Monday, April 21, 2014

Romania aims to exempt heavy industry from green energy costs

BUCHAREST, April 17 (Reuters) - Romania plans to exempt large industrial energy users from paying up to 85 percent of their renewable energy costs for 10 years, the economy ministry said on Thursday, hoping to avoid the threat of job cuts in an election year.

The draft decree, now up for public debate, would be the latest in a wider set of measures the leftist government has enforced this year to help industrial consumers cope with high power and gas bills.

Industry's energy bills have been driven higher largely by the ongoing deregulation of electricity and gas markets and by a generous support scheme for renewable energy producers.

The scheme gives developers green certificates for each megawatt generated and forces power suppliers and large industrial users to buy them based on a gradually increasing annual quota set by the country's energy regulator.

Green energy investors gain once by selling certificates and again when they sell their electricity. The government has already cut back the scheme.

"It is important to create the conditions necessary to maintain local industry output," Economy Minister Constantin Nita said in a statement.

The government decree would grant the exemptions, ranging between 40 and 85 percent of renewable costs, but impose conditions on energy-intensive firms such as not cutting jobs and promoting energy efficient measures.

The green energy support scheme, once deemed too generous by the European Commission, has brought foreign investors to Romania, particularly to wind energy, including Czech energy company CEZ and Italy's Enel.

But large industrial consumers have repeatedly warned high energy bills could lead to production cuts and layoffs.

The economy ministry said energy-intensive firms accounted for about 20 percent of the country's gross energy consumption and generated around 760,000 jobs in 2012. (Reporting by Luiza Ilie, editing by David Evans)

Romania: claims over abuse of mentally ill people puts spotlight on EC’s funding millions

By Chris Harris

A probe has been launched amid allegations that abuse of vulnerable people in Romanian institutions is at ‘crisis levels’.

Mentally ill people are being force fed, deprived of light and subjected to physical and mental violence, according to a disability charity.

The Mental Disability Advocacy Center (MDAC) has slammed the European Commission for allegedly providing millions of euros of funding to such institutions.

The European Commission (EC) said it had begun an investigation into the allegations, but said it had not been approached about any human rights breaches.

Euronews contacted the Romanian government for comment, but it has not responded. A minister told Al Jazeera, who detailed the alleged abuses in its People and Power series, he was outraged and that inspectors would be sent to investigate.

Al Jazeera’s report comes after the Centre for Legal Resources published a report on its monitoring visits to Romanian institutions. It said it had observed situations which amount to ‘torture’ and ‘inhuman and degrading treatments’.

MDAC says EC funding of at least 24 million euros was propping up 50 residential institutions in Romania. It said thousands of people with disabilities were being ‘warehoused’ in such institutions, segregated from society and subjected to inhumane conditions.

Oliver Lewis, executive director of MDAC, said: “Dumping people with disabilities in institutions is a gross human rights violation.

“Conditions inside these institutions are often deplorable. Force feeding, light deprivation, physical and mental violence and deaths have all been uncovered in numerous institutions across Romania. Many have been funded by the European Commission.”

MDAC has also called on the EC to close all institutions that segregate disabled people from society.

Shirin Wheeler, an EC spokeswoman for regional policy, said it would shift its funding focus towards initiatives which encourage independent living.

She added: “It’s important to stress also that in the next funding period, 2014-2020, de-institutionalisation will be the main focus and even a condition for funding . No big, traditional institutions will receive money in the future .

“Regarding individual projects we have been approached by no NGO so far alleging specific projects supported by EU funds are involved in breaches of human rights.

“But following this media report we have reacted immediately by asking various departments of the Commission to investigate the project in question.” EU elections in Romania: a test before a bigger battle

For political forces in Romania, the European elections are first and foremost a test before the presidential election, to be held later this year. EurActiv Romania reports.

Romania is preparing for its third electoral campaign for the European parliament. On 25 April, a full month before Election Day, all the parties and all the independent candidates who have met the necessary legal requirements will begin competing for the 32 seats that Romania will have in the new legislature of the European Union.

Although the European agenda is filled with pressing problems spanning economic issues, debates on freedom of movement, and Euroscepticism, to issues related to Russia, Ukraine and, more recently, Moldova and Transnistria, the Romanian electoral campaign will more likely be focused on internal politics.

