Romania’s consul to Chisinau resigns amid sex scandal

13 July 2009 | 12:34 | FOCUS News Agency

Bucharest. Romania’s consul to Chisinau, Ion Nuica, resigned Monday after “Curentul” daily posted on its website several photos and footage showing Nuica having intercourse with a woman who “seems” to be an employee with the Romanian consulate in Chisinau, Romanian Mediafax news agency reports.

"Romania’s consul general to Chisinau was summoned to Romania last week and today (Monday, e.n.) he submitted his resignation first thing in the morning," Romania’s Foreign Affairs Ministry spokesperson, Alin Serbanescu, told MEDIAFAX, following questions with respect to the photos and footage posted on the respective website.

Serbanescu stressed, however, that Nuica was summoned to Romania last week for reasons unrelated to the respective images.

Romanian Catholics oppose building near cathedral

BUCHAREST, Romania (AP) - Thousands of Catholics have marched through Bucharest to protest the construction of a high-rise office building next to a cathedral.

Catholic opponents say the 19-story building has been built higher than its original plans and threatens the foundations of St. Iosif's or St. Joseph's cathedral.

Romanian Catholic leader Bishop Ioan Robu led the Sunday protest from the 19th century cathedral to the government headquarters a couple of miles (kilometers) north. Protesters prayed there and left a letter to the government.

Construction on the office building was halted in 2006 after authorities said the owners did not have all the building permits. But a court ruled June 25 that work could resume.

Romania Inflation Rate Fell in June on Slower Demand

By Adam BrownJuly 10 (Bloomberg) -- Romania’s inflation rate slipped in June, raising analysts’ expectations for further interest rate cuts, as slower lending and wage growth sapped consumption.

The annual rate fell to 5.9 percent from 6 percent in May, the Bucharest-basedNational Statistics Institute said in an e- mail today. That was in line with the median estimate of nine analysts in a Bloomberg survey.

On the month, consumer prices rose 0.2 percent after remaining unchanged the previous month.“The disinflation process continues and the contraction in domestic demand is helping the process,” Ionut Dumitru, chief economist at Raiffeisen Bank Romania, said in an e-mail. “Probably inflation will be very low in the next months. The central bank could continue to ease the monetary policy stance.”Inflation in eastern Europe has been slowing since the region fell into a recession.

Demand for consumer goods has fallen, joblessness is up and credit dried up, curbing spending.Consumption in Romania dropped 13.7 percent in the first quarter as theeconomy contracted an annual 6.2 percent, slowing annual inflation from 9 percent a year ago and 6.7 percent at the beginning of this year.At the same time, international oil prices rose in June, boosting local prices, and the leu weakened 0.7 percent against the euro in the month. A weaker leu affects telephone bills, rent and other items priced in euros and paid for in the local currency.

The Banca Nationala a Romaniei cut its main interest rate to 9 percent from 9.5 percent on June 30, citing “the outlook of continued disinflation in the coming months” and a slowdown in private-sector lending. It has lowered the rate from 10.25 percent at the start of the year.Bank ActionsThe central bank also lowered minimum reserve requirements to 15 percent from 18 percent on commercial deposits in lei and to 35 percent from 40 percent on foreign-currency deposits.

The bank next meets on August 4 to discuss any further monetary policy changes.Food prices in June rose an annual 3.5 percent while prices of non-food goods increased 6.7 percent on the year, the institute said. Services prices advanced 8.7 percent.Romania in April joined Hungary, Latvia, Belarus, Ukraine and Serbia in requesting aid from the International Monetary Fund to bolster the economy.

The IMF, the European Union and other lenders agreed to provide Romania with 20 billion euros ($28 billion) in financing.As part of the agreement, Romania is targeting a budget deficit of 4.6 percent of gross domestic product this year from a gap of 4.8 percent last year, helping ease inflation with spending cuts that include a wage freeze for state workers.To contact the reporter on this story: Adam Brown in Bucharest atabrown23@bloomberg.net

Romanian Foreign Minister Calls For 'Fair' Moldova Elections

BUCHAREST -- Romanian Foreign Minister Cristian Diaconescu has said Bucharest wants to see fair parliamentary elections held in neighboring Moldova on July 29, RFE/RL's Moldovan Service reports.

