Friday, February 26, 2010

AP: Ex-Romania FM quits party, saying he was spied on

A former foreign minister has left the Social Democratic Party days after quitting a party leadership contest, alleging his colleagues spied on him in a blackmail attempt.

Cristian Diaconescu left the party late Wednesday and aligned himself with a group of lawmakers who support President Traian Basescu.

Diaconescu demanded that authorities investigate the alleged spying. He said it took before last weekend's party leadership elections. Diaconescu withdrew before the vote.

Diaconescu was Romania's foreign minister in 2009. He also served briefly as justice minister in 2004.

U.S. soldier part of nations' task force

By Air Force Staff Sgt. Jessica Switzer, Special to The Post and Courier
Thursday, February 25, 2010

MIHAIL KOGALNICEANU AIR BASE, Romania -- Nearly 40 years ago, murals depicting the glory of the Soviet military were freshly painted at the Novo Selo training area in Bulgaria.

Today, 20 years after the end of the Cold War, they are flaking, subdued images of a bygone era.

Now, artificial thunder echoes through the hills as a Bulgarian M1117 Guardian armored security vehicle runs the training course, mowing down targets with fire from its mounted heavy machine gun.

The son of a North Charleston man is faced with these reminders of the Cold War and the difficulties of conducting U.S. Army business in a foreign nation as a member of Joint Task Force-East, a multinational group designed to build stronger ties with Romania and Bulgaria.

The operation hones the skills of soldiers from all three nations and helps the people living in some of the poorest areas of the two European countries.

Army Sgt. Freddie L. Coakley, son of Freddie Coakley Jr. of North Charleston, is a petroleum laboratory specialist with the 240th Quartermaster Supply Company in Bamberg, Germany, and is in Romania to support the task force, based at Mihail Kogalniceanu Air Base.

"I'm responsible for the fuel operations in Romania," said the 1986 Garrett High School graduate. "We set up our system to make sure everything on base stays running."

Soldiers from all three countries trained together in individual and company-level movements as well as with armored vehicles, a variety of weapons and combat lifesaving skills. They also practiced the coordination needed to go into and clear a hostile urban area.

In addition to the training, the soldiers took time to visit a number of local villages and allowed children to explore the vehicles they were using.

"I enjoy being out here and meeting with a different nation's army and understanding how they operate in ways that are different from our Army," said Coakley, who served 10 years in the Navy before joining the Army four years ago. "Their equipment is very different from ours, but they still get the job done."

Military training wasn't the only reason American service members were in Romania and Bulgaria. A group of doctors and nurses traveled to several villages around the training bases in both countries. The team worked with local health care workers and translators to provide screenings for optical and other general health concerns.

There was also a team of Navy Seabees helping renovate and upgrade local schools and medical facilities.

Despite the language barrier and cultural differences, the American soldiers and their Bulgarian or Romanian counterparts usually were able to get their messages across.

"It amazes me how soldiers can be from two different countries but still be so alike," said Coakley.

Petrom reports worse-than-expected Q4 net loss

BUCHAREST, Feb 25 (Reuters) - Romania's top oil and gas group Petrom, majority owned by Austria's OMV , recorded a worse-than-expected net loss of 171 million lei ($56.18 million) in the fourth quarter. 

A Reuters poll published earlier this week produced an average forecast for a net loss of 75.4 million lei, compared with a net loss of 1.27 billion lei in the same period of last year and a 615 million lei profit in the third quarter of 2009.

Earnings before interest and taxes (EBIT) was 38 million lei, a steep fall from 705 million EBIT in the previous quarter but better than the 1.2 billion loss before interest and taxes in the fourth quarter of 2008.

Net profit rose 34 percent to 1.368 billion lei last year on net turnover of 12.8 billion lei.
"Q4/09 was the second quarter since privatisation with negative net profit due to FX (foreign exchange) losses and interest expenses," Petrom said in a statement.
"Q4/09 EBIT was slightly positive and well above the level of Q4/08, which was negatively impacted by one-off items and a sharp oil price decline."

Petrom said it expected market conditions to remain challenging in 2010 and would continue restructuring, with focus on strict cost management.

"Priority for 2010 is to secure cash flow for future investments, both to maintain business sustainability and achieve growth potential," it said.

Petrom said it expected the market for refined products to remain challenging throughout the year, with a deeply depressed margin environment given the overcapacity in the industry in Romania as well as the rest of Europe.

Former Romanian-German spy fired from festival directorship

Mainz,Germany - German author Peter Grosz was fired on Thursday from his role as theatre festival director, following revelations that he had spied on fellow authors for Romania's Securitate Communist secret police during the 1970s. The town council of Oppenheim, where Grosz headed the annual theatre festival, reached the unanimous decision that the author was no longer appropriate for the role."Grosz was no longer tenable," Oppenheim's mayor Marcus Held told German Press Agency dpa.

Grosz, an ethnic German born in Romania, admitted last week to having spied on, amongst others, fellow writer Richard Wagner, the ex-husband of Nobel literature prize winner Herta Mueller - both of whom are also of German-Romanian origin.He had only been in the role at the head of the Oppenheim theatre and culture festival since October 2009."I am personally very disappointed, he could have pointed out his history before finalizing the contract," Held said, adding that the events placed a question mark over this year's festival.The Oppenheim festival, in operation since 1989, attracted several thousand people annually, according to Held.Grosz said Securitate had put pressure on him to monitor ethnic German authors from 1974 until he left the country in 1977.Since coming to Germany, the author has helped promote young authors and theatric talent. He works as a teacher in the city of Mainz.The mayor of Oppenheim said the town had not evaluated Grosz' work for Securitate, but said they were disappointed at the way he had handled his past."He kept it secret for a long time, and that makes him impossible for the role of the festival director," Held said.

Read more:,former-romanian-german-spy-fired-from-festival-directorship.html#ixzz0gdAogNnL

FT: Environmentalists protest as miner goes for gold in Romanian mountains

By Chris Bryant in Vienna

Published: February 26 2010 02:00 | Last updated: February 26 2010 02:00

Beneath the sleepy village of Rosia Montana in the Apuseni mountains of western Transylvania, the weathered soil holds a gleaming secret.

Around 140km of tunnels bear testament to centuries of effort to win riches from these rocks.

The pickaxes and drills fell silent in 2006 when the last state-subsidised mine was closed in preparation to join the European Union. But Gabriel Resources, a Toronto-based mining company, estimates there are still 10.1m ounces of gold at Rosia Montana, making it the richest untapped seam of gold in Europe.

With an economy in severe recession and gold prices in the ascendant, Romanian politicians are considering whether mining this gold might help reverse a sharp fall in tax receipts and unblock a freeze on foreign investment.

Digging up Rosia Montana's riches is not a foregone conclusion, however, owing to a decade-old campaign by environmentalists who say cyanide used to mine the gold could cause an ecological disaster.

The words "Baia Mare" are never far from campaigners' lips. On January 30, 2000, a dam containing cyanide tailings gave way, sending 100,000 tonnes of contaminated water into tributaries of the Danube. It killed more than 1,000 tonnes of fish and contaminated farmland and drinking water for miles around.

Ten years on, it is hard to find a Romanian who does not have an opinion on Rosia Montana. The project was in limbo after the environment ministry in September 2007 suspended a review of the environmental impact assessment, after a row about minor but vital documentation.

But the formation of a new government last December has put the matter back on the agenda.

"I want this project to start as soon as possible," Adriean Videanu, economy minister, said in December.

Asked about Rosia Montana at a recent investor meeting in Vienna, Sebastian Vladescu, finance minister, told the Financial Times: "In my opinion we need investors . . . If, from an environmental point of view, things can be clarified, then we will be supportive of all kinds of investment that will help us to clean [up] Romania. And I'm sure this will be also be a strong impulse for development of the mining sector and for growth."

With gold at $1,095 an ounce, Gabriel Resources claims mining the concession could generate $4bn for the Romanian economy over the 16-year lifespan of the project, while reinvigorating a beleaguered industry.

Before the fall of the Iron Curtain, Romania's mining industry employed 350,000 people. But by 1997, the number had halved as uneconomic mines were closed. Since then, tens of thousands of additional workers have lost their livelihoods as mining subsidies have been phased out.

The impact on single-industry towns such as Rosia Montana has been severe; unemployment in the area stands at more than 80 per cent. If it was allowed to tap the subterranean bounty, Gabriel Resources says it would create more than 800 jobs for local people who it claims are overwhelmingly in favour of the project.

The company argues that a modern tailings facility would prevent a repeat of the Baia Mare disaster. It also promises to clean up this highly polluted area .

But these arguments have not won over non-governmental organisations, which cast Gabriel Resources as a company out to make a quick buck at the expense of the environment and the community.