A complicated relationship

Romanians will vote to elect a new President in November 2014. The country’s institutional framework splits executive power between a government confirmed by the parliament, and a president elected through the popular vote. As a consequence, both institutions play an immense role in shaping Romanian politics, creating complex tensions between major players. This is why the results of this year’s presidential elections will be of particular importance.

Therefore, political parties view the EU elections as an early opportunity to strengthen their position, and to gain public support for the bigger battle. The ruling center-left coalition will search for ways to promote its political agenda, and counteract all opposition criticism, while the right-wing parties will look for ways to get public attention, and improve the chances of their candidates in the presidential election.

Both the centre-right president, Traian Băsescu, and the Socialist prime minister, Victor Ponta, have publicly addressed the security risks surrounding Ukraine, and more recently in Transnistria, the breakaway region in another Romania’s neighbor, Moldova, where Romanian is widely spoken. But, no matter how big these challenges may appear, the public agenda is primarily saturated with accusations of corruption.

The Romanian political landscape

The 2012 parliamentary elections were won by a coalition named Social Liberal Union (USL) an alliance between Ponta’s Social democratic Party (PSD), the National Liberal party (PNL) of Crin Antonescu, and two smaller forces, the National Union for Progress of Romania (UNPR) and the Conservative Party (PC).

Last February, the coalition was dissolved due to tensions between PSD and PNL, but Ponta retained his parliamentary majority through an alliance with PC and UNPR. Their former partner, the PNL, shifted towards the opposition, while, at the same time, a newly formed right-wing political party, Popular Movement, managed to attract several former members of the Democratic Liberal Party (PDL), including the support of Băsescu.

Parties and candidates line up for MEP seats

The list of the largest political force today, PSD, is led by current MEPs Corina Creţu and Cătălin Ivan. Daciana Sârbu, also a current MEP and wife of Prime Minister Ponta, is on the eligible 7th rank. The PDL has kept its prominent MEPs for the eligible positions - Theodor Stolojan, Monica Macovei, formerly Minister of Justice, Marian-Jean Marinescu, vice-chairman of the EPP.

Similarly, in the case of the liberal party (PNL) and of UDMR, current MEPs top the list: Norica Nicolai (PNL), Renate Weber (PNL), Adina Ioana Valean (PNL), Iuliu Winkler, and Csaba Sobor.

Surprisingly, Elena Băsescu, the daughter of president, a PDL MEP who switched to PMP, will not run for a new term. From this party, the first three candidates will be MEP Cristian Preda, Siegfried Muresan, European People's Party Political Advisor in charge of Economics and Social Policy, and Teodor Baconschi, formerly Minister of Foreign Affairs.

The electoral race will also feature lesser-known parties, that have yet to make themselves noticed in the Romanian political landscape, such as the Socialist Alternative Party, the Social Justice Party, and the National Alliance of Farmers. The Green Party, and the Ecologist Party of Romania, will also run for seats in the European Parliament.

The final political party contending in this year’s elections will be the Greater Romania Party (PRM), a nationalist party that won 2 seats in the European Parliament, in 2009.

Additionally, 8 independent candidates have enlisted in the electoral race. [More details in this document]

The finalization of the list of candidates has been a complicated process, as the Central Electoral Bureau has rejected several political parties and independent candidates. Most of them have contested the decisions of the Bureau at the Tribunal of Bucharest. Ultimately, Bucharest’s Court of Appeal overturned the decisions, and the parties and independent candidates were allowed to run in the elections.

The most notorious case was that of former PNL senator Mircea Diaconu. The National Agency of Integrity prohibited him from participating in the election. In the end, though, the court recognized his right to run for a seat in the European Parliament, and the Electoral Bureau was forced to overturn its initial ruling, and confirm his candidacy.

Thursday, April 17, 2014

Romanian Orthodox MEP candidate campaigns on anti-gay ticket

Iulian Capsali, a Romanian Orthodox priest, has gathered the necessary signatures to be registered as independent candidate for the European elections, the Romanian press reports. He presents himself as “the candidate of the Romanian family”, campaigning against abortion and against “homosexual culture”.

