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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: 121 - (27/06/07)

Romania under Ceaucescu suffered from a harsh dictatorial regime, which had a glacial stability about it. Romanians are perhaps somewhat relieved to have weak governments, which by and large they have had since the 1989 Revolution. They certainly have one now. 

Political instability
Romania lacks a stable government. It stays on sufferance for want of an alternative. None of the possible alliances designed to form a parliamentarian majority seem plausible any more.

The Social Democrats (PSD), the main Opposition party, have had no success in negotiating with President Traian Basescu and his Democrat Party (PD), or with Prime Minister Calin Tariceanu and his Liberals (PNL). The Social Democrats, the home of former communists, seem to be excluded from any government formula.

Under these circumstances the Tariceanu cabinet may survive simply because all the negotiations to supersede it have until now proved to be impossible. A cabinet formed by Democrats (PD), Liberals (PNL) and Liberal-Democrats (PLD) in a centre-right coalition is an attractive idea for many, but it is unfortunately a utopian pipe-dream and wouldn't even have a firm parliamentarian majority. The Liberals won't give up PM Tariceanu in order to cease the war between the presidency and the government. 

Early elections, the obvious solution, to be held in case a PSD anti-governmental motion proves successful, may be hard to organize before June 2008, far too late.

The views of the mayor
In an interview for Jurnalul National, Adriean Videanu, Bucharest mayor and an increasingly influential member of the Democrat Party, sees the former Interior Minister Vasile Blaga (PD) as the most fit for the Prime Minister seat. "The most legitimate prime minister for the moment should be a Democrat", says Videanu. 

"Not because of the Parliament's configuration, but because of the public opinion expressed at the referendum (see below)," he says. "The ideal solution would be early elections, because there is no way for a new and stable government to be formed for the moment. PD doesn't want an alliance with PSD for the time being."

So, it's settled: nothing changes, and the stalemate continues. 

Poland, Romania hosted CIA jails: says Swiss Senator Marty, of the Cof E 
An embarrassing scandal is breaking in Romania at a difficult time for a fractured polity and a beleaguered president, who has fallen out with parliament and the government. A European investigator says he has proof Poland and Romania hosted secret CIA prisons under a post-9/11 pact to hunt down and interrogate "high value" terrorist suspects wanted by the US. Swiss senator Dick Marty said Poland housed some of the CIA's most sensitive prisoners, including Khalid Sheikh Mohammed, who says he masterminded the September 11, 2001, attacks on the US that killed almost 3,000 people. 

"There is now enough evidence to state that secret detention facilities run by the CIA did exist in Europe from 2003 to 2005, in particular in Poland and Romania," Marty says in a report for the Council of Europe (C of E) human rights watchdog.

Marty accused the former Polish president and the current and former presidents of Romania of having known and approved of the secret CIA operations on their soil. In a preliminary report last year, Marty said 20 mostly European countries colluded in a "global spider's web" of secret CIA jails and flight transfers of terrorist suspects stretching from Asia to Guantanamo Bay.

EU members Poland and Romania have repeatedly denied the existence of secret prisons on their territory.

'Lying Curtain'
But innumerable reports indicate that the CIA used what could be described as a 'lying curtain' to conceal from the world their interrogation and extra judicial abductions of suspected al-Qaeda militants in secret prisons in Poland and Romania. Official denials of its existence are grist to its mill.

The Agency enlisted top officials in those countries to create and conceal the facilities. Current and former intelligence officials in Europe and the United States told the Council of Europe that the interrogation facilities were hubs of a global anti-terror campaign that used torture, clandestine flights and extra judicial abductions known as extraordinary rendition, according to a report by the council, which is based in Strasbourg, France, the LA Times has reported.

Although many of the allegations have been made by human rights groups, former prisoners and the news media, the report provided new details about how America's Polish and Romanian allies allegedly set up heavily fortified, top-secret outposts where U.S. agents subjected "high-value" prisoners to abusive interrogations between 2003 and 2005. "Poland and Romania agreed to provide the premises in which these facilities were established, the highest degrees of physical security and secrecy and steadfast guarantees of non-interference," said Dick Marty, the Swiss senator leading the probe.

Romanian president survives 
Nevertheless, President Traian Basescu survived a vote on his possible impeachment in a referendum on May 20th. He called for dialogue with his opponents in an effort to end the country's political crisis.

According to partial referendum results published, based on 91% of ballots cast, 74.3% of Romanians voted against the bid to impeach the president. The referendum was however blemished by the lowest voter-turnout registered in Romania since 1990, with only 43.9% of eligible voters turning up at the polls, according to the partial results.