"It isn't even a Romanian company, it's a Canadian company, so I don't see how this can be in Romania's interest," says Lucian Simion, a campaigner at Greenpeace in Bucharest. "They want to destroy four mountains in the area [through open-cast mining] to take all the gold from it."

Richard Young, finance director of Gabriel Resources, says Rosia Montana is less about short-term profit and more an important test of the mineral-rich country's openness to foreign investment.

"Until this project starts to move forward, other mining companies are not going to risk their mining dollars.

"Mining has a negative legacy in eastern Europe from the communist period. What we're saying is, maybe mining isn't so bad."

Thursday, February 25, 2010

Transelectrica, Transgaz see flat 2010 gross profit

BUCHAREST, Feb 24 (Reuters) - Romania's state-owned power grid operator Transelectrica and gas pipeline operator Transgaz see their gross profits virtually unchanged this year, a draft economy ministry bill showed on Wednesday.

Transelectrica's 2010 gross profit is seen at 11 million lei ($3.6 million), down from last year's preliminary 12 million lei. Meanwhile, Transgaz sees its gross result at 352 million lei, compared with last year's 361 million.
The economy ministry posted the draft bill that sets the 2010 budget of the state firms in its portfolio up for public debate on Wednesday, before sending it to government for approval next month.

Tuesday, February 23, 2010

Romania Receives 3rd, 4th IMF Tranche

The International Monetary Fund, IMF, will this Tuesday disperse the third and fourth tranches of the IMF loan, amounting to 2.45 billion euro, media report.

IMF directors voted to disburse the money last week.

‘This is a signal to all markets that Romania is on the right path. The decision of the IMF executive board indicates seriousness and stability, which will become visible in the time to come in a boost in investor confidence and easier access to the capital markets,’’ IMF representative for Romania Mihai Tanasescu told media.

As a signal of a new found confidence, last week Finance Minister Sebastian Vladescu said his ministry plans to issue Eurobonds in the first quarter of 2010 and will start a presentation tour in two weeks’ time. He said Romania and the IMF have agreed on a government deficit of 5.9 per cent of GDP in 2010,

Bulgaria, Romania to Be Linked by New Danube Ferry in April

Sofia News Agency

A new ferry line connecting Bulgaria and Romania across the Danube River will be launched officially on April 2, 2010.

The ferry boat complex connecting Bulgaria’s town of Nikopol and Romania’s Turnu Magurele is going to be opened in April, according to Valeriy Zhelyazkov, Mayor of the Nikopol Municipality.

Zhelyazkov has announced that at the end of last week, a successful test of the Romanian platform for passengers and freight was carried out.

The distance between the two ferry stations is 800 m. It will take 8 minutes to cross the Danube River for the Romanian ferry boat, which, according to the Nikopol Mayor.

The Bulgarian Port of Nikopol is first going to use an older ferry boat to be provided by Bulgarian River Shipping, Jsc, which will be making the distance in 15 minutes. Later, a brand new ferry boat is planned to be purchased.

The Romanian ferry boat will be able to fit six trucks, and will be traveling at least twice daily.

Crossing the Danube on the Nikopol - Turnu Magurele ferry will cost EUR 2 per person one-way, EUR 12 per car, and EUR 90-100 per truck.

The investment in the construction of the Nikopol – Turnu Magurele complex is EUR 10 M.

Monday, February 22, 2010

DPA: Romanian-German author confesses spying in 1970s

Mainz,Germany - German author and theatre festival director Peter Grosz confessed on Saturday to having spied on fellow authors for Romania's Securitate Communist secret police during the 1970s. Grosz, an ethnic German born in Romania, wrote a 10-page statement, in which he admitted to having spied on, amongst others, fellow writer Richard Wagner, the ex-husband of Nobel literature prize winner Herta Mueller - both of whom are also of German-Romanian origin.Mueller accused Grosz of "denunciation of the worst kind," in Mainz's daily Allgemeine Zeitung. 

The 2009 Nobel laureate had previously called on Germany to find and prosecute former Romanian Securitate agents.Last year, Wagner confronted Grosz with the suspicion that he had been a spy. Grosz said he had confessed to Wagner at the time, explaining the conditions "that forced me into this reprehensible collaboration."Grosz said Securitate had put pressure on him to monitor ethnic German authors from 1974 until he left the country in 1977. 

Grosz said the accusations had launched a "public campaign" against him, which he described as a "public exposure which ominously recalls late Stalinistic show trials."Since coming to Germany, the author has helped promote young authors and theatric talent, "in part to try and dissipate the guilt and shame of my ability to be blackmailed in Romania," Grosz wrote in his statement.It was up to others to decide whether Grosz should retain his position as the director of the Oppenheim theatre festival, he added.

Post-communist Romania getting fat

Government ponders tax on fast food for health reasons and more revenue

Associated Press
Published: Sunday, February 21, 2010

BUCHAREST, Romania — For post-communist Romanians a Big Mac and soda meant much more than a meal: It was a culinary signpost from the free and capitalist west — a sign they too, at last, had arrived.

But modernity requires something different today: the Balkan country is moving to join the health conscious 21st century by proposing taxes on burgers, french fries, soda and other fast foods with high fat and sugar content.

“We have to relearn how to eat,” Health Ministry official Adrian Streinu Cercel said.

The ministry says that — in marked contrast to the situation under communism — half of Romania’s 22 million people are overweight, while instances of obesity have doubled among 10-year-olds.

Officials have refused to say how high the taxes would be. But Cercel says authorities expect to generate up to $1.37 billion in new revenues.

If the plan goes through, Romania will be aligning itself with — and even outdoing — other countries looking to crack down on fatty foods and encourage better eating choices.

Taiwan also recently floated a fast food tax, while Denmark and Austria have made artery-clogging trans-fats illegal. Britain, Norway and Sweden have banned junk food commercials from TV at certain times of the day, while Norway also has long taxed sugar and chocolate.

In the United States, first lady Michelle Obama this month unveiled a public awareness campaign called “Let’s Move” to fight against childhood obesity, while both New York City and California have gone on the legal offensive by outlawing trans-fats.

But Americans have generally been seen as less willing than Europeans to allow their government to dictate their diets.

Critics of the Romanian proposals agree the government should stick to educating rather than taxing, especially during a recession. Some also criticize the government’s plans for exempting pizzas and kebabs and other potentially high-fat dishes, saying the exclusions showed the measure was a “McFat tax” — targeting certain Western fast food outlets — and not something that was truly meant to help the public.

Fast food franchises were not available under the Communist dictatorship that was overthrown in 1989. In the years that followed, the country was so poor that — as elsewhere in Eastern Europe — Western-style fast food was considered a luxury.

When they arrived in the mid-1990s, McDonald’s and Kentucky Fried Chicken restaurants were widely prized, becoming more affordable and ever more popular as the country developed. In 2007, Romania joined the European Union.

Romania’s Health Ministry has been analyzing the nutritional content of some 40,000 fast foods and drinks over the past weeks to decide what exactly should be taxed before submitting the legislation to Parliament next month.

Though some say the tax could have a positive impact on people’s eating habits, others say it is just a new way to squeeze the taxpayer and could even lead to worse eating habits.

Thursday, February 18, 2010

Romanian Graffiti

Dan Perjovschi gets his audience 'into the story' at the ROM

Ben Kaplan, National Post
Aaron Lynett, National Post

A pile of newspapers from all over the world sit on a small desk on the fourth floor of the Royal Ontario Museum. Dan Perjovschi, a 49-year-old Romanian cartoonist and graffiti writer, says he uses the news to inspire his work.

"What my drawings do is get you into the story," says Perjovschi, thickly built and long-haired, a craggy beard offsetting his black hooded sweatshirt and painterly funk. "I was intensely trained in communist Romania, but they train your hand and never talk about your heart --now is like my payback time."

Perjovschi's work is akin to that of a political cartoonist, a profession he took up when communism collapsed in Romania in 1989. Classically trained yet an outsider artist, his work brings to mind Banksy, Basquiat and Raymond Pettibon, and has been exhibited at the Museum of Modern Art in New York, the Venice Biennale and the Tate Museum in London.

"Everything I've been taught about art I've intentionally forgotten," says Perjovschi, who will be painting live on the ROM's walls through Feb. 21, while his provocative doodles will remain on display through Aug. 15. "What can you do with a still life? If you're a contemporary artist you engage with society. I'm much more interested in communication than skills."

Using a thick black German marker, his messages -- already referencing the Olympics, Avatar, Haiti, the Greek economy and the late British fashion designer Alexander Mc-Queen just two days into the project --begin life in a notebook, before going up on the wall in a single, spontaneous first draft.

