Tariceanu chided the PSD leader, declaring, "There are many people in this room who could become prime minister one day, but surely Mr. Geoana is not among them." 

Basescu, Tariceanu at odds over Romanian presence in Iraq
The much greater popularity of the president than the premier helps to explain the outcome of a recent row between them.
Political tensions within Romania's ruling coalition heightened late in June, when Tariceanu made a surprise proposal to withdraw Romanian troops from Iraq. President Traian Basescu has called the idea "unacceptable."
Tariceanu took many by surprise. After a meeting of the Liberal Party leadership convened on short notice via SMS text messaging, Tariceanu told journalists he had ordered his defence minister and a Liberal Party colleague to table the withdrawal proposal to the Supreme Defence Council. He cited soldiers' security, financial reasons and "an increased tendency among European states to pull out their troops," mentioning Spain, Bulgaria and Italy. 
Romania's top defence body, the Supreme Defence Council, has overwhelmingly rejected Prime Minister Tariceanu's demand to withdraw Romania's 890 troops from Iraq. ''When her allies are facing difficulties, Romania can't take her boys and leave. You can't change the course of foreign policy overnight," President Traian Basescu said on 30 June, following the vote. 
Tariceanu's proposal garnered just two votes out of 11. He was opposed by the chief of the army and by two of his Liberal Party subordinates, the foreign and finance ministers. Following the meeting, Tariceanu maintained that the Romanian military presence in Iraq was "unpopular and no longer useful." 
Nevertheless, the Supreme Defence Council's decision was greeted with relief by US and UK diplomats. "Basescu made it clear that Romania remains committed to our common efforts in Iraq and in the global war on terror," said US Ambassador Nicholas Taubman after two days of uncertainty. 
Basescu, who learned about the proposal from the TV, lashed out at his prime minister. He said Tariceanu's statement was "a serious blast against national interests" brought up in public debate without any prior consultation with Romania's allies. Foreign Minister Mihai-Razvan Ungureanu said Tariceanu had not consulted him either. 
US and UK diplomats did not hide their amazement and sought clarification. "These latest reports from Romania are, frankly, a surprise," said State Department spokesman Adam Ereli. "We hadn't been informed about them. They're certainly not consistent with what we've heard from senior Romanian leadership." 
One Romanian soldier has died in Iraq and four in Afghanistan. The military presence abroad, strongly supported by Basescu, has been judged by Liberal Party strategists to be unpopular. 
Mircea Geoana, the leader of the Social Democratic opposition, reacted cautiously. A former career diplomat, Geoana favoured a negotiated pullout timetable. He pointed to the ongoing political battle within the ruling coalition -- specifically, between Tariceanu's Liberals and the Democrats, still devoted followers of their former leader, Basescu. "A foreign policy issue cannot be subject of a political game," Geoana said. 
"I think, at least in the short term, the image and the credibility of Romania in the United States would be affected," says Michael Radu, chairman of the Centre on Terrorism at the US-based Foreign Policy Research Institute. 
"In the longer term, the problem would be to what extent an ally who takes unilateral decisions, based on party interests, or even on personal interests, is a reliable ally," he added. 

The Tariceanu government is made up of 200 dignitaries 
European states have more efficient governments made up of 30-40 dignitaries, while we have five times as many dignitaries who are less efficient than theirs, writes Bursa.
We may be behind in many key fields, but we certainly are above the average when it comes to the number of dignitaries in the government. According to information coming from the vice president of the Senate's Committee for Abuses and Corruption, Democratic Petre Marinescu, we hold a "world record" when it comes to the number of the employees of the government.
Marinescu said the 45 governmental agencies which belong to the government as well mean annual expenditures of about 200 million euros from the state budget, plus several other billions coming from the different international funds.
Furthermore, Marinescu said that these agencies usually have the same responsibilities as the ministries they belong to, making everything even more chaotic and inefficient.
He added that their activity is not at all transparent, being, in fact, very bureaucratic.
Marinescu also pointed out that these fake institutions spend tons of money from the state budget and represent "an oasis" of institutionalised corruption.
The senator said that no one wants these institutions to disappear, as there is a lot of money in the middle, and many governmental officials hide their wrongdoings under the agencies' umbrella.
He gave the example of the director of the Romanian Agency for Foreign Investments, Traian Iordanescu, who is suspected of having collaborated with the former secret communist police, called the Securitate.
Marinescu explained that Iordanescu's name is on a list with governmental employees who have allegedly collaborated with the Securitate; the list was compiled by the Council for the Study of the Securitate Archives.
The senator added that such a person cannot run an important agency of the state.

« Top

AUTOMOBILES

State buys back car factory from Daewoo 


The Romanian government has reached an agreement with South Korean officials for the takeover of 51 percent of the Daewoo Automobile Craiova factory, after the last round of difficulties in negotiations were solved, Bucharest Daily News reported recently, citing sources at the Ministry of Economy. 
The agreement was reached after talks between the Ministry of Economy of Commerce (MEC) and South Korean officials in Seoul, said the paper. Minister Codrut Seres will present the terms of the transaction to the government, the paper added. Daewoo Motor holds a 51 per cent stake in the Craiova factory and the remaining 49 per cent is owned by Automobile Craiova, in which the state controls 72.4 per cent of the shares. 
General Motors took over part of the assets of the South Korean group, which was suffering from financial difficulties in September 2002, but in the agreement the plant had not been included. In a move mandated by the government, the Office of State Ownership and Privatisation in Industry (OPSPI) negotiated the takeover of the share package still owned by Daweoo, to later sell to a strategic investor.