Diaconescu said on July 9 that "we would like a correct, equitable electoral process in Moldova [in which] all political parties have equal access to the public."

He refused to comment on an endorsement by Romanian President Traian Basescu earlier this week for the Moldovan opposition, which is largely pro-EU and pro-Romanian.

Ties between the two countries have been strained by Moldova's accusations that Bucharest fomented unrest in Chisinau after the controversial Moldovan parliamentary elections on April 5, which were won by the ruling, pro-Russian Communists.

Romania has denied any involvement in the demonstrations, which turned violent.

Moody's says Romania outlook stable but faces risks

BUCHAREST, July 9 (Reuters) - Moody's Investors Service said on Thursday it had kept its outlook on Romania stable, but failure to stick to an IMF-led financing deal would put downward pressure on ratings.

Moody's is the only major rating agency to keep Romania at investment-grade level, after Standard & Poor's and Fitch downgraded it to "junk" status last year because of its large macroeconomic imbalances and lack of policies to address them.

It also said the economy could contract by 5.7 percent this year, facing a "difficult recession" on faltering exports and high interest rates.

However, it said Romania would avoid calamity due to "relatively low private sector debt and less reliance on foreign trade".

Like most of its neighbours, Romania slipped into recession this year as the world crisis slashed lending and consumption and forced it to secure 20 billion euros in IMF-led aid.

"The ratings would come under downward pressure if the IMF-EU financing programme unravelled due to implementation problems, or if there were signs that the EU was becoming less inclined to support," the agency said in a credit opinion note.

It rates Romania at Baa3.

Enforced structural reforms and stronger fiscal policies would likely lead to a rise in ratings, Moody's said.

Romania targets a budget deficit of 4.6 percent under local accounting standards, but most economists say a bigger shortfall is unavoidable as the crisis hits tax receipts. Moody's sees the gap at 6 and 4 percent in 2009 and 2010, respectively.

Romania to help Oltchim buy Petrom assets -report

BUCHAREST, July 9 (Reuters) - Romania plans to help chemical firm Oltchim OLTC.BX acquire Petrom's SNPP.BX petrochemicals plant by next month, Prime Minister Emil Boc was quoted as saying on Thursday.

Constantin Roibu, the chief executive of state-controlled Oltchim told Reuters last month his company was in talks with several banks for a 70 million euros ($100 million) loan to fund the acquisition.Many analysts say the debt-laden Oltchim faces serious problems in obtaining financing, especially during a global cash squeeze that has also reduced demand for its products.

But Prime Minister Emil Boc said the government will lend a hand to the ailing company and give state guarantees for 50 million euros."The guarantee is on its way and we hope the takeover will be completed at the start of August," Boc was quoted as saying by state news agency Agerpres.

Boc also said the government wants to guarantee 80 percent of Oltchim's long-term investment plans of 400 million euros and may also consider transferring its debt into the portfolio of the state's privatisation agency AVAS.At the end of 2008, Oltchim had debt maturing this year worth of 1.1 billion lei ($365 million) and longer-term debt of about 600 million lei. Its 2008 turnover stood at around 2 billion lei and it posted net losses of 234 million lei.Oltchim works only at a third of its capacity since Romania's top oil and gas group Petrom, majority owned by Austria's OMV (OMVV.VI), halted petrochemicals production.

Oltchim needs ethylene and propylene from Petrom, which has said it is not interested in keeping the plant, in dire need of upgrades, as it is considered a non-core business.Analysts say Petrom needs to finalise the deal as soon as possible as lack of investment may result in impairments which will affect the group's profit.At 1018 GMT Oltchim shares stood at 0.31 lei, up 3.33 percent on the day, while Petrom's traded 2.13 percent higher at 0.24 lei. Both stocks outperform the bourse's main index .BETI which rose 0.5 percent in line with regional peers. (Reporting by Marius Zaharia; Editing by Greg Mahlich)

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Roma's exit 'more than racism'

BBC News

A senior Housing Executive official has said the recent departure of members of the Roma community from Belfast was linked to more than racism.

