Italy eyes minimum income rules for immigrants

ROME, April 28 (Reuters) - Italy's next government should create a minimum income requirement for immigrants, including those from other European Union countries, the man expected to be Italy's new foreign minister said.

Franco Frattini, who holds the EU's top justice and security post and is a longtime ally of prime minister-elect Silvio Berlusconi, said the income requirement would become necessary for visits of more than three months.

"We need a national law that establishes a minimum income below which foreigners cannot stay in our country for more than 90 days," Frattini said in an interview published on Monday in Il Giornale newspaper, owned by Berlusconi's brother.

"Whoever (has income) above that level stays. Whoever does not have the minimum income will be sent back to their country of origin," he added.

Frattini did not give a minimum income figure but said it should be based on Italy's definition of the poverty line.

A string of well-publicised violent crimes blamed on Romanians and other foreigners have pushed immigration to the top of the political agenda before Berlusconi takes office in early May.

More than 500,000 Romanians are estimated to live in Italy, a number which Rome says jumped dramatically following Romania's entry last year into the European Union. Many are Roma Gypsies living in shantytowns.

Frattini said Rome should ask Romania to send agents to help identify undesirable Romanians.

"They are specialists, they know the dialects of their country. They know how to deal with the Roma, they are very good at identifying people," said Frattini, who has been given unpaid leave from his post at the European Commission pending his expected appointment to Berlusconi's new cabinet.

Berlusconi spoke by telephone with Romanian Prime Minister Calin Tariceanu on Thursday and the two leaders agreed to meet to discuss security issues once the new Italian government takes office, Tariceanu's government said. (Writing by Phil Stewart, editing by Robin Pomeroy and Mary Gabriel)

Romania aims to boost secondary debt market

By Luiza Ilie and Marius Zaharia

BUCHAREST, April 30 (Reuters) - A new Romanian government debt management strategy is likely to boost the country's tiny secondary debt market, a finance and economy ministry official told Reuters in an interview.

Stefan Nanu, director of the finance and economy ministry's treasury department, said the ministry hoped to list treasuries on the Bucharest bourse in September, and it may issue 10- and 15-year leu bonds in late 2008.

Romania fully liberalised its capital markets in 2006, but has next to no secondary debt market, limited issuance of treasury bonds and a small stock exchange. Portfolio investment opportunities remain scarce, and most foreign cash is parked in short-term bank deposits or the property market.

Nanu said the medium term debt strategy, Romania's first, would answer the need for more liquidity and longer maturities.

"The implementation of the strategy will set the premises for a more liquid secondary market since the main instruments we refer to in the strategy are government securities," he said.

"There is a need for more liquid instruments on a broader range of maturities to build a yield curve on a longer timeframe," he said in the interview, conducted on Tuesday.

The strategy, which the ministry published last week and needs cabinet approval, underlines treasuries as the main debt instrument rather than loans from multinational agencies, as in the past.

Longer debt maturities are particularly needed as Romania is overhauling of its outdated state pension system, and private pension funds are hungry for investment opportunities.

"We are considering an alternative secondary debt market by listing government securities on the Bucharest Stock Exchange. In June or July we hope to begin technical tests so that we can float treasuries in September if everything goes well," he said.

IN THE SHORT TERM

The strategy, which the government could approve within a month, envisages issuing bonds of up to 15 years in 2008-2010.

The ministry is also considering issuing inflation-indexed securities, which would benefit pension funds, as well as introducing buy back and bond exchange operations.

So far this year the ministry has focused on short-term instruments because the market has pushed for higher yields. This is due to resurgent inflation and exchange rate volatility caused by the global liquidity squeeze.

It has sold a little over 3 billion lei so far in six and 12-month bills, and 3 and 5-year bonds.

The ministry, which has raised its 2008 local issuance plans to 11 billion lei from roughly 9.5 billion sold last year, has rejected bids repeatedly in recent months. Accepted yields have jumped above the central bank's benchmark rate of 9.5 percent.

"Given current conditions, with growing interbank rates and high inflationary expectations, we are looking at short- and medium-term financing, nothing over five years," Nanu said.

However, he said the ministry may resume its longer term issuance plans later this year if inflation returned towards the central bank's 5.9 percent December forecast and if private pension funds step up demand for treasuries.

"The 15-year bond depends on how the 10-year bond does. Therefore the 10-year bond will be most likely in the fourth quarter. We could issue the 15-year bond this year as well ... and reopen it several times next year to make it liquid."

Potential changes in debt issues' size would appear in the second half of 2008, depending partly on whether Romania issues a eurobond worth at least 500 million euros and carrying a 10-year maturity. A previous eurobond matures in the summer.

"We are not forced to issue the eurobond by June. We also have the alternative to use funds from privatisations to repay the eurobond that matures," Nanu said. (Editing by David Stamp)

EU approves euro143 million aid to Ford plants in Romania

BRUSSELS, Belgium (AP) -- European Union regulators authorized Romania on Wednesday to grant euro143 million (US$223 million) in subsidies to Ford for the overhaul of two motor plants, saying it did not violate EU rules on state aid.

"I am pleased to approve aid for these important investment projects, which are expected to create more than 40,000 direct and indirect jobs," said EU Competition Commissioner Neelie Kroes.

The government aid will be part of a total investment of euro600 million (US$934 million) in the plants to make engines and complete vehicles in the Craiova region of southwest Romania, one of the EU's poorest regions.

"The effect of the aid on competition is deemed to be outweighed by its positive contribution to regional development," the European Commission said in a statement.

Before it can pay out the aid, however, the Romanian government will have to recover euro27 million (US$42 million) relating to the sale of Automobile Craiova assets to the U.S. auto giant last year.

The EU ruled in February that Romanian authorities had undersold the assets to Ford Motor Co. and should reclaim the money.

Ford, which was the only bidder, paid euro57 million (US$89 million) for a 72.4 percent stake. The EU said the stake was actually worth euro84 million (US$131 million) and Romania should recover the difference.

The Romanian government took over the debt-laden factory in 2006 after the previous owner, South Korea's Daewoo Motor Co., went bankrupt in 2000.

Bulgaria, Romania Grain Yield Grows Thanks to Favorable Weather

Sofia News Agency

The grain yield in Bulgaria and Romania in 2008 is expected to be significantly larger than the one in 2007 thanks to the more favorable meteorological conditions.

