Friday, October 31, 2008

Romania: Spending on Power Generation

Oxford Business Group Latest Briefing

As tightening international credit calls for a reconsideration of investment plans in a variety of sectors, energy players show no sign of cutting back on funding their expansion in the generation and distribution of electric power through renewable resources.

According to the latest Invest Romania issue, investments in the electric energy sector are expected to reach 8 to 10bn euros in the coming years. On the back of the country's successful privatisation of the oil sector and most of the distribution units in electric energy, a string of foreign companies, including CEZ, E.ON and Enel, are now eyeing the opportunities created by the opening of the energy production sector.

Wind energy seems to take a particular prominent place in energy players' investment plans. Romania has a wind power potential of 14,000 MW whereas currently only 7 MW has been installed. This leaves investors with a vast playing field and, according to Invest Romania, the announced wind energy projects amount to a total capacity of 10,000 MW.

Last week, CEZ Romania - the local arm of the Czech energy group CEZ which owns the electricity distributor Electrica Oltenia in Romania since 2005 - reiterated its plan to invest 1.1bn euros in what is considered to be Europe's largest wind park, in the Dobrogea region, in the Eastern part of the country. Upon completion, the wind park is expected to deliver a total of 600 MW to the national grid. The first phase, due to be operational by the end of 2009, should see the delivery of 347.5 MW while the remaining 252.5 MW will be completed by the end of 2010.

German holding E.ON is also keeping ahead of the game. In September, local media reported on plans of E.ON to establish three wind energy parks with an installed power totalling 112 MW in Vaslui County in the eastern part of the country. Although unconfirmed by the company, the investment could be worth over 170m euros. Earlier in the year, the company established E.ON Regenerabile Romania to handle the group's renewable energy production.

It is only a year since Enel acquired a 100% stake in Blue Line, a Romanian company that owns the rights to develop wind power projects. "We aim to use this company as a platform for the development of wind potential in Romania and we aim to produce up to 200MW by the year 2011," Matteo Codazzi, CEO & Country Manager of Enel Romania told OBG. Elaborating on these investment plans, Codazzi declared that "investing in wind energy makes sense from an economic, financial and strategic point of view. Although overall contribution to a country energy output will rarely be a double-digit figure, wind energy is cheap, environmentally friendly and secure in terms of supply."

Other areas of renewable energy are also being eyed by a number of international players. In nuclear generation for example, a number of European utility companies such as Germany's RWE, Italy's Enel, Spain's Iberdrola, CEZ and Belgium-based Electrabel, together with ArcelorMittal Romania, are involved in the bidding process for the construction of reactors 3 and 4 of the Cernavoda nuclear power station.

Additionally, private investments in hydro-power are growing as state-owned hydropower generator Hidroelectrica sold off 17 micro hydropower plants to Austrian company Wienstrom for a total of 28.4m euros in June 2008.

These developments are in line with the authorities' ambition to increase both energy securityrenewable energies usage, the country aims to generate 11% of the domestic gross energy consumption from renewable resources by 2010. By promoting renewable energy resources and the expansion of the nuclear energy plant, the Romanian authorities aim to be energy self-sufficient by 2014.

Meanwhile, to absorb the additionally generated power in the national grid, Transelectrica, the state-owned energy transportation company, is to invest around 600m euros in network upgrades as well as the construction of new interconnection lines with neighbouring countries. Currently, Transelectrica and the country's electricity distributors have committed to accommodating an additional 2000 MW of electric power to the national grid.

According to Codazzi, in order to realise the full potential of this wind energy, bottlenecks in energy transmission have to be overcome.

Despite the adjustment of growth projections for a variety of sectors, investors show confidence in the area of energy generation, particularly due to the diversified range of energy sources that the country offers. As Adrian Borotea, corporate affairs manager of CEZ Romania recently told local media, "Energy-wise, because of its balanced generation portfolio, where hydropower and nuclear power account for a large share, and the thermoelectric power plants run mostly on domestically obtained fuel, Romania has a low exposure to the international financial crises."

However, Borotea does foresee a higher impact on energy consumption due to the weaker business environment. "Energy consumption is likely to stagnate; this will make energy companies more careful with the money they allocate to project development, considering investments in this field take a very long time to recoup", he said.

Commenting on whether the global economic slowdown and the resulting drop in oil prices may detract investors from their commitments to alternative energy, Codazzi said that "despite their competitive costs, usage of alternative sources make sense to increase security of supply and cut CO2 emissions; short-term fluctuations in the price of a barrel of oil will do little to outweigh these long-term benefits."

International investors in Romania have opened up to the gains that can be made in the development of alternative energy. With energy security and green power now high on the country's political agenda, private sector interest is set to bring the country's potential to full fruition.
and usage of renewable resources. As part of the negotiations for EU membership and the common policy for the promotion of

Russia's Gazprom courts Romania ahead of elections

By Valentina Pop for Southeast European Times in Bucharest – 30/10/08

Romania's natural-gas politics are heating up a month before the general elections. On Wednesday (October 29th), a delegation from the Russian gas giant Gazprom met with officials of Romania's Transgaz in Bucharest. Besides storage facilities and imports of Russian natural gas, they discussed "the creation of new transit capacities on Romanian territory" -- an allusion to possibly routing South Stream through Romania. The two sides agreed to meet again in December.

Economics and Finance Minister Varujan Vosganian announced on October 23rd that if invited, Romania will join Gazprom's South Stream project. Experts consider South Stream a rival of the US-EU-backed Nabucco pipeline -- up to now Romania's clear choice in terms of energy diversification.

Vosganian's announcement is at odds with President Traian Basescu's position: strongly backing Nabucco and rejecting South Stream in order to reduce dependence on Russian energy supplies.

This is not the first rift between Basescu and the ruling National Liberal Party (PNL). In June 2006, both Prime Minister Calin Popescu Tariceanu and then-Defence Minister Teodor Atanasiu announced Romania would pull out of Iraq. The announcement led to nothing except Atanasiu's sacking.

On the energy front, though, the PNL might prove more successful. It is banking on public outrage over rising gas prices, which the Socialist opposition portrays as the consequence of Basescu's confrontational policies towards Russia.

As Jamestown Foundation analyst Vladimir Socor points out, "Gazprom has skillfully chosen the timing of its move to pry Romania away from the Nabucco project," one month ahead of elections.

The EU has been reluctant to portray South Stream as a competitor of Nabucco, instead saying the two are "complementary". Yet both pipelines would draw from the same Caspian reserves.

Another effect of the Gazprom overture towards Bucharest is the enhanced Russian ability to extract concessions from countries that already signed up for South Stream, especially Romania's southern neighbour, Bulgaria. The latter wants to own the segment of South Stream expected to transit its territory.

Transgaz CEO Ioan Rusu portrayed Romania as better suited than Bulgaria to host South Stream because it would not request ownership of its pipeline segment. He said Transgaz would be content to operate the Romanian section and reap transit revenues.

