Tuesday, March 30, 2010

Romania May Ask IMF for Flexible Credit Line After Loan Expires

By Irina Savu

March 30 (Bloomberg) -- Romania may ask the International Monetary Fund for a flexible credit line or a new “precautionary” standby-loan agreement after its bailout expires next year, President Traian Basescu said.

“From our point of view, we are looking for long-term cooperation with the IMF,” Basescu said at the start of a visit to Romania by IMF Managing Director Dominique Strauss-Kahn.

The Balkan nation, which suffered its worst recession in at least 20 years in 2009, turned to a group led by the IMF and the European Union last year for a 20 billion euro ($27 billion) bailout package to stay afloat. The IMF resumed bailout payments last month to the country after it formed a government and passed a 2010 budget.

The Washington-based lender will discuss “the best course to take” after the bailout program ends next year, Strauss-Kahn said.

Earlier today the IMF chief predicted Romania’s $163 billion economy will expand as much as 2 percent this year. The National Statistics Institute in Bucharest predicted on March 3 that the recession will end as early as this quarter and growth for the year will be 1.3 percent after a 7.1 percent contraction in 2009.

The leu weakened 0.1 percent to 4.0725 per euro as of 12:54 p.m. in Bucharest, while the Bucharest Stock Exchange benchmark BET index fell 0.9 percent to 5988.74.

NYT Opinionator: Counting the ‘Blessings’ of Insomnia

MARCH 29, 2010, 9:00 PM

Drip, drip, drip — that’s what insomniac thoughts feel like, a leaky faucet behind the eyes. Last night the ideas were plinking; forehead-pounding regrets over past deeds, horrid fantasies, car crashes of expectations, unrealizable longings. It’s sheer torture. I don’t deserve it! Drip: Or maybe I do.

For decades, I have been spending my nights flopping around the bed and finally stomping to the medicine cabinet for anything that will put me under the waves. The story I recite to myself, often in the grips of sleep deprivation and to the rumble of garbage trucks, is that it all goes back to being awoken constantly as a kid by parents battling like Vikings in the living room.

I have done my share of meditation in that frayed state of wired exhaustion, but unlike the Romanian writer E.M. Cioran, I never learned to take serious instruction from sleeplessness. Born in Transylvania in 1911, Cioran hardly ever shut his eyes. In fact, at his death in 1995, there was exaggerated talk that he had not slept in half a century. Whatever his hours of slumber, the night watchman’s systematic reflections on the existential meaning of insomnia warrant the attention of our nation, which outpaces every country on earth in the consumption of sleeping medication.

The precocious son of an Orthodox priest, Cioran went to study philosophy in Bucharest in 1929. He published his first book, the lyrical “On the Heights of Despair,” at 23. Though he would come to publicly regret it, in the 1930s Cioran supported the fascist Iron Guard in Romania. He won a scholarship to study in Paris in 1937 and moved there permanently in 1941.

Cioran published a good deal in his native Romanian, but it was in his second language of French that the religiously atheistic writer found his peculiar voice. His highly aphoristic style recalls that of another insomniac philosopher, Friedrich Nietzsche. The titles of Cioran’s books ring like an acoustic necklace of despair. Take, for instance, these pearls: “The Trouble with Being Born,” “The Fall Into Time,” “A Short History of Decay,” “Anathemas and Admirations,” “The Temptation to Exist,” “Tears and Saints.” But from the beginning to the end of his days, Cioran’s thought gyred around the subject of sleepless nights.

Cioran, who was a friend of Samuel Beckett’s, is too relentlessly dark for most tastes. Writing in the New Yorker, Adam Gopnik observed, “A love of Cioran creates an urge to press his writing into someone’s hand, and is followed by an equal urge to pull it away as poison.” I’ll take the poison any day. I find a brother in the beetle-browed philosopher critic of philosophy, and feel less lonely for the fact that there is, at least, someone who can acknowledge that we are tromping through a vale of tears. And while there will hopefully be much tenderness and joy on the path to our disappearance, there will also be much ugliness, agony, and cause to weep.