Michael Graham played a key role in facilitating the return of more than 100 immigrants to Romania.Mr Graham said he believed one of their key reasons for returning home was because they realised they were not entitled to any benefits in NI.

Housing Executive funds were used to fly the families home last month."Racism was certainly the catalyst by which the people finally determined that they wanted to go home," Mr Graham said."But I still believe that had these people been entitled to public funds, which unfortunately they weren't, their decision may have been different."More than 70 members of the Roma community who fled their homes in Belfast after racist attacks travelled back to Romania on Friday.

About 25 people, mainly women and children, had already left despite attempts to persuade them to stay.Emergency funds provided by the Housing Executive are being used to pay for the flights.Social Development Minister Margaret Ritchie said it was a "sad day" for Northern Ireland."It is a symbol of the sectarianism that still divides us and it is a marker that the only way forward is a shared future," he said."I am very disappointed that all but two of the Romanians have chosen to leave."She said she was looking at how her department could help in countering racist attitudes in the community."My thoughts are very much with the Romanians as they leave Northern Ireland today," she added."My drive is building the shared future that they and other migrant workers can live securely and happily in."Earlier this week, the police said they did not know enough about the concerns of the families who fled.

Police do not believe paramilitaries were involved in last week's attacks, which were condemned by all political parties.Barbara Muldoon of Anti-Racism Network accused the police of being slow to act.

French warn against stigmatising Bulgaria, Romania

EurActiv.com
Published: Tuesday 30 June 2009

Just weeks before the European Commission is due to publish an assessment on Bulgaria and Romania's accession to the EU, the French Senate cautioned against "stigmatising" the EU's most recent members and suggested fine-tuning the Union's Cooperation and Verification Mechanism, set up to assist the two countries after their entry.

Background:

When Romania and Bulgaria joined the EU on 1 January 2007, shortcomings remained regarding judicial reform and the fight against corruption - and in the case of Bulgaria, the fight against organised crime. These shortcomings carried the risk that Bulgaria and Romania would not be able to correctly apply Community law and their citizens would not be able to fully enjoy their rights as EU citizens.

A Cooperation and Verification Mechanism was set up to assist both countries. Moreover, the European Commission retained the right to use special safeguards. Such safeguards are included in both countries' accession treaties and can be invoked against new member states as a last resort. If used, the process could lead the EU to refuse to recognise court decisions or even freeze payments of EU funds. Also, if applied, such an unprecedented decision could badly hurt the countries' reputations.

In a turnaround compared to previous monitoring reports, where Bulgaria was invariably portrayed as the laggard in meeting EU standards on judicial reform and fighting corruption (EurActiv 24/07/09), the Commission unveiled new reports last February which depicted Romania as the slow learner this time (EurActiv 13/02/09).

The next annual reports on Bulgaria and Romania are expected in September, but no exact date has been communicated so far. The reports are prepared by the EU executive's secretariat-general under the authority of Commission President José Manuel Barroso, in agreement with Vice-President Jacques Barrot.

A Dutch minister recently asked the European Commission to consider activating safeguard clauses against Romania and Bulgaria should monitoring reports due this summer fail to acknowledge progress in fighting corruption (EurActiv 18/06/09).

In a report to the French Senate, members Pierre Bernard-Reymond (UMP, EPP-affiliated), and Michel Billout (a member of the Communist, Republican and Citizen group), state that the expected report on Bulgaria and Romania, due in September, may "raise doubts among other member states over the conditions under which enlargement has taken place".