While Basescu's team said it was disappointed by the low turnout the president nonetheless insisted the results reinforced the legitimacy of his mandate and of his planned reforms, especially in the area of the judiciary.

The president, who was suspended in April after parliament rebuked him for his "authoritarian tendencies," said he would "invite the politicians to a dialogue on renewing the political class."

Basescu, who will have to wait for Romania's constitutional court and parliament to confirm the referendum results before returning to office, has said he wants to make broad changes, including revising the constitution, to "cut the links between the oligarchs and the politicians" and "clean" the political stage of the remaining relics of communism.

His call for dialogue was met with wariness by his opponents.

"We are prepared to discuss with the president, but only within the framework of the constitution," said Mircea Geoana of the opposition Social Democrats who led the campaign to impeach Basescu.

"While the electorate did not give Mr Basescu a red card, it did not give him a free hand either," he added.

Prime Minister Tariceanu, a former ally of the president turned adversary, agreed, insisting that "Traian Basescu must understand that the Romanians have given him a second chance to begin acting like a responsible politician." 

"I respect this (referendum) decision and I will act in the spirit of collaboration to benefit Romania," added Tariceanu, who is also head of the National Liberal Party (PNL).

Observers meanwhile said the chances of bringing Romania's political crisis to an end would depend on Basescu's attitude, pointing out that his powers were limited and his reforms would result in little without parliamentary support. "Basescu will continue his mandate with reinforced legitimacy, but the hardest part has just begun," according to an editorial in the Cotidianul Traian Ungureanu newspaper, which insisted the president had to start responding to the expectations of the Romanian people.

The Gandul daily's editorialist Bogdan Chireac meanwhile wrote that "things must also change at the heart of the government and in parliament" if the ties with the president are to be repaired. 
                                            ******

The following is a tour-d'horizon of foreign affairs from an insider source:- 

Breakdown assistance to a fractured administration and a fragmenting neighbourhood will be a hard test for incoming Minister of Foreign Affairs, Adrian Cioroianu, as he talks to Ana Maria Nitoi

Every politician wants the position of Minister of Foreign Affairs. It has the best opportunities for travel, the most interesting people to meet, the smartest cars and gives a minister the role of an ambassador for a small country playing on all international stages.

But no one envies Adrian Cioroianu as he takes up this new role. 

Relations between key neighbours such as the Republic of Moldova, Serbia and Russia are not at their best and there is trouble at home. Bridging the gulf between President Basescu and Prime Minister Tariceanu will be hard to accomplish with non-violent means.

The country's relationship with the Republic of Moldova has worsened in the last few months. 

Chisinau has decided not to allow Romania to open two more consulates to resolve the 100,000s of Moldovan requests for Romanian visas. This is a deliberate attempt to make it difficult for Moldovans to access the EU through Romania. 

"We understand that, for now, there are different views on the matter," says the new Minister. "That is why we hope that the relationship between us will not become the prisoner of statements made in the heat of the moment."

Cioroianu pledged, by the time we went to press, to travel to Chisinau and talk with his counterpart to attempt to resolve the deadlock. This will be the first big test of his diplomatic skills.

"We are a firm supporter of Moldova's European [Union] aspirations," says Cioroianu. "Any sincere attempt by Chisinau in this direction will have our unconditional support." 

Autonomy question
Kosovo will be a major issue for Cioroianu. In the past, Romania has, on balance, taken a more pro-Serbian line on the question of Kosovan independence than many of its EU colleagues. The current UN proposal is for the Muslim-majority province to be given an "everything but sovereignty" status. This is a potential overture to full independence, a position rejected by Belgrade.

The new Minister believes the best solution for the conflict is a UN strategy negotiated and accepted by both Serbs and Kosovans. "In this delicate period of defining Kosovo's status, maintaining the province's security is extremely important," he says. "It is vital for the UN Administration and the governing authorities to prove firmness and stop any attempt to raise tensions." 

But Romania's position as a serious partner in negotiations deteriorated in February, when several Romanian officers under a UN mandate killed two Albanian protesters in a demonstration in Pristina.

The future status of Kosovo must not affect the current borders of the region, says Cioroianu, guarantee the multi-ethnic character of the province, reduce and eliminate organised crime, ensure economic development and not lead to ideas of unification.

