Thursday, January 31, 2008

Romania facing labour crisis

The Press Association

Romania is on the verge of a jobs crisis because between 1.2 and 2 million people have left the country to work abroad. And the crisis could deepen in the next two years because fewer youngsters will finish their schooling, the country's labour minister, Paul Pacuraru, said.

The shortage in graduates is a result of the low birth rate in the early 1990s. Mr Pacuraru said that the Romanian government should take emergency measures to prevent the crisis.

The measures should improve the social welfare system, stimulate the birth rate and offer job opportunities to people over 50, he said. He urged the country to make every effort to employ Romanians before bringing in workers from Asia or Africa.

One of the first steps will be to organise a job fair in Italy in June, where employers who face a lack of qualified workers will try to lure thousands of Romanians back, offering them well-paid jobs at home.

Romania has an unemployment rate of 4.1%, its lowest since 1992.

In November, Economy Minister Varujan Vosganian estimated that Romania needed 500,000 more workers, especially in construction, heavy industry and car manufacturing. Most Romanians working abroad are in Spain and Italy. Many moved there after Romania joined the European Union in 2007, taking modestly paid jobs as maids, cleaners and builders.

DPA: Nokia to pay no property tax for 30 years in Romania

Bucharest - Finnish mobile phone producer Nokia will not have to pay property tax for the next 30 years on its new facilities in Romania, the director of the company that runs the industrial park in which Nokia is located said Thursday. If Nokia left the park before the 30 years were up, it would have to pay back the taxes on the land and factories retrospectively, said Viorel Gavrea, whose company Tetarom also owns the Nokia site in Jucu, near Cluj.

The agreement would be formally written into a contract with the Romanian authorities in two months' time, Gavrea said. All other investors in the industrial park will receive the same tax break, Gavrea said. Nokia came in for bitter criticism in Germany over its decision to move production of mobile-phone handsets from Bochum to Jucu. Property tax in Romania is set and collected by local councils. In Jucu it is 1 per cent of the value of the property. Nokia will still have to pay tax on its profits, which is collected by the central government in Bucharest, the Romanian authorities said previously. Romania has a flat corporate tax rate of 16 per cent. When the contract with Nokia is signed in March, the Jucu site will officially receive its designation as an industrial park, Gavrea said. Nokia has 90 hectares in the 159-hectare park. Four Nokia suppliers have also indicated that they wish to locate in the park.

Tetarom plans to expand the park by 170 hectares, more than doubling its size.

Ex-Priest Jailed Over Exorcism Death

BUCHAREST, Romania (AP) — A former priest began a seven-year jail term Wednesday for murdering a young nun during an exorcism ritual when she was bound, chained to a cross and denied food and water for days.

Irina Cornici, 23, died from dehydration, exhaustion and suffocation during an ordeal that stunned Romania and prompted the Orthodox Church to promise reforms and psychological tests to screen potential clergy.

The former priest, Daniel Corogeanu, and four nuns were all convicted and sentenced in September but Corogeanu was freed pending an appeal, which he lost Tuesday. He was picked up by police in the remote northeast Wednesday and sent to jail.

Cornici, who had previously been treated for schizophrenia, had believed she heard the devil talking to her. Corogeanu and the four nuns decided to try an exorcism ritual in June 2005 using techniques that the Romanian Orthodox Church condemned as "abominable".

The church, which has benefited from a religious revival in recent years, defrocked Corogeanu and excommunicated the four nuns, who in September were handed five- and six-year jail terms.

When arrested Wednesday, Corogeanu said he would serve his term if that was God's will, the national news agency Rompres reported.

Corogeanu, a Romanian, dropped out halfway through training for the priesthood, but still served as a priest for the secluded Holy Trinity convent in northeast Romania because of a shortage of suitable candidates for convents and monasteries.

European Commission: Romania's Deficit Is "Serious Concern"


Romania's increasing budget deficit is a "serious concern" the European Commission said Wednesday in its latest review of European Union members' convergence programs.

"Romania needs to aim for more healthy budgetary targets to avoid breaching the rules of the Stability and Growth Pact and to contain the growing external deficit and inflationary pressures which pose a risk to macroeconomic and financial stability," said Economic and Monetary Affairs Commissioner Joaquin Almunia.

Romania's planned reduction of its budget deficit to just below 1% by 2011 is "left until the last year of the program period despite strong growth prospects, " the commission said.

Romania should pursue "substantially more demanding budgetary targets" starting this year, the commission said.

Romania's cyclically-adjusted budget deficit will stay at 3.6% of gross domestic product this year, improve only slightly in 2009 and come down to 2.8% of GDP in 2010, according to the new European Union member's own convergence plan.

Commission forecasts in November said the budget deficit would grow to 4.0% of GDP in 2009.

Wednesday, January 30, 2008

Romania unlikely to balance books by 2011 - EU

BRUSSELS, Jan 30 (Reuters) - The European Commission voiced concern on Wednesday over Romania's budget deficit, which has been growing since the country joined the European Union last year.

The Black Sea country is unlikely to meet its goal of a balanced budget by 2011, the EU executive said in an assessment of the country's long-term fiscal plans.
The Commission also called for deeper budget deficit cuts.

"The increasing deficit of Romania since it joined the European Union and its volatility are a matter of serious concern," EU Monetary Affairs Commissioner Joaquin Almunia said in a statement.

"Romania needs to aim for more healthy budgetary targets to avoid breaching the rules of the Stability and Growth Pact (EU budget rules) and to contain the growing external deficit and inflationary pressures which pose a risk to macroeconomic and financial stability," he added.
Romania wants to adopt the euro, for which it needs, among other things, low inflation and a budget deficit below 3 percent of gross domestic product.

Despite economic growth of more than 6 percent annually, Romania had a budget deficit of 2.9 percent of GDP last year and expects no change to it this year or next.

The Commission sees the deficit growing to 3.2 percent this year and 3.9 percent in 2009, unless policies change.

"Progress towards the medium-term objective (of a balanced budget) is insufficient and fully back-loaded despite strong growth prospects," the Commission's assessment said.

"In view of the risks to the budgetary targets and the significant adjustment that would be necessary after the programme period, the medium-term objective is unlikely to be achieved by 2011 as planned," it said.

The Commission also said Romania should restrain the envisaged high increase in public spending, look again at what it spends the money on and take steps to curb inflation that would complement the budget deficit cuts.

Inflation in Romania was 4.8 percent last year. The government and the Commission expect it to accelerate to 5.6-5.7 percent this year.

Indian drug firms in race for majority stake in Romania's Antibiotice

MUMBAI, Jan. 30, 2008 (Thomson Financial delivered by Newstex) -- Indian drug companies Ranbaxy Laboratories, Dr Reddys Laboratories (NYSE:RDY) and Lupin Ltd are believed to be in the race to acquire 53 pct stake in Romania's pharmaceutical company Antibiotice, The Economic Times (ET) reported, quoting unnamed sources.

The reserve price at auction for the state-owned company, expected to be privatised in March, is around 200 mln usd.

Malvinder Singh, Ranbaxy Laboratories CEO was quoted as saying 'we will consider target companies based on the value and the synergies that can be unlocked from such a deal that can ultimately enhance the shareholders' value'.

'In the generics pharmaceuticals space, we believe there is more opportunity for acquisitions in the emerging markets.'
The ET cited an unnamed senior Lupin official as saying the company is looking for acquisitions in central Europe but declined to comment on specifics and a DRL spokesperson said the company does not respond to market speculation.

Ranbaxy already has a presence in Romania, through the acquisition Terapia, Romania's largest independent generic drug firm, which it bought for 324 mln usd in 2006.