Despite Bulgarian expressions of confidence that construction of South Stream will follow the original agreement, "Moscow is now using Bucharest to pressure Sofia to relent on the issue of pipeline ownership," Socor writes.

Gazprom's official line is that it has not ruled out Romania as a replacement for Bulgaria, NewsIn reports.

No fix for Romania's labour shortage

Since Romania joined the European Union in 2007 more than two million people have left to earn higher wages in wealthier European countries. One of the hardest hit industries is construction. Humphrey Hawksley has been to Bucharest to discover the depth of the skills gap.

The voice of Piero Francisci rose above the clatter of drilling on the floor of the construction site far below.

Carved deep into the ground of a Bucharest suburb was the vast foundation chamber of what should eventually become a high-rise office block.

It should also have been crawling with about 100 construction workers.

Instead, there was just a cluster of men carving out the elevator shaft which, at present, looked like a prehistoric insect, with twisted brown metal girders rising out of grey half-built concrete cones.

"Has anybody actually sat down and worked out how many people are needed to build the infrastructure of this country?" asked Mr Francisci, gesticulating in frustration.

"It needs motorways, bridges, airports, railways, and look at this."

'Luckless task'

Mr Francisci is an Italian businessman with plans to build houses and office blocks throughout Romania - if he can find anyone to do it.

His guest at the building site was Adriana Eftime, the head of a building trade federation.

Her luckless task is to try to persuade the government to issue entry permits to foreigners on the grounds that hundreds of thousands of Romanian construction workers have left the country for better wages elsewhere in Europe.

Government officials say privately that they do not want to flood Romania with foreign workers because it may lead to race problems

So far she is failing.

"I asked them just for 60,000," she explained, "but they wouldn't have it. They said they'd look maybe at 10,000."

"Well, all I can say," said Mr Francisci, "is that if things keep going this way, we'll have to close down."

He took us down a rickety wooden ladder to the floor.

We walked across to where the work was going on and he introduced us to Rajinder Singh Bansal, a carpenter from Delhi - one of half a dozen Indians who had been allowed in.

But Rajinder said he might have to leave when his permit runs out and go back to a job in India that paid a fraction of his current wage.

Mr Francisci had lists of applicants from India, Vietnam and the Philippines whom he wanted to sponsor, but the government was not letting him.

"It's the European Union," he complained.

"Without papers, without money, without any job, anyone can just leave for Italy, France, Germany and we are left with no-one because no-one wants to come from those rich countries to work here.

"So we need to bring them in from the poorer countries, and we're not allowed to."

Mass exodus

Romania's conundrum lies at the heart of how a developing country, with much of its infrastructure broken down, should modernise.

China, for example, routinely building airports, rail links and motorways, has a vast workforce of its own to call upon.

Dubai, that glittering economic engine of the Gulf, imports so many workers that they make up more than 80% of the population.

Romania, it seems, does not quite know what to do.

Since joining the European Union in 2007, more than two million people - or 10% of the whole population - have left for richer parts of Europe.

Meanwhile, just about everything needs fixing.

You do not have to go far to see dirt tracks and donkey carts.

Three million buildings need to be renovated to make them secure against earthquakes. The ring-road carrying huge articulated trucks is no wider than a two lane country road in places.

There are only about 200 miles of motorway and half of that was built during communist times, just as the massive palatial parliament complex - apparently the biggest government building in the world - was put up in just a few years under the dictator Nicolae Ceausescu.

But those were Cold War days and he had no problems in getting builders.

Government officials say privately that they do not want to flood Romania with foreign workers because it may lead to race problems.

The public position is that they want to attract back those workers who have left.

Flood risk

But it is not only the modernisation of a nation that is suffering.

Vlad Radu, an engineer, asked me up to his family's Bucharest apartment in the early evening - just as the washing machine was beginning a cycle.

After a few minutes, white foam bubbled out of the drain in the bathroom, seeping across the floor like a creature in a horror movie.

Every time the washing machine is on, either Vlad or Claudia, his wife, has to keep watch to ensure the apartment does not flood.

"Back in the old days," said Vlad, "we would just call the building maintenance department and someone would fix it.

"But this problem has been with us now for three years. We've tried everything."

So as the financial crisis brings unemployment, for European Union citizens at least there are vacancies in Romania - for plumbers, of course, and jobs for some half a million construction workers.

From Our Own Correspondent was broadcast on Thursday, 30 October, 2008 at 1130 BST on BBC Radio 4. Please check the programme schedules for World Service transmission times.

Story from BBC NEWS:

Romanian cbank holds rates, eyes crisis impact

By Radu Marinas and Marius Zaharia
BUCHAREST, Oct 30 (Reuters) - The Romanian central bank held interest rates at 10.25 percent on Thursday as inflationary pressures remained high and policymakers waited for more impact of the global financial crisis on local markets.

Analysts polled by Reuters this week forecast no change in borrowing costs, arguing worries about the effect on inflation from loose fiscal policy necessitated tight monetary policy.
However, most said a new hike was not on the cards as markets had stabilised in recent sessions and the Romanian leu appeared fairly supported.

"Further decisions would depend on global financial conditions which could make the leu more vulnerable next year," said Lucy Bethell from Royal Bank of Scotland in London.
The central bank said in a statement macroeconomic risks related to the global financial crisis and the inflation outlook required a "firm" monetary stance, which analysts read as a sign that rates could remain on hold for a while.

"The central bank wants to send a signal their current rate is appropriate and that this level might be kept for a longer period in order to counter renewed inflationary pressures," said Ionut Dumitru, head of research at Raiffeisen Bank.

The rate decision follows a similar decision by Poland on Wednesday and a cut by Slovakia on Tuesday.

Romania's markets have fared somewhat better during the global financial meltdown than in the neighbouring Hungary, which had to lift borrowing costs by 3 percentage points last week to shore up investor sentiment and sought financial help from the International Monetary Fund.
After the rate decision the leu stepped back from a 6-day high against the euro set in early trade on the back of regional optimism.

Money market rates have also steadied this week and analysts said interbank borrowing costs may decline in coming weeks after Thursday's central bank decision to lower the reserve requirement on leu liabilities to 18 percent from 20 percent.

Analysts said market sentiment remained shaky, with investors unsure about Romania's policy response to economic threats and fretting over vast external imbalances that make the country more vulnerable to financial trouble than some of its neighbours.

Several analysts said Romania may still have to seek rescue packages from the IMF in the future if the market situation deteriorates.

Concerns about Romania's economic standing worsened this week, when Standard & Poor's cut its foreign currency credit rating one notch to "BB+", putting it back at junk status with a negative outlook and citing a lack of policy response to mounting economic risks.
In good news, Romanian inflation began to ease in recent months, coming off a three-year high of 9 percent set in July to 7.3 percent in September, as lower food and fuel costs offset price pressures stemming from domestic consumption.