The Black Sea region needs more security, prosperity and democracy, but Romania's effort last year to lead a Forum for the Black Sea saw little enthusiasm from Turkey and Russia. The Minister salutes the recent European Commission's statement to outline an EU policy in the Black Sea region, which it will soon present.

What to do with Russia
Romania and Russia have a tricky relationship. During the campaign for overturning his impeachment, Basescu invoked the ghost of Russophobia by claiming that Romania should not rely upon energy resources from their Slavic acquaintances. Regarding Bucharest's relationship with the Kremlin, Cioroianu says: "We shouldn't forget the fact that Russia is the biggest of our neighbours, a country with which we share a long common history marked by important and sometimes dramatic moments."

The Liberal expresses "satisfaction" over his meeting in Belgrade with Russian Minister of Foreign Affairs, Sergei Lavrov. It is the economic dimension of the relationship between Romania and Russia that is most developed, with energy and metal firms such as Lukoil, Gazprom, TMK, Mechel, RAO EES and Ruskii Aliumini's interest to invest in Romania. 

Russia has been a long-term beneficiary of the trade relationship between the two countries - with its exports to Romania putting to shame its imports. But Cioroianu argues that there is a movement towards balance and his nation's exports towards Russia grew in the last year by 60 per cent.

Membership rights
It is time, says the new Minister, for Romania to stop talking about being an EU member state and start acting like one. Romania's qualified work force, very well educated young people and continuously growing economy are its best advantages, argues the Minister. Using these resources, he says, will help Romania become the European Union's seventh state not only in population and surface area, but economically as well.

But the Liberal does not subscribe to the concept of a Europe of two speeds, with different development strategies for the pre-2004 member states and the 12 that since joined. He considers this dangerous for Romania. 

At the same time, the Minister agrees with the idea of 'groupings' of countries, where some are more economically developed than others.

"Differences exist and have always existed between the member states as much as it exists in one country," he says. 

"But I believe that these differences shouldn't lead to exclusions of groups that have different views on the Union's future development. For us it is essential to benefit, just like the other members did, from the wide range of instruments and mechanisms that will allow us to catch up to the European average."

Keeping watch
A seasoned observer of Romania's political horseplay, the 40-year-old lecturer at the Bucharest University began his political career late, when he joined the National Liberal Party (PNL) in 2002. 

He started as a counsellor for then Liberal President, Theodor Stolojan. 

Elected a senator in 2004, he was an observer of the European Parliament and was, since 1 January 2007, one of its members. 

He also chose to stay in the PNL, even when his mentor Stolojan and the pro-Basescu wing left in 2006 to create the Liberal Democratic Party (PLD).

Sticking with the National Liberals paid off, as Cioroianu was rewarded with the crown jewel of Government portfolios, the Ministry of Foreign Affairs.

However, this was not going to happen.

At the beginning of this year, the Prime Minister asked his party colleague, Mihai Razvan Ungureanu, to resign from the Ministry because he failed to inform the head of cabinet that two Romanians in Iraq had been imprisoned by the US army on allegations of spying. Tariceanu then proposed Cioroianu for the vacancy. 

But President Basescu refused to appoint the historian due to his lack of experience - he has never been a diplomat and has only five years in politics. With only months spent as a member of the European Parliament, Cioroianu was seen as a watcher and not a doer.

Many assume that there was another reason behind the President's obstruction. 

Asked if he knows the real reason for the president's decision, Cioroianu says: "No matter what it is, I am convinced it will come out sooner or later."

Now Cioroianu is viewed by some, including himself, as the future intermediary between Basescu and Tariceanu, who hate each other. 

He is the man the two leaders must talk through at summits, cabinet meetings and across the dinner table.
This may be a tougher call than resolving Transnistria or Kosovo. 

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AUTOMOBILES

Radacini Motors' net turnover at 30.3m Euro

Radacini Motors recently reported a net turnover of 106.9 million leu (30.3 million Euro). This is a six-fold increase from the 2005 16.96 million leu seen in 2005, according to the company's annual financial report, Ziarul Financier reported. 
Radacini Motors is the dealer for Opel, Chevrolet and Daewoo brands.
The company's profit reached 6.4 million leu (1.81 million Euro), an almost 11-fold increase on the 597,899 leu posted in 2005, it was reported. Set up in 1991, the company has been a Daewoo dealer since 1995, becoming a distributor of the Opel and Chevrolet brands at the end of 2005. However, the company ceased operating as a general importer for the Subaru brand at the beginning of last year, the paper said. The company sold around 2,300 Daewoo cars last year, compared with 3,000 units in 2005, 1,000 Chevrolet units and 1,400 Opel units. The Radacini group consists of Radacini Motors, Radacini Leasing and Imex Braila.

