Tuesday, July 31, 2007


July 31, 2007 (AFP) - NATO newcomer Romania took over the transatlantic alliance's patrols of the air space of the three Baltic states Tuesday, replacing France, the Lithuanian defence ministry said. Sixty-seven members of the Romanian military and four Mig-21 Lancer fighters will be deployed at Zokniai air base in northern Lithuania, the ministry said.

Other members of NATO have taken turns patrolling the skies of Estonia, Latvia and Lithuania since the three Baltic states joined the alliance three years ago. Romania, which also joined NATO in 2004, is due to patrol the air space for three months before handing over to Portugal.

Estonia, Latvia and Lithuania, which emerged from Soviet rule 16 years ago, lack the aircraft and personnel to police their skies themselves. Earlier this year, the three countries asked NATO to extend the air patrol mission until 2018. The current patrol agreement runs out next year.

Romania gets ready

July 31st 2007
From The Economist Intelligence Unit ViewsWire

Preparing for EU membership threatens fiscal health

Romania’s budget recorded a small deficit in the first half of the year, but is likely to run close to the EU-mandated 3% of GDP limit for the year as a whole as Prime Minister Calin Popescu Tariceanu’s government embarks on a massive infrastructure and welfare programme, designed to bring those areas of Romanian life into line with the rest of the EU.

Romania’s consolidated budget deficit was equal to 0.19% of GDP in the first half of the year, compared with a surplus of 0.16% of GDP in the year-earlier period, the finance ministry reported on July 27th. In local currency terms, the deficit was Lei750m (US$324m). This marks something of an improvement in the second quarter, since the January-March gap was Lei450m. Revenue was equal to 15% of GDP (Lei58.6bn), while expenditure reached 15.2% of GDP (Lei59.3bn).

For an economy that ran a fiscal deficit of 1.6% of GDP last year, the first-half fiscal outturn is impressive. Of course it is helped by economic growth, which although slowing from 2006’s 7.7% expansion in GDP was still growing at 6% in the first quarter. This is being powered by buoyant private consumption, on the back of expanded employment and fast-rising wages. As a result, there is little need for pump-priming. Yet this is precisely what Mr Tariceanu’s government proposes.

Its 2007 budget law sees revenue of 39% of GDP and spending at 41.7%—the highest level since the end of communism. As a result, the government expects the deficit to balloon to 2.8% of GDP this year, with barely any change planned for 2008. The European Commission is less convinced that the government will keep the deficit within the EU’s guideline 3% of GDP ceiling: it projects an increase in the consolidated budget deficit, from 1.9% of GDP in 2006 to 3.2% of GDP in 2007 and the same in 2008, using the ESA 95 methodology. Mainly because we believe the revenue target for 2007 is unduly optimistic, the Economist Intelligence Unit forecasts a fiscal deficit of 3.1% of GDP this year.

The projected increase in the deficit (based on the budget proposal) is largely driven by increases in government capital expenditure projects equivalent to 3.6% of GDP, and increases in social security benefits equivalent to 0.4% of GDP. These will be partially offset by increases in income tax and VAT equivalent to 1.5% of GDP, and cuts in subsidies equivalent to 0.9% of GDP.

Mr Tariceanu says the massive increases in spending are necessary to modernise Romania’s infrastructure and bring its welfare system closer to EU standards. In June, his government decided to double state pensions over a two-year period, at a predicted cost in 2008 of €2bn (US$2.7bn).

Mr Tariceanu’s plans for a “great leap” to catch up with Western Europe in the fields of infrastructure and welfare carry several dangers for the country.

First, they threaten to exacerbate the current-account deficit, which ran at an elevated 11.6% of GDP in the first quarter on the back of the Romanian consumer’s thirst for imports and a dramatic expansion in credit. Worryingly, as the deficit has expanded the country’s ability to finance it through foreign direct investment (FDI) has contracted. In the first four months of the year, FDI covered just 36% of the current-account deficit, compared with 87% coverage in the year-earlier period.

Second, Romania is moving away from adherence to the Maastricht criteria for membership of the euro area. Several new member states are struggling with fiscal problems inherited from previous governments; the emerging problem in Romania is purely of this government’s making.

Third, and perhaps most seriously, there is a serious risk of provoking a resurgence of inflation. Romania’s progress in this front was hard-won, as it was one of the last accession states to achieve single-digit inflation. Last year, consumer-price inflation averaged 6% and it stood at 3.8% year on year for a third consecutive month in June. However, very strong domestic demand and the procyclical fiscal policy that is helping to suck in imports could fire inflation once again. In addition, sharp increases in the minimum wage and three rounds of wage increases in the public sector could reignite inflationary expectations and spill over into the private sector.

We forecast real GDP growth of 6.5% in 2007 and 5.5% in 2008. However, the economy's continued rapid growth will lead to a worsening macroeconomic imbalance. The current account deficit will expand to 11.4% of GDP in 2007 and 13.1% in 2008; it will not fall below 12% of GDP until 2010. The fiscal deficit, meanwhile, will rise to 3% of GDP in 2008 and will only very gradually ease down in the years that follow. So far, the outlook for consumer-price inflation is relatively healthy: we see an average rate of 4% this year, 4.3% in 2008 and 4.1% in 2009. This raises a serious question mark over Romania’s ability to adopt the euro, but at least it doesn’t threaten runaway inflation that would seriously erode macroeconomic achievements. Nevertheless, the risks of wage rises reigniting inflationary expectations cannot be discounted. Mr Tariceanu would do well to remember that great leaps tend to end with hard landings.

Drought hits farmland prices in Romania

This year's drought in Romania, the worst in 50 years, saw a significant decrease in land prices in some counties, the Rompres news agency reported on Tuesday.

In the southern counties, farmers sell their land for prices of only 300 euros (411 U.S. dollars) per hectare, three times below the real value while in the case of the farmland situated near towns and national roads, the price per hectare reaches even 10,000 euros (13,700 dollars).

Meanwhile, the lower price has boosted the sale of farmland held by small farmers, and the farmland has become part of real estate deals in this summer.

Local experts said some brokers buy the land situated near national roads whose market value will increase significantly in the coming years.

Source: Xinhua

Romania mourns Church patriarch

BBC News

The late head of the Romanian Orthodox Church, Patriarch Teoctist, will be buried on Friday, Church leaders say.

The patriarch died of a heart attack on Monday, aged 92. His death came just hours after a prostate operation.

He had been head of the Church since 1986. In 2000 he asked for forgiveness for concessions the Church had made during communist rule.

The leaders of other Orthodox churches are expected to join many mourners at the funeral.

Patriarch Teoctist was widely praised for hosting the late Pope John Paul II in Romania in 1999 - the pontiff's first visit to an Orthodox country in modern times.

About 87% of Romanians are Orthodox Christians, according to census figures.

Romania gets first biodiesel plant

Source: insidegreentech.com

California's Greenline Industries and Romania's Uleroom plan to open Romania's first biodiesel plant today. The 7 million gallons per year facility in Vaslui is also the first biodiesel plant to operate in Eastern Europe.

Greenline Industries designs and constructs biodiesel production facilities. Greenline said Ulerom, part of Romania's Racova Group, is one of the country's largest agri-business corporations.

The plant is a key element in the ability of Romania to meet the European Union's requirement for 5.75-percent biofuels for the country, according to Greenline. "This biodiesel plant is a tribute to international cooperation, the facility was designed in the United States, built in Germany and Romania, and installed by a team from both the US and Romania," said Adrian Porumboiu, president of Racova Group.

The Romanian facility features waterless wash, computerized, continuous flow and modular construction. The plant will use Ulerom's recently upgraded rapeseed, sunflower and soy oil production facility. Ulerom processes about 12,000 tons of seeds a month.

The fully automated biodiesel plant is expected to run on a continuous basis, requiring a staff of three to monitor the various processes. Greenline said it has an additional twenty plants either under construction or under contract on three continents. The company said its design allows for rapid deployment of small to medium sized plants anywhere in the world.

"The plant was delivered on skids, trucked in to Vaslui on regular-sized trailers from our manufacturing facility in Germany. Assembly was done locally in a very short time, using local labor and skills," said Greenline chairman Michael Brown.