"It's like jazz or pure improvisation. I'm more interested in freshness than impressing you with how wonderful an artist I am," says Perjovschi, who proceeds to push a ladder against a wall, and begin drawing with an energetic flourish. A spare marker dangling in the back pocket of his baggy jeans, Perjovschi, clutching a notebook, draws a burqa-clad woman beneath the caption, "Toronto is hot." He smiles and shrugs, and then moves his ladder to an opposite wall and draws a marijuana leaf next to the maple leaf. "Plants discussion," he says, before capping his marker and catching his breath. The work took less time than a TV commercial.

"Sometimes, I'm still surprised by how Danny twists around ideas," says Lia Perjovschi, an artist with dyed red hair who met her husband at art school when they were both 10. "Danny uses humour to cool people down, but it's as if he obeys by disobeying. It looks very easy, but it's a lot of hard work."

Indeed, Perjovschi says his work is intended to look deceptively simple. He gradually stripped every painterly impulse away from his art. He says the ideas he wants to convey are too important to be buried.

"When the revolution broke in our country, we were on the streets with bullets shooting and tear gas," he says, relaying stories of running from the police with Lia or else staging elaborate underground art shows in the woods. "I can be really nasty, and sometimes anger fuels my work, but I just want to give the impression that everybody can do this. Everybody has something to say."

Perjovschi's father worked in a factory while his mom taught kindergarten, and Perjovschi grew bitter as censorship wiped away the Romanian art scene. While his work doesn't expressly detail how he came of age under communism, he says a skepticism of authority and an eye toward the contradictions of power fuel his drawings and cartoons.

"You don't think freezing in your flat when they're cutting off your electricity will be unbearable, but when there's no way out you can become lost in your misery," says Perjovschi, who only found his voice as an artist after communism collapsed and he freed himself from the structure of classicism. Throughout art school, Perjovschi loved to entertain his friends with cartoons. It was only after his country became democratic that he was able to rediscover his original voice.

"Lia and I were involved in the transformation of the country," Perjovschi says. "I don't have any problems with the past. The past creates the energy of today."

- Dan Perjovschi: Late News will be on display at the ROM through Aug. 15. For more information, see

'Portrait of a Fighter' insufferably grim

By Neil Young

BERLIN (Hollywood Reporter) - A textbook example of a movie that would have been twice as good at half the length, "Portrait of the Fighter as a Young Man" is a 163-minute slog through the grim history of Romania's anti-Communist resistance from 1949 to 1957. Episodic, stilted and uninvolving despite the considerable potential of the subject-matter, it's strictly for audiences already interested in the material, and thus has very limited appeal outside its native land.

The much-discussed "new wave" of Romanian cinemaa -- epitomized by Cristian Mungiu's 2006 Palme d'Or winner "4 Months, 3 Weeks and 2 Days" -- continues to yield gems such as last year's "Police, Adjective," and film festivals are understandably still keen to showcase fare from the nation. But this wildly overreaching feature debut by writer-director-producer Constantin Popescu puts the viewer through 8 years, 4 months and 6 days of guerrilla-vs-militia warfare to grindingly tedious effect.

Best known for contributing one of the lesser sections of the Mungiu-devised portmanteau "Tales of the Golden Age," Popescu has bitten off much more than he can chew with this transition to a drastically larger canvas. Inspired by stories from the archives of Romania's dreaded internal security services, he focuses on the activities of an armed group waging a hopeless stand against the "fraudulent" communist government. Outnumbered and outgunned, our noble heroes -- under the charismatic leadership of Ion Gavrila-Ogoranu (Constantin Dita) -- roam picturesque fields, hills and glades and are steadily picked off by the ruthless army, police and militia. The latter's organizers are shown blustering away in smoke-filled rooms, while their bestial henchmen torture and murder all opponents who fall into their dastardly clutches.

While Popescu tries to give the stoic outlaws some individuality, none emerge as properly defined three-dimensional characters. It also doesn't help that every scene features captions pedantically identifying exactly when and where the action is taking place (Popescu manages to kill off Stalin two days early), and to whom. The aim is presumably to add to the documentary style verismilitude of a film presumably closely based on official records. But there's so much text on screen that one wonders why Popescu didn't just write a book about Gavrila-Ogoranu and his men.

Cinematically, despite a couple of transcendental nature moments a la Terrence Malick, the pretentiously titled "Portrait of the Fighter as a Young Man" ("Portretul luptatorului la tinerete") is pretty undistinguished stuff. Seldom, for example, can one movie have featured so many distractingly anachronistic hairstyles. If the aim was to do for early-'50s Romania what Ken Loach did for 1920s Ireland with Palme d'Or garlanded "The Wind That Shakes the Barley," Popescu -- who, perhaps inevitably given current trends, has announced that this is only the first part of a projected trilogy -- falls far short. This is more of an insubstantially light but interminably long-blowing breeze.

Romanians move to tax their once-beloved fast food


BUCHAREST, Romania — For post-communist Romanians a Big Mac and soda meant much more than a meal: It was a culinary signpost from the free and capitalist west — a sign they too, at last, had arrived.

But modernity requires something different today: the Balkan country is moving to join the health conscious 21st century by proposing taxes on burgers, french fries, soda and other fast foods with high fat and sugar content.

"We have to relearn how to eat," Health Ministry official Adrian Streinu Cercel said.

The ministry says that — in marked contrast to the situation under communism — half of Romania's 22 million people are overweight, while instances of obesity have doubled among 10-year-olds.

Officials have refused to say how high the taxes would be. But Cercel says authorities expect to generate up to euro1 billion ($1.37 billion) in new revenues — compared with an estimated euro16 billion in total revenues for 2010.

If the plan goes through, Romania will be aligning itself with — and even outdoing — other countries looking to crack down on fatty foods and encourage better eating choices.

Taiwan also recently floated a fast food tax, while Denmark and Austria have made artery-clogging trans-fats illegal. Britain, Norway and Sweden have banned junk food commercials from TV at certain times of the day, while Norway also has long taxed sugar and chocolate.

In the United States, first lady Michelle Obama this month unveiled a public awareness campaign called "Let's Move" to fight against childhood obesity, while both New York City and California have gone on the legal offensive by outlawing trans-fats.

But Americans have generally been seen as less willing than Europeans to allow their government to dictate their diets.

Critics of the Romanian proposals agree the government should stick to educating rather than taxing, especially during a recession. Some also criticize the government's plans for exempting pizzas and kebabs and other potentially high-fat dishes, saying the exclusions showed the measure was a "McFat tax" — targeting certain Western fast food outlets — and not something that was truly meant to help the public.

Fast food franchises were not available under the Communist dictatorship that was overthrown in 1989. In the years that followed, the country was so poor that — as elsewhere in Eastern Europe — Western-style fast food was considered a luxury.

When they arrived in the mid-1990s, McDonald's and Kentucky Fried Chicken restaurants were widely prized, becoming more affordable and ever more popular as the country developed. In 2007, Romania joined the European Union.

Romania's Health Ministry has been analyzing the nutritional content of some 40,000 fast foods and drinks over the past weeks to decide what exactly should be taxed before submitting the legislation to Parliament next month.

But as Romanians love both their traditional food and fast food options like kekabs, there would likely have been a public outcry if all such foods had been targeted for the tax, nutritionist Gheorghe Mencinicopschi said.

Experts warned against labeling all fast food as bad or all home-cooked food as healthy. For example, a typical Romanian lunch of sarmale — stuffed cabbage rolls smothered in sour cream — followed by walnut-studded yeast cake for dessert is unlikely to be on any recommended diet plan.

"It is dangerous to use generic terms," Mencinicopschi said, noting that different ingredients and cooking style can transform a takeout meal from healthy to horrible.

Romanians spend 40-50 percent of their income on food, to which a 19-percent value-added tax is already applied.

The new fast food tax, if passed, could lead people to pay 20 percent more for fast food products, food industry experts said — a blow to the average Romanian earning about 1,500 lei, or less than euro360 ($500).

Though some say the tax could have a positive impact on people's eating habits, others say it is just a new way to squeeze the taxpayer and could even lead to worse eating habits.

Mihai Visan, who heads the Romalimenta food producer group, said bootlegging increased after the government imposed taxes on alcohol, and cigarette smuggling spiked after tobacco taxes were raised.

"Meat will be taken from unlicensed slaughterhouses, and carcasses will be sold to small producers," Visan said.

World Health Organization nutrition expert Tim Armstrong also said that, while the agency recommends countries consider such taxes to improve eating habits, they could also effectively penalize the poor, who are more likely than the wealthy to buy such products.

Associated Press Writer George Jahn in Vienna and AP Medical Writer Maria Cheng in London contributed to this report.