Indeed, Cioran once wrote that he would not need to write, if only he could weep at will. And then he moans, “But a negative reticence, aggravated by education, or a defective functioning of the lachrymal glands, dooms us to the martyrdom of dry eyes … It follows that we are all sick, and that each of us would require a Sahara in order to scream our lungs out …” (“A Short History of Decay,” p.43). Too much? Cioran uniquely connects the Muse with the capacity for exaggeration and the capacity for exaggeration with insomnia.

There are many poets who bow before the divinities of languor, however, scarcely anyone, save Cioran, pays homage to insomnolence. In a superb article, “Cioran’s Insomnia,” Willis Regier remarks, “Cioran treated insomnia as his defining experience and insignia. He lifted insomnia to the level of a love, a passion play, and heroic battlefield.” Regier registers this Cioranian paean:

…when you came, Insomnia, to shake my flesh and my pride, you who transform the childish brute, give nuance to the instincts, focus to dreams, you who in a single night grant more knowledge than days spent in repose, and, to reddened eyelids, reveal yourself a more important event than the nameless diseases or the disaster of time!” (“A Short History of Decay,” p.169)

And to take a page from on “On the Heights of Despair” (p.83) Cioran offers this blessing:

Just as ecstasy purifies you of the particular and the contingent, leaving nothing except light and darkness, so insomnia kills off the multiplicity and diversity of the world, leaving you prey to your private obsessions.

What strangely enchanted tunes gush forth during those sleepless nights!

Hordes of artists throw their arms around their melancholy as though it were the very taproot of their creativity. Kierkegaard, for instance, referred to his melancholy as his best and most loyal friend. Cioran felt a similar attachment to his insomnia. While he cursed his nocturnal suffering and used morphine, among other things, to try and knock himself out, he ultimately understood his long journeys into the sickly morning light as both crushing him and yet shaping his sensibilities. After all, isn’t wakefulness good? And sleeplessness a sort of wakefulness? “What rich or strange idea,” asks Cioran, “was ever the work of a sleeper?” (“A Short History of Decay,” p.147)

Unlike most scribblers on sleep and its absence today, Cioran did not ponder the biochemistry of shuteye. Instead, he fiercely focused on the subjective experience of, as Regier so elegantly puts it, “the sleep that would not come to bed.” Cioran also explores the significance of the fact that there is but one creature who cannot clock out for a break from the groaning of creation.

We have traditionally defined ourselves in terms of our capacity for reason. Cioran disagrees. We are, he thought, unique for our insomnia. He writes:

The importance of insomnia is so colossal that I am tempted to define man as the animal who cannot sleep. Why call him a rational animal when other animals are equally reasonable? But there is not another animal in the entire creation that wants to sleep yet cannot. (“On the Heights of Despair,” p.85)

A kindred spirit whom Cioran carefully studied, Dostoevsky hinted that the understanding of ultimate truths requires psychological conditions that can only be described as pathological. Of course, like his mage Nietzsche, Cioran did not find much to favor in the concept of truth. However, let us suppose that Cioran is correct, and the raw truth is that existence is a mad cycle of happiness and horror that ends with either getting it in the neck or in a noisome nursing home. If so, then what better state could there be in which to appropriate this truth than that 4 a.m. dread of sunlight, creeping in the window of the bedroom you’ve been padding around for hours?

NOTES: Editions referenced in this article: “A Short History of Decay” transl. R. Howard (Oxford: Basil Blackwell, 1975) and “On the Heights of Despair” transl. Ilinca Zarifopol-Johnston (Chicago: The University of Chicago Press, 1992)

Gordon Marino is professor of philosophy and director of the Hong/Kierkegaard Library at St. Olaf College in Northfield, Minn. He is author of “Kierkegaard in the Present Age,” and co-editor of “The Cambridge Companion to Kierkegaard.” His new book, “Ethics: The Essential Writings” will be published by Random House this summer. He is currently working a book on the distinction between despair and depression.

Romania's Petrom to increase share capital

BUCHAREST, March 29 (Reuters) - Romania's top oil and gas company Petrom SNPP.BX plans to increase its nominal share capital by 202 million lei ($67 million) to 5.9 billion lei, it said in a statement on Monday, significantly less than markets had expected.