This predication was made by Bulgaria's Deputy Minister of Agriculture Svetla Buchvarova before the Bulgarian National Radio.

The 2008 grain yield in Bulgaria is expected to be 70% larger than last year's, which will lead to an increase in grain exports.

In 2007 Bulgaria grew a total of 2,4 million tons of grain (the world grain production was 603,5 million tons), whereas in 2008 the expectations are for some 3,5-4 million tons of grain.

Romania's wheat yield might increase twofold in 2008 by reaching 7 million tons. In 2007 Bulgaria's northern neighbor produced 3,5 million tons of wheat, which was 44% less than in 2006.

Romania's Agriculture Ministry has announced that the country might export 1 million tons of grain to Turkey, Egypt, and Middle East states in 2008.

The yield increase will result not only from good meteorological conditions but also from the increased quantity of cultivated land because the farmers are attracted by the higher grain prices.

The world grain production is expected to reach 635 million tons in 2008, which be a 5% increase.

Romania skilled labour shortage 'highest worldwide'

Published: Friday 25 April 2008

Romanian businesses face the greatest difficulty worldwide in finding qualified personnel, reveals the latest study by Manpower Inc., a world leader in the employment services industry, Euractiv.ro reports.

Published on 22 April and entitled "Talent Shortage Survey 2008: Global results," the study compares the situation in 32 countries from the Americas, Asia-Pacific, Europe, the Middle East and Africa.

It finds that in Romania, as many as 73% of employers say they have difficulties in filling available positions, compared to 12% in the UK, 18% in Italy, 26% in Belgium, 31% in France, 34% in Germany, 47% in Greece and 49% in Poland. For other continents the figures range from 12% in India to 22% for the USA, or 28% for Mexico and 38% for South Africa.

Over 700 business representatives per country answered the survey, revealing the precise demands in each country for 10 categories of personnel. While in most Western countries the greatest demand is for skilled manual trades and technicians, for Romania the highest demand is for engineers.

One explanation for this is that following Romania's accession to the EU in January 2007, all the EU 15 countries - except for Finland and Sweden - decided to make use of a clause allowing 'transitional restrictions' to be placed on the free movement of workers from Romania for as many as seven years. However, most of these countries also introduced sector-specific exceptions, for example by allowing quotas or unrestricted access for highly-skilled labour.

The situation sparked a vast labour exodus to Western Europe, creating labour shortages in many sectors of Romania's economy and slowing the country's economic growth.

In order to tackle the crisis, the Romanian government is encouraging repatriation, while trying to attract workers from outside the EU to fill gaps in the labour market.

The effects of the Romanian authorities' effort to find a solution to the manpower shortage have been felt as far away as Pakistan, where the press has recently highlighted the job opportunities. Romanian firms have already been in contact with countries such as China, India, Pakistan and Kenya, and the first arrivals of foreign workers are expected in 2009.

Workers from the Third World countries will be paid some 200 dollars per month plus meal vouchers, which according to the Romanian press is ten times more than their income back home. Romanian employers will be covering transport and accommodation costs, the daily Ziarul Financiar and the TV channel Antena 3 reported.

Representatives of Romanian businesses said that bringing workers from neighbouring countries such as Moldova and Ukraine is no longer a solution. They also admitted they did not consider training unemployed Romanians to be a solution either, arguing that once they had learned a profession, they would leave the country to work abroad for a higher salary.

The average monthly salary in Romania of €400 still lags far behind Western Europe. But since the country's EU accession, Romanians are witnessing one of the biggest and most rapid salary increases in Eastern Europe. However two million of the 22 million Romanians already work abroad for much higher wages.

New Report Expects Growth of between 4% and 5% in the Romanian Commercial Banking Market

DUBLIN, Ireland — Research and Markets (http://www.researchandmarkets.com/reports/c89794) has announced the addition of Romania Commercial Banking Report Q1 2008 to their offering. The Romania Commercial Banking Report provides independent forecasts and competitive intelligence on Romania's commercial banking industry. From Q108 we will be calculating the Commercial Banking Business Environment Rating (CBBER) for each of the countries surveyed by BMI.

This will permit a more systematic and comprehensive comparison of the conditions within the banking industries of the various countries than was possible in the past. For each country, it will also facilitate a comparison of the conditions within the banking sector and conditions prevailing in other sectors. Romania's overall CBBER is 58.2. The equivalent figures for the USA and the eurozone are 84.8 and 81.4 respectively. Romania's CBBER is fifth of the countries we monitor in Central and Eastern Europe. Within the CBBER, the most important aspect is the (banking) market structure element of the limits of potential returns. This element accounts for 42% of the overall CBBER. Romania's rating for this element, 58.8, is about the same as the overall CBBER but higher than the country structure element of the limits of potential returns, 50.0. BMI expects relatively strong growth in total assets and client loans during the 2007-2012 forecast period.

Nevertheless, the CBBER shows that Romania's banking sector is being held back by country factors, including the low level of per-capita GDP, GDP volatility and the overall financial infrastructure. Q207 real GDP growth in Romania fell behind expectations, and our full-year 2007 growth forecast has now been downwardly revised. Our new 5.8% forecast is predicated on a slight tempering in consumer spending and a disappointing performance of exports, yet is still slightly above market consensus. This is supported by our view that government spending looks set to accelerate, and that growth will also be supported by investment, particularly in construction, as massive infrastructure projects and economic development continue. - document.

Real GDP growth of 5.6% in Q207 was largely the result of slow export growth and a poor performance in the agricultural sector. There were also some signs that the cumulative 125bps of monetary tightening effected over the course of 2006 have started to curb consumer credit growth and spending. Although it continued to outpace the headline rate by some way, private consumption expanded by 10.7% year-on-year (y-o-y), down from 11.3% in Q107. However, the starkest fall was seen in exports, which grew just 2.4% y-o-y in Q207, down from 12.9% y-o-y over Q107, and likely reflecting an as-yet poor ability of Romanian goods to compete in the wider market of the EU. There is little doubt that, looking at the wider picture, the business cycle in Romania has peaked, and that growth will slow in 2008. Our current forecast is for 6.2% real GDP growth, in line with our view of slowing global growth, from 4.9% in 2007 to 4.7% in 2008.