Ex-president of Romania resigns from his party

Associated Press

Former President Ion Iliescu has resigned from the party he created after Romania threw off communism 20 year ago.

The 80-year-old Iliescu says he is leaving the Social Democratic Party to concentrate on writing and reflecting.

Romanian politicians say they are shocked by Iliescu's decision, announced late Tuesday to, and some have urged him to reconsider.

Iliescu is considered one of the country's most temperate politicians, though he has been criticized for his communist past. He served three terms as president during most of the 1990s and from 2000 to 2004.

The Social Democrats vote for a new leader Saturday. It is in disarray after previous leader Mircea Geoana lost the December presidential election.

Wednesday, February 17, 2010

Ceausescus move to keep name from advertising


BUCHAREST, Romania — What's in a name? The Ceausescus think a lot.

Late Communist dictator Nicolae Ceausescu is the best-known Romanian of the last century, but his notoriety isn't the first thing you'd think ad makers would swoop on when promoting a brand.

Surprisingly, Ceausescu has been used in recent years to sell products from chocolate to condoms to hotel rooms. Now the surviving members of the Ceausescu clan are trying to limit use of the name, saying it violates their official registration of "Ceausescu" as a brand at the State Office for Makes and Brands.

Some advertising featuring the Ceausescu name mocks the Romanian leader, like mobile-phone ads that refer to the repression of free speech in the communist era. Others betray a nostalgia for the late dictator, seen as a patriot by some who yearn for a time when jobs were secure and there was little grinding poverty.

In December, a Romanian theater ran into trouble with the Ceausescus after it staged a play called "The Last Hours of Ceausescu" to coincide with the 20th anniversary of Ceausescu's overthrow and execution. The play was then staged in Zurich, Bern and Berlin.

Ceausescu repressed his nation with an army of 700,000 secret police informers. He stifled dissent, limited travel abroad and by the end of his rule there was severe rationing of even basic foods such as oil and eggs.

Ceausescu's son and son-in-law launched an official complaint in January in a bid to force the play's producers to seek permission to use the name, saying the show violated the Ceausescu name's official registration as a brand two years ago.

"We just want to stop people exploiting the name," the son, Valentin Ceausescu, told the Associated Press. He acknowledged that the play was artistic expression, however, rather than a commercial use of the name, and they were not likely to win the case.

Romania's advertisers swooped in the Ceausescu name a few years ago.

A television ad in 2005 has black-and-white images of Ceausescu speaking at the last Communist Party congress a month before his demise. A mobile phone rings and a man in the audience stands up and walks out of the hall with the voiceover saying "You won the right to speak free and now you can "speak free for 1000 minutes," at the end of the commercial alluding to the communist era when free speech was repressed.

Another advertisement for a different brand says "Capitalists in the country, get connected!" playing on a Marxist slogan used in the Ceausescu era.

Less polite is a condom advertisement, where manufacturers extol the virtues of protected sex, wondering what would have happened if the parents of Hitler, Stalin or Ceausescu had used a condom.

Ceausescu was even used to relaunch a popular make of chocolate that was no longer produced after 1989. His face appears on commercials about the Ciocolata ROM bar, a rum-flavored chocolate bar on sale in the country's confectionary stores and supermarkets.

Just over a year ago, real-estate agents in the western city of Arad began a campaign with the slogan "Long live the new urban revolution!" with Ceausescu's face on posters.

Associated Press writer Alina Wolf Murray in Bucharest contributed to this report.

Tuesday, February 16, 2010

Romania and Moldova open new border crossing point

Romania's interior minister and Moldova's prime minister used pliers on Monday to remove a barbed wire fence from the Soviet era and open a new border crossing.

Monday's move heralds improved relations between the neighbors. Moldova was part of Romania until 1940, when it was annexed to the Soviet Union.

Since the 1991 breakup of the Soviet Union, Moldova has mostly been governed since by communists loyal to Russia, but a pro-European alliance won elections in July 2009 and has pledged more economic and democratic reform.

Other Romania-Moldova border crossings have been opened in the past, but Prime Minister Vlad Filat of Moldova said the new border on a bridge crossing the River Prut between the cities of Radauti and Lipcani is important for his country as it moves toward EU membership.

Romania joined the European Union in 2007.

More than 80 percent of Moldova's population is ethnic Romanian. However, the country's loyalties to Moscow remain strong.

In January, on his first visit abroad since re-election, Romanian President Traian Basescu pledged to pull Moldova into Europe's orbit. Hundreds of Romanians lined the streets to cheer the Romanian president during the two-day visit to Moldova.

Romania '09 Budget Gap At 7.2% Of GDP, Below IMF Cap

BUCHAREST -(Dow Jones)- Romania's consolidated budget deficit rose to 36.4 billion lei ($12 billion), or 7.2% of the gross domestic product, at the end of 2009, modestly below the 7.3% of GDP cap agreed to with the International Monetary Fund, the Finance Ministry said Monday, news agency Mediafax reports.

Overall revenue to the budget declined 5.4% on the year to RON156.6 billion in 2009, mainly due to lower revenue from the value-added tax, corporate profit taxes and customs duties. On the other hand, the total expenditure rose 1.4% to RON193 billion.

By sector, personnel spending increased 2.4% last year, mostly due to salary increases approved in the second half of 2008, the ministry said.

It said social assistance costs rose RON9.8 billion in 2009, following an increase of the pension point and the introduction of the minimum social pension as of April last year.

"In order to cushion the impact of the economic and financial crisis on vulnerable social categories, the government adopted a series of sheltering measures for low-income population," the ministry said.

On the other hand, the costs with goods and services in the public sector dropped 12.6% on the year in 2009, following a series of government measures in the sector, it said.

Romania and the IMF agreed on a government deficit target of 5.9% of GDP in 2010.

Last week, the European Commission recommended Romania be given until 2012 to bring its budget deficit down to 3% of the gross domestic product, in light of the country's "effective" corrective measures taken so far. The deadline extension is discussed during this week's Ecofin meeting.

Friday, February 12, 2010

Row in Romania over bid to impose major junk food tax

By Mihaela Rodina (AFP)

BUCHAREST — While First Lady Michelle Obama launched a high-profile campaign against obesity in the US this week, small Romania may be a step ahead with its bid to impose one of the first comprehensive taxes on junk food.

The government proposal, still in the works despite hopes it could start next month, has triggered groans from the food industry and skepticism about its efficacy.

But the health ministry is not backing down on a measure aimed at changing habits it says have left an alarming one in two Romanians overweight, while outright obesity doubled in only two years.

"We can't just stand around doing nothing," said Secretary of State with the Health Ministry Adrian Streinu-Cercel during a public debate.

"We have to re-educate Romanians on how to feed themselves properly."

Not an easy task in a country with a long tradition of heavy meals and fatty trimmings.

Add to this an influx of calorie-laden fast food, a tantalizing hit in a former communist state struggling to keep up with its European Union partners. McDonalds, for one, is hugely popular and "by far the leading player" in fast food sales in Romania, according to the Euromonitor research firm.

Since it was proposed in January, the tax has whipped up roaring debate on special TV talk shows, full-page newspaper articles, cafe discussions and several press conferences by both the pros and the cons.

"Romanians eat badly because they are poor," insisted Dragos Frumosu, head of the industrial food producers union.

Taxing hamburgers, chips or pastries will only push people towards cheaper options, "even less healthy and produced in unsanitary conditions", he said.

The March 1 goal to start taxing is seen as unlikely. A list of "guilty" foods must still be drawn up and approved by the government then put to a parliamentary vote.

But if the bill goes through and "what the health ministry has said is to be believed, it would be the widest-ranging singular tax of this kind," said Oxford scientist Dushy Clarke, a researcher specialised in the impact of health-related taxes and food subsidies.

Though "junk food" taxes exist elsewhere, Clarke said they generally concern chocolate, foods and drinks high in sugar and some saturated fats, as in Denmark. Romania's proposal would also take in foods high in grease, fat, salt and some additives.

In addition, "this tax would be the first of its kind to go straight to producers and importers of junk food," said Clarke.

Taiwan is also considering a comprehensive junk food tax, which is expected to be submitted to parliament later this year and could take effect in 2011 at the earliest. France made a tentative bid, but shelved the idea in 2008.

And while most US states do have soft drink or junk food taxes, experts say they are usually too low to have an effect on consumption. The latest US initiative focuses more on raising awareness and offering healthy choices.

Yet the World Health Organization's 2004 Global Strategy on Diet, Physical Activity and Health suggests that "member states consider fiscal initiatives and policies via taxation, subsidies or direct pricing in ways that encourage healthy eating..."

Bucharest hopes the tax will raise one billion euros (1.3 billion dollars) a year as well trim corpulence, which carries health risks and drives up a nation's medical costs.

