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Books on Romania
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Update No: 115 - (20/12/06)
President of Romania denounces Soviet era and charts new
course
President Traian Basescu of Romania is an unusual man to be head of state. He is
the first one since the 1989 revolution not to be a former top; communist. He
was the captain of a merchant ship under the communists, outside politics
altogether.
He is, therefore, the right man to distance himself from it and start a new
course. On December 18th he formally condemned the Communist dictatorship that
ruled his country for more than four decades, the first time a Romanian head of
state had officially denounced the Soviet-era system. "The regime
exterminated people by assassination and deportation of hundreds of thousands of
people," Basescu told his country's Parliament. He based his assessment on
a 660-page report compiled by a presidential commission charged with analysing
the country's Communist past. This was his own idea.
The parliamentary session drew luminaries from the Communist-era dissident
world, including King Michael I of Romania, who was forced to abdicate by the
Communists in 1947, and Lech Walesa, the Polish labour leader and later Polish
president who started the Soviet empire's unravelling with the Gdansk shipyard
strikes.
The move came just two weeks before Romania joins the European Union on New
Year's Day and represents a belated attempt by the country to make a more
complete break with the Communist past than was possible in the limited
revolution of 1989, managed by the communist apparatchiks themselves. After the
Communist authority collapsed in Moscow that year, many of the region's
Communist officials simply changed hats and continued to participate in
government when authoritarian one-party regimes changed, largely unchallenged,
into independent free-market democracies.
Romania's last Communist-era dictator, Nicolae Ceausescu, was overthrown and
executed, but was replaced by a coalition of former Communist party officials
under the banner of the National Salvation Front.
Some other former Soviet-bloc states have already condemned their Communist
pasts. In July 1993, the Czech Republic passed an act condemning its Soviet-era
government, and Bulgaria's Parliament passed a resolution condemning the former
regime there in 2001. Last month, Ukraine's Parliament passed a bill labelling
the Stalin-orchestrated famine of the 1930s that killed an estimated 10million
people an act of genocide. "It is as important as the condemnation of
National Socialism after the end of World War II," said Plamen Tzvetkov, a
professor of history at the New Bulgarian University in Sofia.
But in many of the formerly Communist countries, the transgressions of the
authoritarian past were never fully explored and the systems that made them
possible were never completely condemned. Romania was among the most
recalcitrant.
Earlier this year, the Council of Europe's parliamentary assembly passed a
resolution condemning the region's former Communist regimes and called on all of
the former communist states "to reassess the history of communism" and
condemn the regimes "without any ambiguity." As a result, Basescu was
under increasing pressure from civil society and the European Union to condemn
Romania's communist-era government, one of the most repressive in the region. He
was reluctant to do so without an authoritative report to back it up.
Authoritative report
In late March, he formed the Commission for the Analysis of the Communist
Dictatorship with young historians, psychologists and anthropologists to provide
him with such a report. He named a University of Maryland professor, Vladimir
Tismaneanu, to head the effort, whose own father had been a top communist, but
was never one himself.
The work was not without its challenges because much of the Communist-era
nomenclature remain embedded in Romania's structures of power. The commission
met silence from some government agencies and resistance from others. One of the
commission's own members resigned, admitting that he had been a Communist
informer.
The final report is long and occasionally lurid. One chapter recounts the
chilling "Pitesti experiment," in which young political prisoners were
systematically tortured and subject to brainwashing techniques by other
prisoners in order to destroy their sense of self and replace it with loyalty to
the state.
The report charges the Communist regime with crimes against humanity and puts
responsibility for the misdeeds primarily on the party and its secret service,
the Securitate. "There's a lot of information in the report, woven together
to make the indictment of Communism quite powerful," Tismaneanu said.
Ion Ilescu, the former president who dominated Romania's post-Communist
political scene and is now honorary president of the opposition Social
Democratic Party, is mentioned in the report as an important ideologue of the
Romanian Communist Party. He served at one point as the head of the Central
Committee's Department of Propaganda.