Erste Bank Q2 Net Up 25%, at Low End of Forecasts

VIENNA (Reuters) - Erste Bank der oesterreichischen Sparkassen (ERST.VI: Quote, Profile , Research) posted a 25-percent rise in second-quarter net profit on Tuesday, at the lower end of analysts' forecasts as costs of integrating its new Romanian unit weighed.

Net profit after minorities came in at 263.9 million euros ($360.8 million) for the quarter to June, compared with an average estimate of 277 million euros in a Reuters poll of 15 analysts, with earnings growth also held back by its key Czech franchise.

Overall revenues grew faster than the analysts expected. Net interest income rose 26 percent, more than forecast on average, while provisions for bad loans expanded less than expected. Fee and commission income grew 25 percent, in line with estimates.

However, operating expenses rose 30 percent, for which Erste mainly blamed the integration cost of Romania's Banca Comerciala Romana (BCR), Romania's biggest bank which it acquired for 3.75 billion euros last year.

Net profit at its Czech unit Ceska Sporitelna, its biggest in the former communist bloc, expanded only 5 percent in the quarter, far off its full-year target of 15-20 percent net profit growth.

Erste Chief Executive Andreas Treichl said in a statement he expected cost growth to slow down in the second half of the year and reiterated he expected full-year net profit to rise by at least 25 percent.

Erste, central Europe's second biggest lender, disappointed investors in April with first-quarter results that showed a weak revenue mix and high cost growth, and its shares have dropped by 13 percent since.

They are now trading at 12 times next year's forecast earnings -- less than peers in emerging European markets as investors remain skeptical about BCR and growth prospects in more developed central European countries.

Romania unveils Israeli-made biometric device

Jerusalem Post

Romanian police will now enjoy a leg up from an Israeli-designed technology that will help them identify criminals. Last week, the Romanian minister of internal security and the Romanian police chief presided over the dedication ceremony of a new Israeli-produced biometric identification system. The system was developed by Motorola Israel and is supposed to be able to identify and break down fingerprints and palm prints.

Part of the appeal of the system is its ability to quickly search and find similarities with information in existing criminal files and databases.

The ADIS biometric system, which is known as the Printak Biometric Identification Solution, allows for the integration of a large variety of criminal information. Beyond print identification, it also can scan for facial identification and document and file locations, allowing police to more effectively organize existing investigative information.

"This system will serve Romania's investigative staff and the general police [the IGPR] in the war against crime. We expect it also to be used by the Interior Ministry, the National Office for Refugees, the Border Police, and the National Authority for Non-Citizens," said Ron Landenberg, the manager of Motorola Israel's Communications Systems for Export division.

Romania is not alone in acquiring Motorola Israel-made biometric technologies. Serbia, Cyprus and Greece have also purchased and operated similar systems.

In 2006, Motorola operated a similar system within the Miami Dade Police Department, and the police there reported that they solved seven cold homicide cases using the new biometric fingerprint system, which can also accommodate partial prints.

Israel and Romania have had increasingly close ties between their respective public security ministries. An agreement between the two countries to enhance cooperation in fighting crime and terrorism was signed earlier this year.

Russian Orthodox Church pays tribute to Patriarch Teoctist I of Romania

Moscow, July 31, Interfax - The Russian Orthodox Church has expressed its condolences over the death of Patriarch Teoctist I of Romania.

"He was a wise pastor of the Romanian people who shared in their difficulties in the period of restrictions and the domination of atheist ideology, and who later led the Romanian Church with dignity throughout the adversities of the period of great political and social changes," Archpriest Nikolay Balashov, secretary of the Moscow Patriarchate Department for External Church Relations, told Interfax on Monday.

The Romanian people "loved and deeply respected their Patriarch," he said.

Teoctist died of a heart attack on Monday at the age of 92 after undergoing an operation at Bucharest's Fundeni hospital.

The archpriest called the death of the Romanian Patriarch "a big loss for the universal Orthodoxy", and characterized him as a "veteran of an inter-church and inter-religious dialogue," in which he actively participated for many decades.

Teoctist was a person, "who knew and loved Russia, which he had visited many times," the Moscow Patriarchate official said.

"The late Patriarch's wisdom combined with love of life and interest in people. His meeting with Patriarch Alexy was a meeting between long-time friends," Father Nikolay said.

Monday, July 30, 2007

Roma from Serbia Seek Asylum in Romania


Bucharest.Forty-four Serbian citizens of Roma origin who illegally entered Romania over the week-end are seeking asylum in a European Union country, the Romanian authorities said on Monday. “The Serbian citizens will have to wait some two weeks for an answer to their requests,” Mihaela Martescu, of the Romanian Office for Inmigration, ORI, said. Martescu said the Bucharest authorities were prepared to tackle this issue, as many other Roma from Serbia appeared to be trying to enter Romania for the same reasons.

Since it joined the European Union on January 1, Romania has became increasingly popular as a destination for people from Balkan countries seeking asylum or citizenship within the EU. This month alone, 57 Serbian citizens crossed the border with Romania and asked for asylum.

Romania beckons to Milan teacher Remote village still relies on horses

Monday, July 30, 2007
Ann Arbor News Staff Reporter

On the final leg of her journey to a village in Romania, Sue Kohfeldt saw three cars and 17 horse-drawn wagons.

That's how the Milan High School teacher describes the remote location of the tiny village where she will soon be teaching. Through a Fulbright Teacher Exchange grant, Kohfeldt will teach English as a foreign language this fall at a high school in Gura Humorului, Suceava, Romania.

"Only I would land in a place with humor in the name,'' Kohfeldt said of the village.

Kohfeldt visited the village during a side-trip from her annual trip to Lithuania, where she helps teachers learn the use of technology in their classrooms. A teacher in Milan for 18 years, Kohfeldt became an expert in the use of technology in the classroom - after once having to ask a student where the "on'' button was on a machine, she said.

The journey to Romania was both harrowing and humorous - due to a miscommunication with the person scheduled to pick her up. Kohfeldt - with a lot of luggage - found herself stranded at the airport in the early morning hours, knowing little Romanian.

She said she attempted to rest - while still protecting her luggage - by sprawling herself over the various pieces.

Through the little Romanian she knew and with a little English help from other travelers, Kohfeldt managed to get a train and taxi to the tiny village.

It's not the first time Kohfeldt has faced a language barrier. She's traveled the globe three times and spends summers in Lithuania, but her grasp of various languages is limited, she said.

"I try really hard to learn the language wherever I go, to not be an 'ugly American,''' Kohfeldt said.

But sometimes, her attempts to communicate can fall short. Once, in a Lithuanian restaurant, she asked for butter for her dinner roll and was served a large stein of beer.

After her arrival in Gura Humorului, Kohfeldt stayed for two days with a Romanian teacher and her family, who will be coming to Milan for the exchange program.

Cristina Tudor will teach English at Milan. Her husband and her son, who will enroll as a sophomore at Milan High School, will join her.

"From the kitchen, I can see the Carpathian Mountains, from the front room, I see the beautiful garden of my neighbor, and from the bedroom, I see the town,'' Kohfeldt said.

She won't have a car - so that will mean a lot of walking in a climate similar to that of Michigan.

"It'll be uphill both ways,'' she joked.

Jennifer Terry, a recent Milan High School graduate who took Kohfeldt's mythology class, has high praise for Kohfeldt's teaching skills.

"You don't think you're learning ... but when you walk away from it, you say, 'Boy, I learned a lot,''' Terry said.

Terry also was impressed with Kohfeldt's willingness to go to Romania.

"She's willing to go to another country and help somebody else - that's a selfless act. And it's a little journey for herself - just like mythology,'' Terry said.

To read Kohfeldt's blog, log on to travelintoromania.blogspot.com/. To learn more about the exchange program, go to exchanges.state.gov.

Marjorie Kauth-Karjala can be reached at mkarjala@annarbornews.com or at 734-482-2961.

Head of Romanian Church dies

By ALISON MUTLER Associated Press Writer

BUCHAREST, Romania — The head of the Romanian Orthodox Church, a man who made history when he invited the late John Paul II to his Orthodox country in 1999 but was criticized for being too close to former Communists, died Monday. He was 92.