Late last year government sources had estimated the capital hike at Petrom, which is 51 percent-owned by Austria's OMV (OMVV.VI: Quote,Profile, Research), would be for about 1 billion euros ($1.3 billion). [ID:nLDE62E0IW] [ID:nLDE5BH1HF]

The increase, designed to keep the company from exceeding a 30 percent cap on debt gearing, is subject to the approval of shareholders, who meet on April 29.

Petrom will issue up to 2.02 billion shares at a nominal value of 0.1 lei per share. It will sell 417 million shares to Romania's economy ministry, which owns a 20.6 percent stake in the firm.

Petrom's share price opened trading on Monday unchanged at 0.349 lei. ($1=3.029 lei) ($1=.7439 euros) (Reporting by Luiza Ilie; Editing by Greg Mahlich)

AP: Ford sues Romania for $3.5M it paid for imports

Ford has sued the Romanian state for $3.5 million (euro2.62 million), duties it paid on spare parts it imported from South Korea, a company official said Monday.

In court papers published in the media Monday, Ford Romania SA said it imported engines and gear boxes for automobiles from South Korea between Nov. 2007 and Nov. 2008. At the time Ford was producing cars for GM Daewoo Auto & Technology Co, said Nadia Crisan, Ford representative.

Crisan told the Associated Press that auditors informed the company it had overpaid customs and duties for the parts, money the company was unable to get back from authorities. She said Ford had filed a suit and the next hearing would be held on April 8.

Mircea Matei, a tax official in the city of Craiova, was quoted by Mediafax news agency as saying Ford should have asked for the money a maximum of a year after the company did the imports.

Ford Motor Co. bought its plant in Romania from the government in March 2008. The company makes light vans there and is expected to start making the new B-Max, similar to the subcompact Fiesta, this year.

Once fully in use, the plant will employ 7,000 people and make up to 300,000 cars and 300,000 engines a year.

Romania cuts benchmark interest rate to 6.5 pct

BUCHAREST, Romania—Romania's central bank cut its benchmark interest rate to a record low of 6.5 percent Monday, the third time it has cut rates this year, in an attempt to revive the country's ailing economy.

The National Bank of Romania cut its main interest rate from 7 percent after slashing it from 7.5 percent in February and 8 percent in January. The interest rate reduction is also meant to stimulate lagging investment and consumption, which have shrunk during the recession.

In neighboring Hungary, the National Bank of Hungary also cut its main interest rate by a quarter percentage point to a new all-time low of 5.50 percent.

Romania received an International Monetary Fund-led bailout last year when its economy shrunk by minus 7 percent after three years of annual growth of about 8 percent.

The fund, which leads the euro20 billion bailout loan to the country which includes help from the EU and others, froze payments in November because of political instability.

Romania suffered its worst recession since communism ended in 1989 last year as booms in construction and commerce collapsed. The inflation rate fell to 4.5 percent last month from 5.2 percent in January as a stronger leu reduced the price of imports, gasoline, rent and other utilities that are measured in euros.

Monday, March 29, 2010

FT: Romania’s planned jet purchase draws fire

By Chris Bryant in Vienna

Published: March 29 2010

European aerospace manufacturers have cried foul over Romania’s proposed $1.3bn purchase of secondhand US F-16 fighter jets after they claimed Bucharest had announced the decision without a proper tender process.

The proposal also triggered questions about how Romania can afford such aircraft as the recession-hit eastern European nation battles to cut public spending to comply with an International Monetary Fund programme.

Romania’s Supreme Defence Council announced last week an intention to purchase 24 used F-16 aircraft from the US to replace a rapidly ageing fleet of Soviet-made MiG-21 aircraft.

Gabriel Oprea, defence minister, insisted on Friday that Romania needed the planes to fulfill its commitments to the Nato alliance, which the former communist country joined in 2004.

The government said the deal reflected the Romanian-US “strategic partnership” and was justified given a shortage of public funds – the old F-16 aircraft come free but will require refitting and servicing. Parliament must first approve the purchase.