The two rapporteurs, who have conducted extensive study visits to the two countries, also consider that the reports may be perceived by Bulgaria and Romania as "excessive stigmatisation" of the two countries. Senators Reymond and Billout also rule out the eventual use of a "safeguard clause", which would annul mutual recognition in judicial affairs between these countries and the EU, describing it as counterproductive for all sides.

As an example, the rapporteurs recall that 60 European arrest warrants were successfully issued between France and Bulgaria in 2007. The safeguard clause can be used only in the first three years after accession; that is, until 1 January 2010. But the Cooperation and Verification Mechanism (CVM) is open-ended. Romania has asked for the mechanism to be shelved, while Bulgaria advocates its adaptation. Reymond and Billout slam the weaknesses of the CVM, which in their view does not provide clear indicators of progress made.

But they are in favour of keeping the monitoring mechanism, provided that it is fine-tuned to put the emphasis on "cooperation". France, for instance, recognises the importance of twinning law-enforcement administrations, the rapporteurs point out. The French senators also advocate more determined action against organised crime at EU level, as in their view, the phenomenon does not only concern the two EU newcomers.

Reymond and Billout also write that there are lessons to be learned from Bulgaria and Romania's accession for future EU enlargements, arguing that stronger compliance should be required before accession takes place. This is already the case concerning Croatia's EU bid, they point out.

Romanian judges to protest against bonus cuts

BUCHAREST, July 8 (Reuters) - Romanian judges plan to close courts for three hours a day from Thursday to protest against pay cuts, adding pressure on the Bucharest government's efforts to contain spending and meet IMF loan conditions.

The new European Union state's judiciary is already a weak part of its administration, blamed for delays, incompetence and corruption, and seen as a major concern in Brussels.Bucharest's centre-left cabinet faces an uphill battle to cut spending, in a move to contain the budget deficit below 4.6 percent of GDP, a key requirement of the International Monetary Fund in the 20 billion euro financing deal secured in March.

As part of planned spending cuts, the government has slashed a number of bonuses paid to its administration staff, while freezing public sector wages. For judges, it scrapped a bonus for stress at the workplace, worth half of their net wages.But Justice Minister Catalin Predoiu and magistrates have said repeatedly that ill-equipped courts and low wages pose an obstacle to justice reforms.

"Tomorrow (Thursday) we will suspend activity for three hours ... and the protest will be held across the entire country," said Mona Pivniceru, president of the Romanian Magistrates Association. "Protests will continue (every day).""A stress bonus or a job bonus...is a person's pay (right) and no one is allowed to cut it," she said.The stress bonus is worth 50 percent of the net wage, which ranges between 4,000 and 5,000 lei ($1,650). Without it, judges still earn bonuses totalling up to 85 percent of the net wage.

The average wage in the Romanian economy was 1,356 lei in May.The justice minister was quoted as saying by state news agency Agerpres that the protest was "illegal" and that he will try to solve the conflict by meeting magistrates to show them the limits of the ministry's budget."I think not all magistrates understand the gravity of the financial crisis we are going through," Predoiu said.The European Commission is still monitoring progress of fresh EU members Romania and Bulgaria in fighting corruption and is set to publish a report this summer. (Reporting by Ioana Patran; Writing by Marius Zaharia; Editing by Louise Ireland)

IMF to cut Romania 2009 GDP forecast

BUCHAREST, July 8 (Reuters) - The International Monetary Fund will revise downwards its forecast for a 4 percent economic contraction in Romania this year, Bucharest's representative to the Fund in Washington was quoted on Wednesday as saying.

Like most of its neighbours, Romania slipped into recession this year as the world crisis slashed lending and consumption and forced it to secure 20 billion euros in IMF-led financial aid in March.

"We are working on a new forecast," Mihai Tanasescu told daily Cotidianul. "The (GDP) fall will certainly be deeper than that we initially estimated."

Under the terms of the IMF deal, Romania must enforce vast public sector reforms, but was allowed to keep a budget deficit target of 4.6 percent of gross domestic product this year -- in Romanian accounting standards -- barely smaller than in 2008 and far above EU limits.
The Romanian economy shrank by 6.2 percent on year in the first quarter, far worse than economists had expected. But the finance ministry has said Romania counts on flexibility from the IMF if the economic pain worsens.