Romanian youngsters, as in the US and elsewhere, are notably at risk. Though outright obesity only affects 3.5 percent of children here aged three to nine, this is a twofold increase in only four years, the ministry noted.

Businessmen do not contest the problem, just the government's proposed solution.

They say Romania already has too many taxes and accuse the ministry of launching the idea without consulting business or union leaders or drawing up a list of products first.

Mihai Visan, head of Romalimenta, an association of food sector professionals, voiced concern about the "social and economic impact" of a junk food tax, which he said would penalise consumers.

After last year's severe recession, he said, producers will make up for any tax by raising prices -- at a time when unions say prices already increased by 20 percent.

Food experts say some earlier experiments turned afoul, including one "sin tax" that took 375 million euros out of the budget after consumers turned to the black market for cheaper alcoholic drinks.

Punitive measures may also turn popular foods into "forbidden fruits", Gheorghe Mencinicopschi, director of the Research Nutrition Institute here, told AFP.

"All restrictive measures can have the opposite effect if they are not accompanied by an education campaign," he said, referring to Romania's ban on fizzy drinks and snack foods in schools.

"The kids just cross the road and buy the same things in the shops before school starts, or take it out of their fridge at home because parents are still buying the stuff."

Thursday, February 11, 2010

Russian envoy uses Twitter diplomacy


MOSCOW — Russia's ambassador to NATO said Wednesday in a post on his Twitter feed that the proverbial Russian bear would "kick the ass" of the United States and its allies if cornered by a new US missile shield.

The ambassador, Dmitry Rogozin, posted the message in response to recent reports that Moscow's Cold War ally Romania had agreed to host interceptor missiles as part of a revised US missile defence system.

"The Americans and their allies again want to surround the cave of the Russian bear?" Rogozin tweeted, along with a link to a news report about the Romania decision.

"How many times must they be reminded how dangerous this is!? The bear will come out and kick the ass of these pathetic hunters," he added in his next tweet, writing in Russian.

An English translation of the same two tweets on Rogozin's Twitter feed omitted the vulgar language, however, warning that the Russian bear would "beat up" the hunters.

Rogozin, who is famed for his outspoken remarks, is one of the few Russian officials to use Twitter, a micro-blogging service that has soared in popularity in recent years.

Moscow expressed concern last week at Bucharest's announcement that it had agreed to host the US interceptors, despite assurances from Romania and the United States that the system was not directed against Russia.

Romanian Proprietatea Fund Sees Eightfold Fall In 2010 Profit Mediafax

BUCHAREST -(Dow Jones)- Romanian investment fund Fondul Proprietatea on Wednesday estimated its net profit will fall eightfold to 91.16 million lei ($ 30.57 million) in 2010, on substantial lower revenue, envisaged at RON154.6 million, news agency Mediafax reports.

The fund, set up in 2005 to compensate Romanians whose properties were seized during communism, reported net profit of RON730.13 million in 2009 and total revenue of RON1.32 billion.

Fondul Proprietatea said 76% of its net earnings in 2009 came from selling its stakes in three Romanian units of Czech energy group CEZ (BAACEZ.PR), in airplane fuel supplier Petrom Aviation, and in drugstore network operator Centrofarm (CEOF.RO).

"There are no foreseeable stake sales this year," the fund said.

According to the company's revenue and expenditure budget for 2010, earnings from dividends are expected to reach RON60.4 million, while the revenue from interests are predicted at RON89.27 million. Net earnings from rate exchange differences are seen at RON4.7 million.

Fondul Proprietatea aims to cut expenditure by 88.13% to RON57.6 million in 2010, due to the "limitations" Romania's economy is still experiencing, the fund said.

Romania's Finance Ministry holds about 60% of Fondul Proprietatea's shares, while the remaining shares are distributed among private stockholders. The fund owns shares in nearly 90 companies, including Transgaz, Transelectrica, Alro, Romgaz and several power distributors.

Romania govt approves IMF-mandated pension reform bill

BUCHAREST, Feb 10 (Reuters) - Romania's centrist government approved a plan to reform the country's outdated communist-era pension system on Wednesday, key to keeping a multi-billion euro International Monetary Fund-led rescue deal on track. Analysts say scrapping thousands of "privileged" pensions of magistrates, army and policemen and raising the retirement age will be a litmus test for the fragile cabinet's ability to enforce painful reforms aimed at safeguarding the recession-hit economy. 

Under the IMF-led deal, the two-month-old government of Prime Minister Emil Boc committed to approve the pension bill in February and help it clear parliament, where it controls only a slim majority, by the end of June.

Commentators expect the pension reforms to face strong opposition from the powerful leftists who have advocated a 12 percent hike against a nationwide, IMF-endorsed pay freeze this year.

Meanwhile, some trade unions have threatened to stage nationwide protests this month and next against plans to sack 100,000 state employees while others have demanded compensation equivalent to 12 months' pay for those whose jobs are axed.
"Romania and Romanians need this law. We need a new pension law that ... must ensure sustainability of the system on medium and long term," Boc told reporters.

"The lowest pension in Romania is 350 lei ($117.2) and the biggest is 37,000 lei ... 100 folds (difference) is too much."

The plan, backed by an already enforced nationwide pay freeze throughout 2010, aims to review state pensions from 730 euros to as much as 9,000 euros per month, and cut those pensions calculated in a "discriminatory way," Boc said.

He said the reassessment of state pensions would bring state coffers 500 to 800 million euros worth of savings.

The Washington-based lender had successfully completed a review of the 20 billion euro ($28 billion) aid package last month, recommending its board unlock tranches halted last year due to political turmoil sometime in mid-February.

The decision, driven mostly by Romania's approval of an austerity 2010 budget, will also free up European Union aid, raising the combined amount of loans to 3.3 billion euros for February/March release.

Tuesday, February 9, 2010

Romanian December Industry Sales Rise for First Time Since 2008

By Adam Brown

Feb. 9 (Bloomberg) -- Romanian industrial sales rose in December for the first time in 14 months thanks to an increase in western European demand for exports of furniture, cars and textiles.

Industrial sales increased 2.8 percent on the year in December after declining 6 percent in November, the Bucharest- based National Statistics Institute said in an e-mail today. On the month, sales dropped 5.4 percent.

The economy contracted an annual 7.1 percent in the third quarter last year after a decline in global trade depleted demand for industrial exports. A return of demand from western Europe will help the European Union’s second-poorest member return to growth this quarter, the International Monetary Fund estimates.

In December, exports increased 7 percent on the year for a second consecutive month of growth, the institute said today in a separate release. Imports dropped 18.4 percent. Romania 20 years later

From Romanian Review on Political Geography, Liviu Bogdan Vlad, Gheorghe Hurduzeu, and Andrei Josan (BAES): Geopolitical Reconfigurations in the Black Sea Area at the Beginning of the 21st Century. FromGeojournal of Tourism and Geosites, an essay onRomanian Rural Tourism between Authentic/Traditional and Modern/Contemporary. FromFTwho won the Romanian revolution? Former members of the oppressive old guard are flourishing in Bucharest’s new order. Twenty years on from the fall of Ceausescu, Romanian filmmakers are finally learning how to make people laugh about their country’s dark past. The enduring legacy of Romania's Securitate: How those who terrorized Romanians under communism continue to instill fear. Elise Hugus on Romania 20 years later: Not exactly bread and roses. A Frenchman is building a resort for well-heeled tourists among the ruins of a former communist gulag in Romania. What became of Romania's neglected orphans? A review of Dracula Is Dead: How Romanians Survived Communism, Ended It, and Emerged since 1989 as the New Italy by Sheilah Kast and Jim Rosapepe. Think Italy, not vampires: A fondness for the US is in Romanians' blood (and more). A Transylvanian critic takes on the popular Twilight series; Peter Baker translates from the Romanian. Liliana Hamzea (UTBv): Americanization and Discourses of National Identity in the Romanian Dilema. Ceausescu’s Romania, the drama of the ethnic Germans — all remained in Herta Muller’s memory and are in her books. A Romanian Jewish writer rediscovered: An article on Benjamin Fondane as poet, critic and filmmaker.

EU backs Romanian fiscal effort, extends deadline

BRUSSELS, Feb 8 (Reuters) - The European Union executive told Romania on Monday the country is on track with fixing its finances and extended by a year to 2012 the deadline Bucharest has to cut its budget deficit below the bloc's ceiling.

The European Commission made its assessment as part of the EU's budget disciplinary procedure, under which countries receive deadlines to reduce their fiscal gaps to below 3 percent of gross domestic product.

The Commission said in a statement that Romania, which has been granted conditional aid from international lenders after being hit hard by the economic crisis, had taken effective action to reduce its fiscal gap.