Romania to hike gas tariffs by 8.5 pct from Feb

BUCHAREST, Jan 30 (Reuters) - Romania will hike gas prices for household consumers by 8.5 percent on average from next month, due mainly to higher costs for imported gas, energy price regulator ANRE said on Wednesday.

Administered prices, including electricity and gas tariffs, are a key component of Romania's inflation outlook, and analysts have said delays in increasing them last year have helped bring annual price growth to post-communist lows in early 2007.

But annual inflation jumped to 6.6 year-on-year in December, overshooting the central bank's 3-5 percent target band by a wide margin because of soaring food costs and strong domestic consumption. The bank targets 2.8-4.8 percent inflation in 2008.

"The decision to apply this adjustment is determined by the evolution of natural gas from import and an adjustment of tariffs for gas distribution," the ANRE said in a statement.

It said consumers recording annual gas consumption below 2,400 cubic metres will pay 989.6 lei ($393) per 1,000 cubic metres for the gas distributed by Distrigaz Sud owned by Gaz de France (GAZ.PA: Quote, Profile, Research).

Gas supplied by E.ON Gaz Romania, controlled by Germany's E.ON (EONG.DE: Quote, Profile, Research), will cost 983.1 lei from Feb. 1.

Finance and Economy Minister Varujan Vosganian has said he aims to keep increases in energy tariffs below the inflation rate in 2008.

Romania, which joined the European Union at the start of 2007, hiked gas prices by 3.7 percent in October. (Reporting by Radu Marinas; Editing by James Jukwey)

Daimler in talks to open plant in Romania

BUCHAREST, Jan 30 (Reuters) - German car and truck maker Daimler (DAIGn.DE: Quote, Profile, Research) is in talks with the Romanian government to open a production facility in the new European Union member state, a local government official said on Wednesday.

Local media in Romania reported this week that Daimler may be interested in opening a facility in the northwestern county of Cluj, where Finnish mobile phone giant Nokia (NOK1V.HE: Quote, Profile, Research) is building a new production plant.

"There are discussions held at the top level between Daimler representatives and the Romanian prime minister about setting up a car producing unit in Romania," an official from the county of Cluj told Reuters.

"They also have Poland as another option but nothing has been decided yet," he said.

Nokia's plant in the small village of Jucu, about 20 kilometres northeast of Cluj, is to replace a manufacturing facility in the German town of Bochum in North Rhine-Westphalia and plans for its opening sparked rage over job losses in Germany.

In Romania, Nokia's decision has calmed fears that foreign investment may dry up in the relatively poor country as wage growth erodes competitiveness.

Daimler, maker of Mercedes-Benz premium cars, has a market value of 53 billion euros, according to Reuters data, and production in 17 countries, according to the group's Web site.

The Romanian government's spokeswoman was not immediately available for comment. (Reporting by Radu Marinas; Writing by Justyna Pawlak; Editing by Quentin Bryar)

Romania's Structural Funds For 2008 Reached Over One Billion Euros

Bucharest, Romania (AHN) - Over one billion euros ($1.47 billion U.S. dollars) in structural funds will be absorbed by Romania in 2008, the Minister of Economy and Finance Varujan Vosganian announced Tuesday at a press conference.

"We are targeting the absorption of 700 million euros ($1.03 billion U.S. dollars) in the agricultural sector, with the objectives to finalize Sapard program and to make progress in ISPA program. We want to absorb at least one billion euros in structural funds, as it is provided by the draft budget," the minister said.

Romania should absorb between 2.5 and 3 billion euros ($3.67 billion and $4.41 billion U.S. dollars) from the European structural funds and pre-accession funds, Vosganian said, pointing out that the amount absorbed in 2007 be doubled.

In 2007, Romania received around 1.5 billion euros ($2.20 billion U.S. dollars) from EU and contributed 1.1 billion euros ($1.61 billion U.S. dollars), the minister said.

About 19.67 billion euros ($28.91 billion U.S. dollars) from structural and cohesion funds have been earmarked by the European Commission for Romania in 2007-2013.

The 2007-2013 National Strategic Reference Framework (NSRF) was signed in July 2007 by Premier Calin Popescu Tariceanu and European Commissioner Danuta Hubner.

It was said that the funds allotted by the European Union guarantee predictability in multi-annual draft preparation that will reduce gaps on the economic and social development between Romania and other EU member states.

Romania ranked as the 15th among the 27 EU member states to finalize the its negotiation on NSRF.

Romania Supports Serbia's EU Path

29 January 2008
Belgrade _ Romania’s President Traian Basescu has said that Serbia’s presidential elections on Sunday will determine whether Belgrade can forge closer links with the EU.

“The February 3 elections will not be about the victory of an individual politician, but about the success of an entire nation, “ Basescu said after meeting his Serbian counterpart Boris Tadic in Belgrade.

Basescu’s brief visit on Tuesday comes amidst the final stretch of campaigning ahead of Sunday’s run-off for the presidency and only a day after the European Union offered Serbia an interim trade and visa-free deal, instead of a fully-fledged Stabilization and Association Agreement, as a stepping stone towards gaining the status of a candidate for membership of the 27-nation bloc.

Tadic, who leads the pro-European Democratic Party, narrowly lost to the strongly nationalist Tomislav Nikolic of the Serbian Radical Party in the first round of voting, and Basescu’s visit is seen as a possible boost to the incumbent president’s efforts to secure re-election.

“Serbia belongs to Europe, and it can solve its outstanding issues within Europe and not outside of it,” Basescu said in an apparent reference to Belgrade’s bid to keep its independence-seeking province of Kosovo within its borders.

After meeting Basescu, Tadic said that “Serbia will continue its struggle for the preservation of its territorial integrity… through peaceful and diplomatic means.”

He, however, said that "Serbia will never give up its European future which is essential for every citizen.

Tadic and his coalition partner, the conservative Prime Minister Vojislav Kostunica, are at odds over policies on Kosovo and the EU.

Kostunica and his minor coalition partner, the New Serbia party, recently made their backing to Tadic conditional on his willingness to amend the four-party coalition agreement by stating that Serbia will not sign a key pre-membership deal with the EU, if the European bloc deploys its police and justice mission in breakaway Kosovo province.

UN-administered Kosovo is set to declare its independence from Serbia, and an EU mission there would be seen by Belgrade as the European Union’s endorsement of Kosovo's statehood.

Tadic, who wants closer links with the EU regardless of developments in Kosovo, has dismissed his partners' demand, further souring relations with Kostunica.

Basescu was also scheduled to meet Kostunica and other key officials.

Tuesday, January 29, 2008

Foreign Investment in Romanian Capital Markets Doubles in 2007

By Adam Brown

Jan. 28 (Bloomberg) -- Net international investment in Romanian stocks and bonds more than doubled last year after the country joined the European Union.

Net investment rose to 460 million euros ($677 million) in 2007 from 220 million euros in 2006, the Romanian National Securities Commission said on its Web site today.

International purchases of Romanian stocks, bonds and investment in local mutual funds totaled 2.36 billion euros last year from 1.123 billion euros the year before, while sales of the securities increased to 1.9 billion euros from 903 million euros, the commission said.

Romania's entry to the EU on Jan. 1 of last year made it easier for many foreigners to invest in the local market. Foreign investment helped raise the benchmark BET index of the Bucharest Stock Exchange by almost 17 percent in 2007.

So far this year, the index has declined 22 percent as many international investors pull out of emerging markets on mounting concern that the U.S. economy is heading for a recession.

To contact the reporters on this story: Adam Brown in Bucharest at

Romania's Romtelecom to Fire Up to 2,500 Employees

By Adam Brown

Jan. 28 (Bloomberg) -- Romtelecom SA, Romania's former telephone monopoly, said it will fire as many as 2,500 of its fewer than 13,000 employees this year to improve efficiency.