Tanasescu did not comment on whether the IMF will set a new deficit target for Romania.
A mission of IMF experts will review Romania's progress in early August before the Fund approves the loan's second tranche.

Romania budget revenues down 6 pct Y/Y in Jan-June

BUCHAREST, July 8 (Reuters) - Romania reported 67.5 billion lei ($21.8 billion) in budget revenues collected from taxes in the first half of the year, 2 percent less than planned and 6 percent down on the year, the tax authority said on Wednesday.Like most of its neighbours, Romania slipped into recession this year as the world crisis slashed lending and consumption and forced it to secure 20 billion euros in IMF-led aid.

Under the terms of the IMF deal, Romania must enforce vast public sector reforms, but was allowed to keep a budget deficit target of 4.6 percent of gross domestic product this year -- in Romanian accounting standards -- barely smaller than in 2008 and far above EU limits.The IMF deficit target hinges on a forecast of 4 percent economic contraction this year.

Six-month tax receipts, which account for the bulk of consolidated budget revenues, amounted to roughly 13 percent of the government's gross domestic product forecast for this year.Romania recorded a consolidated budget deficit of 2.7 percent of gross domestic product in January-June, meeting the quarterly target agreed under the deal with the IMF.

However, first-quarter data showed a deeper than expected recession at 6.2 percent on the year, raising concerns that a bigger budget shortfall would be unavoidable as the crisis hits tax receipts.The finance ministry said Romania counts on flexibility from the IMF if economic pain worsens.Earlier on Wednesday, Bucharest's representative to the Fund in Washington said the lender will revise downwards its 4 percent forecast of economic contraction in Romania this year. A mission of IMF experts will review Romania's progress in early August.

CEZ eyes minority stakes in Romanian unit

PRAGUE, July 8 (Reuters) - Czech power group CEZ (CEZPsp.PR) launched talks to buy the
minority stakes held in its Romanian distribution unit, the power group said on Wednesday.

CEZ acquired a majority stake in Romania's distribution company Electrica Oltenia in 2005 and, as part of the privatisation deal, it got an option to buy minority stakes, CEZ spokeswoman Eva Novakova said in an email."We have now launched talks with owners of the share holdings, but since they are under way we will not comment on them or provide details," Novakova said. (Reporting by Jana Mlcochova; Editing by Michael Winfrey)

Romania Retail Sales Plunge, Led by Cars, Services

By Adam Brown

July 8 (Bloomberg) -- Romanian retail sales declined the most on record in May as lending and wage growth slowed, prompting consumers to put off buying new cars and avoid restaurants, movie theaters and other services.Retail sales slumped an annual 12.3 percent, falling for a fifth month after a drop of 9.7 percent in April, the Bucharest- based National Statistics Institute said in an e-mail today.

That is the biggest decline since at least Jan. 2006, the earliest data available. On the month, sales rose 0.2 percent.The economic recession, which has hit retail sales throughout Europe, has prompted Romanians to delay or cancel shopping trips for non-essential goods after a spending spree that drove up retail sales as much as 34 percent in 2007. Gross domestic product shrank an annual 6.2 percent in the first quarter and the drop in consumption may postpone a recovery.

“We are concerned about economic prospects for 2010,” Nicolaie Alexandru, chief economist at ING Bank Romania, said in an e-mail today. “The ability of households to consume is key in this regard and the data so far is not looking good at all.”Sales of cars dropped 44 percent on the year in May while sales from services including restaurants, hotels and travel agencies dropped 13.9 percent, the institute said. Sales of consumer goods such as clothing and home appliances fell 11.9 percent and food sales slid 4.1 percent.

Lending growth, which accounted for much of the spending increases in the past three years, slowed to an annual 15.9 percent in May from as fast as 64 percent a year ago. Wage increases slowed to 8.7 percent from more than 20 percent.