Not only do we expect a cyclical slowdown, we also foresee foreign investment slowing, as the bulk of large privatisations are over, and with high wage growth and strong nominal leu appreciation, investors start to look even further east. A global 'credit crunch' also signals a turning tide for easy access to credit, which has fuelled Romanian consumption over the last few years. However, the country's economy is still developing fast, and we expect growth of between 4% and 5% to continue for the remainder of the forecast period.

For more information visit http://www.researchandmarkets.com/reports/c89794

WHY DOES MONICA LOVINESCU MATTER?

By Vladimir Tismaneanu

(Monica Lovinescu, a Paris-based literary critic and journalist who encouraged intellectual resistance to Romania's communist regime from the microphone of Radio Free Europe from 1964-92, passed away on April 21 at the age of 85. The daughter of influential interwar academic Eugen Lovinescu, and a mother who was to die in a communist prison, Monica Lovinescu enjoyed tremendous prestige and influence in her native Romania. She was considered a chief ideologue in arguing that communist crimes were equal to those of the Nazis, and her work angered dictator Nicolae Ceausescu to the point that he ordered the beating in 1977 that left her in a coma. She recovered to return to her seat behind the microphone, where she observed the downfall of Ceausescu's regime in 1989.)


Monica Lovinescu matters because she was one of the most important voices of the Eastern and Central European antitotalitarian thought. Her passing away is a major loss for all the friends of an open society. My personal indebtedness to her -- like that of many Romanian intellectuals -- is immense. As a member of the Presidential Commission for the Analysis of the Communist Dictatorship in Romania (which I chaired), Lovinescu participated, even during the most painful moments of physical suffering, in the condemnation of communist totalitarianism. Her solidarity was unswerving, both morally and intellectually.


Lovinescu's crucial impact on Romania's culture is inextricably linked to her major role as a cultural commentator for Radio Free Europe (RFE). There is no exaggeration in saying that no other RFE broadcast was more execrated, abhorred, and feared by Ceausescu and the communist nomenklatura than those undertaken by Lovinescu and her husband, Virgil Ierunca. For decades, Lovinescu fought against terrorist collectivisms, the regimentation of the mind, and moral capitulation. Her patriotism was enlightened and generous. Thanks to her, Romanian intellectuals were able to internalize the great messages from the writings of Camus, Arendt, Kolakowski, Orwell, Solzhenitsyn, Koestler, Cioran, Milosz, Revel, Aron, and the list is fatally too short. A spirit totally dedicated to modernity, open to the crucial polemics of the 20th century, Lovinescu wrote poignant essays on the what American critic Lionel Trilling called "the bloody crossroads, where literature and politics meet."


For years, her outspoken positions in defense of dissident writers and moral resistance to totalitarianism provoked the ire of the party hacks and their Securitate associates. Starting in 1967 and continuing today, publications associated with the most vicious, ultranationalist, and anti-Semitic circles among Romania's Stalinists have targeted Monica Lovinescu. On several occasions, in the 1970s-80s, attempts were made on her life. For Ceausescu and his sycophants (many of whom are still thriving in the Social Democratic and Romania Mare parties), Lovinescu symbolizes all they love to hate: pluralism, tolerance, hostility to xenophobia, compassion for victims of both totalitarianisms (fascist and communist), and a commitment to what we can call an "ethics of forgetlessness." On the other hand, democratic intellectuals (Gabriel Liiceanu, Andrei Plesu, N. Manolescu, H.R. Patapievici, Andrei Cornea, Dorin Tudoran, Cristian Teodorescu, Sorin Alexandrescu, Mircea Mihaies, Alina Mungiu-Pippidi, to name just a few) learned from her that "memory is indispensable to freedom."


Lovinescu matters because she knew how to maintain the unity between ethics and aesthetics. In 1963, she wrote: "We live in an age in which impostures abound. They should not conceal however the other voices -- those of the victims." Her RFE broadcasts were precisely an antidote to the official mendacity, a voice of truth speaking for those condemned to silence. Especially during the watershed year 1968, Lovinescu paid close attention to the ideological crisis of world communism and the importance of disenchantment among ex-Marxist intellectuals. At a historical juncture when Ceausescu masqueraded as a de-Stalinizer, Lovinescu exposed the tyrant's imposture and appealed to Romanian writers to emulate the ethical audacity of Czech and Slovak intellectuals such as Ludvik Vaculik, Vaclav Havel, Ivan Svitak, Ladislav Mnacko, Eduard Goldstuecker, Antonin Liehm, Pavel Kohout, and Ivan Klima. Thanks to Radio Free Europe and to Monica Lovinescu, Romanians had direct access to the iconoclastic pages of "Literarny listy."


At a time when many thought disparagingly about anything smacking of neo-Marxism, Lovinescu and her husband Ierunca highlighted the significance of revisionism for the destruction of communist pseudo-legitimacy. She wrote extensively about the importance of apostasy, which she described as the "voie royale" toward the awakening from what Immanuel Kant coined "the dogmatic sleep." Furthermore, while emphasizing the need for Romanian culture to avoid autarky, she proposed remarkable guidelines that decisively influenced the intellectual cannon in the country.


Lovinescu's writings have come out after 1990 from the prestigious publishing house Humanitas. A few weeks before her passing away, I reread her essays from 1968. They strike me as extraordinarily timely, insightful, and prescient. She understood before many others that communism was irretrievably sick, and she insisted on the role of intellectuals in the insurrectionary saga of Eastern Europe's opposition to Sovietism.


After 1990, Lovinescu and Ierunca saw many of their predictions (including the dire ones) come true. The legacies of national-Stalinism continue to haunt Romania's fragile pluralism. The lackeys of the ancien regime made it politically and financially. Dissidents were exhausted, marginalized, slandered. Things changed, however, after 1996 and especially after 2004. The initiation by Traian Basescu of the Presidential Commission unleashed a national conversation along the lines of historical truth and moral justice. Immediately after President Basescu's condemnation of the communist regime as illegitimate and criminal, on December 18, 2006, I called from Bucharest and told Monica Lovinescu what happened. I mentioned the hysterical sabotaging of the president's speech by Romania Mare leader, and former Ceausescu bootlicker, Corneliu Vadim Tudor. Her answer was short and encapsulated the meaning of an exemplary intellectual and moral itinerary: "The noise doesn't matter. Truth was said. We won!"