Capsali admits that the Orthodox Church has helped gathering 120, 000 signatures for his registration as an independent candidate. Romania is one of the seven EU countries where independent candidates are allowed to compete in European elections. These include also Bulgaria, Cyprus, Estonia, Ireland, Malta and the United Kingdom.

In Romania, independent candidates for the European elections must provide at least 100, 000 signatures. Since 1979, there have been twelve European Parliament elections in which independent candidates have obtained over 2% of the vote. So far independent candidates have obtained an EP seat on 12 occasions. In Romania, the daughter of President Traian Băsescu was elected as an independent MEP in the last 2009 European elections, in what was seen by observers as a transfer of votes from her father’s party PDL to her list [read more].

Capsali, who lives in a three-bedroom apartment with his wife and his nine children, say he decided to be a candidate when a Protestant priest of Romanian origin from the USA, Peter Costea, announced his intention to run for MEP.

“When I saw that he is a candidate, I said to myself that an Orthodox country should have an Orthodox representative”, Capsali says, as quoted by the daily România liberă. Costea, too, is running on an independent ticket, and has claimed to be the richest Romanian candidate, with a personal fortune of €1.6 million which he earned as a lawyer in the USA.

Capsali says he has normal relations with Catholics, but not with Greek Catholics, which he says are “aggressive” against the Orthodox. He also says that he is not bothered by the fact that the Romanian Orthodox Church prohibits its priests from party policies, or electoral campaigning, adding that he relies on the Church to bring him votes.

Asked about his motivation, Capsali says that he wants to be an opponent in the European Parliament of those who contest the family, and named the socialists, the neo-Marxists and the Greens as detractors of the traditional family values. “Even Mr. Barroso has been a Maoist in his youth”, he said, referring to a well-known detail of the biography of the current Commission President.

The “homosexual ideology” leads to the destruction of the family at global level, Capsali says.

“They want to be given some rights at the expense of our rights, of the Christian families’ rights. The famous Lunacek report [Ulrike Lunacek is an Austrian Green MEP, author of the LGBT Roadmap report] says that a child at birth doesn’t have a clear identity. That it is something fluid. And that family, culture, the environment give the child its sexuality, which is a fallacy. They says boys should be wearing skirts”, Capsali says.

The Romanian Orthodox Church is by far the biggest religion in the 21 million person country, but it has so far stayed out of politics. Anti-gay feelings are also strongly rooted in Romanian society. Political pundits say that the attempt to send an Orthodox Church MEP to Strasbourg is in fact a test for the possibility to set up an Orthodox political party for the national elections in 2016.

In the European Parliament, there have been attempts to create some sort of “Orthodox unity” involving MEPs from Greece, Cyprus, Bulgaria and Romania, but not much has been achieved.

Romanian poet, dissident Nina Cassian dies

BUCHAREST, Romania - (AP) -- Romanian poet and translator Nina Cassian, who obtained political asylum in the United States after the Communist-era secret police found her critical poems scribbled in a friend's diary, has died in New York City. She was 89.

Her husband, Maurice Edwards, told The Associated Press she died at home Monday from a heart attack.

The Securitate found her poems in 1985 in the diary of Gheorghe Ursu, who was questioned and later died after being beaten by a fellow prisoner. Cassian, then visiting the United States, was granted asylum.

In 2003, the Securitate officers who ordered Ursu's beating were sentenced to 11 years in prison.

Romanian authorities confiscated Cassian's apartment in Bucharest and her assets after she was granted asylum and her books were removed from bookshops.

She married Edwards, an author who was then the Brooklyn Philharmonic orchestra's artistic director, in New York when they were both in their 70s, he said.

Born into a Jewish family in the Danube port of Galati in 1924, Cassian joined the Communist Youth Wing when it was outlawed by the pro-Nazi government. She said she was attracted by the ideas of equality and lack of racial prejudice.

She debuted with "Scale 1:1" in 1947 which was badly received by the critics because it ran against the Socialist grain of the time. She then wrote a series of books that were flattering to the regime, as did many Romanian writers, arguing it was the only way they could survive artistically.