Household spending is expected to slow down next year but fiscal pressures may remain high due to welfare spending pledges put into law this year and wage demands from the public sector.

But despite the central bank's steep monetary tightening this year, which totalled 325 basis points over 12 months, annual prices are still seen topping the bank's December target range of 2.8-4.8 percent and reaching some 6 percent. (Reporting by Marius Zaharia and Radu Marinas; Writing by Justyna Pawlak; Editing by Victoria Main)

Romania's Central Bank Leaves Interest Rates on Hold

By Adam Brown

Oct. 30 (Bloomberg) -- Romania's central bank left its main interest rate unchanged and lowered the minimum reserve requirement for leu-denominated deposits to support the currency and mute the effects of the global financial crisis.

The Banca Nationala a Romaniei left the Monetary Policy Rate at 10.25 percent, the second-highest in the European Union, it said in an e-mail today. Eight of 10 analysts in a Bloomberg survey predicted no change, while two predicted an increase. It lowered the requirement on leu deposits to 18 percent from 20 percent. The foreign-currency requirement is unchanged at 40 percent.

The leu has come under pressure during the global crisis, threatening to boost inflation, particularly in the euro-linked services industries. The government also lowered its forecast for 2009 economic growth this week to 6 percent from 6.5 percent amid the credit crunch. It predicts economic growth of 9.1 percent on year in the fourth quarter.

``The analysis of the latest macroeconomic developments indicates a continuation of the disinflation process and the maintenance of high economic growth throughout 2008,'' the central bank said in an e-mailed statement today. ``At the same time, the deepening of the financial crisis on global markets has triggered uncertainties surrounding the world economic outlook and its implications for the Romanian economy.''

Liquidity Boost

The lower reserve requirement, to take effect on Nov. 24, ``will increase the amount of lei on the market, lowering short term money-market rates,'' Bartosz Pawlowski, a currency strategist at TD Securities in London, said in an e-mail today. ``This in turn could result in the weakening pressure on the leu, which has been recently supported by high local rates.''

The leu extended losses after today's decision, trading at 3.6397 against the euro at 2:39 p.m. in Bucharest, compared with 3.6336 just before the decision and 3.6178 yesterday. The BET benchmark stock index rose 2 percent.

The central bank left its main interest rate on hold at its last policy meeting in September after raising it seven consecutive times, from 7 percent a year ago, as rising oil and food prices lifted the inflation rate from a 17-year low of 3.7 percent in March 2007 to this year's peak of 9 percent in July.

Inflation Target

The inflation rate fell to 7.3 percent in September from 8 percent in August as a bumper farm crop restrained food-price growth and international oil prices fell. Central bank Governor Mugur Isarescu predicted in August that the rate will end the year at 6.6 percent and raised his end-year 2009 inflation forecast to 4.2 percent from 3.5 percent. He said Romania has to slow inflation to 3 percent by 2010 or risk missing its target of adopting the euro in 2014.

Global financial turmoil has weakened Romania's leu by about 9 percent against the euro and 22 percent against the dollar in the past year as investors pull out of countries seen as carrying a higher risk. Telephone bills, gasoline, rent and many other goods and services in Romania are gauged in euros and charged in lei, meaning a weaker leu has an immediate impact on inflation.

The central bank warned that increased government spending also threatens inflation goals for next year. President Traian Basescu last week approved a 50 percent wage increase for teachers and said he would also favor an increase for state health-care workers.

``Macroeconomic risks associated to the disinflation process, especially those related to income policy and to increased budget spending, remain on the upside in the context of heightened uncertainties related to the impact of the global crisis on financial markets,'' the central bank said.

Budget Fears

Finance Minister Varujan Vosganian has said raises for state employees could widen the 2009 budget deficit beyond the target of 2 percent of gross domestic product and boost inflation.

Standard & Poor's decided on Oct. 27 to downgrade Romania's foreign-currency debt rating to junk, citing increased government spending ahead of Nov. 30 parliamentary elections and the current- account deficit. S&P also gave the rating a ``negative'' outlook.

Other central banks in eastern Europe have raised, lowered or left rates on hold in recent weeks as the global financial crisis manifests itself to varying degrees in emerging markets.

Poland's central bank left its benchmark interest rate unchanged at 6 percent yesterday, saying it expected the global crisis would slow Polish economic growth in the ``next quarters.'' The Slovak central bank cut its main rate on Oct. 28 by half a percentage point, matching the European Central Bank, to 3.75 percent

Hungary, which secured a 12.5 billion euro loan from the International Monetary Fund on Oct. 28 to help cope with the effects of the global crisis, raised its key rate to 11.5 percent from 8.5 percent on Oct. 22 to shore up its currency, the forint.

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

Romania president sees GDP up 4.5-5 pct in 2009

BUCHAREST, Oct 30 (Reuters) - Romania's economic growth could slow down to 4.5-5 percent in 2009 from an expected 9 percent this year, as the global crisis lowers foreign cash flows, President Traian Basescu said on Thursday.

'The situation is not easy ... capital inflows are not coming in as they used to, but we have resources to reach economic growth of 4.5-5 percent next year,' Basescu told reporters.

At 9.3 percent on an annual basis, Romania's economic growth was the fastest in the EU in the second quarter. Third-quarter figures that will encompass the initial impact of global crisis are not yet available.

Thursday, October 30, 2008

Romanian teachers threaten to go out on strike

Wednesday October 29, 11:37 am ET

Tens of thousands of teachers threaten strike after Romania's government delays their raise

BUCHAREST, Romania (AP) -- Seventy thousand teachers in Romania are threatening to begin a strike on Monday, unless the government reconsiders its decision to postpone the 50 percent wage increase they were promised.

Prime Minister Calin Popescu Tariceanu passed a decree on Tuesday delaying the raise that Parliament had approved, saying it must wait until April 1, given the economic problems that Romania and other countries are facing.

Tariceanu also said inflation will rise in Romania if other public sector workers demand similar raises.

Leaders of a union representing the teachers will meet with Education Minister Anton Anton on Thursday to discuss their demands.

Meanwhile, Romania is preparing for a national election on Nov. 30.

Wednesday, October 29, 2008

Romania Govt Endorses 2009 Budget

29 October 2008
Bucharest _ The Romanian Government has passed the public budget for next year but failed to allocate any funds for a 50 percent increase in teachers' wages.

A decision on a pay hike for teachers will be postponed to next April, when a new bill that regulates wages in the public sector will be discussed.

Romania’s government is facing a backlash over its continued opposition to the teachers’ pay rise bill.

Last week, President Traian Basescu approved the bill, while on September 30, Parliament unanimously approved the salary increase, saying the country's good economic performance allows for the move.

However the rise is opposed by the government who fears that an increase of more than nine per cent is not financially feasible and will severely damage Romania's economy.