The assessment bodes well for the disbursement of loan tranches from the International Monetary Fund and the EU that had been frozen due to political turmoil in the Black Sea country.

"Romania has made a serious effort to limit the deterioration of its budget deficit and to preserve macroeconomic stability during the past year," EU Monetary Affairs Commissioner Joaquin Almunia said in a statement.

But since recession in the new EU member state had been worse than initially thought, the Commission recommended giving Romania until the end of 2012 rather than 2011 to correct its deficit.

"The worsening of the economic situation since the initial recommendations were made justifies extending the deadline by one year. But the consolidation effort must continue," Almunia said.

Romania's economy shrank by some 7 percent in 2009 instead of the 4 percent once forecast by the Commission.

The recommendation must be approved by EU finance ministers to take effect, but this is not expected to be a hurdle.

The Commission said Romania had met its fiscal austerity commitments by reducing the public wage bill and cutting public expenditure on goods and services in 2009.

The 2010 budget includes a package of measures cutting expenditure by around 2 percent of GDP and raising revenue by around 0.5 percent of GDP, the Commission noted.

The IMF last month successfully completed a review of the 20 billion euro ($28 billion) aid package, recommending its board unlock tranches halted last year due to political turmoil in mid-February.

The country now has a new cabinet in place, but it faces a tough task in enforcing fiscal cuts given its fragile parliamentary majority and the risk of mounting discontent over mass lay-offs to cut the bloated administration. (Editing by Dale Hudson)

EU gives Romania an extra year to rein in deficit

08 February 2010

(BRUSSELS) - The European Commission on Monday gave Romania an extra year, till 2012, to bring its swollen public deficit back to the EU's limit of three percent of GDP, due to the gravity of the economic crisis.

"Romania has made a serious effort to limit the deterioration of its budget deficit and to preserve macro-economic stability during the past year," said the EU's Economic and Monetary Affairs Commissioner JoaquĆ­n Almunia.

"The worsening of the economic situation since the initial recommendations were made justifies extending the deadline by one year," he added in a statement.

Last July EU nations opened a an excessive deficit procedure against Romania, due to its enlarged budget deficit and recommended that it be brought within the acceptable range by 2011.

However Romania, like the rest of Europe, experienced a recession estimated at around seven percent last year, against the four percent forecast.

The general government deficit in 2009 is now thought to have reached 7.8 percent of gross domestic product (GDP).

The pushing back of the deficit deadline is the second bit of good news for the country in recent weeks.

The International Monetary Fund and European Union announced late last month that they will resume crisis aid to Romania, after the crisis-hit country passed an austerity budget.

The IMF will unblock 2.3 billion euros this month while the EU will unlock one billion euros (1.4 billion dollars).

Yields down at Romanian 1-yr T-Bill tender

BUCHAREST, Feb 8 (Reuters) - Romania sold a planned 500 million lei ($165 million) in one-year treasury bills at an auction on Monday that was oversubscribed while yields fell nearly 150 basis points, in line with market expectations.

Analysts have said investors still covet Romanian debt, as yields remain high for the region, although they have fallen significantly across maturities from a flat 10 percent level seen for most of the fourth quarter of 2009.

On Monday, the average accepted yield was down to 7.48 percent, from 8.86 percent at a previous tender on Jan. 18, central bank data showed.

So far this year, the finance ministry has sold roughly 7 billion lei, but it has lowered February issuance plans as the resumption of Romania's 20 billion euro aid package led by the International Monetary Fund has eased budget funding concerns.

The Fund's decision to free up as much as 3.3 billion euros in IMF and European Commission funds this quarter has also provided support for the currency and interest rates.

Romania did not disclose a full issuance figure for 2010. The ministry has said it plans to sell 10-12 billion lei in treasuries in the first quarter, and issue a Eurobond worth roughly 1 billion lei.

It sold 65 billion lei worth of paper last year.

Monday, February 8, 2010

Romania Jan unemployment rises to 8.1 percent

BUCHAREST, Feb 8 (Reuters) - Romania's unemployment rate rose to 8.1 percent in January from December's 7.8 percent, the employment agency said on Monday.

Dwindling demand from the euro zone states, the new European Union member's main trading partners, has hurt central and eastern European economies, forcing many companies in the state-controlled and private sectors to cut output.

Bucharest needs to make deep spending cuts to curb Romania's large imbalances, since the country secured 20 billion euros in aid from international lenders in 2009 to lift its economy out of recession.

Among these, it plans to cut up to 100,000 public sector jobs in 2010.
JAN 10 DEC 09 JAN 09

Number of unemployed 740,982 709,383 444,907
Jobless rate 8.1 7.8 4.9

Russia condemns US move to put missiles in Romania

Russia has attacked a US decision to site interceptor missiles in Romania, saying the move imperils Barack Obama's much-vaunted "reset" of relations between the two countries and the final stages of nuclear arms reduction talks.

By Andrew Osborn, Moscow Correspondent
Published: 07 Feb 2010

The Kremlin said it was taken aback by news that Romania's top military body had agreed to host US SM-3 interceptor missiles and other military infrastructure in response to an alleged missile threat from Iran. Sergey Lavrov, the Russian foreign minister, said he had demanded an "exhaustive explanation" from Washington, citing a treaty that would prevent US ships delivering the necessary equipment via the Black Sea.

"How can we stay calm when alien military infrastructure, US military infrastructure, has come to the Black Sea area?" Dmitry Rogozin, Russia's ambassador to Nato, told Russian state TV separately.

Mr Obama last year dropped a Bush-era plan to install a missile defence shield in the Czech Republic and Poland. Russia at the time hailed that decision as "brave", viewing it as a diplomatic victory. But a few months later, Kremlin officials say they are deeply disappointed that Washington did not consult Moscow about the Romanian missiles. They were similarly nonplussed last month when the US confirmed it was planning to place Patriot missiles in Poland close to the Russian enclave of Kaliningrad.

The disagreement comes as Russian and US negotiators finalise a pact that will make deep cuts in their nuclear arsenals.

Sergey Ivanov, Russia's deputy prime minister, warned the Romanian move would complicate those talks. "It is impossible to talk seriously about a reduction of nuclear capabilities when a nuclear power is working to deploy defensive systems against nuclear warheads possessed by other countries," he said.

Military experts warned the interceptor missiles could be upgraded to pose a threat to the Kremlin's intercontinental nuclear missiles. Colonel Igor Korotchenko, editor of Russia's National Defence magazine, urged the Kremlin to retaliate. "Russia should warn Romania that if elements of a US missile shield are sited in the country they will be viewed as legitimate targets for Russian missile attack."

On Sunday the head of Nato said the alliance should develop closer ties with China, India, Pakistan and Russia and become the forum for consultation on global security.

Anders Fogh Rasmussen, Nato secretary-general, said: "What would be the harm if countries such as China, India, Pakistan and others were to develop closer ties with Nato? I think, in fact, there would only be a benefit, in terms of trust, confidence and co-operation ... Nato can be the place where views, concerns and best practices on security are shared by Nato's global partners."

But Konstantin Kosachev, chairman of the Russian Duma's International Affairs Committee, reacted with scepticism, saying Nato first had to think globally, and complained that Russia had not been involved in the process.

NYT: Russia Cool to U.S. Plan for Missiles in Romania

February 6, 2010


MOSCOW — Russian officials reacted coolly on Friday to the news that Romania had agreed to host American missile interceptors starting in 2015, with a top envoy saying that the announcement could directly affect Moscow’s position as negotiations to replace the Strategic Arms Reduction Treaty, or Start, reach their conclusion.

Dmitri O. Rogozin, Russia’s permanent representative to NATO, said the United States had not fulfilled its promise to consult Russia on developments in the missile defense system. He suggested that the interceptors could pose a threat to Russia’s security, while noting that both Romanian and American officials went out of their way to assure Moscow otherwise.

“It seems to be in line with Freud’s theory — it means they have some thoughts that the system could be targeted against Russia, otherwise why would they dissuade us about something we never asked about?” he said.

Though the general outlines of the new missile defense plan — including the staging of land-based interceptors in Europe — were made public months ago, Russian officials made it clear that they were taken aback by the announcement of Romania’s role. Foreign Minister Sergey V. Lavrov said the Russian and American presidents had agreed that the “threats and risks of missile proliferation will be assessed jointly as a first step.”

“We expect our American partners to provide exhaustive explanations on those issues in the context of this dialogue,” the Interfax news service quoted Mr. Lavrov as saying at a news conference in Germany, where he traveled to attend the Munich Security Conference.

The announcement came at a sensitive moment. At the Munich conference, Mr. Lavrov has meetings planned with Iran’s foreign minister, and he has suggested that Russia may be ready to consider sanctions against Iran if he is not satisfied with the response in their discussion about Tehran’s nuclear program.

