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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)

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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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