Meanwhile in its budget for next year, the government targets revenues at 38.8 per cent of gross domestic product - or Lei 224.5 billion, while forecasting spending at 40.8 percent of GDP, or Lei 236 billion.

The budget is boosting spending on education (6 percent of GDP), health (3.9 percent), transportation (4.5 percent) and agriculture (3 percent).

Romania faces a fiscal dilemma of having to pour cash into infrastructure and education and health programmes as it struggles to compete on European Union markets, while keeping spending down to contain inflation and a large current account deficit.

Bulgaria, Romania seek EU financing for Danube Bridge repairs
15:08 Tue 28 Oct 2008 - Nick Iliev

Bulgaria and Romania would jointly seek funding from the European Union for the modernisation and rehabilitation of the only bridge across the Danube River between the two countries, website reported, quoting participants in a commission of experts overseeing the bridge's maintenance.

This bridge linking Rousse on the Bulgarian side to Giurgiu in Romania is the only one in this part of Europe, making it an important part of the EU transport infrastructure in South-Eastern Europe.

At the annual meeting between the Bulgarian and Romanian experts, the issue of funding was the pivotal theme of discussion, focused on the condition of the bridge. The meeting started with comprehensive evaluation and reassessment of every element of the infrastructure of the bridge. Particular detail was paid to its mobile part, the 81m section which is suspended in the air when larger vessels pass underneath.

The bridge has been in service since 1954 and several important parts are in bad need of renovation and modernisation, said. The maintenance of the mobile part of the bridge is currently the responsibility of the Romanian specialists, with Bulgaria and Romania sharing the bill.

Within the commission, there are sub commissions dealing with every aspect of the facility and its proper functioning. They are responsible for the meticulous inspection of the technical parts and making sure they operate at the highest possible level, as well as maintaining the high safety standards. The refurbishment and repair of the mobile part of the bridge itself is as part of the rehabilitation process which has been ongoing since 1999.

Both countries believe it is imperative that the new technical plan is put together and implemented as soon as possible.

Experts from both countries have decided that the most important technical priority regarding the project, apart from its mobile section, is rehabilitating the structures of the bridge and in particular the parts which have been suffering from corrosion. New generation anti-corrosion material has to be applied in all affected areas. The bridge itself has a total of 200 000 sq m.

Romania not immune to turmoil, PM warns


By Thomas Escritt in London

Published: October 29 2008 03:49 | Last updated: October 29 2008 03:49

Politicians who think Romania is immune to the global financial crisis are like passengers on the Titanic yet to realise it is sinking, the prime minister warned on Tuesday.

“Imagine that the global economy is like the Titanic, which hit the iceberg,” Calin Popescu Tariceanu told the TV station Antena 3. “At the lower levels, people are in water up to their necks, while on the upper floors the music still plays and people don’t know that the ship hit an iceberg and still listen to music. Those people are here, in Romania. That’s a lot like our situation.”

He made the blunt assessment after Traian Basescu, the president, signed into law a 50 per cent pay rise for teachers.

So far Romania has seemed to weather the economic storm that has levelled neighbours such as Hungary. Foreign investors have been less concerned about the country’s ability to finance its public debt – which stands at 13 per cent of gross domestic product – than they have about neighbouring economies.

But on Monday Standard & Poor’s downgraded Romania’s sovereign debt to “junk” status, a move that sent the Romanian leu down 2 per cent on the day. On Tuesday afternoon in London it stood at 3.72 to the euro.

Juan Fernandez-Ansola, the International Monetary Fund’s representative in Bucharest, said: “Capital inflows have been the driving force for growth in this economy, [and] the reassessment from the rest of the world ... will have an effect on net flows into Romania.”

While public debt financing remained “manageable”, he warned that investors would worry if the government appeared not to be responding to the new situation. “Hiking wages sends the opposite message ... especially because it’s not about reform and restructuring, but just 50 per cent up without any considerations.”

Consensus growth forecasts for next year stand at 4-5 per cent, compared with 8 per cent for this year.

Bulgaria’s government cut its growth forecast to 4.7 per cent on Tuesday, down from 6.5 per cent, as the World Bank urged the country to prepare an emergency plan.

Mr Tariceanu’s National Liberal party heads a minority government that enjoys ad hoc support from the opposition Social Democratic party. Two weeks ago the Social Democrats joined forces with the Democratic Liberal party to pass the pay measure, widely seen as a sop to voters before elections on November 30. Mr Tariceanu wishes to block the pay increase.

Romania Has `No Intention' of Borrowing From IMF

By Adam Brown

Oct. 28 (Bloomberg) -- Romania's government said it has ``no intention'' to borrow from the International Monetary Fund even after the lender offered support for neighbors Ukraine and Hungary to stem the effects of the global financial crisis.

``Romania has no intention to borrow from the IMF in the present context of the financial markets,'' Finance Minister Varujan Vosganian's press department wrote in reply to a Bloomberg e-mail today. ``Romania is not among the countries that currently negotiate loans with the IMF.''

The IMF is helping boost economies in eastern Europe as investors, stung by losses in developed nations, sell riskier emerging-market stocks, bonds and currencies. The lender is advising Romania on measures to shore up confidence in its markets after the currency fell more than any other in Europe over the past five days.

The IMF said earlier today it is in ``close dialogue'' with Romania though the Balkan nation is not asking for a loan. Iceland was the first country to get financing from the Washington-based lender during the crisis, while Belarus and Pakistan also asked for help.

``We do not have discussions about such financial support under way with Romania, but we maintain a close policy dialogue with the Romanian authorities,'' the IMF said in an e-mailed statement. ``Decision makers need to send a clear signal to the markets with wage and fiscal policies that are realistically attuned to a very difficult external environment.''

Bulgarian Meeting

Bulgarian Finance Minister Plamen Oresharski will meet with IMF officials at the end of this week ``as part of consultations on general policies and coordination of projections,'' he said in Sofia today.

The country, Romania's southern neighbor, has sufficient fiscal reserves, exceeding government debt, and ``has no intention'' to borrow from the IMF, he added.

Romania should scrap a 50 percent wage increase for teachers that was approved last week and rein in other government spending to cope with the global financial crisis, the Washington-based lender said.

The IMF has agreed to lend money to Ukraine and Hungary to shore up their economies amid the turmoil in global credit markets and slowing global growth. The lender yesterday said it would lend $16.5 billion to Ukraine for 24 months and will announce a ``substantial financing package'' for Hungary.

After the IMF statement today, Prime Minister Calin Tariceanu pledged to curb public wage increases and to refrain from raising state spending next year to keep the budget deficit in check.

Spending Freeze

``We decided to freeze public spending to the 2008 levels and wages will rise moderately next year because we have to tighten the purse strings,'' he told reporters in Bucharest. ``We have to cope with this difficult period.''

The Romanian leu has weakened about 12 percent in the past year and the benchmark BET stock index has dropped about 74 percent as investors shun countries seen riskier.