The announcement dealt a blow to rival European defence contractors Saab of Sweden, and the Eurofighter consortium. Both had hoped to bid for the contract.

“The decision surprised everybody,” Richard Smith, Saab’s Romanian marketing director, told the Financial Times. “We had been told to expect a tender process. But there’s a lack of any process at all.”

“Eurofighter regrets Romania’s decision was made in the absence of an international call for tenders, the standard European Union procedure,” the consortium, which includes EADS, BAE Systems and Alenia/Finmeccanica, said.

Romania has been looking to replace its air-defence fleet for years, but lacked sufficient resources even before the financial crisis hit.

Last year it was forced to turn to IMF for a €20bn bailout and is now following a strict programme to rein in bloated public spending.

The cost of servicing and equipping the initial batch of F-16 aircraft for delivery from 2013 is estimated at $1.3bn, including pilot training.

However, Romania has also indicated the possible purchase of a further 24 F-16 aircraft, which could significantly increase the final bill.

In 2008 a Pentagon notice on the possible sale estimated the total price of all 48 jets at $4.5bn including servicing, training, refitting and other add-ons.

“It’s quite financially insane … as they will have to finance this somehow. Does Romania have this kind of money available now or not? I don’t believe they do,” said Mr Smith.

Saab said it was prepared to offer attractive financing terms and noted that the F-16 deal appeared to lack so-called “offsets” – customary side-deals guaranteeing economic benefits in kind to the purchasing country, such as employment opportunities.

Romania’s socialist opposition has called for parliament to be given full details of all the bids before approving the F-16 sale.

The furore is a blow to Romania’s attempts to tackle a perceived lack of transparency and reputation for corruption, which Transparency International, the anti-corruption wathdog, has ranked amongst the worst in the EU.

Romania is the only member state that has not signed the EU’s defence procurement code of conduct.

The IMF declined to comment on the sale. In 1997 the Washington-based lender successfully urged Romania to drop a planned $1.4bn purchase of US-made helicopters because of budgetary constraints.

Holocaust survivor fights apathy

By Ray Furlong
BBC, Sighetu Marmatiei

Hedi Fried was never supposed to return home. Packed into a cattle truck in 1944, she was deported to Auschwitz with the other 17,000 Jews in Sighet, now Sighetu Marmatiei in Romania.

But like her town's most famous son, the Nobel laureate Elie Wiesel, she survived and has often returned to the town to bear witness to what happened with talks and lectures.

Now, aged 85, she's made an emotional final journey there.

The rain streams down as we draw up outside Sighet's Jewish cemetery.

"This is my pilgrimage, the last one," says Hedi, stepping over a large brown puddle.

"When I come to Sighet I remember my childhood stories, and I see the ghosts. When I walk the streets I see people coming and going. But they're not here any more, none of them."

There are rows of gravestones at odd angles in the grass, many engraved with the word Auschwitz and several names. Hedi's family gravestone contains, among others, her mother and father.

"They went up in smoke," she says, "but I had their names put here."

A prayer for the dead is recited, and Hedi shows me her grandmother's gravestone nearby. She died long before the Holocaust, when Hedi was a child.

"I remember how she always used to give me sweets," she says, recalling a bygone age when Sighet was a bustling Jewish city.

As we drive through potholed streets to our next stop, she points at the low-rise houses with crumbling 1920s facades.

"All of these were Jewish houses," she says, the only person in the town who can remember what it was like.

Her family moved into a new house in 1937. "I was delighted with it. I thought we had invented functionalist architecture!" she says, as we stand outside an elegant but decayed building.

"That was my window. I can see myself talking to my boyfriend," she says. But the mood instantly darkens. "I can also remember leaving for the last time."

"This was the most modern house in town, the first with a water-closet. So the last thing I did here was to flush the toilet.

"I thought we'd come back soon. We didn't. My parents didn't come back. My sister and I survived just by chance."

After surviving Auschwitz, Hedi and her sister were moved to Bergen-Belsen, later liberated by the British. After the war they moved to Sweden, where Hedi worked as a psychologist.