Romtelecom, a unit of Greece's Hellenic Telecommunications Organization SA, said in an e-mailed note today it will carry out the cuts to lower costs as its fixed-line business wanes.

``For 2008, Romtelecom's strategy is aiming to improve efficiency and ensure for the company the basis for solid future growth,'' the company said. ``The new business plan will require the redesign of workflows and work methodologies, resulting in job reductions which will not exceed 2,500 positions.''

Romtelecom, 54 percent-owned by Hellenic Telecom, has seen its fixed-line subscriber base decline with the growth of mobile-phone use in Romania. The company has said it aims to boost Internet and television connections to retain clients and improve profitability.

In today's note, Romtelecom said it quadrupled its broadband Internet connection sales in the last quarter of 2007 from a year earlier and boosted its pay-television subscriber base to 8 percent of the Romanian market.

Romtelecom also said it maintained its fixed-line subscriber base at 3 million, for a market share of 70 percent, after years of declines.

``We saw growth and evolution during 2007 but we need more focus on quality and efficiency in order to face the market challenges and the competition aggressively developing on all segments,'' Romtelecom Chief Executive Officer Georgios Ioannidis said in the note today.

To contact the reporters on this story: Adam Brown in Bucharest at

AP: French President Sarkozy to address Romanian parliament during one-day visit

BUCHAREST, Romania: French President Nicholas Sarkozy will address Romania's Parliament during a one-day visit on Feb. 4, as lawmakers debate and ratify the new European Union treaty, officials said Monday.

Sarkozy will meet President Traian Basescu and Prime Minister Calin Popescu Tariceanu during his visit, the first since he became president.

"As a way of marking (bilateral) relations and the support which France has given us over the years, Parliament will debate and ratify the treaty after Nicholas Sarkozy addresses Parliament," said Bogdan Olteanu, who heads Parliament's Chamber of Deputies.

The treaty replaces the failed EU constitution and is meant to streamline EU decision-making.

France has traditionally been Romania's closest ally in the West and has major business interests in the country including car maker Renault, which produces the popular low-cost sedan Dacia Logan, mobile phone carrier Orange, and France's Societe Generale owns Romanian Development Bank.

Monday, January 28, 2008

ROMANIA: Not Ready To Live Green

By Claudia Ciobanu

BUCHAREST, Jan 28 (IPS) - A simple architectural solution could ease housing and environmental problems in Romania and beyond.

Each spring and fall, when the rivers rise, floods bring down hundreds of houses in villages around Romania. Every time, authorities say that weather conditions have taken them by surprise, and grant minimal financial assistance. People again start building their homes from scratch.

Clay houses could be an answer to such emergency situations, and in numerous cases where people cannot afford construction materials, local architects say.

Houses built from clay or cob -- a mixture of clay, water, sand, straw and other natural materials -- are cheap and easy to build. "Most of the construction materials can be found on site," says architect Ileana Mavrodin. "From digging the foundation, we get the earth needed for the walls, and the vegetal soil is used for the roof."

For the past two years, Arhiterra, a Bucharest-based group of architects, engineers and artists, has been proposing building of houses from basic materials easily available around the country.

The group was formed in part to pressure parliament, which intends to prohibit earth houses in areas affected by floods. Arhiterra member Corina Stoianovici says Romanian legislators argue that such houses will be vulnerable to spreading waters, but they are really more keen on protecting the interests of the timber business.

Earth houses can be built with materials that make them resistant to humidity, for instance, adding linseed oil to clay, the architects say. So vulnerability to water should not be used as a pretext against such housing.

"We are seeking answers to difficult questions posed by a developing economy and the transition period, when many people are left poor," Mariana Celac, architect from Arhiterra told IPS.

Beyond organising workshops to familiarise the public with this housing model, the group has also been building model houses around the country. "These experiments were organised, not unintentionally, in relatively isolated and underprivileged areas," Raluca Munteanu, coordinator of the working group told IPS.

"In these areas, one can still find certain traditions and crafts that modernity forgot, and from which we may still have a lot to learn," Munteanu said. Experimenting with traditional building techniques also enabled use of the local labour force, she said.

Clay houses can be more than an answer to poverty. More widespread use can reduce environmental damage because their construction and upkeep demands low energy consumption, the environmental architects say.

"Cob is gentle on the planet," says Ileana Mavrodin. "It reduces the use of wood, steel and toxic building supplies. Buildings are solar oriented and energy efficient, warm in the winter and cool in the summer, no air-conditioning is needed, and minimal heating is required due to the exceptional thermal quality of the cob."

In spite of the advantages of clay houses, there are reasons to doubt that Romanians will embrace this construction model on a large scale.

"In order for such an architectural type to be successful in our country, people must first understand that the energy resources of the land are limited, and then act towards minimum energy consumption in the long run," Klaus Birthler, one of the architects designing earth houses, told IPS.

Environmental awareness remains low in the country. Unlike other Central and Eastern European countries such as Slovakia, the Czech Republic and Bulgaria, where environmental movements developed during state socialism and played a central role in the 1989 regime changes, in Romania such organisations have been promoting a credible message only in recent years.

Furthermore, cultural obstacles stand in the way of small-scale, traditional building. Putting up an imposing house has become a fashion among the emerging middle class, anxious to confirm its newly acquired status through building in concrete.

On the outskirts of capital Bucharest, property prices have skyrocketed over the last couple of years, driven by demand from businesses and from young professionals looking to raise their children away from the city.

As members of the European Union for a year now, Romanians want to be considered a part of the developed world rather than join ranks with the poorer third of the world that lives in earth houses.

A part of the developed world might already be moving in a direction other than Romanians think. "Politically speaking, we have the paradox of underdeveloped countries giving up tradition in favour of 'miraculous' concrete, compared to developed countries which hope to rediscover traditions and diminish the usage of unfriendly materials," said Munteanu. But it is still early days in that direction.

Romania: Mobile Phone Investment

Oxford Business Group Latest Briefing

The relocation of a mobile telephone factory to Romania has highlighted the benefits to the country of foreign direct investment (FDI). The Finnish firm Nokia, the world's largest manufacturer of mobile handsets, is planning to open a new production line just outside the north-western city of Cluj-Napoca.

The Nokia plant is due to open on February 11 and is expected to have a final workforce of 3500. The company has been recruiting around 100 people a week recently, according to some reports. Nokia has invested around $88m in the factory, but according to local press reports, it may be extended further to make it the world's largest handset factory.

The factory will replace one in Bochum, Germany, where labour costs are ten times higher and mobile phone sales are growing much slower than in Central and Eastern Europe. When Nokia announced the move last spring, Raimo Puntala, senior vice president for Nokia's operations and logistics, said the reasons for the plant's location in Romania were the country's availability of skilled labour, its good inbound and outbound logistics connections, its overall efficiency and the long industrial tradition in the area. Cluj-Napoca has a well-regarded technical university and is located on the road between Bucharest and Western Europe via Hungary, which is currently being upgraded to a European-standard motorway, with links to Serbia as well.

The decision has caused considerable controversy in Germany, with Finance Minister Peer Steinbrueck accusing Nokia of caravan capitalism and other leading parliamentarians switching to other companies' handsets.

The benefits for the region, however, will be sizeable. The factory will be located in an industrial park where Nokia's suppliers will be encouraged to base their operations, further boosting local employment. An additional benefit is the expected effects of the transfer of skills and technology to other sectors as well as more interest and investment in Cluj-Napoca's university if it can effectively build links with Nokia and its partners. It is hoped the factory will encourage young people to stay in the area rather than seeking employment in Western Europe, as many Romanians have done in recent years, reducing the workforce in an already tight labour market. If successful, it will illustrate the benefits FDI can bring.