A government spending increase approved last week may cost 0.75 percent of gross domestic product, the IMF said, adding that extending the raise to all state workers may cost more than 4 percent of GDP in 2009.

Romanian President Traian Basescu yesterday said he favors a wage increase also for health workers. Tariceanu, his chief political rival, has said any raise would trigger demands and strikes from other state workers and ruin next year's budget. The government has estimated the potential shortfall at 7 percent of GDP, compared with a 2 percent goal.

Politicians are fighting over state wages ahead of parliamentary elections, a three-way fight between the opposition Social Democrat Party, Tariceanu's National Liberal Party and Liberal Democrat Party, which backs Basescu.

Sed Lex, the union that represents more than 100,000 public sector employees, said it will strike as early as this month to back a 50 percent raise for all its members.

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

Dina Cocea, "queen of Romanian theater" dies at 95

BUCHAREST, Romania (AP) — Dina Cocea, the aristocratic "queen of Romanian theater" who performed over 100 roles in a career spanning more than 50 years, has died at age 95.

Ion Caramitru, director of the National Theater, says Cocea died Tuesday in the Floreasca hospital after suffering a heart attack.

Cocea studied theater in Paris and had her debut on the French stage in 1934, before returning to Romania a year later. Besides the theater, she starred in a dozen films and represented Romania at the United Nations cultural agency, UNESCO.

But it was her beauty, talent and aura of dignity that prompted one Romanian theater expert to dub her "the queen of Romanian theater."

Cocea was the daughter of Romanian writer N.D. Cocea and actress Alicia Cocea.

Funeral arrangements were not immediately known.

IMF says no plans for rescue package for Romania

BUCHAREST, Oct 28 (Reuters) - The International Monetary Fund said on Tuesday it was not in talks with Romania about granting it financial help, but said its external environment was "very difficult".

Some economists have warned in recent days that Romania may have to seek outside help to shore up its finances and support markets, with the leu currency very volatile and blue-chip stocks falling 75 percent this year.

Romania's western neighbour Hungary has reached an accord with the IMF and the European Union on a broad economic rescue package to restore investors' confidence amid a global financial meltdown.

"We do not have discussions about such financial support underway in Romania, but we maintain a close policy dialogue with the Romanian authorities," the IMF said in a statement.

Late on Monday, Standard & Poor's cut Romania's foreign currency credit rating one notch to "BB+", putting it back at junk status with a negative outlook and citing a lack of policy response to mounting economic risks.

Despite such criticism, social spending has become a key issue in the electoral campaign ahead of Romania's parliamentary ballot on Nov. 30.

In particular, opposition parties have introduced a law mandating a 50 percent increase in teachers' wages, a move that has intensified wage demands from other public sector employees.
"Even before this salary increase became known, public and private financing sources were drying up," the IMF said. "In this setting, the initiative ... may need to be reconsidered."
The leu currency showed little reaction to the IMF announcement, holding slightly above the previous session's 10-day low hit after the S&P announcement.

However, analysts said the IMF statement was likely to add to longer-term pressures on the currency.

"Romania is an extremely vulnerable country and the idea of the IMF not considering a deal may hit the confidence further," said James Lord, emerging markets strategist at Standard Bank in London. (Reporting by Justyna Pawlak and Marius Zaharia, editing by Mike Peacock)

Romania in `Close Dialogue' With IMF, Not About Loan

Oct. 28 (Bloomberg) -- Romania is in ``close dialogue'' with the International Monetary Fund, though it is not asking for a loan from the lender that has offered support for Ukraine and Hungary.

``We do not have discussions about such financial support under way with Romania, but we maintain a close policy dialogue with the Romanian authorities, '' the IMF said in an e-mailed statement today. ``Decision makers need to send a clear signal to the markets with wage and fiscal policies that are realistically attuned to a very difficult external environment. ''

Romania should scrap a 50 percent wage increase for teachers that was approved last week and rein in other government spending to cope with the global financial crisis, the Washington-based lender said.

The IMF has agreed to lend money to Ukraine and Hungary in a bid to shore up the countries' economies amid the turmoil in global credit markets and slowing global growth. The lender yesterday said it would lend $16.5 billion to Ukraine for 24 months and will announce a ``substantial financing package'' for Hungary in the ``next few days.''

After the IMF statement today, Prime Minister Calin Tariceanu said he will hold down public wage increases and will not raise state spending next year to keep the budget deficit in check.

Spending Freeze

``We decided to freeze public spending to the 2008 levels and wages will rise moderately next year because we have to tighten the purse strings,'' Tariceanu told reporters in Bucharest. ``We have to cope with this difficult period.''

Romania's leu has weakened about 12 percent in the past year and the benchmark BET stock index has dropped about 74 percent as investors shun countries seen as carrying a higher risk to investment.

The IMF is helping boost economies in eastern Europe as investors, stung by losses in developed nations, sell riskier emerging-market stocks, bonds and currencies.

The spending increase approved last week may cost the government 0.75 percent of gross domestic product, the IMF said adding that extending the raise to all state workers, may cost more than 4 percent of GDP in 2009.

Romanian President Traian Basescu yesterday said he favors a wage increase for health workers. Tariceanu, his chief political rival, has said the raise would trigger demands and strikes from other state workers and ruin next year's budget. The government has estimated the potential shortfall at 7 percent of GDP, compared with a 2 percent goal.

Politicians are fighting over state wages ahead of parliamentary elections, a three-way fight between the opposition Social Democrat Party, Tariceanu's National Liberal Party and Liberal Democrat Party, which backs Basescu.

Sed Lex, the union that represents more than 100,000 public sector employees, said it will strike as early as this month to back a 50 percent raise for all its members.

To contact the reporter on this story: Adam Brown in Bucharest at abrown23@bloomberg. net

Tuesday, October 28, 2008

Iraqi refugees drive in Romania with illegal Lebanese licenses

Interior ministry moves to halt fraud
By Andrew Wander
Daily Star staff

BEIRUT: More than 100 Iraqi refugees who have fled to Romania since the 2003 US-led invasion of Iraq were issued with Lebanese driving licenses despite having never visited the country or taken a driving test, The Daily Star has learned. Documents handed to a road- safety watchdog show the driving licenses were issued illegally to refugees in Romania. The Iraqis paid Lebanese civil servants $500 to $600 for the documents, instead of paying more for proper driving lessons and legal licenses in Romania.

The fraud occurred in the first quarter of 2007. Senior government figures, including the prime minister, were made aware of the issue in November last year, but it appears no action was taken until two months ago, when new Interior Minister Ziyad Baroud handed the case to judicial authorities.

"We are aware of this case and we have submitted it to the prosecutor," Baroud told The Daily Star on Monday.

"Two months ago I took the necessary steps. Nine civil servants have been stopped from working and are subject to prosecution," the minister said.

Baroud said the that government had been in contact with Romanian authorities through the Foreign Ministry to deal with the issue.