(Vladimir Tismaneanu is professor of politics at the University of Maryland, chair of the Presidential Advisory Commission for the Analysis of the Communist Dictatorship in Romania, and author of numerous books including "Stalinism For All Seasons: A Political History Of Romanian Communism" [University of California Press]. Since 1983, he has been a regular contributor to Radio Free Europe/Radio Liberty.)

Art ordered returned to son of Romanian dictator Ceausescu

(AP:BUCHAREST, Romania) A Romanian court has ordered the National Art Museum to return works of art confiscated during the 1989 anti-communist revolt to a son of late dictator Nicolae Ceausescu, he said Friday.

Valentin Ceausescu said the collection had been owned by his brother, Nicu, who died in Vienna in 1996 of cirrhosis of the liver. Valentin Ceausescu is his heir.

The Bucharest Court ruling late Thursday can be appealed.

The works ordered to be returned include paintings and sculptures by Romanian artists that are held by the National Art Museum. Among them are works by Theodor Pallady, Corneliu Baba and Nicolae Tonitza. An estimate of their value was not available.

Authorities confiscated the works when Nicu Ceausescu, a Communist Party official, was arrested during the uprising that ousted his father from power. Nicolae Ceausescu and his wife, Elena, were executed.

He was convicted of genocide in the deaths of 89 people in the central city of Sibiu during the revolt. He served three years of a 20-year prison sentence and was released in November 1993 on grounds of ill health due to liver disease.

Nicu Ceausescu filed a lawsuit seeking return of the art in 1996, shortly before his death, his brother said.

"I hope they will hand the works back, but I am not entirely optimistic," he said by telephone.

A museum spokeswoman contacted by telephone said the museum did not want to comment on the case.

Spain Won't Expel Illegal Workers from Bulgaria and Romania

Sofia News Agency
25 April 2008, Friday

Spain will not be able to expel any more Bulgarians and Romanians working there illegally after a ruling of the Spanish Supreme Court.

The Court has canceled an expulsion order from 2001 concerning a Romanian citizen, and another one concerning a Bulgarian, both of whom did not have permits to reside in Spain and to work there legally.

According to the ruling, the accession of Bulgaria and Romania to the European Union on January 1, 2007, has turned their citizens into citizens of the Union, to whom the Spanish laws about sanctions against foreigners could not be applied.

The Supreme Court emphasized that expulsion orders could be applied only to persons who had not only been working illegally in Spain, but also did not have the right to reside there.

After January 1, 2007, Bulgarians and Romanians have the right to reside in Spain, and therefore they could not be expelled for working there illegally.

According to the official data of the Spanish authorities more than 500 000 Romanians and 100 000 Bulgarians live in the country. Spain has introduced a moratorium on the acceptance of any more new guest workers from the two Balkan states.

U.S., Romania discuss training and exercises

Air Force Lt. Col. James R. Bachinsky

BUCHAREST, Romania — U.S. and Romanian military officials further advanced their military partnership, with the inaugural meeting of the Joint Committee here April 21.

The committee serves as the policy and legal body charged with oversight of U.S. forces training and exercise activities on the territory of Romania. The Joint Committee is mandated by both the 2005 Defense Cooperation Agreement and the Joint Committee Implementing Arrangement (IA) signed on 20 July 2007.

The meeting was led by co-chairs, U.S. Air Force Maj. Gen. Robertus Remkes, Director of EUCOM Strategy, Policy and Assessments directorate, and Mr. Corneliu Dobritoiu, Romanian Ministry of Defense (MoD) State Secretary for Defense Policy and Plans.

In his opening remarks, Remkes thanked Romania for their efforts not only within the borders of Romania but also their support of on-going military operations in Iraq/Afghanistan.

Mr. Dobritoiu thanked everyone for the hard work leading up to this first meeting, highlighting the importance of the on-going U.S./Romanian partnership which is critical as the U.S. and Romania begin the second year of military training exercises.

The Joint Committee serves as the ultimate authority for a larger group of subcommittees organized by functional categories, these include the Policy and Legal Advisory; Personnel; Military Exercise; Logistics; Security and Information Exchange; and Communications subcommittees.

An Executive Committee, comprised of the leads of all of the subcommittees, reviews the work of the subcommittees, examines the suitability and applicability of recommendations, and advises the Joint Committee.

These groups will serve as a forum to address and attempt to resolve issues that arise during military exercises and associated U.S. forcessâ? activities. Issues that cannot be resolved at lower levels will come to the subcommittees for resolution, or forwarded to the Joint Committee for resolution. Officials on both sides emphasized the need to empower officials at the operational level to reach consensus on issue resolution.

url = http://www.eucom.mil/english/FullStory.asp?art=1684

Bulgaria, Romania to demand EU sprat draught quota removed

SOFIA, April 21 (Xinhua) -- Bulgaria and Romania are to demand the removal of the quota of sprat draught in the Black Sea, imposed by the European Union, local press reported Monday.

The decision was made at a Monday meeting between Bulgarian Agriculture and Food Supply Minister Nihat Kabil and his Romanian counterpart Dacian Ciolos, who is paying a two-day visit here.

The reason for the demand is that the states could not gain even a half of the compulsory fish quantity.

The 100-ton quota of turbot draught should be also increased, the officials said.

Bulgaria's Minister Kabil emphasized the bloc stipulated that the net for turbot draught should be wider so that little fish could not stuck into them.

Kabil said that he will rely on a statement of the two countries' research institutes working on the valuation of the fish stocks while raising the matter before the EC.

Kabil and Ciolos also discussed the opportunity to establish a joint working group to draw a program for the priorities of the two countries in the Common Agricultural Policy of the EU.

Bulgaria, Romania strike deal on agriculture policy

sofiaecho.com

Bulgarian and Romanian agriculture ministers agreed to work together closer in the implementation of the common European agriculture policy in the two European Union member states, Focus news agency reported on April 21.

Bulgaria's Agriculture and Food Supply Minister Nihat Kabil met with Romanian minister of agriculture and rural development Dacian Ciolos in Sofia. Kabil said after the meeting that the two countries should protect their interest in finding solutions to local problems.