The leu has weakened about 16 percent against the euro in the past year, discouraging Romanians from buying imports, which have fallen about 20 percent this year from last year.The statistics institute started this year reporting retail sales comparisons adjusted for the difference in the number of working days between months. Figures before January weren’t adjusted.

To contact the reporter on this story: Adam Brown in Bucharest atabrown23@bloomberg.net

Romanian Sailors Kept Captive by Somali Pirates

By Gina Neagu
Epoch Times StaffJul 7, 2009

After months of uncertainty, the names of most of the crew members of the Italian ship Buccaneer, seized by Somali pirates, have been released.

The online Italian publication Liberoreporter.it revealed on Monday, July 6, the names of four of five Romanian sailors taken hostage, along with 10 other fellow Italians and one Croatian by Somali pirates in the Gulf of Aden on April 11.

According to the source, all four Romanian sailors whose names were published—Nicusor M. (chief engineer), Adrian G. (deck officer), George D. (mechanic), Marius A. (pilot)—were from the Romanian city of Constanta, while the fifth sailor was from Bucharest. All five Romanian sailors are between 28 and 35 years old.

There are over 40,000 Romanian sailors boarded on various ships around the world. This stems from the maritime tradition of Romania, which in the past owned a third of the world’s merchant fleet. In light of the economic crisis and the fact that Romania has only five commercial vessels left, Romanian sailors take out contracts on foreign ships passing through the Gulf Aden and the Horn of Africa, where Somali pirates have operated for several years.

“After the Filipino sailor community, with over 100 sailors in the hands of pirates, and Ukrainians, with 20 sailors seized in the Gulf of Aden, in the third place in the ranks of those nations most affected by the phenomenon of piracy comes Romania, with 16 sailors taken hostage,” reports Liberoreporter.it.

The Italian site has frequently published articles in recent weeks about the Buccaneer, and talks about the drama that the 16 families of the kidnapped sailors are going through, as the Italian Foreign Ministry chose to deal with the problem in a quiet way.

Italian press has recently published several articles about the crew of the Buccaneer, including telephone discussions with Somali kidnappers who pressed for negotiations with the Italian authorities to be performed directly, without intermediaries.

In an article published recently by the daily newspaper La Stampa, the father of a kidnapped Italian sailor stated that all five Romanian sailors had been transferred to shore to fishing villages by their kidnappers, while the ship remains anchored off the coast of Lasqorey village, 68 miles west of the port of Bosasso, the economic capital of the Somali region of Puntland.

Ship captain Mario Iarloi said on June 10 that six of the crew members had been transferred to shore. Pasquale Vollaro, the father of one of the Italian sailors, said only the 10 Italian sailors are still on board and are being treated very badly by their kidnappers.

“The pirates moved the Romanian sailors to shore and kept on board the ten Italians, whom they treat like animals. My son told me they only get a little rice every day, they have no drinking water and they have to boil the water they get because it is dirty. He is afraid they will be killed, he is terrorized,” Vollaro said.

Early June, ship captain Mario Iarloi contacted the newsroom of Corriere della Sera and told reporters that the crew has very limited reserves of food, drinkable water, and medicine and people are forced to live without air conditioning in temperatures that frequently top 104 F.

“We are exhausted. Please rescue us from this ordeal, or we’ll ask the pirates to kill us,” the ship's captain said over the phone.

The Italian Foreign Ministry has repeatedly stated that negotiations for the release of the crew are conducted through political channels, via Somalia, not directly with the pirates. Additionally, he stated that the possibility of military action to force the release of the crew or getting the crew released through payment of a ransom has been excluded.

He has asked the Italian and Romania press to be more discrete in this case, not to endanger the sailors’ lives by circulating information about them.

The ship Buccaneer is the first Italian flag sequestered by Somali pirates, and the press speculated in April, during the first days after the seizure, that Rome would obtain a quick release of the crew due to their influence in the former Italian colony. These comments were fueled at that time due to the optimism shown by some senior Italian officials such as Premier Silvio Berlusconi, the President of the Chamber of Deputies Gianfranco Fini, and the head of diplomacy Franco Frattini.