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ENERGY

Alro Slatina may take over thermal or hydropower plant

Romanian aluminium producer Alro Slatina is interested in taking part in the privatisation of a power complex, so as to take over a thermal or hydropower plant, while not ruling out the option of building an electricity production facility in a green-field project in a neighbouring country, Nine o'clock reported, cited by Reporter.gr. 
Alro is the largest electricity consumer in Romania, accounting for eight percent of the national consumption. 
In order to ensure the necessary electricity, the company is considering three options. The first is for regulatory authorities to modify the current billing system, to distinguish between smaller and larger consumers. The second alternative is to take over a power complex, a thermal power plant or hydropower plant, which should be rehabilitated and upgraded. The third option is the construction of a thermal power plant of up to 1,000 megawatts of installed power, for which the feasibility study has already been initiated. 
According to the study, the thermal power plant would use coal as a raw material, which might be imported from Russia, Ukraine, New Zealand or Australia, it was reported. Construction works should take two years, after a financing source had been identified. "All companies interested in the privatisation of the power complexes have asked us whether we want to buy energy from them," Alro Board Deputy Chairman Marian Nastase was quoted as saying.

EMS acquisition by Enel approved

The privatisation of electricity supplier Electrica Muntenia Sud (EMS) by Italian power company Enel has been approved by the Romanian government, Romanian newspapers reported on May 31st, cited by Interfax News Agency. 
The company is planning to invest more in the energy sector in the country, the papers said. 
Enel was selected the winner of a majority stake in the most valuable Romanian electricity distribution and supply company, Electrica Muntenia Sud, in mid-2006. Enel paid 820 million Euro for a 67.5 per cent stake in the company. State-owned electricity supplier Electrica operates with national coverage in eight areas of Romania through eight different units, with EMS supplying electrical power to the capital city Bucharest.
Electrica's portfolio has three distributors left for privatisation: Electrica Muntenia Nord, Electrica Transylvania Sud and Electrica Transylvania Nord.
Enel announced that after the acquisition of EMS, the company plans to make other investments in the region by participating in other ongoing and forthcoming tenders.
Such tenders include thermoelectric power plants in the Southeastern Romanian cities of Braila and Doicesti, as well as the nuclear power plant in Cernavoda in Southeast Romania. Enel also intends to invest in the renewable energy sector in Romania's through acquiring wind farms. The company is planning to invest two billion Euro in Romania's distribution sector over the next 15 years, with one billion Euro used to modernise EMS's network and to improving its customer service.

Rompetrol plans to list majority stake on London bourse

Rompetrol Chairman and CEO, Dinu Patriciu, was recently cited by the Bursa news site as saying that the company plans to list a minority stake on the London Stock Exchange in the next two to three years, Interfax News Agency reported. 
The CEO also announced that the company has invested some US$600 million in modernising its Petromidia refinery in the Black Sea town of Navodari in 2006, "in order to bring it up to European standards." The Petromidia refinery provides around 28 per cent of Rompetrol's revenues, the news site reported.
Patriciu said the company also plans to acquire another refinery in Europe, adding that there are currently seven refineries on sale on the continent.
Rompetrol's long-term goal is to be present in all countries in the Central European region, through acquiring more filling stations. The oil firm currently operates some 440 filling stations.
Rompetrol group reported revenues of US$5.6 billion in 2006, double the 2005 figure, after the purchase of French petroleum-products distributor Dyneff, it was reported. The Rompetrol group expects US$7.5 billion in revenues in 2007 and an operating profit of US$250-270 million. The main businesses of Rompetrol include refining, exploration, distribution, industrial services, logistic and marketing.

Energy suppliers to bid for 1.65m MWh of electricity

Romanian energy suppliers will bid to acquire a total of 1.65 million MWh (megawatt hours) of electricity put on the Romanian Centralised Market for Bilateral Contracts (PCCB), which is administered by the Romanian Power Market Operator (OPCOM), Romanian news site Bursa reported on May 30th. 
The auction will take place on June 5th and 6th, while deliveries will be conducted in the period of October 1, 2007 through December 31, 2008, it was reported. Bids launched by Romanian energy suppliers include that of Romanian power distributor Elcomex, which intends to acquire 330 MWh with a maximum offer of 144 leu per MWh; ICPE Electrocond Technologies, which is planning to buy some 219 MWh at a maximum price of 148 leu per MWh; Green Energy, bidding for 219 MWh with a 144.5 leu offer and Buzman Industries, which has plans to acquire two packages of 440 MWh each at a maximum price of 145 leu.