Romanian President Traian Basescu sent his condolences to her family, hailing her as a poet, writer, translator and songwriter appreciated in Romania and the US.

"Nina Cassian, who lived, loved, wrote, smoked, drank, and played more than any of us has gone - simply, swiftly, at home, the way she had hoped to go," said documentary maker Mona Nicoara, a friend.

"She had always been fragile, one way or another - yet it was hard to think of her as anything short of immortal."

Cassian also wrote children's books and translated Shakespeare, Moliere and Bertolt Brecht, and her work was published in The New Yorker, The Atlantic Monthly and other publications.

She wrote 50 books, including a volume of poems in English in 1998 called "Take my word for it," and "Continuum" in 2008. Her last book was the 2013 "C'è modo e modo di sparire" -- a compilation of her poetry between 1945 and 2007 translated into Italian.

She is survived by her husband. A memorial service will be held Tuesday at the Riverside Memorial Chapel in New York before the ashes are returned to Romania.

Tuesday, April 15, 2014

Romanian villagers take on Chevron over plans to drill for shale gas

Monday, April 14, 2014
By Isabelle Wesselingh, AFP

PUNGESTI, Romania--U.S. energy major Chevron, shielded by barbed wire, under police protection and under fire from egg throwers, is in trouble in Romania with villagers angry at its drive to drill for shale gas.

Opposition is fierce in the tiny remote village of Pungesti near the border with Moldova which has become a symbol of hostility to the environmentally controversial techniques of extracting shale gas.

“In other countries, I have not experienced this type of protest,” said grim-faced drill site-manager for Chevron, Greg Murphy.

His words were almost drowned out by cries of “stop Chevron,” “thieves,” and “please leave” from dozens of demonstrators at the wire barriers as he showed journalists the site in the northeast of the country.

Various new techniques for extracting oil and gas, notably “fracking” involving the injection of water and chemicals deep into rock to release reserves, has lead to booming production in North America.

The flows of this cheap energy are causing upheaval on world markets in what the International Energy Agency describes as an energy revolution.

Demonstrators Disrupt Project

Chevron has broadened its attention to potential reserves in eastern Europe, especially in Poland and Romania.

But the company's attempts to establish its first exploration well in Romania were suspended twice at the end of 2013 owing to demonstrations by villagers.

Now the site is a “special security zone,” and people in the area have to show identity papers.

Chevron has gone on a charm offensive with an “open day” bussing the media pack directly into the site in coaches to avoid contact with the local people.

But villagers outmaneuvered the minders, made their way across fields and turned up uninvited to vent their anger as the Chevron executives showed journalists around.

One of the coaches came under fire from eggs. “We thought Chevron executives were inside,” a demonstrator told AFP later.

Chevron's country manager in Romania, Tom Holst, held that the objectors did not represent feeling in Pungesti, which includes several hamlets nestling in hills.

“I would say that people of Pungesti are very anxious for this project. There are benefits to be had and those benefits are jobs. There are approximately 60 locals who are working here on the project. About 30 from Pungesti,” he said.

“Given the recent events in the Ukraine, countries are very, very concerned that they have energy security and that they are not dependent on imports,” he said referring to Russian intervention in Crimea and a big increase in the price of Russian gas for Ukraine.

Romania, unlike many countries in eastern and western Europe, is not heavily dependent on Russian gas since it produces gas itself, and last year imported from Russia only about 10 percent of its supplies, according to financial newspaper Ziarul Financiar.

But the main concern which drives opposition to the drilling is that fracking technology could seriously damage the environment below and above ground.

On this, too, Holst was reassuring.

“This is an exploration well,” he said. “Hydraulic fracturing will not be used.”

But many local people object that if the drilling finds gas, it will be only a matter of time until fracking techniques are used.

Their homes bear banners saying “I don't want fracking” or “Stop Chevron.”

Cows, Goats and Water

Mariana Morosanu, a 33-year-old local farmer who has cows, goats and chickens, referring to a common concern that underground water reserves could be contaminated, asks: “If it's not dangerous why did France ban fracking?”