Romania's ambassador to Lebanon, Daniel Tanase, said that he had not been informed of the matter.

"I'm not aware of this. If this is the case, then I will contact both the Romanian and Lebanese authorities," he said.

"The controls in Romania are very strict. It's difficult to drive without a license, which is why they were forced to get one elsewhere," he added.

According to UN estimates, at the time the licenses were issued Romania had taken in about 450 Iraqi refugees, meaning about a quarter of the Iraqi refugee population in the country could have been driving on illegal Lebanese licenses.

Driving licenses were not issued in Iraq for months after the 2003 invasion because US forces closed Saddam Hussein's government infrastructure and set up their own administration. Iraqi refugees were forced to take driving tests in other countries, but because the Lebanese license is recognized around the world, some simply "bought" one from criminals cooperating with rogue civil servants working in the licensing agency.

The corruption came to light when copies of the licenses were handed to the Youth Association for Social Awareness (YASA), a Beirut-based health and safety watchdog that has led a campaign against the "selling" of driving documents.The group decided to inform the relevant authorities rather than make the information public, said YASA founder Ziad Akl.

"YASA decided not to go to the media with the information at the time," he said. "Instead, in the presence of MP Pierre Dakkashe, we presented the evidence to Premier [Fouad] Siniora and Interior Minister [at the time] Hassan Sabaa. Our question now is what has happened about this?"

After months of apparent inaction, Baroud insisted that the case was now being dealt with and judicial proceedings were ongoing. "I did what needed to be done," he said.

But campaigners say that many more driving documents have been issued illegally in Lebanon. Akl said corrupt officials took advantage of confusion following the 2006 war to sell "tens of thousands" of driving licenses in late 2006 and early 2007, and warned that other countries may also have drivers using illegally issued Lebanese licenses.

"This is an international mafia," he said, referring to the perpetrators. "We are relying on Interior Minister Ziyad Baroud to deal with this situation. I don't have evidence it is still happening, but I also don't feel confident that it has stopped."

Information about the case came to light just weeks after YASA warned that many Lebanese were bribing their way onto the road rather than taking a proper driving test. YASA is hoping a new law will be adopted next year which will help stamp out corruption in Lebanon's driving-licensing authorities.

Romania's Foreign Debt Cut to Junk by S&P on Budget

By Adam Brown and Gavin Finch

Oct. 27 (Bloomberg) -- Romania's foreign-currency debt rating was lowered to junk by Standard & Poor's as the global financial crisis weighs on the Balkan nation's economy and the government boosts spending before parliamentary elections.

The rating was cut to BB+, one step below investment grade, from BBB-, with a ``negative'' outlook, S&P said in a statement from London today.

``Difficult global and financing condition, accompanied by expansionary fiscal and income policies ahead of the upcoming elections, have progressively heightened downside economic risks,'' the ratings company said in the statement.

Emerging market nations including Romania are suffering from an outflow of capital, falling currencies and plunging stock markets as international investors shun risk during the deteriorating global economic outlook. Romania also faces Nov. 30 elections and lawmakers approved spending increases that Finance Minister Varujan Vosganian said may boost the 2009 budget deficit to 7 percent of gross domestic product from a target of 2 percent.

``Foreigners are going to be very skeptical now,'' Ionut Dumitru, the chief economist at Raiffeisen Bank Romania, said in an e-mail today. ``The rating decrease was unjustified. It's true that things have gotten worse and there were many electoral promises but the rating was already very low.''

Wage Battle

Romanian President Traian Basescu said today he favors a wage increase for health workers after he approved a 50 percent raise for teachers. His chief political rival, Prime Minister Calin Tariceanu, has said the raise would trigger demands and strikes from other state workers and ruin next year's budget.

Finance Minister Varujan Vosganian has said the raise would prompt strikes from other workers and may drive the budget deficit to as much as 7 percent of gross domestic product next year from the targeted 2 percent.

Politicians are increasingly fighting over state wages ahead of Nov. 30 parliamentary elections. The elections are a three-way fight between the opposition Social Democrat Party, the National Liberal Party led by Tariceanu, and the Liberal Democrat Party, which backs Basescu.

Sed Lex, the union that represents more than 100,000 public sector employees said it will strike as early as this month to back a 50 percent raise for all its members.

``In 2009, the rapidly worsening economic outlook is likely o lead to an even wider budget deficit,'' S&P said today. ``The negative outlook reflects the possibility of a downgrade in the event that tightening of external finance conditions lead to a sharp downturn in economic growth.''

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

Monday, October 27, 2008

Romania: C-Bank warns won’t publish money market indices

Source: ACG News Agency

27. October 2008. | 11:27

The central bank has invited Thursday managers of seven commercial banks for talks over the recent imbalances on the Romanian money market.

The National Bank of Romania has requested seven banks to return to normal inter-bank interest rates and said it might temporarily suspend the publication of the inter-bank bid/offer indices

ROBID/ROBOR, if ROBOR exceeds by more than 25% the Lombard rate, the central bank said in a statement.

"Now, the Lombard rate is at 14.25%. So, it means that if the inter-bank interest offer rates exceed 17.8125%, the National Bank of Romania can step in,” central bank spokesman Mugur Stet said Thursday.

According to the statement, the central bank’s board has decided to amend the norms regarding the money market functioning, in order to avoid situations like in the recent days.

“The recent evolutions of the ROBID/ROBOR quotations represent a temporary and isolated situation, and the banks that were invited today were requested imperatively to return to normal rates," the statement reads.

The central bank has invited Thursday managers of seven commercial banks for talks over the recent imbalances on the Romanian money market.

Over the last week, overnight rates have shot above 50%, eroding the relevance of the central bank's official 10.25% policy rate

Serbia: Romania strongly supports Serbia's EU integration

Serbian Prime Minister Mirko Cvetkovic and Romanian Prime Minister Calin Popescu-Tariceanu today agreed to organise a trilateral meeting with Italian Prime Minister Silvio Berlusconi regarding Serbia's integration into Europe.

Tariceanu, who is on an official one-day visit, told journalists that he presented Prime Minister Berlusconi the idea of trilateral meeting in Belgrade.

Afterwards, Romanian Minister of Trade and Tourism Ovidiu Silagh and Serbian Deputy Prime Minister and Minister of Economy and Regional Development Mladjan Dinkic signed an agreement on economic, scientific and technical cooperation.

The Romanian Prime Minister said that the meeting should prove that Romania and Italy support Serbia's EU accession, showing Serbia has two strong supporters in their EU integration process.

We would like to show that, apart from words of support, we also have something concrete to offer to Serbia, stressed the Romanian Prime Minister.

Cvetkovic accepted the idea and said that such a meeting would be a good platform for affirmation of support to Serbia's EU integration.

He appreciated Romanian assistance to Serbia, regarding not only the EU integration process, but also Serbia's struggle for the preservation of its territorial integrity and sovereignty.