The National Bank of Romania (BNR) reported that Romania secured more than $9.7bn in FDI in the first eleven months of last year, comparing favourably to the rest of the region. Hungary, with roughly half the population of Romania, but a significantly larger economy attracted $4.4bn of FDI last year, according to the Hungarian finance ministry.

The launch therefore comes at a time when fears are rising that the global credit crunch and uncertainty about the Romanian economy may stem investment. FDI has been a driving force behind much of the country's growth in recent years and has contributed to offsetting its troubling current account deficit.

While the FDI inflow last year represents a drop from the $13.3bn received in 2006, it is largely because there were fewer big-ticket privatisations of government assets to bring in lump sums last year. These included tenders for infrastructure projects such as the Cernavoda nuclear power plant, as well as privatisations in the automotive sector. FDI covered 43% of Romania's $22.6bn current account deficit between January and November 2007, according to BNR data. FDI brings in foreign currency to Romania, offsetting the outgoings of purchases of foreign currency-denominated imports.

However, last year the current account deficit grew as FDI fell. While the deficit is likely to be smaller in 2008 due to the weakening of the Romanian currency and a slight shrinkage in consumer demand, FDI could well decline further. It should be noted however, that a fall in FDI may in fact cause a fall in imports, positively affecting the current account, as many investors, particularly in industry, import capital goods such as machinery and construction materials in large amounts.

Additionally, confidence in Romania's stability has weakened in recent months. Observing political squabbles, higher-than-expected inflation, the growing current account deficit, hikes in public spending and a weakening of GDP growth, ratings agencies have flagged warnings. In November, Standard & Poor's downgraded Romania's outlook, and on January 24, France-based credit insurance company Coface (Compagnie française d'assurance pour le commerce extérieur) kept the country's risk rating at A4-. Cristian Ionescu, Coface Romania's managing director, said, It is certain the recession now starting to become apparent in the US will influence European economies [...] Romania becomes a collateral victim of the international uncertainty-filled environment. He added that Romania's economy has been negatively affected by the US mortgage crisis.

Given these factors, Romania must consider how it can draw in more foreign investment in the long term. Nokia has noted Romania's current advantages in workforce, position and industrial tradition. However, as European Commission President Jose Manuel Barroso pointed out, if Nokia can move production from its home country to Germany, it also has the perfect right to move from there to Romania. Taking his logic to the next step, companies can of course move from Romania to a destination that offers them better value for their money. While this is of course unlikely in the next few years, given the scale of Nokia's investment, other industries have seen companies relocate from Romania as the conditions were no longer favourable - the textiles sector being one such example.

With wage growth in the country being the second-highest in the EU, Romania will not be able to capitalise on a relatively affordable workforce forever unless it works on other variables that draw in FDI. These include liberalising labour legislation, investing in and reforming education, reducing employment taxes and further developing infrastructure, which is currently insufficient. Finally, political stability and careful policy-making are a must.

Despite these macro-economic and policy concerns, Romania has managed to catch up with other Central and East European countries, becoming one of the hottest FDI destinations in Europe.

The vampire strikes back

Old-time Transylvania — with its charming rustic dwellings — is being lovingly restored for the tourists. But don’t count on finding Dracula, says Clive Aslet

“Would you consider putting that mad lamp with the naked man in the corner?” David Mlinaric, the doyen of interior decorators, has come to Transylvania. Jessica Douglas-Home, champion of Romanian culture, shuffles a 19th-century ambassador’s uniform to the appointed position. We are in the village of Malancrav, for the grand opening its manor house after restoration by the Mihai Eminescu Trust. To many, the first word that comes into mind when you say “Transylvania” is Dracula, but not here. One of Jessica’s triumphs is to have defeated proposals for a Dracula theme park. Her passion is for another Romania: the peasant land of vast mountain landscapes and self-sufficient villages. Prince Charles loves it; he has come twice.

It was Ceausescu’s megalomaniac scheme to destroy Romania’s villages that stirred Jessica’s interest in the countryside. His execution in 1989 generated another threat to the Saxon enclave in the hills that roll up to the Carpathian mountains. The German-speaking population — about 70% of the whole — locked their churches and left. The Saxons had been invited to shore up what was a border of Hungary in the 12th century. There are over 200 of these villages, and almost as many Saxon dialects, which they kept after Transylvania (long part of Hungary) became assimilated into the new country of Romania in the 20th century. After the second world war, Stalin sent ethnic Germans to the gulags. When the Iron Curtain fell, most of the remaining population emigrated to the fatherland. Legend has it that the Transylvania Saxons are descended from the children the Pied Piper danced out of Hamelin. Now a new music of washing machines and factory jobs lured them back. Some villages lost all their Saxons, leaving nobody to ring the church bells or wind the clock. But the fabric of the Saxon culture survives.

I took the sleeper from Vienna to Sighisoara. Through the train window unfolds a landscape of wooded hills, vegetable gardens and meadows. Geese and turkeys roam over the banks of the village stream. The blues and ochres of the house fronts are mixed up from the bath of slaked lime kept in every cellar. The trust believes in discriminating tourism. Visitors will create a new village economy, providing a market for home-brewed schnapps, hand-woven rugs and lace.

Caroline Fernolend is councillor for the upland village of Viscri. Under communism, she worked at the state farm. When most of the other Saxons in Viscri left, she and her husband, Walter, stayed. The trust’s Romanian director, she has made it her responsibility to save Viscri’s Saxon culture from the 21st century. The trust helps villagers restore their houses and rents them out to visitors. Everything in Viscri is made at home: sheep’s-milk cheese, tomato and aubergine relish, blackberry jam, bread.

Hives provide honey. Lambs are slaughtered in the courtyard, as they always have been. Look on a road map and you may not find Viscri. It may have been left off by the map-makers. “They’re jealous,” sighs Jessica. “The Romanians don’t want the world to know about these Saxon places.” That hints at the region’s complexity, with its four communities: Saxon, Romanian, gypsy and Hungarian. Unlike the Saxons and the Jews, Romania’s Hungarians did not leave: they had no homeland to welcome them. We meet two of them in Saromberke, wizened, toothless people who turn out to be no more than 60. The authorities are making them change their Hungarian names to Romanian ones. When we stop to buy beans from a roadside stall, the 88-year-old shoeless woman at first smiles, then bursts into tears. Her pension is a few pence a month.

Back in Malancrav, a little of the Austro-Hungarian empire, circa 1880, has returned. Looking out from the Hungarian terrace, you see the Saxon village below. Beyond are the mountains. Slide too abruptly down a slope and you may find yourself next to bears gorging on wild cherries. There is harmony with nature here, and between people. For the moment. Go quickly to see this magic world, while it lasts.

Clive Aslet is editor at large of Country Life

The Mihai Eminescu Trust ( ) has guesthouses in several Transylvanian villages. Clive Aslet flew to Vienna with British Airways (prices from £120 return; ) and took the sleeper; prices from £330 first-class ( )

EBRD pioneers energy efficiency facility for Romania

The FINANCIAL -- The EBRD is launching its first ever credit facility to finance energy efficiency projects by private industrial companies in Romania.

Under the new framework, the Bank will make loans to the banking sector which will then provide credits to private firms. Three loans have already been signed: €20 million for the Banca Comerciala Romana (BCR), €10 million for CEC and €5 million for Banca Transilvania (BT).