She said: “My child passes through the garden and asks me: will I still be able to pick fruits, will the grass still grow? He looks at the hills and he asks me if they will remain this beautiful if Chevron starts drilling. I don't know what to answer ... People protest but Chevron goes on with its plans.”

Catalin Scantei, a carpenter had the same concerns, and pointed to cracks in his house which he alleged had been caused by heavy traffic of lorries carrying drilling gear.

“Before people were calm, they lived their lives,” he said. “Here in the village we work the fields and grow animals. But now if they poison our water and everything, what will we do?”

But the objecting villagers target the root of their wrath at Romanian officials, accusing them of “betrayal.”

The Social Democrat Party of Prime Minister Victor Ponta, when in opposition, opposed exploration for shale gas but is now fervently in favor.

“Unfortunately, our politicians do not care about the population,” Mariana asserted.

For Chevron, Holst was confident: “We expect that within the next two to three weeks, the drilling operation will commence here in Pungesti,” he said.

Romania's forestation level well bellow EU average

April 14, 2014
Source: IHB/AGP

Romania has a low forestation level, of only 29 percent, compared with the 40 percent average of the European Union members, shows a study presented on Thursday by Academician Victor Giurgiu, in the international symposium 'Woodland strategies in European countries,' organized by Romsilva, Consilva and the European Council of Foresters, the Romanian media agency 'Agerpress' reports.

According to the study, the forestation level of Romania's territory is also very low compared with other European countries with similar natural conditions, such as Slovenia, with 62 percent forest areas, Austria, with 47 percent, Slovakia, with 41 percent. Academician Giurgiu explains this situation through the low level of forest administration and with the excessive dissolution of the stock of wood.

'We are confronted with an excessive dissolution of the forest property. At present, there are about 900 thousand owners, following the unreasonable reconstruction of the ownership right, and this process is still going on, Romania having become one of the EU countries with the most small forest estates per thousand inhabitants, without having managed to merge these owners' associations. There are areas of approximately 500,000 hectares of woods not benefitting from forestry administration or services, to which other fraudulent forest retrocessions are added, mainly in Transylvania, Valea Trotusului, Banat,' Academician Giurgiu showed.

He underscored that 'there is a very reduced concern for the afforestation of the spoiled lands, three million hectares at present, for the creation of the national system of windbreaks, the harnessing of the torrential hydrographic basins and the promotion of ecologic technologies for wood exploitation.'

The study also reveals that Romania is one of the EU countries with the highest share, 50 percent, of forests devoted to the protection of the environment factors, water, soil, climate and biodiversity. In terms of the wood volume existing in the forests, over two billion cubic metres, Romania ranges among the first four countries in the European Union.

Friday, April 11, 2014

Romania keeps ancient tradition of bee medicine alive

Agence France-Presse 
April 10, 2014

Bee venom to combat multiple sclerosis, pollen for indigestion, honey to heal wounds -- the humble bee has been a key source of alternative medicines since ancient times, and Romania is working to keep the tradition of "apitherapy" alive.

The tradition goes back to ancient Greece when Hippocrates applied honey to treat wounds, and the Romans saw pollen as "life-giving".

In the past of India, China and Egypt, a resinous substance collected by bees from the buds of certain trees, known as "propolis", was popular as an antiseptic.

"The hive is the oldest and healthiest natural pharmacy," said Cristina Mateescu, director general of the Institute for Apicultural Research and Development in Bucharest.

Today in the wilderness of Romania's Carpathian mountains, honey bee products are still a familiar part of traditional medicine.

"In my village, my great-grandmother was a healer and used products from beehives. She inspired me," Dr Mariana Stan told AFP.

Having spent years as a conventional doctor, Stan now practises in Bucharest as a "apitherapist" -- using bee products "which give slower but longer lasting and more profound results".

In a country still infused with folk culture, several families continue to use propolis against sore throats, as well as honey and pollen to boost the immune system.

- Apitherapy pioneer -

Every town in Romania has its "plafar" -- natural pharmacies selling products made from plants, honey, beeswax and propolis.

"Romania is a pioneer of apitherapy, which it recognised very early as a component of scientific medicine," said US professor Theodor Charbuliez, head of the Apimondia Commission of Apitherapy, a group that brings together thousands of practitioners from around the world.