He hails from the northern region of Bukovina and was a natural ally of the
neighouring Soviet potentates and of Moscow which gave him protection against
Ceaucescu. He stood up to him on occasion to mitigate somewhat the dictator's
dottier ideas. Romanians respected him for that and re-elected him to the
presidency in the 1990s.
On December 18th, he accused Basescu of "McCarthyism" and "politicising
history" and attempting to demonise the democratic left. The Social
Democratic Party has adopted a resolution condemning the report.
The report cites the names of many other former apparatchiks, including
Tismaneanu's own late father, Leon Tismaneanu, who was deputy director of the
state publishing house and wrote in support of the regime.
Stormy parliamentary session
Corneliu Vadim Tudor, now leader of the ultra nationalist Greater Romania
Party, was singled out for his role as a former Communist state poet. Tudor and
his supporters tried to disrupt the parliamentary session on December 18th.
At one point, Tudor stood up, blew a whistle and held up a red card like those
used to signal fouls in soccer. While some lawmakers applauded Basescu's
remarks, others sat in stony silence.
Commemorative National Day
Basescu said he would support the commission's recommendation that Romania
establish a national day commemorating the victims of Communism and erect a
museum of dictatorship.
"The Communist regime was illegitimate and criminal," Basescu said.
"It treated an entire population as a group of guinea pigs for an
experiment."
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AUTOMOBILES
New car sales in Romania up 17.8% in 10 months
Sales of new passenger cars in Romania rose 17.8 per cent on the year to 209,935
in the 10 months through to October, the Romanian Car Producers and Importers
Association (APIA) said on November 17th, New Europe reported.
Commercial vehicle sales fell 6.1 per cent to 30,688 in the same period. APIA
expects sales of passenger cars in the whole of 2006 to rise by up to 10 per
cent after accelerating by 48.5 per cent to 215,532 last year. Romania's car
market was estimated to be worth between three billion and 3.5 billion Euro
(US$3.8 to US$4.5 billion) last year. Romania's automobile industry produced
171,052 passenger cars in the first 10 months of 2006, up 18.9 per cent from a
year earlier, the Romanian Car Producers and Importers Association (APIA) said
in an e-mailed statement.
Including trucks and buses, Romania produced 181,359 motor vehicles through
October, up 12.6 per cent year-on-year, APIA said in its monthly bulletin.
Exports by the two Romanian car makers, Dacia and Daewoo, went up by 45.8 per
cent on the year to 66,836 vehicles for the first 10 months of the year. Exports
were boosted by Dacia's no-frills Logan model, which is sold in 42 counties.
French car maker Renault owns a 99.4 per cent stake in Dacia, which launched the
Logan in September 2004. Daewoo is owned by the Romanian government, which plans
to privatise it shortly. Car production in Romania rose 76.3 per cent last year
to 174,538 vehicles.
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CREDIT RATINGS
Fitch affirms Banca Transilvania's rating at BB-
Fitch Ratings has affirmed the ratings of Romania's Banca Transilvania (BT) at
Issuer Default BB-, Short-term B, Support 4 and Individual D, the international
rating agency said in a release, New Europe reported.
The outlook on the issuer default rating remains stable. "BT's ratings
reflect a good level of profitability and the franchise the bank has developed.
They also reflect modest levels of capitalisation combined with relatively low
loan reserve levels, as well as risks associated with its fast expansion,"
Fitch noted. Banca Transilvania has developed a decent franchise in the retail
and small and medium-sized enterprise (SME) sectors, and has grown to be the
fifth largest bank in the country. "However, this level of growth does lead
to risks, most notably in the loan book, where performance may worsen as loans
season," Fitch's Financial Institutions Group director, Tim Beck, was
quoted as saying.
Profitability is reasonably strong, but the bank has seen some margin pressure,
particularly on the lending side. "Margin pressure is likely to continue.