The loans are part of the EU/EBRD Energy Efficiency Facility which is a wider joint programme of the European Commission and the EBRD to provide up to €100 million in credits to banks involved in lending for energy efficiency projects in Bulgaria and Romania. Introducing energy efficiency to Romanian businesses is intended to help mitigate the impact of climate change. The programme is complemented by €24 million of EU grant funding from the Phare programme, which will be used for technical assistance to support energy efficiency projects and for incentives to kick-start investments.

The facility aims to encourage enterprises to make better use of energy resources and assist in mitigating the impact of increasing energy prices and reducing the high energy intensity of Romanian industry by introducing energy efficiency measures. By reducing the energy wastage in Romania, the project will help the country meet its obligations as an EU member state. The EBRD aims to help participating banks build up expertise in this area by combining its energy efficiency mandate and tailored technical consultant services within a commercially viable framework.

The loans are expected to support Romania’s efforts to overcome obstacles to investment in energy efficiency projects that persist in the country. The Romanian government has already undertaken several key measures to improve energy efficiency and lowering the carbon intensity of the economy.

Nicolae Idu, Head of the Representation of the European Commission to Romania, welcomed the excellent co-operation between the EU and the EBRD for the benefit of the new EU members which dates back to 1999, when the first EU/EBRD SME Finance Facility was granted under a similar framework. “This time we are launching a new product for energy efficiency and the value of enhancing the existing co-operation is high,” Mr. Idu added.

Jean-Marc Peterschmitt, EBRD Director for Bank Relationships, said that this facility is an important element of the Bank’s Sustainable Energy Initiative as it will further increase investments in energy efficiency. We are delighted that BCR, CEC and BT continue to be our strategic partners by joining the EBRD and the EU in promoting energy efficiency initiatives in Romania, he added.

Manfred Wimmer, CEO of Banca Comerciala Romana SA, part of the Erste Group, said that BCR has been a long-term key partner for many of EBRD’s pioneer projects in Romania, for the benefit of the Romanian companies and of the Romanian economic growth. “Energy saving is of particular interest for BCR and the Erste Group as it benefits the environment and general welfare, two of our main objectives we are focusing on as a responsible partner of the communities”, Mr. Wimmer stated.

Radu Gratian Ghetea, President and CEO of CEC, said that energy efficiency will become the new strategic direction for CEC in the context of its modernization. CEC will implement this new facility in addition to the two already existing facilities for SMEs and rural businesses. “The co-operation with the EBRD in the energy saving sector is a key strategic orientation for CEC and we will continue with our efforts to enhance it,” Mr. Ghetea added.

Robert C. Rekkers, CEO of Banca Transilvania, said the new facility will boost BT’s efforts to consolidate its position as a market leader in Romania and in the region. “The EBRD is not only a key shareholder, but also a continuous source of innovative and creative financing to help us reach out to new clients. The new facility for energy efficiency is part of our strategy for the coming years,” Mr. Rekkers added.

Energy efficiency is a key priority for the EBRD. The new EU/EBRD facility for Romania is expected to replicate the successes already achieved with similar arrangements in neighboring Bulgaria, Ukraine and Slovakia.

Banca Comerciala Romana, CEC and Banca Transilvania are leading commercial banks in Romania.

The EBRD is the largest institutional investor in Romania, with €3.5 billion committed to 248 projects across the country. Working with its many partners, the Bank has mobilized more than €6 billion for projects in Romania.

Never mind the Balkans

OLD Stalinist dictators and contemporary child trafficking rings have meant that much of the news coming out of Romania has tended to be grim. Fanfare Ciorcarlia are doing their best to change all that.

Old Fruitmarket, Thursday


Romania's answer to the Buena Vista Social Club, they are an 11-piece Gypsy brass band who, when at full throttle, sound like the well-oiled, latter stages of a Balkan wedding party; precisely the sort of event where most of them learnt their musical chops.

In Britain, brass bands tend to evoke two images. One is colliery bands parping mournfully about pit closures and the other is the Brighouse and Rastrick Band performing 'The Floral Dance'. Fanfare Ciorcarlia are a much more lively proposition.

Even getting on stage seems to be part of their performance. The gig starts with the two tuba players, the baritone horn and the tenor horn lining up and beginning a slow, melancholy tune. It sounds like a sombre march but always one that is teetering on the edges of something more jaunty. As the back section is joined by the first of two saxophonists, the tempo climbs and the tune begins to let its hair down.

One by one, three trumpeters take to the stage, each one ratcheting up the pace. By the time two percussionists have completed the line-up, the musicians have all let rip and the number has turned into a right royal knees-up. It started out as a glum tune fit for a funeral and ended with much the same wild abandon that might be expected had knocking been heard coming from within the putative coffin.

After the opening track, the audience was treated to a lengthy, enthusiastic address in a Balkan tongue. At a rough guess, less than 1% of the audience understood a word but everyone assumed it to have been whatever the Romanian is for "Shake your pants, Glasgow".

Fanfare Ciorcarlia come from Zece Prajini, a village in the north-east of Romania. It is small and remote enough to make Ecclefechan seem like Tokyo. Despite this, the band sounds as though the village was an international crossroads for most musical genres. At times they swing like a Fifties big band playing speed jazz. At other times, it is more akin to a block party in a downtown Cairo souk. Slinky Latin influences creep in occasionally as do beguiling Eastern European melodies. Sometimes they sound as though they could have time travelled to the Old Fruitmarket from the 18th century. Other songs could be contenders for the top spot in next week's pop charts in Istanbul.

It is mostly instrumental but there is plenty of opportunity to launch the odd salvo of "Oi! Oi! Oi!" but we also get a taste of Roma rap, some ululating wailing and a burst of Prajini-style scat singing.

A lot of the numbers are performed at a high octane pace but one which stood out wa s a rueful sounding song whose lyrics seemed to consist mostly of the phrase 'so gloomy'. My Romanian is a little rusty so I've no idea what was being sung about, but the tone of the song suggested a tragic, forbidden, inter-village love affair that ended badly when the boy came to a sticky end in an accident involving farm machinery. Fabulously morose, the sax players sounded suitably sorrowful, while the deeper bass instruments rumbled menacingly like incoming bad weather.

Aside from 'So Gloomy', Fanfare Ciorcarlia make infectious feel good music and it attracts a diverse fanbase from fortysomething folkies (clothes by Rohan, hair by Lord Of The Rings) to less trad audience members. It seems unlikely that the Romanians had previously seen a punkette wearing tats, a skinhead and a kilt, but then the woman in question had probably never heard a tuba solo before. It seems a fair trade.

Shining light on Romania's dark past

Cristian Mungiu revisits Communist era

The circle of cinematically fruitful countries is small. Every few years, another contender is welcomed into the family of film nations, with the newest member being Romania.

Romanian filmmaking made its first international splash with Cristi Puiu's acclaimed "The Death of Mister Lazarescu," which topped many critics' polls in 2006, before reaching new heights with Cristian Mungiu's "4 Months, 3 Weeks, and 2 Days." Winner of the Palme d'Or at Cannes, recipient of hushed hosannas from numerous film critics, "4 Months" is a brilliant calling card for a nascent national cinema suddenly among the world's most luminous, and a filmmaker whose austerity and preoccupation with the plight of women has broached comparisons to Robert Bresson and the Dardenne brothers.

"4 Months" is set in the Communist Romania of 1987, just two years before the fall of Nicolae Ceausescu; but this is cold comfort to Otilia (Anamaria Marinca) and Gabita (Laura Vasiliu), two students whose nightmarish plight is nothing more than ordinary life under Communism. Mungiu's film is discreet about its intentions, thrusting us headlong into its narrative with little explanation, leaving us to acclimate ourselves to a world not our own. Out of respect for its intentions, we'll be discreet too, and leave the plot summary minimal, for "4 Months" is a film best experienced unprepared.