Modules on apitherapy have started to work their way into more conventional medical classes and extracts from propolis developed by the Apicultural institute into recognised medicines.

Founded in 1974, the institute employs 105 people who look after local bee colonies and sell around 30 approved products.

A new range even seeks to treat cats and dogs with bee-related products.

Bucharest also boasts an Apitherapy medical centre, the world's first, which opened in 1984.

Scepticism remains among the regular medical community in the absence of scientific studies about the effects of bee venom, but many users are full of praise and welcome the cheap costs and environmentally friendly approach.

Doina Postolachi comes twice a week to the medical centre to receive injections of bee venom, or "apitoxin".

The 34-year-old poet says the injections have allowed her to "rediscover hope" in her fight against multiple sclerosis.

"For a year, I could no longer walk or get into my bath. My feet were stuck to the ground. But today, the venom treatment has given me back strength in my legs. I walk, I can take baths," she said.

She said she has never wanted any regular pharmaceutical treatments "which come with numerous side effects".

- Bees do wonders -

There has been mounting interest across the world in apitherapy.

In 2013, Washington University in the US city of St Louis published a study on the efficacy of milittine, a toxin contained in bee venom, in countering the AIDS virus.

In France, thousands of patients have benefited from bandages treated with honey at the abdominal surgery department of Limoges hospital.

Bee products are also infiltrating the cosmetics industry, used in skin-toning and anti-wrinkle creams.

Part of the appeal rests with the natural and organic image of bee products.

"In Romania, we have the chance to maintain an unspoiled nature," said Cornelia Dostetan, a member of the National Apitherapy Society.

Under Communism, poverty meant that pesticides were rarely used and the country has never shifted to large-scale monoculture forms of agriculture. The result is that Romania retains a great diversity of flora, said Dostetan.

Certified organic, the Romanian brand Apiland, a specialist in raw pollen, has launched its products in France and Italy.

According to the last agricultural census in 2010, Romania counted 42,000 beekeepers and more than 1.3 million colonies of bees.

Postolachi says she looks on the bees with "immense gratitude".

"These miniscule beings do wonders."

Romania presses for NATO redeployment over Ukraine crisis

Agence France-Presse

NATO should redeploy its forces in eastern Europe and take a firm stand to prevent a contagion of the Ukraine crisis, Romania's foreign minister urged in an interview Thursday with AFP.

"Romania has concrete expectations of a redeployment and an eastward repositioning of NATO's naval, air and ground forces," Titus Corlatean said.

"The Black Sea region must be a top priority for NATO and the EU," he stressed.

Bucharest "is extremely concerned over developments in Ukraine which have a serious impact on international security," Corlatean said, stressing his country is "on the frontline".

Romania, a member of both the European Union and the North Atlantic Treaty Organisation, shares a border with Ukraine in the east and in the north.

In recent days pro-Kremlin activists have seized government buildings in several cities in Ukraine's east, declaring independence and vowing to vote on splitting from Ukraine.

The US has accused Moscow of trying to "create chaos" to justify a military intervention like in Crimea.

"Our expectations towards Russia are clear and firm: it should engage in a political dialogue and avoid escalation," Corlatean stressed.

EU and NATO should "stand firm in order to stop potential risks of contagion of the crisis from Odessa in Southern Ukraine to Transdniestr", a pro-Russian breakaway region in Moldova.

Trasndniestr, a strip of land on Moldova's eastern border, broke away from the rest of the country in the wake of the 1991 fall of the Soviet Union but is not recognised by any other state.

On Monday, its leader, Yevgeny Shevchuk, said his dream would be to see the region "together with Russia".

Moscow maintains thousands of troops there for years against the will of the pro-Western Moldovan government.

"We hope that a political dialogue will prevail", Corlatean insisted saying Russia could show its good will by participating in a new round of negotiations planned next week to solve the Transdniestr situation.

"It is important that these talks take place even if they are delayed because this will show if Moscow is more open on the matter or not.

"We have no interest in a clash between the European Union and Russia", but Corlatean warned that if Moscow choses escalation, "further sanctions are still an option".

And the gas issue should not be a reason to "forget about the fundamental values of international law".