Both countries also share common visions on the European fisheries policy, with the two ministers agreeing that the sprat fishing quotas for both countries in common Black Sea waters should be abolished, as it cannot be reached. At the same time, the flounder fishing quotas should be doubled, as it is currently only 100 tons a year (50 tons for each country).

A group of representatives from Romania and Bulgaria will be working together to sharpen priorities the two countries in the field common EU agriculture policy, the ministers agreed

Ciolos said Romania also had problems in adopting the European agriculture funds and some breaches of EU rules were discovered in 2004/2005, when Romania had to give back tens millions euro to the EU.

Romania, Croatia, Serbia Sign Oil Pipeline Deal

BUCHAREST (AFP)--Romania, Serbia and Croatia signed an agreement here Tuesday to build a pan-European oil pipeline but Slovenia and Italy have yet to confirm their participation in the project.

The agreement calls for the creation of a company to develop the EUR3.5- billion pipeline between the Romanian port of Constanta and Trieste in Italy.

"It's a first step, a necessary one to bring this project to fruition," Romania's state secretary for economic affairs Viorel Palasca told a press conference.

The new company, made up of Romania's Conpet and Oil Terminal, Serbia's Transnafta and Croatia's Janaf, will be officially registered in London, where it will be based, within 45 days, he added.

Slovenia and Italy, which initially expressed interest in the pipeline, haven't yet named the companies representing them in the project, Palasca said.

"Italy is waiting for the creation of a new government but even if it does not take part, there are alternative routes (for the pipeline)," he added.

Vladimir Vrankovic from Janaf noted however "without Slovenia, there are still options, but without Italy, there isn't a project."

The project, which has the European Union's backing, calls for the construction of a 1,300-kilometer pipeline to bring oil from the Black Sea to Central Europe in a bid to reduce dependence on Russian oil.

Romania changes vehicle tax under EU pressure

22 Apr 2008

Romania’s government Monday ordered changes in the nation’s vehicle registration tax, bowing to European Union authorities who deemed it an unfair barrier to car imports.

Revenue from the new tax, to take effect June 1, is to be used entirely for environmental protection, the Mediafax news agency reported. The European Commission - the EU’s executive - has threatened to drag newcomer Romania before the European Court of Justice, describing the tax as protectionist and illegal by EU standards. The old measure, introduced at the start of 2007 just as Romania joined the EU, was based on a vehicle’s age and resulted in imported second-hand cars being taxed the most. Brussels viewed the tax as a Romanian government attempt to protect domestic automakers. Meanwhile, the average Romanian car is 13 years old. (m&c.com)

IMF says Romania may need more action on inflation

22 Apr 2008

Romania may need tighter monetary policy because of the rapid inflation surge in recent months, the International Monetary Fund said on Tuesday.

Inflation jumped from a post-communist low of 3.7% in March 2007 to a nearly two-year high of 8.6% last month, as mounting wages and domestic demand added to pressures from global rises in food and energy costs.

The central bank has hiked its benchmark interest rate in recent months to 9.5% in a bid to quell inflationary pressures in Romania, which joined the European Union last year. The bank targets inflation at 2.8-4.8% this year.

“We believe more monetary tightening may be needed given the negative inflation surprises in recent months,” Albert Jaeger, IMF mission chief for Romania and Bulgaria told reporters at the end of annual consultations. “But we see good chance that inflation will go back to target range if appropriate monetary and fiscal policies are implemented. We see inflation going back to range in 2009.” Jaeger told Reuters he estimated year-end price growth at 6.5%, above current market expectations and the central bank’s 5.9% forecast. The IMF also said it was worried about budget spending plans and “somewhat optimistic” revenue forecasts. “Given the approach of (local and parliamentary) elections we see serious fiscal risks ... that the fiscal deficit in 2008 could come out higher than projected,” Jaeger said.

The centrist minority government targets a consolidated shortfall of 2.3% of gross domestic product this year. The Fund said the government should target a lower deficit and that revenues may be overestimated by 1-1.5% of GDP. The IMF sees Romania’s economy growing by around 6% this year and 4.7% in 2009. (Reuters)

Romania: Inflation Climbs Again

Oxford Business Group Latest Briefing

Romania's inflation hit another high in March, as global and domestic factors dragged prices upwards. As last year, the country seems likely to overshoot its inflation target by some way. As a consequence, the central bank has been increasing interest rates rapidly. While pressures from food prices and liquidity may ease over the year, the aim of bringing the price index down to 3% by 2010 is now looking problematic.

Annual consumer price inflation reached 8.63% in the year to the end of March, up from 7.97% in February, according to the statistics released by the National Institute of Statistics (NIS). Romania has been hit by higher than expected inflation of late, with the end-2007 figure reaching 6.57%, well above the 3-5% target band set by the central bank, the National Bank of Romania (BNR). Inflation in 2006 was 4.87%, so last year's results confounded hopes on disinflation.

The BNR expects inflation to cool a little over the year, but still come in significantly above its target of 3.8%; in February, it revised its forecast for 2008 to 5.9% from 4.3%. The International Monetary Fund (IMF) has a more pessimistic estimate of almost 7%.

Inflation in March was 0.67% overall, compared to 0.1% in the same month last year. Services saw the largest price increases - 0.92% - followed by non-food goods (0.67%) and foodstuffs (0.55%). A breakdown of monthly inflation statistics reveals that price rises were driven by increases in the costs of several key goods and services. Food oil prices, for example, rose 3.44%, while post and telecommunication services gained 1.4%; milk and other dairy products increased 1.21%. Perhaps most importantly, fuel prices climbed 2.31%.

Food prices, which rose 10.82% in the year to end-March, have been driven upwards by a number of factors on the supply side. Domestically, last year's drought damaged crops, cutting harvests. On an international level, many food-producing countries have been hit by climatic issues, from the lack of rainfall to flooding, which bedevilled Romania's neighbour Bulgaria. Crop growing trends have also tended to move away from cereal crops that form the staple of many countries (in Romania, bread and therefore wheat). A shift towards lucrative biofuels in the US, and now the EU, has seen farmers switch from basic cereals. The same has happened as meat consumption in the developing world, particularly in Asia, has increased, encouraging livestock farming at the expense of wheat and rice.