Earlier this month, we spoke by telephone with Mungiu, 39, from Los Angeles, where he was promoting "4 Months."

Q.How did you come to filmmaking?

A. When I was 14, 16, I started watching lots of films. I was watching the very strange films of the period - the Romanian films that were very strange, very propagandistic, and the reaction they provoked in me is "I can do way better than this, and this is not how stories should look." I knew from the beginning that it was not going to be possible, or it would be very unlikely, for me to become a film director during the Communist era. Finally, with the fall of Communism in 1989, I moved to Bucharest and studied film.

Q.How did you find the actresses for the movie? The movie lives or dies based on their abilities, and Anamaria Marinca in particular is exceptional.

A.Everything seems easy when you see the film, but it was a very complicated process. My first idea was I need girls of 19, because this was the original age of the girls that told me the story. I was first auditioning lots of girls this age who were students of acting in Romania, just to discover that I couldn't find anyone that I trusted enough. Then I expanded this age limit, and I ended up having a couple of girls of 28. I knew Laura Vasiliu because we were working on some commercials before. And I knew Anamaria Marinca. She was on my short list of people to see from the beginning. The transformation that she is capable of - from what she is in real life to what she is when you ask her to be in character - is unbelievable for me.

Q.So the film is based on the real experiences of women during the Ceausescu era?

A.The film is based on one very true story that is very close to what you see in the film. It's a personal history of this girl that I knew quite well, and she told me this story some 15 years ago. I never thought I'm going to make a film out of it ever, but [in 2006], when I was looking for a relevant story from my 20s, we ran into each other. And I was telling her that I was trying to write about our 20s, and somehow this came back in conversation.

Q.The ending of the film is extremely moving, in its bleakness and its haunting power, but also offers a sentiment of forgetting expressly violated by the film itself. Is your film a refusal to let the horrors of the Communist era - especially those visited on women - be forgotten?

A.The conclusion lies for me in this line: You can't pretend that these things haven't happened. You can't pretend that you were not hurt. And what really happened after we decided to make this film - and this was our greatest surprise - was to discover that what was a personal story for me and this girl was pretty much a personal story for everyone our age, or older. All of a sudden, the film served the peculiar social purpose of encouraging people to speak about something that was very taboo for a long period. I don't think you can pass over a period like this, and the healing process of talking about this is absolutely necessary.

Q.On watching the film again, I was struck by the seemingly unnecessary scenes toward the beginning of the film - where a stranger gives Otilia a bus ticket so she can avoid the ticket inspector, and where Don Bebe (Vlad Ivanov) visits his mother. There seems to be a common duty for the characters in this film to help each other, even at their own expense. Is the missing element in this equation the shared unseen, unmentioned enemy - the government?

A.It's not that precise, but there is something close to what you say. What I wanted to reveal was that people were much more capable of solidarity whenever there's a common enemy. Whenever there's a common enemy, two things happen: There's a solidarity among people which are close to each other, and the other thing that happened is that if the system is abusive toward individuals, individuals at the same time will tend to be abusive toward one another if they don't know each other well. These two things together were characteristics of the Communist times. A conclusion of living then was, if they screw me all the time, I have the freedom to take advantage of whomever I can whenever I can, because this is how life goes. All of the film is set in 1987 - it's true to remember that we had no idea that Communism is close to an ending.

Q.How did Romanians respond to your victory at Cannes? I heard you received a medal from the president.

A. (laughs) It was way more popular than I ever expected. Because we were considered favorites in Cannes, there was a lot of press, and a lot of coverage, and it was so popular in Romania that in a very strange way this award was more important for lots of people than the film [itself]. It kind of suffocated the social purpose that I hoped the film would have in Romania. People were just very very glad, and behaved as if we got the World Cup in football . . . But right after Cannes, which is to say from people who hadn't seen the film, all of a sudden, the film was not that important, [yet] what it managed to achieve was very important, which was very strange for me. The best part that happened to us was that later on, this was followed by a very good reaction from the audience, which was much more important for us. Most of the people aged 40, or more than 40, were very touched by the film.

Film Review-metroactive

The Procedure

'4 Months, 3 Weeks and 2 Days' looks at life in a world without legal abortions

By Richard von Busack

MOST AMERICANS would think of Romania as a strange country, which is why the wave of first-rate films coming out of there have an added shock of recognition. Cristian Mungiu's 4 Months, 3 Weeks and 2 Days, the best film from that corner of the world, is also a tremendously accessible film. While it explores a hot-button issue, it doesn't manipulate the viewers through the simple opposition of good heroines vs. evildoers. Instead, the film wracks you with the simmering suspense underneath a calm surface. The lead actress, Anamaria Marinca, puts it well when she says that the dialogue is a soundtrack to a story told in silence.

And this calm represents, in miniature, the surface calm of a utopian dictatorship. The story is set in Romania in 1987, in the "Golden Age," as Mungiu calls it sarcastically. Soon, the Ceausescus, megalomaniac husband-and-wife dictators, will be toppled and executed.

Otilia (Anamaria Marinca) and Gabita (Laura Vasiliu) are students sharing a 12-by-12 college dorm room in a part of Romania that is in neither the capital nor the bereft, starved-out countryside. Otilia is naturally the stronger of the two, a college student on the way up, with a boyfriend from a family of doctors.

Otilia is very pretty, with that champagne-colored hair that is not quite blond or quite brown. She has drive. Her technical degree means working in a factory, but it also means not heading back to the mudball small town she came from. Her roommate defers to her; Gabita seems younger, smaller, sadder.

Otilia is efficient at gaming the system, at knowing the black market, at getting the cigarettes she needs for petty bribes. She has cut a class, claiming it was her period, and now the inspectors want a doctor's note; a pack of cigarettes might fix that problem.

It is Otilia who arranges the meeting with her friend's illegal abortionist. He (Vlad Ivanov) is a balding, furtive man in his late 30s; he calls himself Mr. Bebe. "Trust is vital," Mr. Bebe insists, but all the demands he made weren't met. It's the wrong hotel, so Mr. Bebe had to leave his ID card at the front desk.

Gabita herself didn't make the connection in person, like she was supposed to, and the two girls forgot the sheet of plastic they were supposed to bring for the procedure. Worst of all, Gabita fudged the dates on her pregnancy. She is actually four months gone. This takes what is already an illegal activity and puts it into a new category of offense, a murder with a penalty of five to 10 years.

Sitting at its customary middle distance, the wide camera takes in the three participants in their final stage of negotiation. As having his routine disturbed has inconvenienced Mr. Bebe, he decides to add a special surcharge to his end of the deal. Both ladies will be required to pay in advance.

The aftermath, when Otilia is washing up in the bathroom—scrubbing herself to get Mr. Bebe off of her—there's a shot of the back of her head, one moment of stillness against the camera's searching, endless tracking. Since the beginning, the camera has been following Otilia on the innumerable errands you have to go on when you live in a place where nothing works, like the blinking electricity in the halls or the gas lines that are useless after 8pm.

Raising the Curtain

Twenty years ago doesn't seem like a long time, but Mungiu had to strip down today's Romania to make this film; he had to take the advertisements away and remove the cars. Yet you are never really conscious of the work of an art director.

This film makes the worst of the Iron Curtain tangible, in a way it probably never could have been back when the commissars ruled. Romania's dictatorship seems only a few degrees different from our world; the film is like a mirror held at a narrow angle that reflects everything around us, only slightly skewed and with blurred margins we never noticed.

And the greatness of 4 Months, 3 Weeks and 2 Days lies in the natural, melodrama-free acting. Otilia's old life is over, sitting in the white stillness of an empty tram car, on her way to a party she can't stand to be at. The ghostly mask of middle age is already laid on Otilia's young eyes and mouth.