Patriarch Teoctist died of a heart attack following surgery on his prostate gland earlier Monday, doctors at the Fundeni hospital told Realitatea TV.

Teoctist was appointed to head the church in November 1986, but briefly stepped down after anti-communist protesters in 1989 said he had been too conciliatory toward former dictator Nicolae Ceausescu. He had refused to condemn Ceausescu's destruction of Orthodox churches in Bucharest. He was reinstated a few weeks later.

Although he was often criticized for failing to take a stand on thorny issues such as the rights of the Eastern Rite Catholic Church in Romania, the patriarch won praise when in 1999, the late Pope John Paul II visited Romania at Teoctist's invitation.

It was the first invitation extended by an Orthodox Church leader to a Catholic pope since the churches split in the Great Schism of 1054. The two leaders called for the healing of divisions within Christianity.

Teoctist also won the respect of Romanians after he confessed that he had felt abandoned by God for years — from the time when he briefly resigned as patriarch until the pope's visit.

Teoctist was also criticized for opposing the investigation of clerics who were believed to have collaborated with the Communist Securitate secret police. When communism ended, there was no purge within the church and no acknowledgment of the extent of clerics' collaboration.

Born into a poor family in northeastern Romania in 1915, Teoctist was the tenth of 11 children. He became a monk when he was 20.

Earlier this month, Teoctist condemned a Vatican document in which Pope Benedict XVI reasserted the primacy of the Roman Catholic Church, describing it as "brutal" and saying it made inter-church dialogue difficult.

Romanian anti-communist dissident and writer Victor Frunza dies aged 72

BUCHAREST, Romania (AP) - Former anti-communist dissident and writer Victor Frunza has died in Denmark of a heart attack, a government institute for Romanians living abroad said Monday. He was 72.

Frunza, who died Friday, was forced to leave Romania in 1989 after writing a letter critical of the Communist regime led by dictator Nicolae Ceausescu. The letter was published internationally, and Frunza was interrogated by the dreaded Securitate secret police. He later settled in Aarhus, Denmark with his family.

While in Romania, Frunza secretly wrote a history of Communism in Romania, which was published in Denmark in 1984. He also published essays championing human rights, and a published a political magazine called «Marathon Runner.

He returned to Romania after Ceausescu's execution in 1989, publishing books such as «The history of Stalinism in Romania,» and «The destiny of a man sentenced to death, Pamfil Seicaru.
«Victor Frunza, formerly exiled in Denmark ... had an important contribution to the fight of the Romanian political exiles against Ceausescu's regime,» said the government-run National Institute for the Memory of the Romanian Exile.

Frunza was a founding member of the anti-communist movement «The Civic Alliance,» which played a key role in helping Romania's opposition come to power in 1996.

He also wrote a play, «The Great New Train Station,» and poetry. Frunza's body, which has been placed in a chapel in Denmark, will be cremated there in a ceremony later Monday, the daily Ziua reported. He was survived by his wife and a son.

Romania: Three Romanian companies have submitted information offers for MAV Cargo

Railway Market Magazine

CFR Marfă, Grampet and IRS have submitted non-aligned offers for the integral taking over of national freight transport operator in Hungary, MÁV Cargo.

The submitting of the offers is included into the first round of the auction, the submitted offers being information offers.

12 information offers were submitted in the auction for the privatisation of MAV Cargo. The rest of the offers were made by:

- Deutsche Bahn AG,

- Spedi-Trans,

- Rail Cargo Austria consortium (which includes AG and Gysev Zrt.),

- New World Resources Transportation BV,

- Magyar Rail Cargo Vagyonkezelo Klf.,

- Ashmore Global Special Situation Fund 3 Limited consortium,

- World BV consortium (formed by Pegasus Ventures BV and Cargo Central Europe Rail),

- Trans Europe Rail consortium (formed by Lehman Brothers, Euroventures, Guernsey and Dunavagon).

When analysing the offers, the Hungarian authorities will take into consideration factors like: the biggest price, the efficiency of operations, the increasing of the competitiveness, the developing of freight railway transport, as well as the improving of the working conditions for the employees.

Lewis Charles Romania Property Fund to float on AIM on Aug 2

LONDON (Thomson Financial) - Lewis Charles Romania Property Fund Ltd said it intends to float on the Alternative Investment Market on Aug 2 with an anticipated market capitalisation of 27.41 mln stg.

The Channel Islands based closed-ended fund is seeking to raise about 27.41 mln stg at 140 pence per share.

The company said 42 pct of its shares will not be in public hands at admission.

The fund added that its investments will be limited to Romanian residential and commercial property.

Aconex Selected for Three Projects in Romania

BUCHAREST, Romania, July 30 /PRNewswire/

Aconex, www.aconex.com, has been selected by project management firm PCMG to provide its online information management service to three major residential and hospitality developments located near Mamaia beach and within Constanta in Romania. Aconex is a web-based collaboration system that will control the flow of documents and correspondence on the projects and streamline communication between the project teams.

The Mamaia development will contain apartments and underground car parking. The second project, Dacia, consists of 75 apartments in a courtyard complex close to the main boulevards and a new retail mall. The third project is a residential high rise called Oasis, situated next to Siutghiol Lake in Constanta North. The project will comprise of 300 units on a lakeside plot overlooking the Mamaia seaside resort.

Through using Aconex, organizations working on the developments will be able to manage their documents and correspondence through one central, online platform, allowing them to view, distribute and track their files electronically at any time and from any location.

Josh Randall, Aconex Manager Eastern Europe, said: "Each of these projects will generate thousands of documents and pieces of correspondence that will need to be distributed between dispersed project teams. Effectively controlling this flow of information will be an important part of delivering these projects on schedule and within budget.

"Through using Aconex, PCMG and its project partners will save time through being able to quickly access and distribute documents; reduce costs such as printing and postage; and mitigate their exposure to risks such as information loss, disputes and delays. Through our network of offices, we are also able to provide on the ground training and support to all project participants."

Andrei Popovici, PCMG Director, said: "With project team members based in Constanta, Bucharest and the UK, we required a solution for efficiently collaborating between dispersed parties. Through using Aconex, project teams are able to quickly and efficiently store and distribute their information electronically -- reducing the time and money spent sending files between the UK and Romania."

Aconex, www.aconex.com, is the world's largest provider of online collaboration to the construction and engineering industries. From its 30 offices, the company services projects with a combined value of US$160 billion.

PCMG Ltd is one of Romania's leading project and development management firms. The company has offices in Bucharest, Constanta, Cluj Napoca and London.

Media Contact: Will Turbet, Aconex Communications, wturbet@aconex.com

Romanians brighten Harry Potter game

By Justyna Pawlak

BUCHAREST (Reuters) - In the mobile phone version of the "Harry Potter and the Order of the Phoenix" video game, the torches hanging along the dark walls of Hogwarts glow in an eerily realistic fashion.

"We invented the technology, it's called 'dynamic lighting'," said Mihai Pohontu, general manager of Romania's mobile phone branch of Electronic Arts Inc, the world's biggest video game publisher.

Romanian programmers, such as Pohontu's team, are among the most sought-after in the world as large international IT companies turn to the east European country to take advantage of strong computing and language skills coupled with cheap labour.

Its computer literacy is not without its dark side -- the country has an unenviable reputation as a hotbed for computer fraud and a large community of hackers.

But legitimate IT is one of Romania's fastest growing export sectors with turnover of about 1 billion euros ($1.38 billion).

Roughly 90 percent of some 1,000 IT companies in Romania are foreign-owned and the government hopes exports will reach 1 billion euros in the next couple of years.

In February, Bill Gates opened a Microsoft Corp. technical support centre in Bucharest. The investment followed, among others, the launch of a development centre by Amazon.com Inc in the university town of Iasi in 2005.

That is the online retailer's only software development hub in Europe besides one in Scotland's Edinburgh. Other centres are located in India, the United States and South Africa.

"Romanian programmers are exceptionally creative. And in games, you need to explore," said Pohontu.


Prospects for large cash inflows from the European Union after Romania joined the bloc this January, cut-rate taxes and low wages add to Romania's appeal.

"In Eastern Europe, Romania is appreciated as having the biggest growth potential together with Turkey and Russia," said Stefan Cojanu, head of Oracle Corp in Romania.