"There is a lot of talk about Europe's dependence on Russian gas but Russia is also depending on European markets" to sell its production, Corlatean said.

"Russia could have an interest in listening to what Europe wants on Ukraine", he says.

President Vladimir Putin on Thursday sent a letter to leaders of 18 European countries, warning them Russia could cut gas supplies to Ukraine.

But in what might be an overture to de-escalate the crisis, Putin also said that "Russia is prepared to participate in the effort to stabilise and restore Ukraine's economy", but only on "equal terms" with the EU.

Romania caps green energy quota to help large industrial firms

BUCHAREST (Reuters) - Romania's government capped the amount of renewable energy that large industrial consumers must buy this year in a move to help offset their high energy costs and stave off the threat of job cuts ahead of elections later this year.

The cap is part of a wider set of measures the leftist government plans to enforce this year to help industrial consumers, who have repeatedly warned that high power and gas prices could lead to production cuts, layoffs and even plant relocations.

However, the measure also boosts uncertainty for private investors in the electricity and gas sectors, which could scare off badly needed investment. The government has already lowered its support scheme for renewable energy projects.

The support scheme gives developers green certificates for each megawatt generated and forces power suppliers and large industrial users to buy them based on a gradually increasing annual quota set by the country's energy regulator.

Green energy investors gain once by selling certificates and again when they sell their electricity.

On Wednesday, the government said it capped the annual quota at the 2013 level of 11.1 percent of gross power consumption.

The incentives, which have been in place since 2012, were once deemed too generous by the European Commission. But they have also brought droves of foreign investors to Romania, particularly to wind energy, including Czech energy company CEZ, Italy's Enel or Energias de Portugal.

The renewable support scheme is not the only factor pushing energy prices higher. The government is also in the process of deregulating its gas and power markets in stages, as agreed under an aid deal from the International Monetary Fund and the European Commission.

Romania has put off deregulation for years to protect voters in a country where the average individual income is roughly $500 a month. For millions of Romanians and some industrial consumers tariffs are capped below market prices.

(Reporting by Luiza Ilie; Editing by Susan Fenton)

Tuesday, April 8, 2014

Romania could earn billions by integrating its Roma, World Bank says

(Reuters) - Romania could enjoy a more productive economy and gain hundreds of millions of euros a year in tax receipts if it integrated its young and impoverished Roma minority, a World Bank study showed on Monday.

Human rights groups have criticized Romania - home to up to 2.5 million Roma, or roughly a sixth of the population - for not doing enough to improve their living standards or job prospects.

The government in Bucharest commissioned the study to help it reach poverty reduction targets agreed with the European Commission, which has earmarked funds in the next EU budget for integrating the Roma better across the entire region.

The Roma are Europe's largest ethnic minority. Out of an estimated 10-12 million, some six million live in the EU. Despite the fact that EU countries have banned discrimination, many are victims of prejudice and social exclusion.

In Romania, nine out of 10 live in severe material deprivation, the study said. Children under 14 years make up almost half of their number and only a third of Roma boys will still be in school at 16, and even fewer girls. A third of Roma who seek work will experience discrimination.

If Roma unemployment rates fell and wages rose, Romania could reap productivity gains between 887 million euros and 2.9 billion euros per year - up to 2 percent of GDP - and up to 675 million of extra taxes, the study found.

A better educated Roma workforce would also fill an employment gap in the EU's second poorest state, where the population has shrunk and aged rapidly since the fall of Communism in 1989, as younger Romanians left in search of a better life elsewhere.

"Inadequate education and skills and poor health hamper one's access to earning opportunities," said Kosuke Anan, a World Bank expert and co-author of the report. "At the same time, the lack of earning opportunities results in insufficient resources."

In neighboring Hungary, Roma number some 600,000-700,000, or around 7 percent of the population. As in Romania, most are unemployed, poor and relatively uneducated.

Mistrust among Hungarians towards the Roma has been fuelled by the far-right Jobbik party, which won an unprecedented 21 percent in Sunday's national election.


Many Romanian Roma have flocked to western European cities since the country joined the EU in 2007. According to police, some are involved in petty crime or begging on the streets, and outbursts of anti-Roma sentiment are now common.