And with the Start renegotiation, a central project in the “reset” between the countries, in its final stages, Russian leaders have repeatedly said missile defense remains a stumbling block.

Russian analysts said the SM-3 interceptors planned for Romania posed no threat to Russia’s nuclear deterrent, since they target medium- and short-range missiles. But that might change when a second generation of interceptors is put in place in 2018, a possibility that makes Moscow wary, because the United States is under no obligation to share data about the system, said Sergei M. Rogov, director of the Institute for the U.S. and Canada Studies in Moscow.

“Here comes the question of transparency,” he said. “Why is the U.S. making a decision again without consulting with Russia?”

The announcement is not likely to derail Start negotiations, Mr. Rogov said, but could jeopardize talks that negotiators hoped would follow, including deeper cuts to strategicnuclear weapons. The news from Romania came, he said, amid various signs of “reverse movement” in the “reset”: Start negotiations have dragged on, Secretary of State Hillary Rodham Clinton rejected Russian calls for a new European security structure, and Poland and Sweden called for Russia to withdraw its nuclear missiles from Kaliningrad.

“Additional issues are overloading the ‘reset,’ which is not moving very far or very fast,” Mr. Rogov said. “So I am concerned about it.”

Those concerns were underlined when Russia released its new military doctrine, approved on Friday by President Dmitri A. Medvedev. The document, which guides military policy for a decade, identified the American missile defense system as a major threat to Russian security, saying it “undermines global stability and violates the current balance of nuclear forces.” Another central concern of the document was the continued expansion of NATO and the organization’s attempt “to globalize its functions in violation of international law.”

Michael Schwirtz contributed reporting.

Russia expects US comprehensive answer about missile defense sites in Romania


BERLIN, February 5 (Itar-Tass) -- Russia has reminded the United States about the Montreux Convention, which limits the ability of warships to pass through Black Sea straits and which is signed by Romania, due to the U.S. plans to deploy missile defense sites in Romania.

“We expect a comprehensive answer from our American partners, as the Montreux Convention regulates the Black Sea regime,” Russian Foreign Minister Sergei Lavrov said on Friday.

He also referred to missile defense agreements with the United States. “There is an agreement with the Barack Obama administration that is already being fulfilled. The sides agreed to start with the joint analysis of missile proliferation threats and risks. We think that European colleagues, among them Germany, should join this work,” he said.

“Once we evaluate missile proliferation risks and related threats, we may discuss diplomatic, economic or, possibly, military-technical measures that must be taken,” Lavrov said.

Romanian President Traian Basescu said on Friday that his country was ready to host the American missile defense sites.

“The network will become operational in 2015. We will soon start negotiations with the United States, and the prospective agreement will have to be ratified by the parliament,” he said.

In his words, U.S. Under Secretary of State for Arms Control and International Security Ellen Tauscher delivered President Barack Obama’s message to Romania. The new system will protect the whole of Romania from ballistic missiles, he said.

“The system is absolutely not targeted against Russia. It is directed against other threats,” Basescu said.

Romania to host new version of US missile shield



EUOBSERVER / BRUSSELS – Romania on Thursday announced it had agreed to the new US anti-missile defence shield envisaged by the Obama administration after scrapping initial plans in Poland and the Czech Republic.

In a brief statement, Romanian President Traian Basescu said the country's top security body had accepted Mr Obama's invitation to host parts of the American anti-missile defence shield.

Mr Basescu stressed that the system was aimed against threats coming from countries such as Iran, not Russia, in anticipation of potential criticism from Moscow. Previous plans tabled by the George W. Bush administration, which would have put the interceptors in Poland and a radar in the Czech Republic, had been seen as a direct threat to Russia.

The Obama administration decided to scrap those plans, an announcement that caused a stir in Warsaw, especially as a result of the timing, made on the very day when the country was remembering the 60th anniversary of the Soviet invasion.

Mr Basescu also pointed to the fact that the previous version would not have covered his country's territory in case of an Iranian attack, as the range of the Polish-based shield would have reached its limit somewhere in western Romania.

The Romanian Parliament has the last say on the deal, with the new facilities expected to become operational in 2015.

"The US has determined that Romania is well-suited for the location of this system to provide protection for European Nato Allies," the US embassy in Bucharest said in a statement.

Foreign minister Teodor Baconschi said the plan was first presented to Mr Basescu during a visit by US vice-president Joe Biden to Bucharest in October but was not made public.

Romania is already hosting US training facilities for its military, part of a Pentagon shift from large Cold War-era centres in Germany toward smaller and "more flexible" installations closer to the Middle East.

It was also embroiled in a scandal surrounding alleged secret CIA prisons as part of the so-called rendition programme developed by the Bush administration during the "war on terror", in which individuals were secretly flown out of countries like Afghanistan to intermediate locations before being released or transferred to the prison in Guantanamo, Cuba.

Back in Washington, US State Department spokesman Philip Crowley said this announcement was a "first step" in terms of the new anti-missile shield architecture, which would later also include ship-based interceptors in the Black Sea.

Mr Crowley also noted that Poland was still in talks for a "northern land-based" missile site. "That development is still under consideration and discussion with Poland," he said.

The spokesman insisted as well that the new shield was not aimed at Russia, but against "the emerging threat coming to the region from Iran."

Romanian Central Bank Raises 2010 Inflation Forecast on Tobacco

By Irina Savu and Adam Brown

Feb. 3 (Bloomberg) -- Romania’s central bank raised its inflation forecast for 2010 after a tobacco tax increase prompted a “very high” annual rate in January.

Year-end inflation may be 3.6 percent, rather than a previous forecast of 2.6 percent, Banca Nationala a Romaniei Governor Mugur Isarescu told reporters in Bucharest today.

“January inflation will prove to be higher than expected and that will affect the consumer price index for the entire year,” Isarescu said. “2011 inflation will no longer be affected by the tobacco tax increases.”

Policy makers this week cut the benchmark interest rate to 7 percent from 7.5 percent after the nation’s credit rating outlook was raised and optimism increased that its bailout will be resumed. The International Monetary Fund, which leads the 20 billion-euro ($28 billion) loan for Romania, predicts 1.3 percent economic growth this year will add inflation pressure.

The inflation rate was 4.7 percent at the end of last year, when the economy contracted about 7 percent. Early tobacco price increases pushed the rate above the 4.5 percent target agreed with the IMF. The central bank targets inflation of between 2.5 percent and 4.5 percent this year and between 2 percent and 4 percent in 2011.

The price of tobacco, which accounts for 4.6 percent of the basket of goods in the index, rose 38.6 percent on the year in December and was expected to rise faster in January.

Leu Effect

Depreciation pressure will lesson on the leu this year as government measures improve investor sentiment, Isarescu said at the same press conference. The currency was little changed at 4.1375 to the euro as of 11:40 a.m. in Bucharest. It rallied this week to its strongest in more than a year, and has gained 2.9 percent this year.

Fitch Ratings on Feb. 2 raised its credit rating outlook on Romania and Standard & Poor’s said it may do the same after the IMF signaled it will unlock the country’s bailout loan.

The Washington-based lender froze the loan last November after the government collapsed amid infighting. A fund mission last month recommended resumption of the loan after Prime Minister Emil Boc put together a Cabinet on Dec. 23 and lawmakers on Jan. 14 approved the spending and revenue plan that seeks to narrow the 2010 gap to 5.9 percent of gross domestic product from an estimated gap of 7.3 percent last year.

Isarescu warned, that of a “great danger in the coming period of a state of euphoria” as the economy resumes growth.

Friday, February 5, 2010

Romania: Construction Contraction

Oxford Business Group Latest Briefing

4 February 2010
While the Romanian economy contracted by some 7% last year, the withering of the construction sector was far more dramatic. According to data released in late January by Eurostat, the statistical office of theEuropean Union (EU), output in the Romanian construction sector fell by 24.4% for the 12 months ending November 30, the steepest fall across the EU zone.

In part, the reversal of the sector's fortunes is due to the sharp fall off in demand for new business space, with investments in non-residential developments such as office and retail construction all but drying up in 2009. There was also a steep decline in housing construction, largely due to banks' reluctancy to give out credit for much of last year.

According to a report issued by the National Institute of Statistics at the beginning of January, the number of construction permits for residential buildings dropped by 20.8% year-on-year in the first 11 months of 2009. In November, the number of permits for new residential building dropped by 15.6% compared to the previous month, with 3463 licences being issued, the report said, while just 37% of housing projects started in Bucharestbetween 2006 and 2008 had been completed by the end of July 2009.

Though keen to promote a return to growth, Romania's government has been limited in its options, having little room to maneuver when drafting the 2010 budget as it sought to ease concerns of the IMF and the EU over excessive spending.