The software maker, which has a support and software development centre in Romania, has doubled its local staff to 1,000 over the last year since opening a tower office in central Bucharest. It plans to hire an additional 500 employees.

"The geographical distance, the similar time zone and business mentality argue for us to develop our activities in a country where costs are also lower," Cojanu said.

Romania's low wages of around $600 a month compare with $1,050 in Poland and $950 in the Czech Republic. Both countries also attract hefty investment in the IT sector.

However, some see a risk the sector is overheating. Double-digit wage growth and a shortage of skilled labour is dampening the enthusiasm of some investors and Romania is struggling with emigration as workers leave for better pay.

"The battle for specialists is very intense," said Ana Ber, head of human resources firm Dr.Pendl & Dr.Piswanger.

"There aren't enough of them, especially as many emigrated."

Industry observers say this state of affairs has prompted companies to focus on building support or software development centres, which need cheaper and lower skilled labour, rather than hiring high-end programmers.

"Romania remains good for outsourcing but not for first-class software authors," said Dragos Stanescu, sales and marketing manager at GECAD, a Romanian company that sold RAV Antivirus technology to Microsoft in 2003.

"The brains are already with companies that have good salaries and it is costly to buy them. A good senior programmer can earn 2,000 euros gross a month. Plus a 30 percent raise to buy him, and you have a salary of a good programmer in Germany."


FBI data show Romania may be the biggest single source of online auction fraud in the world, a multi-million dollar industry that scams people using Web sites like eBay.

"It's highly organised. They create fake accounts to trick people into thinking they are insured," said Gary Dickson, FBI representative in Romania.

"If Romanians were stopped, the amount of online fraud would drop significantly."

Experts say some 70 percent of software used in Romania is pirated, and salesmen still visit office buildings in central Bucharest to sell pirated CDs and DVDs.

Some hackers hope their skills will help secure employment, although breaking into other people's networks for fame or as part of a job CV has its dangers.

"The Romanian hacking community is quite large. They see the computer as a ticket out of the country. It is the easiest way to get a better-paid job abroad," said Victor Faur.

He faces a potential 54-year jail term if convicted on charges of hacking into U.S. government computers, including NASA. He was indicted in 2006.

"I saw a computer for the first time when I was 14. And I was glued (to it)," said Faur, 23.

(Additional reporting by Iulia Rosca and Marius Zaharia)

Lions to die in sub standard Romanian zoos

By Bruno Waterfield in Brussels

Romania's lions face a death sentence as the country's neglected zoos lose the battle to implement European Union regulations aimed at animal welfare.

Government inspectors have already condemned three lions in Bahusi zoo, in Eastern Romania, to death by lethal injection and campaigners estimate that hundreds of animals in up to 20 zoos are at risk.

A BBC investigation has found that deformed, aged or sick animals are to be killed as the cash-strapped authorities admit that many of Romania's 41 zoos, often burdened with the legacy of the Communist era, will fail to make the grade on EU Directives by a December 31 deadline.


Bahusi Zoo is one of the institutions so shocking that it has been closed to the public. Its remaining animals have been rejected by other zoos in other countries and face death.

Bahusi's three lions, scarred by their poor treatment throughout their lives, will be put down despite being only five to six years old.

The lions, Bella, Romani and Gypsi were rejected by foreign zoos because they bear the scars of mistreatment and confined cages.

"In a better equipped zoo, they could live to 20," said Monica Minciu of the Romanian Alliance for the Protection of Animals.

"The problem is what to do with all these animals once this and other zoos close. Unless funds are not found quickly or a home for the animals is found in Romania, the most probable thing which will happen with these animals is that they will be put down."

Mihaita Afrenie, the manager of Timisoara zoo, in Western Romania, told the BBC that three lions there are to be "shot" because their cages are not big enough under EU rules

British Euro MP Robert Evans is pushing for a rescue plan to be coordinated between the EU and Romania before zoos are forced to close at the end of the year.

"The Romanians are really struggling to put this EU Directive into practice" he said.

"I think it's time that the rest of the EU took responsibility so that we can save the lives of animals, like the lions at Bahusi."

"The other 26 richer countrie of the EU have got to come to Romania's assistance, not just with money but technical assistance. This is not Romania's fault, they simply do not have the money."

The WSPA, a British animal rescue organisation, is working in Romania to save zoo bears that might be slaughtered or "sold to restaurants which hold them in tiny cages as tourist attractions".

"We're building a second bear enclosure now to take in around 15 bears that have to be rehomed from at least five zoos that are closing down due to the European Zoo Directive," said the WSPA's Victor Watkins.

Sunday, July 29, 2007

M50 Gypsies abandon Irish dream

The roundabout Roma were lured to Dublin by relatives' empty promises of easy money

Daniel McLaughlin in Tileagd and Henry McDonald
Sunday July 29, 2007


'I told them not to go to Ireland, that it would be a disaster - and now they are all coming back again,' says Anna Demian, matriarch of the Tileagd Roma community to which about 100 men, women and children have just returned from an encampment on the M50 roundabout at Ballymun, Dublin.

Demian, 68, mother of 13 children, and grandmother of 140, counted her relatives back into the village this week after they were flown home to north-west Romania, amid Irish fears of an influx of job-hunting Gypsies, and anger at their grim depiction of life in Romania. Claims by some Roma that they had been living beside a rubbish dump where they foraged for food, were false - Tileagd is an extremely poor cluster of cramped houses, with no running water, but it is far less squalid than the fly-infested quagmire they created by the M50.

All of Tileagd's Roma have small houses to live in - though many are in disrepair and are shared by a dozen people - and some of those who have returned from Ireland had given up jobs at home to pursue the promise of a better life in Dublin.

'Augustin Rostas worked as security at our nursery for more than two years, making £120 a month, compared to the national minimum wage of about £80,' said Kevin Hoy, chief executive of the Smiles Foundation, a charity that has been working in Tileagd since 2001. 'He was a well-respected member of his community, with about 12 children, a horse and a good house in the Romanian part of the village. In June he gave up his job and sold his horse to go to Ireland, and took one of his sons, Malin - one of our best pupils - out of school to go with him,' says Hoy, referring to the nursery and junior school run by the charity. 'Now he's back here, he's embarrassed, he's lost his job, he's sold his horse, he's got no money and he's lost respect in the village.'

The Gypsies say that after 1 January, when European Union membership allowed Romanians to travel visa-free across the bloc, relatives who left Tileagd for Ireland several years ago implored them to come to Dublin, where accommodation, jobs and social security supposedly awaited.

Seduced by tales of easy wealth, many men funded the trip by selling the family horse - which they use for transport and work in the fields, and whose offspring they sell for vital cash - and paid a travel agent for a five-hour minibus ride to Budapest and a flight from there to Dublin.

The Irish government now believes that the Roma on the roundabout were under pressure from criminal gangs in their native Romania to settle in Ireland. The group, according to government sources in Dublin, were to send back a large percentage of Irish social welfare payments to the criminal gang had they been allowed to settle in the Republic. The sources pointed out that the Gypsies on the M50 actually flew to Ireland, some via Hungary, others direct from Bucharest, an air fare that would cost more than €200 (£135). There are still between 3,000 to 4,000 Roma in Ireland. While many have settled and found jobs, many others remain dependent on social welfare, begging and petty crime. A group based in Dundalk is sent north on the train every day to Belfast where they beg in the city centre.

In the past five years, the Republic has tightened up its asylum laws. In 2002, 11,634 people from abroad applied for asylum in Ireland, the figure today is around 4,323.

Gyuri Rostas, Augustin's brother and a leader of the Tileagd Roma, is angry that his people fell for the tall stories about Ireland, but cannot confirm claims from some returnees that Romanian Gypsies in Dublin asked them for cash in return for non-existent work and lodging.

He says the Tileagd Roma's main problem is poverty, and a spiral of debt into which they plunge when benefits are not paid on time and they have to buy food and other necessities on credit.

Ireland picked up the tab for the Gypsies' journey home - which for some included a British Airways Club Class flight from London to Budapest - but Dublin will consider it a small price to pay if it prevents a repeat of Ballymun.

