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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: 132 - (01/06/08)

The EU pinpoints all-pervasive corruption 
There is no doubt what is the number one problem in Romania – tackling corruption that goes right to the top of government, as in Bulgaria. It is poisoning relations with the EU.

Bulgaria and Romania joined the EU in January 2007 under precise conditions. Brussels was well aware of the perils of disbursing EU funds in the Balkans. European Commission officials visited Sofia and Bucharest to assess judicial reforms on May 18-23. The visit took place amid mounting pressure in Brussels to invoke so-called "safeguard clauses" against the two countries, which could result in EU funds being slashed.

There are three areas where safeguard measures can be invoked under Bulgaria and Romania's EU Accession Treaties: economic, internal market and judicial reforms. The safeguard clause can be invoked up to three years after accession and could result for example in food export bans or cuts to EU funds in areas such as agriculture and "structural" policies.

The two EU newcomers are struggling hard to avoid a "worst-case scenario" ahead of a Commission monitoring report expected on July 16. According to reports in the Romanian press, the mission has taken place at a time when some officials in Brussels are wondering whether taking the two countries onboard as early as January 2007 was "a mistake" and are applying pressure to activate the safeguard clause on justice.

Both countries could lose EU funds or have their national court decisions annulled if a safeguard clause is triggered against them.

Evidence mounts that corruption is still rife
Prosecutors have gathered substantial evidence on corruption cases against Prime Minister Adrian Nastase, former transport minister Miron Mitrea, current Labour Minister Paul Pacuraru and five other senior officials, the Romanian media have reported.

Although this could be an important test case for the country, the Romanian constitutional court ruled that the Parliament must give its approval to investigate high-ranking politicians. This prompted Romanian President Traian Basescu to call the constitutional court "a shield for corruption."

A telling image of what corruption can represent in Romania was provided by the discovery of €1.7 million in cash in the boot of a car belonging to oligarch, football club owner and populist politician Gigi Becali. He said the money was intended "to buy chocolate and candy". Strange as it may seem, the courts often consider such mocking explanations to be valid.

The high-profile cases may remain taboo, but at least statistics from the anti-corruption prosecutors' office (DNA) show that hundreds of people have been indicted in recent months and dozens convicted. What remains to be seen is whether the Commission will find these developments satisfying.

Justice is not the only problem area. According to reports in the Romanian press, the country could lose a large part of its EU agricultural funds due to poor management of the programmes.

Romanian Justice Minister Catalin Predoiu admitted there is resistance to strong reforms in his country in an interview for Reuters. "I wouldn't believe in reform measures that do not face the tendency to preserve the status quo. However, I am happy to see that both the government and parliament showed commitment to fighting corruption," Predoiu said.

The internet site, Hotnews.ro, quotes sources from the Romanian government, who consider that Brussels will not trigger the Justice safeguard clause. The officials expected however the monitoring procedure to continue for another year.

The Bulgarian daily 'Sega' is more pessimistic. It expects that Bulgaria may lose access to most of the EU funds, and if the government continues to perform as badly until the end of its term in mid-2009, then the country may be "put in the freezer," losing its voting rights in the Council.

Basescu berates the politicians
Romanian President Traian Basescu, as we have seen, has called the country's Constitutional Court "a shield" for corruption, a stinging rebuke. The comment earned him reprimands from politicians across the spectrum. Combined with the Becali affair, it shows how corruption is a day-to-day concern in Romania. 

Basescu also said that various politicians had asked him to intercede on their behalf with the judiciary when under investigation. His comments touched a raw nerve in the Black Sea state, which many observers say has regressed in reforms against high-level graft since joining the European Union last year.

As Romania heads into local government elections on June 1 with the ballots rife with candidates tainted by corruption accusations, the worry is that reforms have not been sufficient to keep corrupt officials from office.

Basescu was referring to a ruling by the Constitutional Court in March requiring prosecutors to seek parliament's approval for checks on some senior politicians. That decision opened doors to new delays in investigations of corruption, adding to accusations that the establishment is not serious about tackling fraud.

A handful of probes into allegations of abuse among former and current cabinet ministers, including ex-prime minister Adrian Nastase, are already stalled by other delays in courts and changes in legislation.

"Other than with prosecutions, there is no progress since 2005," said Laura Stefan of the Romanian Academic Society, a think-tank. "The message to the people is that to have a nice life you have to be rich and powerful. "There is no law but power." 

Far-reaching problems
Bucharest's struggle to clean up is raising concerns in the European Union as diplomats say Romania may have been allowed to join the bloc too early. Brussels monitors the reform progress but its ability to enforce the new members' commitments wanes after accession.

Such disappointment in Brussels may make it harder for other candidate countries in the Balkans to join the wealthy bloc, analysts say. They argue the EU will be more cautious in setting entry targets and much tougher in demanding reform results.

"The lesson is that if there are things you don't seem able to resolve in the run-up to accession, then we are not confident you will able to achieve them afterwards," said Katinka Barysch from the Centre for European Reform in London.

For Romania, the foot-dragging means slower transformation from the brutal pre-1989 regime of Nicolae Ceausescu towards democracy, as Romanians are reluctant to trust state institutions. According to Transparency International, Romania is the most graft-prone EU member.

Its ruling centrists argue they are doing what they can to combat widespread abuse and reform the judiciary.

They point to statistics from the anti-corruption prosecutors' office (DNA) showing hundreds of people have been indicted in recent months and dozens convicted.

"Of course there is resistance to strong reforms," Justice Minister Catalin Predoiu told Reuters. "I wouldn't believe in reform measures that do not face the tendency to preserve the status quo”. Despite the tough rhetoric, results in the war on top-level crime are scant. The Romania Libera daily newspaper said its research showed almost every county is fielding a candidate for the local election who is either being investigated for graft or has faced accusations of abuse.

One of the highest-ranking officials to have been sentenced to jail on graft charges, Nicolae Mischie, is now running for office again, after switching allegiances from the ex-communist PSD to the nationalist New Generation Party of soccer tycoon Becali. Mischie was sentenced to four years for abusing power while he headed a county council in southwestern Romania. 

Deep Roots 
Civil society observers and diplomats say too many Romanian politicians are entangled in powerful interest groups that oppose reforms, while others simply protect their own practices.

An example, they say, is a protracted parliamentary debate over Romania's new criminal procedure code, which some observers have said could effectively prevent prosecution of graft if introduced in its full form.

Romania's Senate has improved the draft, including removing a ban on wire-tapping phones before pressing criminal charges against a suspect. But resistance is strong.

"The system is far more powerful than we thought," said Stefan. "People are defending themselves like crazy."

In coming weeks, parliament is also due to decide whether to approve prosecutors' request to investigate former Prime Minister Nastase, former Transport Minister Miron Mitrea and current Labor Minister Paul Pacuraru. All three face corruption charges which they deny and label as politically motivated.

"Nobody believes the deputies will hand them (the politicians) over to the Justice Hall," wrote Mircea Marian, a columnist for Evenimentul Zilei daily. "Their files of corruption will be lost forever."

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