Fuel prices, which increase transportation costs and company overheads, have been a root cause of some of the inflation across the board. Instability in the Middle East and increasing demand from the growing economies of Asia and Africa have contributed to pushing oil above $100 a barrel. Demand from countries such as China has also driven up the cost of commodities and construction materials.

These factors, of course, have been affecting other European countries as well. The EU-wide price index has risen 5.9% in the past 12 months, despite a slowdown in some of the larger economies in Western Europe. Nonetheless, there are also important domestic contributors to price rises.

The weakening of Romania's currency, the leu, has made imports significantly more expensive, while in the run-up to elections slated for this autumn, a battening down of the fiscal hatches seems unlikely (though the budget deficit is being reduced, to widespread praise). Having said this, the leu's slip will help ease perhaps Romania's biggest economic problem, the current account deficit, by cheapening exports and reducing demand for imports.

Wages have also been galloping ahead of growth, increasing 21% in the year to February against around 6% for gross domestic product in 2007. While monthly statistics for February show a slight wage drop, the trend is still towards higher pay. Where wages have not been seen to keep pace, protests have occasionally occurred, for example the 19-day strike at the large Dacia car plant, which was called off on April 11 after a pay rise was negotiated.

Furthermore, inflation is an extremely important issue in Romania, as the country must bring its rate down significantly in order to join the eurozone. Current requirements stipulate the candidate countries for the European Single Currency must have inflation to no more than 1.5% above that of the three EU countries with the lowest rates, for two years. Romania would therefore have to aim for around 3% on present performance. In early April, BNR deputy governor Cristian Popa said that it is the BNR's aim to lower inflation to 3% or even lower, by 2010. The governor, Mugur Isarescu, had warned in February that Romania's slated adoption of the euro in 2014 would be unobtainable if inflation does not fall in a sustainable way in 2008 and 2009.

Therefore, in response to the growing price pressures, the NBR has hiked up rates considerably[MSOffice5]. In March, it increased its main rate half a point to a 31-month high of 9.5%, the fourth consecutive rise. Isarescu has affirmed the bank's commitment to pure inflation targeting, saying that it will not intervene to secure the leu's exchange rate.

Combined with the NBR's actions, other factors may also lead to a medium-term easing of inflationary pressures. A slowdown in the global economy and a reeling in of loans due to the international credit crunch and cyclical factors may help reduce the amount of liquidity pouring onto the Romanian market. Meanwhile, a concerted backlash already underway against biofuels and improved harvests may contribute to bringing food prices down. And if the next government has a strong mandate, it may feel more able to apply this fiscal brakes where necessary. As the effects of the current administration's low and flat tax income are felt in the pockets of workers, wage pressures may also decrease.

However, all these will take time to work their way through into prices - agricultural changes in particular - while the jury is still out on the effects of the flat tax.

The authorities will hope that disinflationary factors will come together to bring inflation within target in the next two and a half years. The past few months suggest that this may be harder than they imagined.

A Quiet Protest

The New York Sun

By PRISCILLA BECKER
April 21, 2008

The work of Eugen Jebeleanu, one of Romania's best-known poets, may be epic in its scope and span of years, but in "Secret Weapon: Selected Late Poems" (Coffee House Press, 98 pages, $15), his first collection translated into English, the epic is achieved inch by lyric inch.

Jebeleanu's career, too, had epic dimensions: He got on the good side of Ceausescu even before the dictator rose to power, and this afforded Jebeleanu lifelong protection from Ceausescu's arbitrary persecution of artists. He was able, as a result, to write unmolested — often critically of Ceausescu — for 60 years, publishing more than 12 volumes of poems. "Secret Weapon" is Jebeleanu's final collection, released in Romania in 1980, 11 years before Jebeleanu's death and two years before Ceausescu's execution. The poems integrate protest of the conditions of life — both under Ceausescu's regime, and in general — with acceptance of them. They are themselves Jebeleanu's "secret weapon":

This despised thing
envied by all
because it cannot be seen
but exists

Invisibility is key in these poems, the realm in which both the powerless and the omnipotent (the "merciless, unseen force") operate. Throughout the collection, Jebeleanu returns to this theme: the commonality between opposites. Take death, which is impossible to escape in "Secret Weapon": The boundary between it and life is, for Jebeleanu, thin to the point of transparency. And that is the image one begins to develop of the poet himself — of a man looking through material conditions into insubstantiality.

Jebeleanu is not interested in prolonging life, but neither is he wishing for death: Death feels near in these poems — as it likely should for a man in his 80s — but not as a promise of peace. Like life, death makes no promises for Jebeleanu, and both are rendered as states of constant vigilance:

The night comes.
It doesn't allow me
to think about stars.
The winter comes.
Be careful.
Cold is a shrapnel.
And what else. . .

Continue walking.

The poems of "Secret Weapon" have a consistent lyric intensity, made clear in part by the translation by Matthew Zapruder and Radu Ioanid. The simple, transparent language, largely clean of rhetoric, captures layers of allusion and levels of meaning inherent in the expression of a mostly suppressed history. This is the way Jebeleanu chooses to hide — in the open, invisibly. And he makes a compelling case for acceptance — not in a Hindu sense, with the element of surrender, but with fierceness and defiance:

So remain, looking at the tables
just as you'd look at a sky
upon which two stars can be discerned ...

The word "remain" is what strikes the radical note. Jebeleanu insists on looking squarely at the conditions — the "tables" — of life. The calculation is bleak, but Jebeleanu remains vigilant, as poet and citizen.

Ms. Becker's book of poems, "Internal West," won the Paris Review book prize. Her work has been published in Fence, Open City, Filter, the Boston Review, Verse, and the Nation. Her second collection of poems, "Stories That Listen," was recently completed.

Romania changes vehicle tax under EU pressure

DPA

Bucharest - Romania's government Monday ordered changes in the nation's vehicle registration tax, bowing to European Union authorities who deemed it an unfair barrier to car imports. Revenue from the new tax, to take effect June 1, is to be used entirely for environmental protection, the Mediafax news agency reported.

The European Commission - the EU's executive - has threatened to drag newcomer Romania before the European Court of Justice, describing the tax as protectionist and illegal by EU standards. The old measure, introduced at the start of 2007 just as Romania joined the EU, was based on a vehicle's age and resulted in imported second-hand cars being taxed the most. Brussels viewed the tax as a Romanian government attempt to protect domestic automakers. Meanwhile, the average Romanian car is 13 years old.