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FOOD & DRINK

Halewood Romania Q1 sales reach more than 2m Euro

Halewood Romania group, one of the leading wine producers on the local market, has posted sales of over two million Euro in the first quarter of 2007, up 26 per cent on the same time last year, Ziarul Financier reported on June 4th.
"The sales increase was largely the result of effective distribution, which was assisted by the restructuring of our sales department, in a new approach to the market, as well as by our marketing operations," Halewood Romania Marketing Manager Delora Panga was quoted as saying. She specified that the results were in line with the expected growth rate, and did not generate any significant changes in the estimates for the year ahead. Halewood is one of the biggest wine importers on the local market, with exports accounting for 35 per cent of the company's turnover in the first quarter of the year. In the long run they are expected to account for 60 per cent of the turnover. "For the end of this year, our objective is to double our market share and we intend our red wines with appellation of origin to hold a six percent market share. In the wake of this first quarter, we have met 30 per cent of our objectives," specified Delora Panga.

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FOREIGN LOANS

EBRD approves 50m Euro loan for modernisation

The management of the European Bank for Reconstruction and Development (EBRD) approved a loan worth 50 million Euro (163.5 million leu) in co-financing, alongside other banks, of the programme for the modernisation of the Romanian Post infrastructure. The project, worth an aggregate of 60 million Euro (196 million leu), includes the construction and commissioning of the first automatic sorting centre in Bucharest and the modernisation of the existing one in Cluj Napoca. The EBRD will finance over 80 percent of the total cost of the project that will enable the Post to increase its processing capacity with a significant improvement of the quality of its services, New Europe reported.

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TECHNOLOGY

UPC Romania to invest 40m Euro in 2007

UPC Romania will invest 40 million Euro this year to upgrade its communication network and introduce a unique invoicing system at the national level, declared the general manager of the cable-TV operator, Richard Anderson, Reporter.gr said. 
"The upgrading of the network will allow furnishing TV, land telephony and Internet services in all the medium and big size localities from Romania where the company is present, until the end of 2007," Anderson was quoted as saying. UPC Romania representatives announced that as of June 1, the subscribers of the operator may make unlimited calls to any national land telephony network. Thus, they launched two subscriptions, with values of 50 leu and 80 leu, which include also the access to the Internet. By the end of 2008, UPC Romania will close the re-branding operation, for which two million Euro was allotted. Anderson also added that UPC Romania is interested to participate to the auction for the acquisition of a WiMAX license. The networks of the operator provide services to over 1.4 million clients from around 200 cities. Since it has entered Romania, in 1992, UPC invested over US$500 million. UPC Romania is affiliated to Liberty Global, a US company. UPC Romania reported revenues of 140 million Euro in 2006.

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TELECOMMUNICATIONS

Nokia to invest 60m Euro in Tetarom unit

By the end of 2008, Nokia is due to commence the production of mobile phones in its factory located in Tetarom III Industrial Park, Reporter.gr said. 
Nokia plans to invest some 60 million Euro in this unit, and need a total of some 3,500 employees for the production. Some 10 component providers are expected to join this project and contribute around 200 million Euro for the completion of the investment. In order to install utilities on the 159 hectares plot of land, 33 million Euro is needed, of which 10 million Euro are set to be covered by the local and county authorities and the remainder from governmental funds, it was reported.

Orange Romania's 3G+ services coming soon

Orange Romania will launch 3G+ services in 10 cities on June 25th, increasing thus the speed of transfer of the mobile data for the current clients of the services 3G/EDGE, without increasing tariffs, Nine o'clock reported, cited by Reporter.gr. 
The announcement was made by Orange Commercial Manager Thierry Millet as the company celebrates 10 years of activity on the Romanian market. The clients of the company currently using 3G/EDGE services will receive the 3G+ services at the same tariffs as for 3G. The 3G service of Orange Romania has now 400,000 clients. The company intends to double the number of 3G clients until the end of the year, according to Millet. By the end of the first quarter this year, Orange Romania had income of 283.3 million Euro with at 8.2 million clients. The company forecasts a boost of income to 1.1 billion Euro and of clients to nine million this year. The mobile telephony reported over 8.2 million clients in the first quarter of 2007. Orange is a member of the group France Telecom, one of the biggest communication companies in the world, with almost 160 million clients on five continents.

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