Calin Popescu-Tariceanu

The Prime Ministers agreed that the Serbian minority in Romania and Romanian minority in Serbia form a strong link between these two countries, stressing that their minority rights have to be of the highest priority.

They expressed hope that bilateral political and economic cooperation will be improved, and added that Corridor 7, infrastructure construction, energy cooperation, prevention of natural disasters as well as large international projects such as the Nabuko and Constanta-Trieste oil pipelines might become joint projects.

The Romanian delegation also comprised representatives of the Romanian Foreign Ministry and Romanian Ambassador to Serbia Jon Makovej.

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Living in the land of Dracula

Sat, Oct 25, 2008

Hollywood's version of Transylvania, all rocky crags, black cloaks and dripping fangs, does wonders for tourism, but the real place is outstandingly beautiful - and home to a way of life now lost elsewhere in Europe. How much longer can it thrive, asks Deirdre McQuillan

BLAME THE IRISH for misleading the world about Transylvania. Bram Stoker's Gothic novel Dracula, with its bloodthirsty vampires and spooky castles, spawned a host of Hollywood films that perpetuated the myth of a dangerous, remote realm, all rocky crags, black cloaks and dripping fangs. Today these associations do wonders for vampire tourism in southern Romania, and despite its very tenuous link with Vlad the Impaler - a real warlord called Vlad Dracul, or Vlad the Devil, on whom the character of Count Dracula was based - Bran Castle attracts hordes of visitors every year.

The real Transylvania is outstandingly beautiful, its idyllic landscapes at total variance with its popular fictional image. I spent some time recently in the Hungarian-speaking area, based in a village called Miclosoara that friends had recommended, about a 40-minute drive from Brasov, one of Europe's best-preserved medieval cities, which is surrounded on three sides by the Carpathian Mountains.

It was a key location for the film of Cold Mountain, with Nicole Kidman, and was also used in the new Harry Potter movie, and it has much to explore, but I wanted to get into the countryside. Miclosoara, closed to visitors during the Ceausescu era, is a secluded Szekler - or Settler - village untouched for centuries, where a number of houses are being restored and revived for tourism. Like many thousands of other Romanian villages, it was scheduled for destruction in 1990 by the old regime.

Such a fate would have ended a way of life rich in tradition that now continues undamaged despite growing local fears about the effects of EU farming regulations.

A typical day in the village begins, as it has from time immemorial, at dawn when a boy sounds a silver bugle. At this signal a gate opens at each house, and from the cobbled yard emerges a cow, joining her next companion along the street - I must have counted 30 one morning. Followed by goats and horses in a steady procession, the herd, like something out of the ark, slowly makes its way to pastures way up in the foothills of the mountains.

It takes these animals about an hour to reach their grazing grounds, where they remain for the day, tails flicking peacefully in the shade of wild pear, hornbeam and veteran oak trees. At about 7pm they return home to be milked, plodding slowly back through the village to their waiting owners, oblivious to impatient trucks, cars and other vehicles in their wake, the odd moo announcing their arrival. It is an unforgettable sight.

A few days later, on a lovely sunny September day, with a guide on a horse-drawn cart, we trotted past those pastures, through wild-flower meadows studded with crocus and chicory, on our way to visit a shepherd and his flock. "People here are always working for tomorrow," said our guide as we watched the harvesting and passed other horse-drawn carts laden with hay.

From April to September shepherds set up home up with their families in the higher reaches of the plateaux, milking the sheep twice a day in pens, making cheese that is sent back down to the village. Fierce packs of guard dogs protect them at night from bears and wolves. Our shepherd slept out in the open, armed with a gun, his bed a rudimentary wooden box lined with sheepskins. Romania's Carpathian Mountains have Europe's largest population of brown bears, said to number about 5,500, and stories abound of their foraging activities close to towns. The shepherd's young daughter paraded her dolly pram proudly around their shack for us while he complained about rumours that the EU might restrict the number of guard dogs he could have.

Such is the beauty of the landscape that some observers have described it as being what 18th-century English parkland looked like before the introduction of enclosures; others say it brings the Grimms' fairy tales to mind. I had come down from the north of the country to Brasov on a train journey that took eight hours through some of the most glorious scenery imaginable - and awful environmental destruction, too - so had seen swathes of Romania beforehand.

These Transylvanian tours are organised by an enterprising, well-travelled Hungarian Romanian veterinary surgeon called Count Tibor Kálnoky, the fifth generation of an aristocratic family, who returned to the ancestral estate in Miklosoara from a lucrative pharmaceutical job in Germany. He then set about restoring it and setting up guest-house accommodation to attract tourists interested in history, culture and wildlife.

The ruined 17th-century hunting lodge is being saved, but it is an enormous undertaking that will take years to complete. Its wrecked grandeur inspired the French actress Fanny Ardant to select it as a location for a film yet to be made, an Albanian revenge tragedy.

"Many people thought I was mad," Kálnoky tells me with a smile as we sit at a table shaded by vines outside the guest house, but it is obvious that his dedication and sense of mission have reaped rewards of every kind for him and his young family.

The restoration of the houses, many of which date back to the l800s, and their furnishings has been done with taste, exactitude and an eye for detail; my lovely room has linen and lace sheets and the most comfortable bed I've ever slept in.

You get a sense of the variety and self-sufficiency of village life that's now almost extinct elsewhere in Europe, and he encourages visitor engagement. We meet locals, such as the beekeeper, the blacksmith and a doughty septuagenarian woman still working from morning to night, running a mill grinding corn, weaving, farming, cooking and gardening - and clearly adored by her grandchildren.

One afternoon, on a trip with Kálnoky through maize fields down to the river for a picnic, we count more than 21 species of bird, including a kingfisher, a Syrian woodpecker and the great grey shrike, otherwise known as the butcher bird, for its gruesome habit of staking its prey after the kill. Kálnoky is an avid ornithologist, his bible the Collins guide, which is illustrated by Killian Mullarney.

There was something to discover every day. In the nearby village of Vargyas we meet a member of the Suto family, who have been making and painting furniture for 15 generations, since their arrival as carpenters and joiners to furnish Daniel Castle in 1568. Their traditional furniture and wood carvings are painted freehand, using colours made from minerals sourced in a nearby gorge, and decorated with ironwork forged by the local blacksmith.

Ornate wooden entrance gates, characteristic of Szekely folk art, are everywhere, embellished with floral patterns and other motifs; the Sutos' gate is particularly rich in detail. In the local graveyards are unusual wooden totems on the graves, topped with tulip motifs - open for a female, closed for a male - which are peculiar to Transylvania.

Our group was a mixed bunch of mostly UK visitors, along with an Australian and an Iranian, and we dined together every evening convivially at one long table in the wine cellar of the house beside a blazing wooden fire. The food and local wine were excellent; we usually had a light soup followed by a stew and dessert. Apple soup was a new experience one night; juice from the orchards is preserved using grated horseradish. Occasionally, bread is baked in a cabbage leaf, which imparts both a pattern and a particular taste.

