Books on Romania
% of GDP
Update No: 100 - (25/08/05)
Following his announcement earlier in July that he would resign and call snap
elections to strengthen his hand in order to implement key reforms, Prime
Minister Tariceanu said on 19th July that he would rather stay on as priority
had to be given to Romania's recovery from its recent disastrous floods.
He said that it would have been cowardly for him to resign at this point. Mircea
Geoana, the leader of the opposition Social Democrats (PSD) expressed support
for Tariceanu's decision. "In a moment of a dramatic crisis for the country
one needs a government and, between two evils, we choose the smaller one,"
Meanwhile, Enlargement Commissioner Olli Rehn has reiterated that Bucharest had
no time to lose with its reforms if it wanted to join the EU as planned on 1st
Romanian Prime Minister confirms pending government re-organisation
Prime Minister Tariceanu, confirmed on 15th August that a government re-organisation
would occur in the autumn. Talking to reporters, Tariceanu said the changes
would affect both personnel and the government structure. He said he is
particularly dissatisfied with the work of Health Minister Mircea Cinteza and
suggested that EU Integration Minister Ene Dinga might also step down. Tariceanu
also indicated that he agrees with those who want to split some
"giant" ministries, such as the ministry of transport, construction
Romania returns to budget surplus
Central Bank Governor Mugur Isarescu said Romania's economy is developing at a
steady rate. He also said inflation is expected to drop to 7.5 per cent in 2005
and to 5 per cent in 2006, down from 9.3 per cent in 2004.
Romania reported a consolidated budget surplus for the first quarter equal to
0.13% of gross domestic product (GDP), compared to a deficit of 0.14% of GDP for
the same period of 2004, the Finance Ministry said in a statement. The
first-quarter surplus amounted to 3.71 trillion lei (102.6m Euro/US$129.7m).
Total revenue amounted to 190.4m lei in the first quarter of the year, up from
160.4m in the same period of 2004, the ministry said. The jump in budget revenue
was mainly due to rise in collected corporate tax, social insurance
contributions and value-added-tax (VAT) payments.
This is good news, for analysts who feared that tax cuts could lead to mounting
budget deficits noted that government cut income and corporate taxes from the
beginning of 2005 IMF asked Romania to reduce its 2005 budget gap to no more
than 0.5% of GDP, from the previous target of 1.5% of GDP. The Fund, however,
later gave consent to Romania's cabinet to raise the budget deficit to 0.7% of
We need a security 'belt
Romanian President, Traian Basescu, said at a recent meeting with students at
the Sociology faculty that the Romanian authorities are considering finding a
way to grant citizenship to the Republic of Moldova's Romanians.
The Romanian head of state said that the Romanian authorities are considering
lifting the freeze on the issue of citizenship, yet there are restrictions
imposed by the Schengen Agreement and Romania's EU Accession Treaty. Basescu
added that the formula accepted with (Republic of Moldova) President Voronin was
"one people, two independent, sovereign countries," given that Romania
and the Republic of Moldova have an undisputed common history. He stressed that
the democratisation of Romania's eastern neighbour is a prerequisite to national
"We need a security 'belt,' around our borders. Democratisation is not a
mere political objective, because, if it were so, we would not allot all kinds
of resources to contribute as much as possible to the creation of this sanitary
space," Basescu stressed.
Romania, Greece focus on sustainable economic development
The third Forum Invest economic conference "Romania and Greece:
Priority Policies for a Sustainable Regional Economic Development" was held
in the Greek capital, Athens, on June 7th. The official reception was held on
June 6th at the Romanian embassy in Athens. The forum focussed on the role
Greece plays in sustainable regional economic development and how to approach
the European Union through a sound business climate. Among keynote speakers at
this event: Dimitris Sioufas, Greek minister of development, Evripidis
Stylianidis, Greek deputy minister of foreign affairs, Yannis Pehlivanidis, vice
chairman and deputy CEO, National Bank of Greece; Marcin Swiecicki, coordinator
of OSCE Economic and Environmental Activities, Codrut Seres, Romanian minister
for economy and commerce, Gheorghe Seculici, Romanian vice prime minister, Eugen
Dijmarescu, deputy governor, National Bank of Romania.