At the party, she is praised and teased by the boyfriend's relatives, who are raucous and jolly and heavy-handed about the girl's piss-poor rural background. And the boyfriend would like some attention, too, of course, being a young man in love.

The camera stays still to watch Otilia in the center of a tangle of arms reaching across the table for glasses and ashtrays and treats. Meanwhile, Gabita is in who knows what kind of state, bleeding, perhaps feverish, alone in a second-class hotel. The scene brings back acute memories of youth, of the desperation to be away from the places where adults and duty force you to stay. And Otilia's odyssey is not over yet, since it includes a nighttime trip to a dark high-rise that's rather worse than any image in an Eli Roth film.

Rights Wronged

Mike Leigh's Vera Drake showed how the iron grasp on reproductive rights is the pleasure of an upper-class regime; he suggested that working-class solidarity would overcome it. I have to believe that, but 4 Months, 3 Weeks and 2 Days is probably the more accurate film.

This is the kind of story you hear at 3am, the sort of terrible, back-against-the-wall situation only young people and college students get into. Mungiu builds the story with such likeliness that it holds up to questioning later on. (Well, Gabita could have had the baby and adopted it out—nothing like a Romanian orphanage to build a child's character.)

The film expresses a bigger logic: When a society is rotten from top to bottom, a person has to be enterprising and seek every possible advantage. That's why, in his own mind, Bebe gets to keep his nice-guy status.

The film's notes describe how abortion became illegal in 1966. It is estimated that a half-million women died of botched abortions during the Communists' reign and that 1 million abortions were performed in the first year after the procedure became legal in 1980, a "number far greater than any country in Europe." One would surmise that poor women in a poor country short of contraceptives often find themselves facing drastic measures.

This isn't the place to mark the 35th anniversary of Roe v. Wade or to note again that people who take their rights for granted soon lose them. For this reason, Juno's portrayal of an abortion clinic as a last resort for skeevy, itchy people, or Knocked Up's shying away from any mention of the word abortion, seem rather less than a joke to me.

An even worse joke is played by moralists who believe people can be forced into good behavior by the law. If there's a practical, rational ground for people on either side of the abortion debate, this movie shows the way to it.

Romania and a Hard Place

January 25, 2008

Communism in practice takes the first half of its slogan — "From each according to his ability, to each according to his need" — to the vicious extreme. Cristian Mungiu's new film "4 Months, 3 Weeks and 2 Days" proves just how far a negligent regime can reach in stamping out ingenuity, intellect, and dignity.

Communist Romania was cursed by malevolent indifference. Dispassionate about the needs of its people, the Romanian government, specifically that of Nicolae Ceausescu between 1965 and '89, put its citizens through increasing trauma without reflection. Mr. Mungiu's film captures the hamster-wheel effect of trying to survive in a place where the lives and welfare of the citizens are deemed insignificant. Zooming in on the events of a traumatic day in the lives of two women, "4 Months," which won the 2007 Palme d'Or at Cannes and has been an unmitigated triumph on the festival circuit, conveys the ripple effect of Romanian communism without stooping to hyperbole.

Set in Bucharest in 1987 during the waning days of the communists' rule, the film follows a young woman and her friend as they try to procure an abortion. Gabita (Laura Vasilliu) wishes to terminate her pregnancy, but abortion and all forms of contraception are illegal in her country. A single student studying technology at the university, Gabita enlists her friend Otilia (Anamaria Marinca) to help handle the logistics and lend emotional support. Before long, the two have enlisted the dubious Mr. Bebe (played with disturbing precision by Vlad Ivanov) to help with the procedure.

Childlike and helpless, Gabita lacks the life skills of her friend, and relies on Otilia completely in her time of need. But for all of her self-reliance and other strengths, Otilia is often as prostrate as her desperate friend. While Gabita is stretched to her limits easily, Otilia's resilience is pushed through increasingly trying tests.

Throughout the film, Otilia suffers indignities large and small, from compromising sexual affronts to being mocked by the friends of her boyfriend's parents after she accepts their offer of a cigarette. Despite her strength of character, Otilia is in many ways broken down by the complacency adopted by those around her as a defensive survival tactic.

Ceausescu's attack on personal property, livelihood, and happiness in Romania spawned a merciless nonchalance in the populace regarding the welfare of others. Romanians resorted to survival of the craftiest — to this day, few things happen in Romania without a baxish, or bribe.

Otilia buys extra cigarettes to grease the transactions of her day, gives tips to people for meeting the minimum requirements of their jobs, and is shaken by the costs of her friend's decision. Having scrounged for the means to pay for Gabita's abortion, the women soon learn that Mr. Bebe wants far more than money to perform his duty.

Eschewing direct reference to the communist party's influence, Mr. Mungiu's film manages to convey the trauma of the period with its attention to the details of everyday life. The photography is exquisite; appearing to use natural light, cinematographer Oleg Mutu achieves a startling realism. At night, Otilia wanders down unlit streets, her perilous situation underscored by indistinct and difficult sight lines. Often the camera loses control, using jagged, jolting shots to highlight the chaos of the moment as a representation of all moments. For interior scenes, Mr. Mungiu's camera remains still for long shots, dissecting the room with its concentrated gaze. From voices off camera to Ms. Marinca's unmoving face, the director manages to dissect the pressures, tensions, and expectations of Otilia's life.

Ms. Marinca's unyielding image is a study in combative resignation. Long silences convey far more information than dialogue could manage. On screen nearly the entire film, Ms. Marinca's presence draws attention and emotion toward her at all times. She is the able eye of this storm, and the fear that she will be swept away propels the film forward.

"4 Months" is utterly brutal to the end, when Gabita and Otilia are served offal from a wedding party at the hotel where they are staying. A staple in the country, the butchered brains and leftover body parts on the table aggressively bring the violence of the story full circle.

In a place where the motives of self-preservation often usurp family and state, altruism is rare, kindness risky. Otilia has extended herself for her friend, and been punished accordingly. But even her decision is one of self-preservation — it could easily be her up in that hotel room next time.

Mr. Mungiu's film is an unblinking depiction of what comes down to survival instincts. Gabita, Otilia, and even Mr. Bebe are all trying their best to get by, though the morality of that endeavor is an extremely relative matter. "4 Months, 3 Weeks and 2 Days" leaves open the question: What do you do when there are no good choices?

Friday, January 25, 2008

Nokia finds Romania's hidden labor force


CLUJ, Romania, Jan 24 -- The tiny village of Jucu in northwestern Romania, which will host a new factory making Nokia mobile phones, currently earns its livelihood from farming vegetables such as peppers, tomatoes and eggplants.

It doesn't have a full-time doctor, a school-house or indoor toilets. Some 60 houses don't have running water. But it does -- still -- have relatively cheap labour.

A decision by the Finnish mobile handset giant to move a major production line to Romania this year sparked rage in Germany over job losses, but in the nearby city of Cluj in Romania it calmed fears foreign investment was drying up.

Over the past year, alarm bells have been sounding all around eastern Europe about a rising shortage of labour that may stunt the growth and long-term development prospects in some of the poorer regions.

"In our area we are only missing workers in the construction sector," Nicolae Beuran from the Cluj chamber of commerce told Reuters. "Many builders went to Germany, some went to Spain or wherever else they got paid more."

The fears are that ballooning wages and migration to western labour markets have eroded the competitiveness of manufacturing in eastern Europe and could stop an influx of foreign cash.

Industry observers say Romania is missing hundreds of thousands of workers in some sectors since migration depleted the workforce. Roughly one in 10 Romanians lives abroad.