Some will head west again to find their fortune. Others, like Cristian Rostas, swear they are committed to life in Tileagd. A brother of Gyuri and Augustin, Cristian travelled to England in March with high hopes. 'I was drunk and people were saying life was great over there, so I sold my horse and took my wife and we flew off,' he recalls, his bravado tempered by lingering shame. At Luton airport, he took a taxi to Rugby, to the home of a sponsor of the Smiles Foundation whose address he had stolen from a charity worker's bag. After a couple of nights in a bed and breakfast arranged by social services, Cristian was sent back to Tileagd. 'It was very bad,' says the contrite Cristian. 'Now I don't drink or smoke and I am not going anywhere ever again.'

Africa Israel strikes deal in Romania

Israel Money

Real estate company buys 38 acres in the heart of Bucharest to build luxury neighborhood in $105.6 million deal
Golan Hazani

Africa Israel Investments Group headed by Lev Leviev signed a purchase agreement of a 38-acre factory in Bucharest over the weekend. The plot's blueprints have been approved for a 700,000 square meter residential and commercial area. According to estimates, the company plans to build a luxury neighborhood in the area with between 4,000 and 5,000 housing units.

The transaction is expected to cost 77.5 million euros ($105.6 million). Tthe plot is located in the center of the city, in the heart of an existing residential area and the company is expected to begin construction within a year.

This is Africa Israel's biggest acquisition in Romania to date. Up until now, the company has purchased 25 acres in northern Bucharest in the Pipera region, and two shopping malls in Romania. The company believes that the real estate potential in Romania has not yet been realized and is in the middle of negotiations on a number of other deals in the country.

Saturday, July 28, 2007

IHT: Romania Budget Deficit

BUCHAREST, Romania: The Romanian finance minister on Wednesday said the country's proposed 2008 budget foresees a 2.7 percent deficit, with a 43 percent pension hike estimated to cost as much as €6 billion (US$8.3 billion).

Economic growth, estimated to hover at about 6 percent for the next few years, will help support the additional spending, and the government does not plan to raise taxes, Economy and Finance Minister Varujan Vosganian said.

The government also plans a 6 percent cut in payroll taxes.

However, as the average pension increases from 396 lei (US$180, €130) to 568 lei (US$260, €190), the government will need to overspend again in 2008, Vosganian said.

Gross domestic product is estimated to be 438 billion lei (€146 billion; US$202 billion), with the budget deficit estimated to reach 11.9 billion lei (€3.9 billion; US$5.4 billion) — about 2.7 percent of GDP.

The European Union, which Romania joined in January, and the International Monetary Fund have asked the government to tighten public spending and to reduce the budget deficit, which is expected to reach 2.8 percent this year.

In 2008, Romania also plans to spend more on education and health care, two sectors which have been underfunded for years, the finance minister said.

Lifting the iron curtain

Toronto Star

BUCHAREST–When describing the attractions of Romania's capital, people have a tendency to speak conditionally.

"Bucharest could be one of Europe's most beautiful cities," says Petru, a young student I met in a sidewalk café in the historic Lipscani district.

"There's a lot of history and culture here. It really should be a popular city . . . but things have prevented it from becoming one."

Some of those "things" would be 50 years of Communist rule – the last 24 (until 1989) under the murderous dictatorship of Nicolae Ceacescu – then a bloody revolution followed by lingering political corruption and economic disorder, which left an impression that everybody here was either on the take or on the make. So, Bucharest was largely avoided as other post-Communist Eastern European cities opened up to Western travellers.

But things are changing. Thanks to the European budget airline boom and new direct flights from New York, Bucharest is beginning to be noticed, especially by young travellers seeking a novel destination that doesn't cost a lot.

Don't get the idea that Bucharest is just Prague-lite or a bargain-basement Berlin, though. It has its own dynamic cultural scene and a rich history stretching back to the Middle Ages.

"The overall picture of the city sometimes is not nice," says my guide Razvan Balint, who operates both a tour company and an IT firm.

"But if you take it step by step, you'll find some wonderful things."

It's easy to see his point as we drive through a neighbourhood that looks like a Cold War theme park, with block after block of identically shabby apartment buildings. Balint instantly pinpoints each one's age, like layers in an archeological dig.

"Those were built in the '60s, those were built in the '70s," he says. "It's easy to tell ... the government used to come up with one design for apartments and just use it over and over for 10 years, then come up with another one and do the same."

The definitive Communist relic of the Ceaucescu era is the gargantuan Palace of the Parliament. It's the second-largest building in the world and its stats are staggering: 360,000 square metres in area, 84 metres high, 1,100 rooms, massive marble staircases, 3,500 tons of crystal in its chandeliers. Marble tiles with the floor plan on them reveal the extent and the intricacy of the construction.

If it were somewhere else, it might be hailed as an architectural wonder – which it surely is in an overweening way. But for Bucharesters, the memories of its construction are still fresh and still dreadful.

Ceaucescu called it the "House of the People," a cruelly ironic title since to make room for it, thousands of people were evicted, and neighbourhoods full of historic buildings and churches were bulldozed. The entire country was forced to endure crushing economic hardship to pay for it.

"For that bloody palace, we were all starving, we were all freezing . . . everything – bread, cheese – was rationed, and the heat in our apartments in the winter was set at 14 degrees C," Balint recalls bitterly. "And nice streets with lovely houses, a lot of greenery. They were all through this area . . . and just wiped out to make that bloody palace."

Ceaucescu intended to open it officially in 1990 to celebrate his 25th year in power, but the revolution – and an executioner's bullet – prevented him from doing that.

Now it houses the Romanian parliament and hosts international conferences and while it's more apt to inspire scorn rather than admiration, it's worth seeing as an insight into totalitarian excess.

Fortunately, many genuine treasures from Bucharest's past escaped destruction. Churches, palaces and museums that rival those in other European capitals are re-emerging after being hidden for so many decades behind the Iron Curtain. There are cultural wonders like the Romanian Atheneum, built in 1888 and now home to the Romanian George Enescu Philharmonic, and the National Museum of Art, a former royal residence that displays works by El Greco, Rembrandt and Rubens, along with Romanian artists.

In the northern part of the city, graceful residences and monuments – including a Triumphal Arch that's a carbon copy of the one in Paris – occupy leafy boulevards and delightful parks that reflect a prominent French influence and earned Bucharest the nickname "Little Paris" at the end of the 19th century.

"A while ago, I was with an architect from the United States," says Balint. "He was very excited when he saw these things. He said, 'You cannot imagine, you don't see this with the eyes of an architect.' We just drove around and he kept saying, 'Stop here, stop there . . . look at that house, that's neo-classical, that's Art Deco, that's Beaux-Arts . . . now he's putting together a group for a tour that just focuses on the architecture of Bucharest."

Medieval wonders abound as well. The Curtea Veche (Old Court) is the ruins of a 15th century church and fortress begun by Vlad Tepes (Vlad the Impaler).

The Lipscani, the historic commercial heart of the city, which deteriorated under the Communists, is undergoing a facelift with new upscale restaurants, chic hotels, shops and bars as the city opens itself up to the world.

"This is a place where everything is starting," says Balint.

"We have to have patience, some capital and good people to build businesses. There are lots of new ideas."

Stefan Teris describes his new idea as he pours a glass of Feteasca Neagra (Black Maiden), a flavourful Romanian vintage. He calls it "The Library of Wines," a wine club with a twist – a sort of salon dedicated to wine appreciation and cultural exchange.

"We are trying to educate the public about wine," says Teris, a journalist-turned-entrepreneur. "We won't just serve wine ... this isn't a liquor store. We'll serve the history of wine, the story of wine. We will have pairings not just between food and drinks, but between wine and literature, wine and music, with programs prepared by experts."

He hopes it will appeal both to a discerning domestic clientele as well as foreign visitors.

"This will be a place for anyone who is interested to learn about Romanian wines and Romanian vineyards," says Teris. "It will also be where people can discuss our culture, our history, our religion . . . and learn to appreciate all aspects of Romanian life." And perhaps also appreciate Bucharest's many attractions – unconditionally.

Daktronics video screen planned for Romania

Brookings-based Daktronics will design and build a $3.6 million video screen project in Romania.

Daktronics, which makes electronic signs, screens and billboards, will install huge video screens on the facade of the Cocor Shopping Centre, the company said.