« Top

BANKING

BCR's sale to Erste postponed 3 months 

The government decided recently to extend the deadline for the approval of the sale of Banca Comerciala Romana (BCR) to Austrian Erste Bank to September, as the Competition Council has not issued an opinion on the operation yet, New Europe reported.
According to the privatisation contract, the document was originally due to be endorsed by the cabinet in Bucharest on June 23rd. Government spokesperson Oana Marinescu said the postponement had been decided because of the delayed answer from the competition council. The council asked for additional documents in order to be able to give an opinion, Marinescu added. The decision regarding the extension of the term was published in the official paper. Initially, Erste Bank was due to transfer the value of the 61.88 percent stake in BCR by June 26 to Romania.

Greece's ATE Bank grabs 50.94% of MindBank 

ATE Bank (Agricultural Bank) said that after the completion of the due diligence process it has purchased 50.94 per cent of Romania's MindBank at the price of 32.06 million Euro, which is 2.15 times its book value at the end of 2005, Euro2day reported.
The bank added that it also signed an agreement to acquire an additional 6.19 per cent stake in MindBank to eventually bring its total holding to 57.13 per cent. Completion of the transaction and final payment of the purchase price depends on approvals by the central banks of Greece and Romania. ATE Bank said that this move was in line with its strategic decision to expand in the Balkans. Brokers said MindBank has 78 million Euro in assets and a network of 10 branches in Romania that focus on the small and medium-sized enterprises lending sector.

« Top

ENERGY

Mol plans to buy refinery, build filling stations 

Mol Rt, Hungary's biggest oil company, is planning to acquire a refinery and build new filling stations in Romania as part of its expansion in Eastern Europe, Budapest Business Journal cited a company spokeswoman as saying. 
"We have plans to acquire a refinery in the middle term, possibly in the next three to five years," Eva Csog, a spokeswoman for Mol's Romanian unit, said. "But we can make it earlier, if there is an appropriate opportunity." 
The Hungarian oil company does not have any specific acquisition targets at the moment, Csog said. Mol has no plans to buy the Rafo Onesti refinery, the newswire Mediafax reported, citing Dumitru Dragomir, Mol Romania's finance manager. 
Budapest-based Mol is competing with companies like Austria's OMV AG and Russia's OAO LUKoil for customers in Eastern Europe and the Balkans, where economies and fuel use are growing faster than in the west. 
Mol is also seeking acquisitions in Croatia, Bosnia and Serbia. 
The Hungarian company also plans to spend 20 million Euro this year and next building new filling stations in Romania to boost its existing network of 135 stations and gain a 20 per cent share of the Romanian fuel market, Csog said. 
Mol controlled 13 per cent of the Romanian retail market at the end of March and doubled fuel sales in the country in the first quarter, according to Mol's earnings report. 
The company bought Royal Dutch/Shell Group's 59 filling stations in Romania last year for an estimated US$70 million.

Enel to invest 380m Euro in Romania 

Enel will invest 380 million Euro in Romania by 2010 in order to increase and reinforce its electric plants, said managing director, Fulvio Conti, during a pres conference the recently, reported AGI. 
Conti also said that Enel is still interested in taking part in the tender for the construction and the management of the third and fourth nuclear reactor of the Caernavoda plant, for which it has been applying since 2004 alongside four other companies. The Romanian government is going to wait to receive letters of intent. The Italian electric company won the competition to lay claim to the Romanian distribution company, Electrica Banat and Electrica Dobrogea (AGI).

Romania gets another 39m Euro for Petrom sale 

Romanian authorities collected an additional 39 million Euro from the Austrian company OMV, at the end of May, after a price adjustment stipulated in the contract for the privatisation of Petrom, New Europe reported. 
The adjustment mechanism was meant to reflect the evolution of the Romanian company's financial situation in the period between the signature of the contract and the completion of the transaction. The contract was signed in July 2004 and the transfer of ownership was complete in December 2004. The audit firm that evaluated the deal concluded in its report that OMV owed a further 39 million Euro to the Romanian state. The Austrians did not contest the report.

« Top

FOOD & DRINK

PepsiAmericas acquires bottling company for US$98 

PepsiAmericas Inc, the second-largest bottler of Pepsi products in the world, acquired the remaining 51 per cent stake in a Romanian bottling company for US$98 million, the company said recently, New Europe reported. 
The deal makes Quadrant-Amroq Bottling Co. Ltd, which produces, sells and distributes beverages throughout Romania and Moldova, a wholly-owned subsidiary of PepsiAmericas. 
The Schaumburg-based company paid US$51 million for the first 49 per cent of Quadrant-Amroq in June 2005. "Contiguous to our existing operations, this acquisition will allow us to leverage our capabilities, infrastructure and go-to market system we have built over the last five years in Central Europe," PepsiAmericas Chief Executive Officer Robert Pohlad said in a statement. Pohlad also cited the growth possibilities associated with Romania's impending accession to the European Union.

« Top

FOREIGN GRANTS

WB to finance health system 

The World Bank (WB) could grant Romania several credits for social projects in the 2007-2009 period some of them focusing on eliminating bribes in the health system, New Europe reported.
The International Bank for Reconstruction and Development (IBRD), a member of the WB, will grant Romania US$100 million for the financing of human development projects. The bank's private investments division, the International Finance Corporation, will finance the development of private suppliers of health services. Another programme will contribute to the development of the private pensions system, allowing the deficit in the pensions system to remain under one per cent of the GDP until 2009.

« Top

« Back

 


 
Published by 
Newnations (a not-for-profit company)
PO Box 12 Monmouth 
United Kingdom NP25 3UW 
Fax: UK +44 (0)1600 890774
enquiries@newnations.com