Bulgaria, Romania Demand EU Sprat Draught Quota Removed

Sofia News Agency

Bulgaria and Romania are to demand the removal of the quota of sprat draught in the Black Sea, imposed by the EU.

The decision was made at a Monday meeting between the agriculture ministers of the two countries Nihat Kabil and Dacian Ciolos.

The reason for the demand is that the states could not gain even a half of the compulsory fish quantity.

The 100-ton quota of turbot draught should be also increased, the officials said.

Bulgaria's Minister Kabil emphasized the bloc stipulated that the net for turbot draught should be wider so that little fish could not stuck into them.

Romanian anti-communist dissident and journalist dies

The Associated Press

Monday, April 21, 2008

BUCHAREST, Romania: Monica Lovinescu, a Romanian journalist who was an outspoken opponent of this country's former communist regime, died in France on Monday, the national news agency Rompres reported. She was 85.

Lovinescu — who had moved to France in 1947 shortly after communism took power in Romania, and was granted asylum there — died at the Charles Richet Hospital in Val d'Oise, 15 kilometers (9 miles) from Paris, after battling an unspecified illness for three months, Rompres said.

President Traian Basescu praised her as an inspiration.

She "will always be for us the voice of moral resistance in times of oppression and suffering," he said in a statement. "Her fight against communist totalitarianism with the written and spoken word gave faith to those in the country ... that truth and freedom would prevail."

Lovinescu, who worked for about 30 years for U.S.-funded Radio Free Europe based in Paris, was the daughter of Romanian literary figure Eugen Lovinescu and married to the literary critic Virgil Ierunca.

After she sought refuge in France, Lovinescu's mother was jailed in Romania for political reasons. Denied medical care in jail, she died and was buried in a common grave, the journalist said.

Between 1951 and 1974, Monica Lovinescu contributed to Romanian-language broadcasts of Radiodiffusion Française and worked as a member of its Eastern Europe staff.

She became a journalist for Radio Free Europe in 1962 and created two weekly pieces that were influential in generating internal Romanian opposition to the communist regime of Nicolae Ceausescu. She informed Romanians about cultural and political trends in the Free World. She also published many memoirs and journals, in Romanian and French, that often criticized communism.

Romanian philosopher Gabriel Liiceanu has said he was told by a senior intelligence officer that her broadcasts angered Ceausescu so much that in 1977 he told Romania's secret service: "Let's shut her up! Let's break her into pieces! Let's break her teeth, jaw and break her hands so she can never write or speak again."

Later that year, Lovinescu was severely beaten in front of her home in Paris, leaving her in a coma with head injuries. Ion Pacepa, who served as deputy head of foreign intelligence under Ceausescu before defecting in 1978, has said the beating was carried out by two men acting on Ceausescu's orders. Lovinescu later recovered and returned to broadcasting for Radio Free Europe.

Ceausescu was overthrown and executed in 1989, and Lovinescu continued her work with Radio Free Europe until 1992.

On Monday, the Romanian Writers' Union called Lovinescu "an emblematic figure" for other Romanian writers who faced censorship at home, the union said in a press release.

There was no immediate word about burial plans for Lovinescu, a childless widow. Ten Romanian civic rights groups wrote to Basescu Monday urging him to make her funeral a day of national mourning.

She left her estate in France to the Romanian state, the Romanian Foreign Ministry said.

Romania Aircraft Plant Up For Sale

BalkanInsight.com

21 April 2008 Bucharest _ A 64.89% share in the IAR Ghimbav aircraft maker has been put up for sale by Romania’s National Privatisation Authority.

The documents for the company's privatisation have been submitted to the Competition Council and the European Commission.

Talks have also been held with Brussels to ensure the deal is transparent and there is no unfair state meddling.

In assessing offers by investors, 95 percent of the final points are represented by the price of shares, and five percent by development expenses.

For participation in the negotiations, a business plan has to be submitted by the investor for five years, which will include the financing sources, and a development plan for the defence industry.

The National Privatisation Authority, AVAS has included in the contract non-negotiable conditions regarding the national economy and the defence industry.

The documents will be opened on June 23, in the presence of all potential buyers.

IAR Ghimbav, located in the centre of Romania near the city of Brasov, makes and repairs aircraft.

Romania relaunches privatisation of IAR Brasov

BUCHAREST (Thomson Financial) - Romania said it has revived plans to privatise aeronautical group IAR Brasov.

The deadline for bids for 64.89 percent of the group is June 23, privatisation agency AVAS said.

A previous attempt to sell an identical stake was abandoned last year, when the government rejected an offer from the sole bidder, EADS' Eurocopter unit.

Romania looks to Brussels for help in joining US visa waiver programme

SofiaEcho.com

12:32 Mon 21 Apr 2008 - Alex Bivol

Romanian prime minister Calin Popescu Tariceanu said that Romania stood a better chance to join the US visa waiver programme if the European Union handled the negotiations, rather than pursue a bilateral agreement with Washington.

"I believe that, from our point of view, it would be more opportune if the talks on lifting visa restrictions are held between the US and the EU. We must be realist, the EU has more influence than Romania in any kind of negotiations with the US,"Tariceanu said during a talk-show on Realitatea TV private broadcaster on April 19.

Tariceanu said he talked about the visa waiver issue with US president George W. Bush during the Nato summit in Bucharest earlier this month, receiving a show of support from both Bush and secretary of state Condoleeza Rice.

US consular services rejected a total of 37.7 per cent of applications submitted by Romanian citizens last year, the highest refusal rate for an EU member state. To qualify for the visa waiver programme, an applicant country must have at most 10 per cent rate of rejections.

Romania's biggest grievance was that the reasons for rejections were never explained by consulate officials, Tariceanu said. At the same time, there were no reasons to believe that Romanians were more likely to attempt to become illegal immigrants by staying beyond the expiration date of their visas. "I do not think that there is any fundamental difference between Romanian applicants and Poles, Hungarians or Czechs," he said.

Earlier last week, Richard Barth, assistant secretary at the US department of homeland security, said that Romania would have to meet the same criteria as other countries in Eastern Europe. Barth visited Bucharest to discuss Romania’s progress towards meeting the criteria to be considered for the visa waiver programme with officials from the interion and foreign ministries.