Romania says backs Moldovan opposition

Reuters

Romania's president risked antagonising Moldova and Russia by saying he hoped the pro-Western opposition would make gains in Moldovan pollsRomania's president risked antagonising Moldova and Russia on Tuesday by saying he hoped the pro-Western opposition would make gains in this month's Moldovan parliamentary election.

Wading into a sensitive campaign, President Traian Basescu told a group of foreign journalists: "I hope that democratic forces, the current opposition, get a better positioning after the 2009 elections."

He added: "We consider that after the elections, irrespective of who is in power, (bilateral) relations would re-enter a normal path. No one can change our goal to bring Moldova closer to the European Union ... we have a duty towards the Moldovan population."

The last election in April produced a Communist victory and sparked violent street protests, which the authorities said were fomented by Romania. Bucharest denied this.

Russia said at the time that the riots were aimed at undermining the sovereignty of Moldova, and pointed the finger at forces favouring union with Romania.

Wedged between Ukraine and Romania, Moldova is among a group of former Soviet republics where Russia and the EU are waging a competition for influence that has fanned tensions between them.

Most of Moldova was once part of Romania and the two countries share a common linguistic heritage, but the country of 4.3 million also has longstanding links with Russia.

Three liberal opposition groupings, broadly pro-Romanian in outlook, won 41 seats in the April election. The Communists won 60 and fell one vote short in parliament of securing the election of communist Prime Minister Zinaida Greceanii as president, an outcome that triggered the new general election which is set for July 29.

Communist President Vladimir Voronin accused Romania, a member of the EU since 2007, of whipping up the April violence and said opposition parties were bent on having their country swallowed up by its western neighbour.

He said opposition groupings had done nothing to distance themselves from the "unionist" arguments of Romania's leadership which has offered Moldovans free education and passports -- about 800,000 people have applied.

Basescu would not say how many applications were currently pending but said: "We evaluate that in time, no more than 2 million (Moldovan) citizens would regain Romanian citizenship." This did not represent a danger from the point of view of emigration, he said.

EU tells nations to curb deficits

BRUSSELS—The European Union on Tuesday gave Poland, Hungary, Romania, Latvia and Lithuania two- and three-year deadlines to curb their budget deficits, which have been swollen by the world financial crisis and its fallout in Eastern Europe.

EU finance ministers gave Poland and Latvia until 2012 to bring the yearly gap between government spending and revenue under the maximum 3 percent of gross domestic product.
They set a 2011 deadline for Hungary, Romania and Lithuania.None of these countries use the euro but they are still required to stick to budget limits in order to minimize the differences between EU economies.

Government debt and deficits have soared over the last year as the financial crisis forced them to spend heavily to rescue banks, shore up their currencies and pay out more in welfare benefits while tax revenues shrank during the downturn.Hungary, Latvia and Romania have tapped billion euro (dollar) bailouts from the European Union, the International Monetary Fund and others to help them pay the bills.

These come with strict conditions attached that require them to make harsh cutbacks.Latvia had to approve spending cuts last month in order to get a second slice of its EU bailout, worth euro1.2 billion, that the EU will borrow on the market and lend to the Baltic nation before the end of the month.EU Economic and Monetary Affairs Commissioner Joaquin Almunia said he knew "the efforts are huge" but said Latvia had to stick strictly to the promised cuts.

Neither Hungary or Romania have ever stuck to the 3 percent limit since they joined the EU. Hungary entered in 2004 and Romania in 2007.Euro member Malta was also given until 2010 to reduce its deficit. Ministers said it could not get a longer deadline because overspending was not linked to the financial crisis.

Romanian president hopes Moldova opposition wins

By ALISON MUTLER
Associated Press

Romania's president said Tuesday he hopes pro-Romanian opposition forces will prevail in Moldovan elections.Traian Basescu said in a meeting with foreign journalists that he wants the "democratic forces, the opposition to the current government to have better results after the election."