France has deported thousands of Romanian and Bulgarian Roma from illegal camps, prompting criticism from the EU.

Even so, some prefer begging abroad to being at home.

"At least here people give me food and medicine," said Ana Ferariu, a 65-year-old Roma woman begging outside a convenience store on London's crowded Oxford Street.

Ferariu, who doesn't speak English, said she left the impoverished town of Botosani in eastern Romania after her husband died and her house was destroyed in a flood. She sleeps in parks and has been picked up by police at least ten times.

"I am harmless, if people want to give me something that's ok, but if they don't that is also fine. If I die over here, the queen will bury me, but who will bury me at home?" she said.

In common with other countries, Romania has Roma inclusion programs in place but the results have been not be monitored properly to gauge their effectiveness, the World Bank said.

The study recommended building up local capacities to manage pro-Roma projects and better tap EU development funds, making more realistic budget estimates and strengthening anti-discrimination laws.

Romania readies tax cuts to spur economy

By Radu Marinas and Matthias Williams

BUCHAREST (Reuters) – Romania will scrap the tax on profits that companies reinvest in the country and cut some other levies to help create jobs and secure economic growth of around 3 percent this year, the finance minister said on Monday.

The government will also reduce firms’ social security payments by 5 percentage points, slash value-added tax on certain foods and, once it can afford to, introduce a lower income tax rate for low earners, Ioana Petrescu told Reuters in an interview.

Romania is the European Union’s second poorest state but its economy has outpaced most peers of late, thanks to a revival in exports and a stellar 2013 harvest that pushed growth to 5.4 percent in the fourth quarter.

While the tax cuts should help keep growth relatively high, Petrescu said they would be matched by deficit-reduction measures to ensure Romania met this year’s fiscal targets.

“Either (there) needs to be more tax collection or a reduction in expenditures or freezing the expenditures for that particular period, so we certainly are committed to fiscal prudence,” the minister said in her first interview with the foreign media since taking office in March.

She declined to go into specifics but said the government was in discussions with the International Monetary Fund about reviewing the royalties it charges firms to mine its natural resources.

Romania has an ongoing 4 billion euro (3.30 billion pounds) standby aid deal with the IMF, its third since a real estate bubble burst in 2009 and tipped the country into recession.


Tax cuts could help shore up the popularity of Prime Minister Victor Ponta’s leftist government, which faces European elections in late May ahead of a presidential ballot in November in which Ponta might run.

“I am optimistic that this year we’ll also have an economic growth maybe around 3 percent, and I think this can be sustained by pro-growth fiscal policies,” said Petrescu, a 33-year-old Harvard-educated economist who was previously an economic adviser to Ponta.

“... We intend to eliminate the provision to tax reinvested profit so hopefully that would spur more investment and more capital creation.”

That measure was likely to be introduced in July, meaning it would have has a low impact on the budget of about 20-30 million lei ($6-9 million), she said.

As part of its agreement with the IMF, which is key to Romania’s credibility with investors, the government has pursued deficit-cutting measures and economic reforms such as cleaning up inefficient state companies in order to spur growth.

It is targeting a fiscal deficit under IMF norms of 2.2 percent of economic output this year, compared with a goal of 2.5 percent in 2013.

There have been calls within the ruling alliance for Romania to exit such IMF agreements, but Petrescu said such a decision would depend on the economic climate in 2015, the year the current deal expires.

Petrescu’s forecast for growth in 2014 is higher than the IMF’s projection of 2.2 percent. She also forecast that inflation will quicken this year. It is currently at a record low of 1.1 percent, which prompted the central bank to end its run of rate cuts in March.

Romania, which is rich in natural resources including oil, gas, coal, salt and gold, is rethinking the level of royalties it charges for extraction – currently among the lowest such taxes in Europe and a boon for companies such as Austria’s OMV, Chevron and Romgaz.

Petrescu said the government was looking at “redesigning” the royalty system while taking care to not make investment prohibitively expensive.

“We had extensive talks with the IMF officials (and)... we’ll have more talks on this topic,” she said. “We need to be careful because a lot of investments in this area are very risky at the very beginning so if we tax them too much they might just simply not do it.”