"We cannot set artificial goals or lower standards. According to US law, every visa case has to be adjudicated individually, on its merits," US ambassador Nicholas Taubman, who attended the meeting, said.

He added: "Most Romanians traveling to the US do respect the terms of their visas, but overstays and illegal work remain a significant problem. Romanians who hold US tourist visas can do their part to lower the refusal rate by not working in the US and by departing the US on time."

Bulgaria, which joined the EU together with Romania in January 2007, hopes to seal a bilateral memorandum of understanding, the first step towards joining the visa waiver programme, already by the end of this year. It rejection rate went down from 23 per cent to 14 per cent over the past two years.

But Bulgaria needed to prove that it could fight organised crime in an effective manner if it wanted the US to lift visa restrictions for Bulgarian nationals, US consul in Sofia Daniel Perrone said on March 28.

So far, seven EU countries that joined the bloc in 2004 - Czech Republic, Estonia, Latvia, Lithuania, Hungary, Slovakia and Malta - have signed in recent months memoranda of understanding detailing future efforts towards joining the visa waiver programme.

The European Commission, however, has long insisted that it should handle the negotiations, fearing that member states would provide more personal information on its citizens that they are allowed under EU rules, in order to have visa restrictions lifted. It has threatened legal action against the member countries that go too far, saying that "the commission continues to have concerns with certain aspects of these bilateral agreements and reserves the right to take action."

Last week, interior ministers agreed that the EC would negotiate the conditions for a deal allowing all member countries to participate in the visa waiver programme.

"I believe that the mandate provides for clear directives for the Commission to negotiate certain issues of exclusive EC competence with the US," Commission vice-president Jacques Barrot said.

The EC would handle talks on the visa waiver programme conditions that fall under the responsibility of the EU's executive body, but other issues would be left for individual member states to negotiate on their own, Barrot said.

East European banks uses household savings to combat cash squeeze

By Luiza Ilie
Reuters

Friday, April 18, 2008

BUCHAREST: Banks across Eastern Europe are seeking to plug liquidity shortages with cash from household savings in a trend that may help protect some of the region's red-hot economies, while trimming margins in the banking sector.

Global credit woes have thinned cash flows from some West European banks to their eastern units, and rising risk aversion in international markets has made funding too expensive for some local borrowers, say local bankers and analysts.

This, coupled with persistently high demand for credit in some cash-hungry former communist economies, has driven local banks to increase interest on saving accounts to attract customers in developing markets like Romania, Bulgaria or Poland.

"Banks are borrowing at increasingly higher yields and when these funds reach Romania you add the costs of bigger country risk and of minimum reserve requirement," said Ciprian Dascalu, analyst at Millennium Bank in Bucharest. "Basically, banks need to start drawing on their own funding sources.

"So for now, banks opt to lower their profit margins somewhat, their margins to finance lending to boost savings," Dascalu said.

In Romania, where consumer borrowing has been particularly rampant, some smaller banks have increased interest rates by 2 to 3 percentage points, often exceeding the central bank's benchmark rate of 9.5 percent.

Bigger banks, like Erste Bank's BCR, or the Romanian subsidiary of ING, have also jumped on board.

The rush has gathered speed in the past two months as bankers prepared for a heightened liquidity crunch in the tax payment quarter.

So far they were quite reluctant to raise interest rates on deposits to keep margins up, "but now it will have an adverse impact on the margins," said Marta Czajkowska, an equities analyst from KBC Securities in Poland, referring to Romanian banks.

Bulgaria is also struggling to contain voracious demand that threatens to overheat the economy. Average interest rates on three-month lev deposits have risen to 4.95 percent from 3.99 percent a year earlier.

While Bulgarian banks have consistenly increased rates on both lev and non-lev deposits, in Romania emphasis is placed on local currency savings, which some analysts say is because the central bank has a lower minimum reserve threshold for leu than hard currency.

Efforts to encourage savings are also evident in other parts of the region. Polish state-controlled PKO has raised returns on savings deposits, prompting more aggressive competitors to follow suit. Serb banks have taken similar steps to bolster the client base.

"A lot of people have become aware the most important thing for a bank is a solid funding base," Dascalu said.

The banking system in eastern Europe is dominated by foreign institutions which seized the opportunity for growth - in Romania over 90 percent of the banking system is foreign owned, in Bulgaria it is 80 percent.

Economists say higher savings rates could dampen household consumption and provide a cushion for some of the region's overheating economies.

Romania has one the lowest savings levels in the European Union and is struggling with resurgent inflation, which has risen to 8.6 percent on the year in March from last year's post-communist low of 3.7 percent, as well as a bloated current-account deficit. Both are driven by domestic demand.

Lending in Romania rose 60.4 percent last year to 148.18 billion lei, or $65.1 billion, while deposits were up 34 percent to 129.06 billion lei. In Bulgaria, loans grew 62.5 percent, while deposits 34.3 percent.

"Interest rates on savings have risen beyond the most positive expectations of the best economist from the central bank," the central bank governor of Romanian, Mugur Isarescu, said.

"It is very important for the fight against inflation and for the current-account deficit."

Biggest Mall Opens in Romania Today

Balkan Travellers

18 April 2008 | Romania’s biggest mall opens today in Băneasa, an area in the northern part of the capital, Bucharest, national media reported.

The Băneasa Shopping City will contain 221 stores, of which 70 per cent are open to customers today. The cafés and restaurants are expected to begin work after next weekend’s Easter holidays the Romanian newspaper Evenimentul Zilei reported.

Beside cosmetic and decorative objects, the mall will also have clothing brands that are entirely new to the Romanian market.

A relatively new phenomenon, no shopping malls existed in the Balkans until a few years ago. Just in the last couple of years, however, they have sprung up en masse and largely replaced the street-side stores and the department stores left from the communist era as preferred shopping places.

Just in Bucharest, there are already 11 malls, including the Băneasa Shopping City one, and 10 more are to open within the next two years. In Romania altogether, there will be more than 70 malls by 2010.

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PM: Romania needs constructive relationship with Russia

Romania needs a constructive relationship, of cooperation, with the Russian Federation, Romanian Prime Minister Calin Popescu Tariceanu said on Saturday at a local TV Channel.

It is in Romania's interest to have a friendly relationship with Russia and not a "cold one," Tariceanu said a