More than 200 Romanian and Greek companies announced their participation. The
forum also touched on national competitive advantages in the global economy;
identifying and promoting joint projects in priority sectors, and attendees
looked at how business is supported through European funds, local banks and
international financial institutions. Co-organisers of the event were the
Federation of Greek Industries (SEB), the Hellenic-Romanian Business Council, in
cooperation with the Piraeus Chamber of Commerce and Industry. Sponsors were
Banca Romaneasca SA, National Bank of Greece, Bancpost, Banca da Romana de
Marfuri, LaDorna and the World Trade Centre Bucharest.
Mahindra & Mahindra eyes Tractorul
Mahindra & Mahindra Ltd, India's biggest tractor maker, bid for Romania's
Tractorul SA, competing with the country's biggest maker of tractors, MYO-O SA,
a closely held Romanian maker of agricultural machinery, the state-asset sales
agency AVAS said in a statement. The government put Tractorul SA back on sale
after Italy's Landini SpA decided against buying the company. AVAS didn't give a
date for awarding the sale. The government will select the buyer of its 80
percent stake in Tractorul following direct negotiations with the bidders, AVAS
Renault to invest in Romania
Renault will invest more than 200m Euro (US$243m) to start a new investment
project in Romania, the Prime Minister Calin Tariceanu said recently.
Accoding to Ziarul Financiar, the French Group has chosen Romania for building a
new gear boxes plant by investing some 215m Euro in the next few years, Ziarul
Financiar reported. The Romanian authorities will participate with 17.5 per cent
of the investment value by granting some 38m Euro as state aid covering four
important sectors: the regional development, the environment protection, the
training of the employees and the research- development segment. The world's
fourth-biggest automaker already owns Romania's car manufacturer Automobile
Dacia, which makes a successful no-frills Logan brand.
Regulator OKs HVB-Tiriac merger
Romania's Competition Council approved the merger of HVB Bank Austria
Creditanstalt (BA-CA) and Tiriac Bank, with the former in control, New Europe
BA-CA will acquire 50 per cent, plus one share of Tiriac Bank's capital, and
will continue controlling HVB Bank Romania with 50 per cent plus one share. The
merger contract was signed in mid-June. The bank resulting from the merger, HVB
Tiriac, will be the fourth largest bank in Romania, after BCR, BRD-Societe
Generale and Raiffeisen.
Transelectrica eyes big investment
Romanian utility Transelectrica's investment programme drawn up for the period
2001-2013 provides for 900m Euro, daily Bursa reported, citing Transelectrica
manager Razvan Purdrila.
The investment funds will come mainly from international bodies, such as the
European Bank for Reconstruction and Development (EBRD), the European Investment
Bank (EIB) and other similar bodies, but also from the company's own sources.
They are meant for rebuilding network infrastructure and the electricity market
as well as for the modernisation of interconnection lines.
June industrial output up 1.6%
Romania's industrial output rose 1.6 per cent month-on-month in June, a shift
from a 4.6 per cent fall in May, propped up by energy and manufacturing sectors,
the national statistics institute (INS) said recently, New Europe reported.
Industrial production edged down 0.8 per cent year-on-year June but rose 2.1 per
cent over January-June from the same 2004 period, said the statistic institute.
Labour productivity in Romania was up 5.1 per cent year-on-year in June and rose
4.8 per cent in the first half this year.
MINERALS & METALS
Mittal Steel to raise output
The Iasi-based Mittal Steel will increase its production of high added value
products by 20 per cent, after having received the API 5L certification from the
American Petroleum Institute (API), the company said in a statement, New Europe
Mittal Steel Iasi obtained the API 5L certification, which is given for products
that can be used in the oil and gas industries. API is the only institute in the
world that issues certificates for products used in the oil industry.
UPC to buy Astral Telecom
Liberty Global announced that its European subsidiary, UPC Broadband, has
reached an agreement to acquire from a group of Romanian entrepreneurs, foreign
investors and AIG New Europe Fund, 100 per cent of one of Romania's largest
broadband telecommunications operators, Astral Telecom SA (Astral), New Europe
Astral currently serves approximately 890,000 video, voice and data revenue
generating units (RGUs). Liberty Global already operates in other parts of the
country through UPC Romania with over 360,000 RGUs. Liberty Global will acquire
100 per cent of the shares of Astral for a price of US$404.5m.