The ruling Communist Party that won the April 5 ballot in Moldova is generally seen as pro-Russian. Moldovan authorities have been criticized by diplomats and rights groups for mistreatment of protesters in anti-government rallies and a lack of press freedom.

Basescu's public remarks about the upcoming vote will likely irk Moldovan Communist leaders who have already accused Romania of backing violent ant-government protests after the elections. Romania strenuously denied the charges.

At least two people died in the protests in the Moldovan capital. The opposition says the elections were rigged. Protesters stormed the Parliament and president's offices and there were mass arrests. Rights groups said some protesters were beaten and forced to sign statements while under arrest.Relations between Romania and Moldova have deteriorated since then. Moldova imposed visa requirements on Romanians traveling to Moldova.

Moldova holds elections on July 29.

Romania GDP may shrink by 6 pct in '09 -Econ Min

BUCHAREST, July 7 (Reuters) - Romania's economy could shrink by as much as 6 percent this year, as the world crisis batters the European Union state's exports, Economy Minister Adriean Videanu said late on Monday.Like most of its neighbours, Romania slipped into recession this year as the global crisis slashed lending and consumption.

It was forced to secure 20 billion euros in IMF-led aid.Under the terms of the IMF deal, Romania must enforce vast public sector reforms, but was allowed to keep a budget deficit target of 4.6 percent of gross domestic product this year -- under Romanian accounting standards -- barely smaller than in 2008 and far above EU limits.The IMF deficit target hinges on a forecast of a 4 percent economic contraction this year.

So far, Bucharest's centre-left government has said it would stick to the agreed shortfall target, but first-quarter data showed a deeper than expected recession at 6.2 percent on the year, raising concerns that a bigger gap would be unavoidable.'I think that the most pessimistic scenario could be -6 percent,' Videanu told a late night show on local television station Realitatea.Videanu said that if the economy shrinks by more than the initially forecast 4 percent, the budget deficit would rise, but he added investment spending would not be hurt.

Earlier on Monday, Prime Minister Emil Boc said the deficit could rise only to allow investment spending.'I have every determination to discuss with the IMF and the European Commission about raising the budget deficit, but only for infrastructure,' Boc said in a statement after meeting representatives of employers associations.'I can assure you the money will not go in plasma TVs, awards, bonuses or other such things. However, we will not touch the flat tax or the VAT.'Earlier this month, a ruling coalition party chief said Romania's government may raise this year's budget deficit target if the economic situation worsens.

Romania leftists push for major fiscal stimulus

BUCHAREST, July 6 (Reuters) - Romania's ruling coalition Social Democrats proposed on Monday spending 14 billion euros ($20 billion) on investment and fiscal incentives to counter the impact of the global economic crisis.

The 24 measures, which the party plans to discuss with their Democrat Liberal partners, envisages spending on infrastructure, housing and farming, rebates for pay-on-time taxpayers and incentives for employers who create new jobs.

The Social Democrats also proposed scrapping a corporate lump sum tax which the government has just introduced in a bid to bring the grey economy to the surface. The plan supports a cut in the value added tax for staple foods and cutting energy tarriffs for household consumers by a third.

'It is good to have proposals that focus on investment. But we've been hearing about investment plans for a while and nothing is actually done,' said Nicolaie Alexandru-Chidesciuc, ING Bank's chief economist in Bucharest.

'It isn't good at this time to adopt measures that ... help companies or the population because we cannot afford these expenditures. They may help the real economy in the short term but ... lead to tax hikes in the longer term.'

Romania has slid into recession this year as the world crisis slashed lending, consumption and demand for Romanian goods abroad, and forced the EU member to secure 20 billion euros in IMF-led aid in March.

The two ruling parties form an uneasy coalition, riven by disputes and policy differences, with the leftists seen as less fiscally restrictive. However, they command some 70 percent of seats in parliament, allowing them to push through difficult legislation.