The Romanian banking sector is becoming increasingly competitive as foreign
owners complete their restructuring programmes and strive to establish a
meaningful franchise," Beck added. Banca Transilvania has the fourth
largest branch network in the country, and 4.5 per cent of system assets, the
rating agency added. Ownership is fairly widespread with shares listed on the
Bucharest Stock Exchange. The largest shareholder is the European Bank for
Reconstruction and Development with 15 per cent. No other shareholder owns more
than five percent, Fitch said.
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ENERGY
Petrom will invest over 3bn Euro in oil and gas production
Romanian oil company Petrom will invest over three billion Euro by 2010
including one billion in 2007 alone in securing Romania's crude and natural gas
production, said the company in an e-mailed press release on November 23rd, New
Europe reported.
"As the biggest company in Romania, Petrom has decided to get involved in
the general concept and in the development of the national energy strategy. The
security of energy supplies and the sustainable management of energy resources
are a continuous concern both for the Romanian state and for all energy
companies, Petrom implicitly," the press release read.
Petrom is Romania's biggest energy company with activities in exploitation,
production, refining and trade activities as well as petrochemical production.
Petrom controls oil and gas reserves evaluated at one billion barrel of oil
equivalent with an annual refining capacity of eight million tons and a
distribution network of some 550 stations in Romania. It also controls an
international network of 82 gas stations in the Moldovan Republic and Hungary,
which is due to expand with 178 supplementary premium stations in Romania,
Bulgaria, Serbia-Montenegro. Its 2005 business figure amounted 2.97 billion
Euro.
The announcement comes as the Supreme Defence Council was due to discuss the
national energy policies in a session on November 23rd. OMV President, Wolfgang
Ruttenstorfer, met on November 20th Romanian President Traian Basescu and Prime
Minister Calin Popescu Tariceanu to discuss this and the security of Romania's
energy supplies. Basescu on November 22nd required the examination of past
energy privatisation deals.
Speaking after a meeting of the country's top defence body, the Supreme Defence
Council, Basescu said that all contracts in which state-owned energy companies
were sold off will made public. The privatisation contract of Petrom was
published recently by daily Ziua.
Prosecutors are already investigating several privatisation officials involved
in the deal on suspicion of damaging national security interests. According to
politicians, OMV Petrom requested last month to steeply raise prices for natural
gas. Petrom is talking with government about setting up a fund to soften the
blow of rising natural gas prices. Romania has pledged to bring natural gas
prices in line with the EU average by 2009.
Tariceanu and Ruttenstorfer on November 20th agreed to work to find ways to keep
gas prices low for individual consumers. They discussed several possibilities,
including setting up a fund to help low income families pay their gas bills.
"Petrom could potentially be forced to bear the cost of gas subsidies for
low-income households. One-third of gas is imported from Russia for US$300/1,000
cubic metres, but households currently pay around US$120/1,000 cm. No figures of
the size of the fund have been discussed. We believe the talks apply only to
natural gas and potentially heating oil; motor fuel prices in Romania are
already fully liberalised. Petrom and state-owned Romgaz are the country's main
gas suppliers," said Wood analyst, Bram Buring.
"Sounds like the Romanian government is trying to shift its pain on the
private sector, similar to PGNiG in Poland or Hungarian pharmas. Ironically, gas
price convergence is one of the main earnings drivers for Petrom," noted
Burin. Romania produces about 70 percent of the gas it needs, with the rest
being imported from Russia.
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FOREIGN LOANS
EBRD to lend 100m Euro to Kaufland Romania
The European Bank for Reconstruction and Development (EBRD) plans to lend
Kaufland Romania 100 million Euro to partially finance a 300 million Euro
project of the company to expand its discounting hypermarkets network in the
country, the European bank said on December 6th, New Europe reported.
"The proposed project is the second in a regional cooperation to finance
the Schwarz group's strategic expansion of its Kaufland discounting hypermarket
format in Central and Eastern Europe. The expansion will mainly focus on small
and medium sized towns," the EBRD said in project summary posted on its
website. The project is pending final board review on January 5th. Kaufland
Romania is part of the Schwarz group, a privately held company based in Germany.
