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Key Economic Data 
  2003 2002 2001 Ranking(2003)
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


Update No: 168 - (26/06/12)

While Romania is turning its back on the authoritarian party that governed the country from 2008 until January this year, it is also becoming more apathetic about Europe as the negative effects of the eurozone financial crisis and continuing poverty create disillusionment with what the EU has to offer.

The Romanian economy suffered badly when the global financial crisis began in 2008. In 2009 Romania accepted a 20 billion euro loan from the International Monetary Fund (IMF), the World Bank and the EU Commission which would help stabilise its currency. In exchange, the then government of Prime Minister Emil Boc and his Democrat-Liberal Party (PDL) launched a draconian austerity programme: salaries were cut and sales tax was raised. Critics say the government’s commitment to austerity policies gave Romania’s ruling politicians an excuse to act as they pleased and the government become more authoritarian. Ciprian Siulea, a founding member of CriticAtac, the main leftist discussion forum in the country, said in January, “Romania has been an extremely diligent and submissive student of the EU and IMF. This is why the obvious and repeated infringement of democratic rules and values is overlooked. In a certain sense, politics came to an end and we are governed mainly by economics.”

Romania’s government under Boc was accused of approving laws without any consultation or parliamentary debates, manipulating elections and splitting opposition parties by means of corrupt methods. Frustration among Romanians led to major street rallies and clashes with police in January this year, which brought down the government.

On June 10, current Prime Minister Victor Ponta's New Leftist party, which came to power in May, won a comfortable victory in local elections. Promising to restore wages and cut some taxes, while sticking to a €5bn International Monetary Fund-led aid deal, Ponta's Social Liberal Union (USL) alliance won up to 65 percent of votes in some areas and more than 50 percent in some big cities. The results put the USL on course to win a majority in a parliamentary election later this year.

Boc's PDL party returned a poor result, gaining only 13-30 per cent of votes in Bucharest. Defeated, the former prime minister stepped down from the leadership of the PDL on June 14, saying he took responsibility for the massive loss. Other senior members also resigned, leaving the party without competent management.

It has now been five years since Romania joined the European Union and the country's initial hopes for prosperity upon accession have been dashed. Romania is the second poorest member of the EU after Bulgaria and it looks as though it will not get the chance to pull itself out of poverty, corruption and other blights that can prevent states from developing democratically. In Petrachioaia, a town 13 miles outside of Bucharest, four out of five people have no indoor toilet or running water. Just one in five people has a job.

In the run-up to EU membership in 2007 and immediately afterwards, foreign companies invested heavily in Romania's factories and GDP rose two-thirds to 47 percent. But the global economic crisis ended the boom, and between 2008-2010 the country's output had fallen by 8 per cent. Romania re-entered recession this year.

Being part of the EU has made life a little easier in Romania – in Petrachioaia, the main road was paved for the first time in 2008, and the last of the town's four schools got plumbing two years ago – but the country still doesn't have the infrastructure to sustain a healthy economy. Romania's motorways only link up three of the country's cities and none of these major roads lead to an international border or a port, making it difficult to export goods. Unemployment is also so high – only a quarter of the population have steady jobs – that standards of living remain low. Dogged by corruption, Romania has only used eight percent of the 19 billion euros available to it since 2007.

Polls show that fewer than half of Romanians now have faith in the EU, down from over two thirds before the country entered the bloc. Tom Gallagher, a professor of east European politics at Bradford University, said that raises the risk of political dissent or a rise of radical parties if people become frustrated with the gap between rich and poor.

"Romania will be a permanent drag on the EU if we continue to fall behind, and the country faces long-term underdevelopment and decay unless there is a relaunch of the partnership with the EU," Gallagher said.

That partnership is stagnating. On May 30, the European Central Bank released a report saying that none of the eight countries on the waiting list to join the euro single currency – Romania, Bulgaria, the Czech Republic, Latvia, Lithuania, Poland, Hungary and Sweden – currently meet the required standards.

Before the debt crisis, EU member states that were not yet part of the single currency union – including Romania – were queuing up to join, but interest has faded and only Latvia is on track to join the euro in the next two years.