"Transylvania" comes from a Latin phrase meaning "beyond the forest", and the region's wonders are rapidly being discovered by the outside world. Off the main highways, roads can be difficult and potholed, and signposting is notoriously confusing, so it's best to take organised tours where possible.

The dead may have come to life in Bram Stoker's novel, but in Transylvania today a landscape and way of life now lost elsewhere in Europe are thriving. But for how long?

Go there

Aer Lingus (www.aerlingus. com) flies from Dublin to Bucharest, but they arrive late at night, so you need to stay in the city before venturing farther.

Deirdre McQuillan few with Tarom (, the Romanian national carrier, from London Heathrow, returning with Aer Lingus.

Where to stay, where to go and what to eat in Romania

Where to stay

Travelling to Transylvania will almost certainly mean spending a night in Bucharest. The small Rembrandt Hotel (Smardan Street 11, 00-40-21- 3139315, has been highly recommended. From Bucharest Airport you get a taxi into town (about €15), then a train to Brasov, two and a half hours away.

Count Kálnoky's Estate. Miclosoara, 00-40-742-202586, These restored buildings are a great place to stay. The main building has a reception area, wine cellar, restaurant and some upstairs rooms. Outlying buildings, some a five-minute walk away, house guest rooms. What makes it an all-year-round attractive location is that tours are offered every day to places that would be otherwise difficult to find. It is a hiker's paradise, and some guests told me that it's even lovelier in winter, when the place is covered in snow. The website gives lots of information about the cultural and nature tours, as well as its riding treks.

Casa Rozelor. Str Michael Weiss 20, Brasov, 00-40-268-475212, A hotel and art gallery in a converted medieval granary.

Casa Wagner. Piata Sfatului 5, Brasov, 00-40-268-411253, At this converted 15th-century German bank, in the city's main square, each room is decorated in a different style.

If you prefer a package, UK-based company Beyond the Forest (, 00-44-1539531258) organises week-long full-board tours from the UK to Transylvania, with flights, transfers and excursions.

Where to go

Bran Castle. Traian Mosoiu str 489, Bran, 00-40-268-238333, This 14th-century fortress on top of a 60m crag, about 25km south of Brasnov, is promoted for its tenuous link with Vlad the Impaler, the inspiration for Bram Stoker's Dracula, and is the former home of queen Marie of Romania, a member of the British royal family and a grand-daughter of Queen Victoria, who decorated much of the interior. Bran Castle is now a museum, attracting nearly 500,000 visitors a year. Count Kálnoky also offers a tour.

Transylvania is a huge region made up of 10 counties, with much to see and explore - some great cities, for example, such as Brasov, the fortress town of Sighisoara and historic Sibiu, are said to have more than 100 attractions, including a lot of castles, such as Bran, Hunedoara and Peles. It is a region of unspoilt landscapes and mountain passes made for activities such as skiing, hiking, paragliding, wildlife spotting or, simply, walking.

It's easy enough to hire a car, but everybody I know who has done so warns about the difficulties of getting around, particularly when few people in the countryside speak English and signage is haphazard. Trains can be tricky enough; some are better than others, and it's often necessary to book ahead. You are told to beware of walking too close to flocks of sheep; guard dogs can be zealous.

What to eat

Transylvanian cuisine has been influenced by the region's history of invasion and the effects of different cultures, from the Greeks and ancient Romans to the Saxons, who settled in the south, not to mention the Slavs and Hungarians.

Fresh bread and homemade jams are the usual breakfast fare, and the honey is good - you often see lorries with portable hives travelling the roads. Guest-house fare tends to be hearty home-cooking, with starters of salami, cucumbers and picked peppers, followed by meaty stews and pastry desserts or ice cream. Transylvanian wine is excellent and inexpensive.

What to read

The three guidebooks I used were The Rough Guide to Romania(£11.99), Transylvania: A Land Beyond Fiction and Mythby Zoltan Farkas and Judit Sos (Jel Kep, £11.90) and Transylvaniaby Lucy Mallows (Bradt Guides, £14.99).

© 2008 The Irish Times

Financial crisis hits automobile marketing Romania

26 October 2008 | 10:49 | FOCUS News Agency

Bucharest. Global financial crisis starts to affect Romanian economy. More and more companies in different fields of the economy announce that they will restrict the industry due to the little sales. Many of the projects had already been stopped due to the lack of money, Romanian television Realitatea web page reports. Romanian government admitted that several sectors of the economy start to “expire” and deposed the proposal to help the business.

Automobile industry was absolutely “struck” by the global crisis. “Reno”, “Ford”, “General motors”, “Toyota”, “Volkswagen” BMW are just some of the bigger companies that were affected by the financial crisis.

Romania's President Approves Pay Rise

24 October 2008
Bucharest _ Romanian President Traian Basescu said on Friday that he will support a controversial law which will increase teachers' wages by 50 per cent.

On September 30, Parliament unanimously approved the salary increase, saying the country's good economic performance allows for the move. However the rise is opposed by the government who fears that an increase of over nine per cent is not financially feasible and will severely damage Romania's economy.

"There is no reason not to approve the law as it was enacted by Parliament. I assure you that the money to be given to teachers is far less than the amount which is not used by the government, from EU funds, for building new roads, for example," Basescu said.

Prime Minister Calin Popescu Tariceanu did not want to comment on the President's decision, but announced a government meeting for Saturday in order to analyse the side effects of such an increase.

Economists are concerned about the measure's potential impact on Romania's consumption-driven, overheated economy.

Romania Backs Nabucco, South Stream

24 October 2008
Bucharest _ Romania is ready to support the construction of both the Nabucco and South Stream pipelines, the Economy and Finance Minister Varujan Vosganian says.

"Romania is ready to support any European Union-undertaken project, both Nabucco and South Stream," Vosganian told a press conference.

The statement was the first a Romanian official made showing the country's interest in the South Stream, a Russia-sponsored project which is widely seen as competition to the EU-sponsored Nabucco.

The South Stream project, led by Russian energy giant Gazprom and Italy's ENI with a cost of €10 billion, involves the construction of a gas pipeline for the delivery of natural gas from Russia to Europe.

Gazprom has already inked deals with Bulgaria, Serbia, Greece and Hungary for the development of the project. Slovenia and Austria might participate in the project as well.

Romanian President Traian Basescu Wednesday urged the speeding up of the construction of the Nabucco pipeline project, saying that the EU must diversify sources for energy supply in order to impede tendencies by some countries to use energy as a political instrument.

The 3,300-kilometre Nabucco pipeline, which will bring gas from Central Asia to Europe while bypassing Russia, is expected to become operational in 2013with investments estimated at €7.9 billion.

Analysts say South Stream, with an annual gas transport capacity of 30 billion cubic metres, will enhance Russia's domination over gas deliveries to Europe.