Govt to borrow 450m Euro from EIB
Romania said recently it plans to borrow 450 million Euro from the European
Investment Bank (EIB) to repair its roads, the government said on November 29th
in an e-mailed statement, New Europe reported.
The 20-year loan will have a five-year grace period. "The EIB loan is to
finance the sixth stage of the national project for road rehabilitation,"
Romanian Transport Minister, Radu Berceanu, was quoted as saying. The project's
total cost is estimated at 987 million Euro with government contribution
amounting to 537 million Euro, Berceanu said. The money will be used to upgrade
1,112 kilometres of major roads in northeastern, central, northwestern and
western Romania. Around 4,000 kilometres of roads have been modernised in the
first five stages of the project. Romania, which will join the European Union in
2007, needs extensive investment in transportation projects and co-financing
from the EU to bring its worn-out infrastructure up to EU standards.
IBRD gives US$180m loan for infrastructure
Romania will borrow US$180 million from the International Bank for
Reconstruction and Development (IBRD) to finance improving the quality of
national roads and railway networks in the first several years of EU membership,
the World Bank said on November 27th in an e-mailed statement, New Europe
reported.
The loan agreement was signed by Romanian Finance Minister, Sebastian Vladescu,
and the World Bank Manager for Romania, Benoit Blarel. The loan is aimed at
supporting the funding of rail and road maintenance programs amounting to US$225
million. The World Bank has delivered loans totalling US$ five billion to
Romania since 1990.
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MINERALS & METALS
KazakGold-Oxus Gols JV wins bid for gold plant
KazakGold Group Limited and British mining company Oxus Gold PLC said
Romaltyn, a 50:50 joint venture of the two companies, has bought the assets of
the Transgold Plant and deposits in the outskirts of Baia Mareis in Romania for
US$6.99 million as part of its strategy to operate in eastern Europe and central
Asia, announced recently in a press release of the companies. "The newly
formed 50:50 joint venture, Romaltyn, expects to re-commission the project and
bring it back into production in approximately six months time," said the
release, New Europe reported.
Romaltyn will spend an estimated US$12.54 million on the project, the company
said. Once re-commissioned, the plant would treat approximately two million
tonnes of tailings in the first year, producing about 30,000 ounces of gold at
an average recoverable gold grade of 0.48 grams per tonne. A spokesman for
Romaltyn suggested the problems arose because the tailings operation was too far
from the plant. Once re-commissioned, the plant could treat about two million
tonnes of tailings in its first year and produce approximately 30,000 ounces of
gold at a cost of US$200 an ounce. The Romaltyn bid includes an 8.5 million
tonnes tailings dump 7.8 kilometres from the plant, a stockpile of gold-bearing
pyrite resources and two exploration tenements, Sophia and June 11. These need
their 12-month exploration licences re-instated and that could take up to a
year. The Baia Mare operation suffered from environmental problems when deposits
from the plant spilled into a river and killed hundreds of fish.
Alro to invest US$50mn in alumina unit
Romanian aluminium smelter Alro said on December 6th it will invest US$50
million in the next two years in its alumina-producing subsidiary Alum to raise
the output by 20 per cent, Alro said in a statement to the Bucharest Stock
Exchange (BVB), New Europe reported.
The investment will be used to modernise the main production facilities at Alum,
cut the consumption of materials and energy, upgrade a thermal power plant and
align the factory to European labour and environment protection standards, Alro
said.
Thanks to the upgrades, Alum will raise its annual output capacity to at least
600,000 tonnes from 500,000 tonnes now, it was reported. Alum aims to increase
its production to one million tonnes of alumina per year by 2010.
In order to reduce the time needed for the upgrades, the factory will be shut
down completely, Alro said. Alum is majority owned by Alro. The aluminium
smelter has initiated a merger with Alum to consolidate its own operations. Alro
is one of Europe's largest aluminium smelters. Its medium-term target is to
raise its output to an annual 420,000 tonnes of aluminium from some 260,000
tonnes now.
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