In its budget, passed by the parliament in late January, the government of Prime Minister Emil Boc had to commit to reducing the state deficit to 5.9% of GDP, down on the 7.3% posted for 2009, put a freeze on increasing wages and state pensions, and reduce public servant numbers by up to 100,000 so as to meet IMF and EU requirements for the release of loan funding.

The EU and the IMF had demanded Romania curb spending before resuming payments from a $27.8bn support package, suspended in October after the government failed to implement promised austerity measures.

However, though being restricted in the budgetary largesse it could distribute, the government was able to throw a bone to the hard-hit building sector, making a 5% cut to the value-added tax (VAT) applicable to construction costs.

The reduction in the tax will be felt by the Treasury, with Gheorghe Gherghina, the state secretary at theFinance Ministry, saying on January 10 that the lowering of the VAT rate would reduce revenue by $328m.

The budget also factored a return to growth in 2010, with GDP forecast to expand by 1.3%. Though at least some of this recovery will depend on the speedy release of funds by international lenders.

Despite the numerous challenges, there are some signs that the building industry is starting to pick up, though it will have a long way to go before it returns to pre-crisis levels. According to the Eurostat report, output in the Romanian construction sector increased by 2.9% in November 2009 compared to the previous month. The result outstripped the overall performance of EU countries, where there was a seasonally adjusted fall in production of 0.6%, which itself was a sharper decline than the 0.3% drop in October.

This moderate turnaround could be a result of a slight easing of the credit squeeze imposed by many banks, with the National Bank of Romania (BNR) having reduced its key interest rates to 8% late in 2009 and making a further 0.5% cut on January 5.

Radu Gratian Ghetea, the president of the Romanian Association of Banks, believed that a further round of interest rates in lei-denominated loans could help spark a revival for the construction industry.

Romania's building sector had great potential due to the extensive infrastructure that was required, while the residential component was also significant, and would, "continue to attract investors, both local and foreign," Ghetea said in an interview with local press in late January 2010.

Although the government's VAT cut on construction work, combined with the expected improvement in the economy, is expected bolster demand for new projects in the short term, it is more likely that Romania's construction industry will build up momentum next year, when GDP is predicted to expand by a robust 5% or more.

Activist denied access to secret files in Romania

(AP:BUCHAREST, Romania) A poet who has led the way in publishing secret police files from Romania's communist past is being denied further access to the information.

The government says Mircea Dinescu will be removed from the National Council for the Study of the Archives of Romania's former Securitate secret police because his ownership of two agricultural companies makes him "incompatible" with public office.

But Dinescu told The Associated Press on Thursday that the real reason is to punish him for advocating greater transparency and democracy in Romania and strongly opposing President Traian Basescu's re-election in December.

Dinescu, who was a dissident under communism, has helped publish files that exposed public figures who had collaborated with the Securitate.

NYT: Romanians Accept Plan for Basing of Missiles

February 5, 2010

MUNICH — Romania’s top defense body approved an American proposal to base missile interceptors there, the country’s president said Thursday in a hastily arranged announcement.

The president, Traian Basescu, said in a statement that Romania, a former Warsaw Pact member and now part of NATO, was prepared to negotiate with the United States to accept ground-based interceptors as part of an antiballistic missile defense system. He said it could be working by 2015.

While the participation of Poland and the Czech Republic in the missile shield had been well known, the possibility that Romania would join them was not.

Romania made its announcement as Defense Secretary Robert M. Gates was in Turkey for a NATO meeting. He was not immediately available to comment but the White House spokesman, Robert Gibbs, said the announcement was welcomed. “We’re pleased that Romania has agreed to participate in that defense shield,” he told reporters in Washington.

Political analysts in Romania said the speed of Mr. Basescu’s announcement appeared to be an attempt to capitalize on the agreement at the expense of political rivals at home, where most view a deepening of ties with the United States favorably and where Mr. Basescu narrowly won re-election in December.

“He wanted to take credit and announce, ‘In my second mandate, I’m this strong and big contributor for Romanian national security,’ ” said Radu Tudor, a correspondent in Bucharest for Jane’s Defense Weekly.

Mr. Basescu said the proposal accepted by the Supreme Defense Council came from President Obama, whose under secretary of state for arms control and international security, Ellen O. Tauscher, was in Romania.

Mr. Obama abruptly changed course on the proposed antiballistic missile shield in September, focusing on a system designed to shoot down short- and medium-range missiles from Iran.

The original system, proposed by President George W. Bush, would have put a radar installation in the Czech Republic and interceptors in Poland. Russia opposed the plans, arguing that the system, so close to its border, was a security threat. Russian criticism diminished after Mr. Obama reconfigured the proposal to use smaller interceptors.

Mr. Basescu said that with Romania’s participation, the system was not directed at Russia but rather “against other threats,” without specifying them.

Dmitri V. Trenin, director of the Carnegie Moscow Center, said the Romanian announcement would not come as a complete surprise to Russian leaders, since it “was one of the options people had in mind.” He said the Romanian site was farther from the Russian border, and — unlike the proposed Polish site — would not allow the interceptor missiles to stop a Russian missile headed to the United States over the Arctic Ocean, a possibility that had aroused anxiety in Moscow.

“Of course, people who would be interested in portraying any kind of missile system as potentially a threat will be able to use this, but I don’t think the government has much interest in playing this up,” Mr. Trenin said.

Russian leaders still complain that the missile system could upset the cold war balance of power. Prime Minister Vladimir V. Putin said in December that the plan was the main obstacle to negotiations on replacing the Strategic Arms Reduction Treaty.

But Aleksandr A. Khramchikhin, assistant director of the Institute of Political and Military Analysis, in Moscow, told the Web site that Russia had long suggested Romania or Bulgaria as an alternative to the Polish and Czech sites.

Nicholas Kulish reported from Munich, and Ellen Barry from Moscow. Helene Cooper contributed reporting from Washington.

Thursday, February 4, 2010

Romania and the return of property to Greek Catholics

SSJC via ENI) - In a ruling that could affect similar disputes, a European court has ordered the government of Romania to compensate a Greek Catholic parish for failing to return to the parish properties seized from it under communist rule."Legislative shortcomings have helped create a drawn-out preliminary procedure capable of hindering the applicant parish's access to a court," the European Court of Human Rights said in a January 15 judgment. The court said the Romanian government had violated articles of the 1950 European Convention on Human Rights. It ordered Romania to pay 23,000 euros to the Greek Catholic parish to cover damages and expenses.

The ruling concerned a case brought by Greek Catholics at Sambata in Romania's northern Transylvania region, whose church was placed in Orthodox hands when their community was outlawed in 1948. The Catholics said the local Orthodox parish had refused to allow them to share the building when their church was re-legalized in 1990, or to form a joint Orthodox-Catholic committee, as required by law, to discuss property issues. "Accordingly, the applicant parish was treated differently from other parishes involved in similar disputes, without any objective or reasonable justification," the Strasbourg-based European court ruled. "This was a violation of human rights regulations which prohibit discrimination."

The Greek Catholic Church is loyal to Rome but shares an eastern liturgical and spiritual heritage with Orthodox churches. In Romania, the post-war communist regime forced the church to surrender 2,588 places of worship to state institutions or Orthodox parishes.

Inter-church ties in Romania have been tense since the 1989 collapse of communist rule because the Romanian Orthodox Church, which claims the loyalty of 87 percent of the country's 22 million inhabitants, has refused to return confiscated Catholic properties. These include 1,504 parish houses, and 2,362 schools and cultural centers.Although a Catholic-Orthodox commission was set up in 1998, a year before Pope John Paul II visited Romania, it made little progress and only 160 Greek Catholic churches were returned.

In February 2009, Greek Catholic leaders protested a draft law that would confirm Orthodox ownership over still-disputed Catholic places of worship. In a letter to Romania's President Traian Basescu, the leaders said their church, "reserves the right to use all the legal means, domestic and international," to obtain redress. In an early January 2010 statement, Romania's Orthodox patriarchate said it believed concerns about Greek Catholic properties were "artificial and exaggerated.” It said it was again seeking dialogue with the Greek Catholic Church.

The Greek Catholic bishop of Oradea, Virgil Bercea (pictured left), told Ecumenical News International that ecumenical ties had deteriorated since the 2007 election of Patriarch Daniel Ciobotea. Bercea said he was worried Catholic Church members could also be denied access to Greek Catholic cemeteries, which could now be reserved for Orthodox burials. "Even now, the Orthodox are waging a psychological war against us; it seems our government leaders do not appreciate the situation's gravity," said Bercea, whose church, according to government data, currently has 654,000 members compared with 1.5 million in 1948.