The displays will present full-color pictures and video. Two displays will be installed on the building's front, one more than 11 feet high by 38 feet wide. Another display will be almost 77 feet high by 38 feet wide.

The building's sides will feature five two-sided LED displays measuring more than 16 feet high by 10 feet wide. Another side display will measure more than 12 feet high by almost 70 feet wide.

"This project will be a large accomplishment for us, and we hope that our relationship with Cocor lasts well into the future," said Carlos Verez of Daktronics' Germany division.

Strasbourg Court Sanctions Romania for Failure to Remedy Police Ill-Treatment of Romani Man

The European Court of Human Rights today delivered its judgment in the case of Cobzaru v. Romania concerning the beating of a Romani man by police officers while in custody in Mangalia, Romania, and the ensuing official investigation. The Court held that Romania is responsible for breaches of the prohibition of inhuman and degrading treatment (Article 3), the right to an effective remedy (Article 13) and the prohibition of discrimination (Article 14). The applicant was represented by Monica Macovei, a Bucharest-based lawyer, the Romanian Helsinki Committee, and the European Roma Rights Centre.

On 4 July 1997 after a domestic incident involving his partner and her relatives, the applicant went to the local police station asking for help. However, instead of offering help, two police officers brutally ill-treated him, and eventually released him after two hours. As a result of the beating, the applicant suffered from craniocerebral trauma and numerous bruises and haematoma all over his body. The official investigation into the assault ended with a decision of non-indictment, and was marked by numerous derogatory remarks on the part of the authorities in relation to the applicant's and the witnesses' Roma ethnicity.

In relation to the applicant's claims under Article 3, the Court noted the numerous shortcomings of the official investigation, and concluded that the Government did not satisfactorily establish that the applicant's injuries were caused otherwise than by the treatment inflicted on him while he was under police control, thus warranting a finding of both the substantive and the procedural aspects of Article 3.

The Court also established a violation of Article 13 of the Convention, since no effective investigation into the allegations brought by the applicant was carried out, and moreover, since the negative result of the criminal proceedings prevented the applicant from availing of any other domestic remedy.

The ruling on the applicant's Article 14 claim brings welcome clarification to the Court's case-law on the prohibition of discrimination. Firstly, the Court held that there was no evidence that the beating was motivated by racial hatred, and therefore did not find a substantive violation of Article 14. Secondly however, with regard to the procedural aspect of Article 14, the Court noted that even in the absence of prima facie plausible information to prove that the assault on the applicant was racially-motivated, the authorities were under an obligation to investigate a possible racist motive to the attack given the number and notoriety of such incidents in post communist Romania, and the general policies adopted by the Romanian government to combat discrimination against the Roma. Thirdly, the Court held that during the official investigation, a number of derogatory remarks were made in relation to the applicant's Roma origin, which disclosed the general discriminatory attitudes of the authorities, which in itself constituted discrimination contrary to Article 14.

The ERRC and APADOR consider that the judgment in the Cobzaru case is important for two reasons. Firstly, it highlights Romania's failure to provide effective protection to its Roma minority from harm meted out by police officers, as well as the widespread anti-Roma discrimination in the country. Secondly, Cobzaru further crystallizes the Court's case-law in the field of discrimination, principally by attaching significance to the general context of anti-Roma discrimination in Romania, and thus going beyond the particulars of the applicant's situation.

Read the full text of the judgments here: http://www.errc.org/db/02/6E/m0000026E.docc

Cambodian cargo ship sinks in Black Sea near coast of Romania

CONSTANTA, Romania (AP) - A Cambodian ship carrying about 1,000 metric tons of construction supplies has sunk in the Black Sea near the Romanian port of Mangalia, with all seven crew members rescued, authorities said July 27.

The incident happened July 26 evening when the ship, named Multitrader, began to sink and its captain called Mangalia port authorities for assistance, said Adrian Burcea, chief officer of the local border police.

Authorities have sent out an anti-pollution team to the sunken ship to check whether there were any leaks of fuel or lubricants, he said.

Romania Posts Small Budget Deficit

BUCHAREST, Romania (AP) -- Romania posted a 0.19 percent budget deficit in the first half of 2007, the Finance and Economy Ministry said Friday.

The government plans, however, to increase the deficit to 2.8 percent of gross domestic product by the end of the year due to higher spending on agriculture subsidies to help farmers cope with a severe drought.

The European Union has warned Romania, which joined the bloc in January, to tighten public spending to ensure its deficit remains below the 3 percent deficit guideline for EU member states

The government also plans a deficit of 2.7 percent for 2008, mainly due to a 43 percent hike in pensions and additional spending on education and health care.

Romania is experiencing an economic boom, with the GDP expanding rapidly since 2000. Last year, GDP grew by 7.7 percent and growth is expected to hover at about 6 percent in following years.

Friday, July 27, 2007

Changing lives in Romania: Dr. Ginger Williams goes on trip for Volunteers in Medical Evangelism

Source: battlecreekenquirer.com

Submitted by Elena Valle

Dr. Ginger Williams, Chief Medical Officer at Oaklawn Hospital and member of Family Bible Church in Marshall, recently participated in a mission trip to Romania, providing free medical care and touching the lives of Romanian villagers, gypsies, and physicians.The trip, which lasted a week, was organized by Volunteers in Medical Evangelism, associated with the Southern Baptist Convention. The mission of the trip was to spread the Gospel, but the group of 25 volunteers, including nurses, doctors and dentists, also provided basic healthcare. Over $80,000 worth of medications were donated to the mission.

The group was based in Campina, a town an hour and a half from Bucharest. Each day, Williams woke at six am and ate a breakfast of half a tomato, goat cheese, and scrambled eggs with the rest of the group at their hotel. After packing up the equipment, the group left on a bus at eight o'clock and arrived about thirty minutes later at a new village, where they set up their clinic inside a church, sometimes even in the sanctuary. On three of the days, the group traveled to gypsy villages with concrete block houses.

The churches advertised the clinic ahead of time, and on most days, about 150 Romanian villagers showed up. On the busiest day, however, the volunteers saw 300. Patients would first go through a triage staffed by nurses and then meet with an evangelist while waiting for medical, dental, or eye care.The day normally lasted about eight hours, but the volunteers always worked until all the villagers had been seen by a physician or dentist. The longest day was 11 hours long.Williams said many of the villagers had more access to healthcare than they chose to use. However, people at poverty level also had difficulty accessing the healthcare system and lacked education about their health.

Villagers commonly held superstitions, such as the belief that, if a breeze blew on them from outside, they would get sick, or that vitamins would make them fat. Interestingly, the majority of the people who came to the clinic believed their health problems were caused by anemia or low calcium, even though this was rarely the case.Williams was the only American physician in the group, and she found that the most common illnesses were high blood pressure, diabetes, rheumatism, and arthritis. Poor dental hygiene was also common, possibly the result of unfluoridated water or lack of education.People of all ages received care at the clinic, but the group did more than treat patients directly.

Williams believes their impact on the life of Daniel Negoita, a Romanian physician and Williams' translator, will have a long-lasting influence on everyone he works with in the future.Negoita offered his help to the group, expecting that there would be four to five other Romanian doctors and that he would be able to take most of the week off. However, there turned out to be no other Romanian physicians and no medically trained translators, so Negoita stayed with the group the entire week."

Although he was very shy and reserved initially, he really blossomed through the week and became endeared to virtually everyone," Williams said.Negoita was concerned that the gypsies, who are a minority discriminated against and somewhat feared in Romania, would be hostile to him, but they actually greeted him very warmly, and he responded very warmly in return."I think this will not only affect his interactions with this group in the future, but he will also be in a position to affect the prejudices of others," said Williams.

Negoita also told the group that the week spent following God's leading in this mission had changed his life and that it would change his practice of medicine in the future."Since our goal was to change lives for God, I was very touched by the change in him over the week," said Williams, who hopes to participate in more mission trips in the future. "I know this will have an ongoing impact and ripple effect in that culture for years to come."

Meinl European Land purchases 60,000 square metres shopping centre in Romania

VIENNA (Thomson Financial) - Meinl European Land AG (MEL) said it has signed contracts to purchase a 60,000 sq m shopping centre in Constanta on Romania's Black Sea coast.A total of some 130 mln eur will be invested in the shopping centre, the Austrian real estate development company said in a statement.Meinl also said contracts for seven more projects worth 400 mln eur and involving retail and commercial sites in various Romanian cities are closed to being signed.