But Nokia appears to have found a pocket of labour supply around Cluj, a Transylvanian university town dating back to the Roman era, where residents hope that thousands of graduates will attract foreign cash and well-paid jobs.

"We can offer what we have," said Beuran. "We are a big university centre and have a hundred thousand qualified students."

Even though unemployment is as low as three percent in Cluj, local officials say foreign investors are managing to attract labour by paying more than local employers.

Average pre-tax salaries are 450 euros a month in Cluj -- one seventh of levels in Germany's state of North Rhine-Westphalia which includes Bochum, the economically depressed region that Nokia is to quit for Romania.

The pay is still low despite Romania's double-digit real wage growth in recent years as it speeds up towards western European living standards and taps cash from the European Union, which it joined a year ago.

Some foreign manufacturers complain about skill shortages, while the state Employment Agency in Cluj says there is a "crisis" in the labour market.

But city authorities say there is more foreign investment in the pipeline. According to city council head Marius Nicoara, Cluj is talks with several companies, including a large U.S. firm in the auto industry which wants to invest $200 million.

"We are in advanced discussions with other investors but can't offer them as much land and electricity as they want. So we are in a great position to choose," he said.


For Cluj and the improverished countryside surrounding it, Nokia's 60 million euro ($88 million) investment spells a promise of much-needed government cash, modernisation and basic facilities.

"We need many things here and I hope they will be resolved faster thanks to Nokia," said Jucu mayor Dorel Pojar. "Since its arrival, there is a prosperous future ahead of us."

He hopes the Bucharest government will funnel more cash -- and faster -- for development projects and infrastructure to spruce up the area, a long valley surrounded by farmland and barren, greyish-brown hills.

Local authorities in Cluj say they are investing dozens of millions of euros on infrastructure projects in the region, building up roads, water networks and industrial parks to bring in foreign manufacturing.

A multi-billion-dollar highway project connecting central Romania with western Europe through Hungary is planned to run just km away from Jucu.

"I will work if I can find work," said Ana Gherman, 66, a pensioner from Jucu who used to bake biscuits and make juice for the village bar. "I could be a babysitter for a family which moves here to work for Nokia.

"But if it doesn't happen for me, the Nokia plant is still a future for the children here."

Nokia, which plans to start production in Jucu in the first quarter, reported a 57 percent rise in its October-December earnings per share on Thursday, with booming demand in emerging markets boosting its global market share to 40 percent.

The company declined immediate further comment on its choice of Romania, but has said the move aimed to lock into lower wage costs to defend its profit margins: at just under 24 percent on cellphones, these are already much stronger than its rivals.

Local authorities hope the boost to the region's economy should ensure sustainable growth even if Nokia moves factory again after some years.

Like Germany's Bochum, which has lost its historic mining and steelmaking industries and now is about to see 2,300 Nokia jobs disappear -- Cluj lost much of its heavy industry following the 1989 fall of communism.

"Romanians are used to bankruptcies. When we had those, we found solutions, we went abroad to work," Jucu's Pojar said.

"Even if Nokia leaves in five years, we will remain with lots of good things, roads, indoor plumbing, etc." (Additional reporting by Marius Zaharia in Bucharest) (Reporting by Justyna Pawlak; Editing by Sara Ledwith)

Trafficked children in care after police raid on 'Fagin gangs'

· 25 held in Slough swoop on Romanian networks
· Pickpockets and cashpoint thieves reap £20m a year

Vikram Dodd, crime correspondent
Friday January 25, 2008
The Guardian

Twenty-five people were arrested in dawn raids yesterday as police tried to shut down a gang which trafficked children from Romania and forced them to steal and rob on the streets of London.

Police say that since Romania joined the EU in 2007 there has been a sharp rise in children being brought to London by modern-day "Fagin's gangs". Up to 200 Romanian children have been forced into crime in London and can generate up to £20m a year for gangs controlling them.

The 10 children taken into care yesterday included one less than a year old. They were all found in overcrowded conditions, with 25 people crammed into a four-bed house. But after medical tests yesterday they were found to be in good health.

Police say intelligence led them to raid 17 addresses in Slough in Berkshire, from where credit cards, cash and documents linked to fraud were recovered.

Police believed they caught at least two gangs carrying out non-violent stealing such as pickpocketing, cashpoint thefts and mobile phone thefts. The children were used in the City and central London to distract potential crime victims.

Commander Steve Allen, who runs policing in the borough of Westminster, said: "We were dealing with a highly organised criminal network, originating in Romania, transferring children into Britain to commit crimes."

Allen said that between April and December 2006, 12 Romanian nationals were arrested for theft. A year later that number was 214. The police estimate that the Romanian children can each generate up to £100,000 a year for gang leaders. Allen said: "The family will give a child to a criminal gang on the understanding or promise the child will work and become a source of income for the family. The family will be given a loan by the gang at a high interest rate and left with a large debt."

The children are now to be treated as "vulnerable victims" and Slough council social services will try to find family members they can settle with. Slough's assistant director for children and families, Nicky Rayner, said some youngsters could be reunited with their families in Romania: "There is a legal presumption that if they can be cared for within the family they should be returned."

EBRD Helps Romania Energy Efficiency

24 January 2008
London _ The European Bank for Reconstruction and Development has extended its programme of providing credit facilities for energy efficiency projects to include Romania for the first time.

The London-based Bank, known as the EBRD, is giving loans to three Romanian commerical banks, which will then make credits available to private firms to boost better use of energy.

The three loan agreements, signed on Thursday, amount to €20 million for the Banca Comerciala Romana, BCR, €10 million for the CEC Bank and €5 million for the Banca Transilvania, BT.

Jean-Marc Peterschmitt, EBRD Director for Bank Relationships, said that this facility would further increase investments in energy efficiency.

“We are delighted that BCR, CEC and BT continue to be our strategic partners by joining the EBRD and the EU in promoting energy efficiency initiatives in Romania,” he added.

The loans are part of the EU/EBRD Energy Efficiency Facility, with a total amount of €100 million being made available in credits to banks to lend for energy efficiency projects in Bulgaria and Romania.

About €80 million is being earmarked for Romania, and the rest will go to Bulgarian projects.

On Wednesday, the EBRD committed €15 million to Bulgaria’s UniCredit Bulbank within the framework of that programme.

A further €24 million in EU grants will be available to boost technical assistance required for improved energy efficiency in the two Balkan countries.

Promoting energy efficiency among Romanian companies is designed to ensure that Romania meets its obligations as an EU member and contribute to mitigating the likely impact of climate change.

In spite of the economic reforms of recent years, wasteful use of energy remains a key problem in Romanian industry.

According to the International Energy Agency, the energy intensity of the Romanian economy is 4.1 times as high as the average of the EU countries; in other words the same amount of production output requires 4.1 times as much in energy costs in Romania as elsewhere in the EU (excluding the two most recent members, Bulgaria and Romania itself).

Even when using purchasing power parity – another way of measuring how much a currency is worth – Romanian energy costs are 1.44 times higher than the EU average.

Terry McCallion, the EBRD’s Senior Banker for Energy Efficiency projects, told Balkan Insight that the loans to Romanian banks were the latest in a series of similar credit facilities which were pioneered in Bulgaria with initial funds worth €200 million.

Bulgaria was the first recipient of the loan facility because of its specific problems, following the closure over the years of four obsolete nuclear reactors, deemed unsafe by the European Commission.

Since then Georgia, Slovakia and Ukraine have also become beneficiaries of similar arrangements, and they are now being joined by Romania, sharing the new credit facility with Bulgaria.

McCallion said the EBRD was now examining other potential markets, including in the western Balkans, for energy efficiency credits, but added that no decisions had been reached as to which countries would be the next in line to qualify for loans.