Messer to build air separation plant in Romania

FRANKFURT (Thomson Financial) - Messer Group GmbH will build an air separation plant producing nitrogen, oxygen and argon at costs of 20 mln eur in Resita, Romania, the producer of industrial gases said in a statement.

The plant will be located on a site of Russian steel pipe manufacturer TMK.

AP; Cambodian cargo ship sinks in Black Sea near the coast of Romania

CONSTANTA, Romania: A Cambodian ship carrying construction supplies sank near the Romanian port of Mangalia, spilling fuel into the Black Sea, authorities said Friday. All seven crew members were rescued.

The ship, named Multitrader, began to sink Thursday night, and its captain called Mangalia port authorities for assistance, said Adrian Burcea, chief officer of the local border police.

Some of the ship's fuel leaked into the water. The spill measured about 10 kilometers (6 miles) long and 50-100 meters (yards) wide on Friday morning, said Dumitru Bucuresteanu, who heads an anti-pollution task force for the Romanian Naval Authority.

Anti-pollution crews were working to clean up the spill, he said, adding that the fuel was not expected to reach the coast, but instead to move with currents in the opposite direction. Heat was causing some of the fuel to evaporate, he said.

Romania: Is the Party Over?

Oxford Business Group Latest Briefing

Many analysts have come to believe that, like all good parties, the peak of Romania's economy - a hot spot of the European emerging markets scene over the last several years - may soon come to an end. While most economic indicators predict only a modest dip of one percentage point in real GDP growth to 6.5% for 2007, there are some worrying trends, which if they are not tended to, could slow growth even further.

Among the most worrying is Romania's growing current account deficit which widened in the first quarter of 2007 by 125% year-on-year to reach $4bn. Foreign Direct Investment (FDI) receipts, which have been used in previous years to offset the deficit gap, seem incapable of keeping up. In the period of January to March they fell 30% compared to last year, and they now only account for 46% of the deficit gap (as opposed to 90% in 2006). Most analysts agree that with the expected decline in privatisation receipts, there is little hope this issue will resolve itself by the end of 2007.

Much of the growth in Romania's current account deficit can be blamed on the 30% increase in imports over the last year. Imports have soared on the back of Romania's growing middle class, which has been plied with steadily rising wages and easy credit. In turn, this has fuelled domestic demand for luxury foreign goods such has electronics, clothing and, most notably, foreign cars, which have seen a 40% rise in sales in the first three months of this year. This has been exacerbated by the high value of the lei, which has made imports increasingly attractive to consumers and manufacturers alike.

While growth in domestic demand has yet to spill over into inflation, many worry that it may soon begin to have an effect in this area as well. As domestic demand is soaring, most areas of the retail market and domestic suppliers are struggling to expand their operations, modernise their factories and expand their labour force. With labour costs rising more than 100% in year-on-year terms in some manufacturing sectors, real estate prices soaring and the costs of metals, agricultural goods and other input materials at record highs, such expansion comes at a hefty cost. For these reasons it is no surprise that retailers have privately told OBG they expect a double-digit increase in prices over the next year.

Such reports add credence to recent statements by the International Monetary Fund, the World Bank and other international institutions. Analysts from these organisations have argued that the Central Bank's modest inflation targets for 2007 - a decrease of only 1% this year - is a sign the bank is finding it increasingly harder to control inflationary pressures.

What is most worrying to many outsiders is that the government seems largely unconcerned about these trends. Minister of Economy and Finance Varujan Vosganian has publicly stated he thinks that the tighter fiscal policies advocated by the IMF make no sense and would have a dampening effect on growth. He went further to say Romania would not follow the fund's advice to reduce the general budget deficit to less than 1% of GDP this year. Instead, he warned that public expenditure may be increased.

Vosganian's warnings became a reality last week when Prime Minister Calin Popescu-Tariceanu's plan to increase pensions given to many of Romania's elderly by 43% came one step closer to becoming a reality. Vosganian argues that the plan, which is estimated to cost $8.3bn, will not require an increase in taxes and will instead be supported by the growing Romanian economy.

While the government almost certainly will not increase taxes, many analysts worry that these recent plans, combined with promises to invest further in education, health care and infrastructure, may force Romania's budget deficit, which the European Commission considers is already too high, to even higher levels.

What is less discussed is how such an increase in government spending will affect an economy that is already showing signs of inflationary pressure and overheating. Analysts seem to agree that the planned expansion of the pension scheme will only exacerbate the domestic demand issue. Despite a dramatic increase in the value of their homes, pensioners have largely remained out of the domestic spending binge that has occurred in the last several years. An increase in the size of their monthly pension payments may be exactly what is needed to push them over the edge into the spending bracket. This in turn could expand the growing account deficit even further.

Despite these worries, many of the challenges Romania faces are common among emerging markets throughout the world and some analysts say they are more due to growing pains than structural problems within the economy. The spending binge, which is fuelling the account deficit, is largely due to the steady gains in employment and wages. If local retailers and manufacturers, which are hurting from the high value of the lei and rising labour costs, can adapt to Romania's evolving marketplace, then they may be able to capitalise on the growing domestic demand and thus cut their exposure to the export market.

Romania's anti-Beyoncé

Angus Batey
Friday July 27, 2007


"Who is Miss Platnum?" ponders 26-year-old Romanian-born German resident Ruth Renner, the creator of the eastern European R&B parody that has moved beyond a joke. "Well, she's a mixture between this rough Romanian lady that can be loud and that drinks a lot, that likes to eat, and is very, er, emancipated. But there's also parts of her that are very sad and dramatic. I would say she's a very emotional character, who lives everything very intensely."

If there's a sense here that Renner isn't really sure about where to draw the lines that circumscribe the anti-Beyoncé she's created, that perhaps shouldn't come as a surprise. Miss Platnum, Renner's lurid, larger-than-life R&B singing alter-ego, is something of a work in progress, and is defined almost as much by what she is not as by what she is.

"She is a part of me," Renner says, "but sometimes, it helps to exaggerate: to think of a story not just as your own story, to take parts of it but then make something up, and make a whole new thing. I think the exaggeration and the ironic thing - the humour - is very important. I'm missing that in R&B and soul music right now, so that's also why I wanted to do something almost against all the Ciaras and Beyoncés. Mariah Carey used to be such a great singer, but now she's just all plastic. Poor little lady."

Comparisons to another ironic character from the former Communist bloc are wide of the mark, Renner reckons. "People were calling me Miss Borat," she chuckles. "I think part of what he did was funny, but what I do is really different, because I don't try to offend anyone."

The contrast between Miss Platnum - gauche in feather boas, cheap bling and championing materialistic excess, singing about her love of massive portions of food and how her life will be made complete by a Mercedes-Benz - and her softly spoken, studious creator is considerable. But Renner, who moved from Romania to Berlin as a child, is as steely and focused about her music as she is in her mickey-taking.

That is the key to why Miss Platnum may soon be attracting more than the novelty attention her single, Give Me the Food might at first suggest. The remixers of the single include the ultra-credible Ghanaian-British rapper Sway and house outfit Bugz in the Attic, and Renner doesn't just hit her satirical targets, she nails her musical ones as well. Her debut album, Chefa, lures you in with the jokes and the irony, but keeps your attention with its blend of crisp, fluent R&B production and a knowing, deceptively organic absorption of Balkan musical figures. It's funny and clever, but it doesn't forget to be good.

"I love R&B, I don't wanna make fun of it," says Renner. "I just laugh about how people are: I'm pointing the finger at anyone who's imitating that kind of airbrushed perfection. I just want to make better R&B music, for myself, and find a corner where I fit in. And I've realised I don't fit in this Beyoncé/Ciara type of thing: I don't look like them, and never will do, so I just try to do my own thing. Most young ladies, when they start thinking about doing R&B or soul or hip-hop, they all look at these types and then they try to imitate them. And realising that you cannot really get there is maybe a good thing. For me it was."

· Give Me the Food is out now; the album, Chefa, follows in September

Govt urged to tackle Romania on treatment of Roma

Belfast Telegraph

Crosscare is calling on the Government to persuade the Romanian authorities to improve living conditions for the country's Roma community.

The charity, which had been assisting the Roma families camped on a roundabout off the M50 in Dublin, says human rights groups have found that they are worse off in their home country.

Crosscare wants Minister for Europe Dick Roche to use his office to influence the Romanian authorities to improve their record.

Greece, Romania to cooperate on civil protection

Greece and Romania signed Thursday a memorandum of cooperation on civil protection.

As a result the two nations will work together on central administration, electronic governance, the training of civil servants, decentralization and absorption of EU funds via Regional Operational Programs.

Greek Interior, Public Administration and Decentralization Minister Prokopis Pavlopoulos signed the memorandum with visiting Romanian Minister of Administrative Reform and Interior Cristian David.

Pavlopoulos was pleased that Romania, "a country that is a good friend and also a neighbor of Greece," was now "in the large European family."

Referring to the problems currently faced by Greece and southern Europe in general, Pavlopoulos said that close cooperation in the field of civil protection was needed to confront crises.

He also expressed sympathy for the suffering caused by this summer's devastating heatwave and wildfires in Romania. Authorities said Wednesday that the heatwave-related death toll had risen to 33.

David said Romania would follow Greece's plans on confronting floods and fires, as Romania is not accustomed to high temperatures and therefore has "a lot to learn."

Source: Xinhua

Roma group leaves for Romania

BBC News

A group of Roma people who had been living on a roundabout near Dublin airport have been flown back to Romania.

The group, who had been living on the M50 near Ballymun, had wanted the Irish government to grant them housing and allow them to stay in the country.

However, they departed Dublin Airport just after 1800 BST on Wednesday.

They will be taken to their respective villages in the western part of the country by bus once they arrive.

A Garda spokesperson confirmed that the Roma's decision had followed dialogue with gardai in recent days, and Wednesday's operation had been conducted by officers from Santry and the Garda National Immigration Bureau.

Under Irish law, they were not entitled to work or stay in the country more than three months, but said conditions there were better than at home.

This claim was contested by the Romanian Embassy in Dublin.

Rare Siberian tiger cubs born at Romanian zoo

GALATI, Romania (Reuters) - Lenuta and Costel, two tiger cubs from one of the world's most endangered species, the Siberian tiger, were born in a Romanian zoo this year, breeders said on Thursday.

The Siberian tiger, native to northern China, southern Russia and parts of North Korea is on the brink of extinction in the wild, decimated by poaching and loss of habitat. Scientists believe only a few hundred now live outside captivity.

The cubs, now weighing 3 kilos (6.6 lb) each, were born on May 21 to six-year-old Gina and her mate, six-year-old Geo.

"It is a miracle," Liliana Stancu, chief of a zoo in the city of Galati in eastern Romania, told Reuters. "Their mother was extraordinary, accepting them, carefully looking after and feeding them from the very beginning."

"Without her help it would have been almost impossible for the little tigers to survive ... we try not to touch the cubs so as to not scare the mother into loosing the milk."

The mother, a 250-kilo cat, kept the cubs out of public view in an indoor den until this month.

Martifer enters shopping centre market in Portugal, Poland and Romania

LISBON (Thomson Financial) - Martifer SGPS has acquired a 60 pct stake in Portugal's largest independent shopping centre management company Global Shopping for 300,000 eur, said Jornal de Negocios, citing Martifer's CEO Carlos Martins.

In the interview, Martins said that the Global Shopping acquisition will give Martifer "an experienced team to develop the projects we have in this area for Portugal, Poland and Romania".

Global Shopping's activity will not be restricted to Martifer's developments and will be open to other projects, said Martins.

According to the report, Mota-Engil SGPS affiliate Martifer has already invested 500 mln eur in property developments, including shopping centres, retail parks, and logistics centres, and is currently eyeing opportunities in Spain and Eastern Europe.

Global Shopping manages four shopping centres in Portugal covering 100,0OO square metres, and is responsible for sales in another three.


Sofia Echo

Bulgaria and Romania joined the European Economic Area in an agreement signed on July 25 in Brussels, according to an Economy Ministry statement.

The EEA agreement facilitates relations between EU member states and a small group of non-EU European countries in the context of the European domestic market.

The results of the negotiations mean that Bulgaria and Romania will benefit from the principle of equal treatment, according to BBC Monitoring.

The treatment for Bulgarian and Romania will be in accordance with the agreement that includes the 10 member states that joined the EU in 2004.

Almost 100 million euro in financial assistance will be granted by AELS/SEE countries to support steps to protect the environment, promote sustainable development, the reduction of greenhouse gas emissions, energy efficiency, and the development of human resources and health care.

Corus Establish New Office in Romania

Corus International has established a new office in Bucharest, Romania to further expand its network of offices aimed at focusing on packaged steel supplies for in-country projects in the infrastructure, energy and mining sectors.

The new office adds to Corus International's already expansive network across the growing Central and Eastern Europe region, including facilities in the Czech Republic, Hungary, Poland, Russia, Turkey and Ukraine.

Kieron Wilkinson, Managing Director of Corus International said, "The establishment of a new office in Bucharest will allow us to strengthen our presence and our understanding of these markets and will pave the way for further investments in this fast growing region."

The head of Corus International’s Romanian office, Ionel Negoita, has a considerable background in the steel industry and will lead a team who will also work alongside Romanian contractors involved in major overseas projects to meet their steel requirements.

Corus International forms part of the Corus Distribution & Building Systems Division and consists of two major business streams, namely Trading and Projects, and is responsible for managing the Company’ network of sales offices around the world.

Thursday, July 26, 2007

Some 100 Gypsies voluntarily repatriated from Ireland arrive back in Romania

TIMISOARA, Romania (AP) - A group of some 100 Gypsies who had been living in makeshift tents in Ireland were voluntarily repatriated and escorted back to their home villages in western Romania, officials said Thursday.

The 99 Gypsies, including 36 children, arrived on a plane late Wednesday to the western city of Timisoara. They were escorted by more than 30 Irish police officers, local Romanian officials said.

The group had been living in makeshift tents near a highway in Ireland before Irish authorities offered to fund their trip home. Some Gypsies chose to remain in Ireland. Those who returned were taken to two villages in the Bihor county, near Romania's border with Hungary.

Baron Rostas, 40, who went to Ireland six weeks ago with his wife and two teenage children, said he decided to return after failing to find work in Ireland. None of the group had work permits. «I left Romania because I wasn't getting social welfare,» Rostas said. «We didn't go to Ireland to beg; we wanted to work. He said he would go to Ireland again, however, if he could not get social welfare in Romania.

Gypsies, also known as Roma, are routinely discriminated against when applying for jobs in Romania, and many live in abject poverty. There are officially some 500,000 Gypsies in Romania, but surveys put the actual figure at more than 1 million. Many do not declare themselves to be Gypsies due to widespread prejudice. Romania joined the European Union on Jan. 1, and Romanian citizens no longer require visas to travel to Ireland and other European Union countries.

AP: Romania plans 2.7 percent budget deficit for 2008, due to pension hikes

BUCHAREST, Romania: The Romanian finance minister on Wednesday said the country's proposed 2008 budget foresees a 2.7 percent deficit, with a 43 percent pension hike estimated to cost as much as €6 billion (US$8.3 billion).

Economic growth, estimated to hover at about 6 percent for the next few years, will help support the additional spending, and the government does not plan to raise taxes, Economy and Finance Minister Varujan Vosganian said.

The government also plans a 6 percent cut in payroll taxes.

However, as the average pension increases from 396 lei (US$180, €130) to 568 lei (US$260, €190), the government will need to overspend again in 2008, Vosganian said.

Gross domestic product is estimated to be 438 billion lei (€146 billion; US$202 billion), with the budget deficit estimated to reach 11.9 billion lei (€3.9 billion; US$5.4 billion) — about 2.7 percent of GDP.

The European Union, which Romania joined in January, and the International Monetary Fund have asked the government to tighten public spending and to reduce the budget deficit, which is expected to reach 2.8 percent this year.

In 2008, Romania also plans to spend more on education and health care, two sectors which have been underfunded for years, the finance minister said.