Nightmares continue

She has also been a tireless campaigner to keep retelling the story of the Holocaust, travelling the world to give talks and lectures, first returning to Sighet in 1968.

"So many survivors found it impossible to talk about what happened. But for me it's actually therapy. Even now, coming here, I'm working through it.

"At first I thought I could never return to Auschwitz, but I did and since then my nightmares are not as strong. I still have them but I no longer wake up in a damp sweat."

But Hedi is also concerned that new generations are not learning the truth about the Holocaust.

"My aim to come to Sighet was that the children understand what their great-grandparents have done, because when I lived here as a child I was a 'damned Jewess','' she says.

"They don't know what their grandparents have done: some have been perpetrators, a few rescuers, the majority bystanders. And that's what they have to learn: never, ever be a bystander."

Teenage ignorance

At the Elie Wiesel museum in Sighet, schoolchildren perform a folkdance for Hedi. She gives a talk - but the event is disorganised.

While she sits behind a table, teenagers stand huddled in front of her looking embarrassed.

Others are outside in the corridor. They couldn't hear a word even if they were trying to - which they're not.

I ask one 17-year-old boy why he is here.

"I don't know why, we've been told to come," he says, laughing.

"What do you know about the Holocaust?" I ask.

"Nothing, we haven't done it at school yet."

A 15-year-old girl who was inside is a little more forthcoming. She says Hedi spoke about her childhood in Sighet and what happened to her family.

"Were you surprised?" I ask.

"Yes," she replies.

"Have you ever heard what happened here in your town before?"


Fading traces

Monosyllabic answers are common to teenagers. But the local schools clearly did not see Hedi's visit as an opportunity to teach their pupils about this town's horrific recent history.

Of the 17,000 Jews who lived here before the war, there's hardly a trace - just a few families and a single surviving synagogue.

After the talk, Hedi joins in the folkdance, drawing on enviable reserves of energy for an 85-year-old.

But back at the hotel afterwards, she's clearly tired when asked about the lukewarm response that her testimony drew from the local youth.

"People don't want to talk about it, especially what happened in their own community. The bystanders are ashamed of it," she says.

"But tomorrow I am going to another school."

Story from BBC NEWS:

AP: Romanian defense minister: We need 2nd-hand F-16s


Romania's defense minister said Friday the army needs used U.S.-made F-16 jet fighters to modernize its army, earning criticism from at least one European company that claimed the country could be buying junk.

Gabriel Oprea defended a decision by the country's Supreme Defense Council this week to replace MIG 21 Lancer planes with 24 secondhand F-16, saying Romania needs good-quality planes at a member of NATO. The president's office said the country could not afford new planes.

The marketing director in Romania for Sweden's Saab AB, Richard Smith, blasted the proposal, saying the army may end up with "someone else's junk."

Smith said that Swedish company Saab had offered brand new Gripen fighters, with low interest, a generous nonpayment period and 100 percent offset. He urged the defense ministry to send all offers to Parliament for lawmakers to be able to compare before they vote on whether to pass the proposal.

Officials from the consortium that produces the Eurofighter Typhoon also criticized the decision.

Romanian authorities had identified five types of jets to choose from: F-16s, JAS-39 Gripens, Eurofighter Typhoons, F-18s and Rafales.

Friday, March 26, 2010

Deutsche Welle: Little appetite in Romania for fast-food legislation

Many governments around the world are making an effort to reduce obesity rates and encourage healthy eating. But Romania's efforts to introduce a fast-food tax have not seen an encouraging start.

The Romanian Ministry of Health intended to impose a tax on fast-food and it was expected to have done so by now. Such a tax was meant to encourage healthy eating, but so far the plan has not panned out.

"Based on the declaration made by the government at the start of the year, the tax should have been in place by the middle of March," Tiberiu Fueriu, editor in chief of the trade publication Food and Bar Magazine, told Deutsche Welle.

The government ran into trouble when it realized that a lot of the products sold by Romanian fast-food stalls aren't really junk food at all. On the streets of Bucharest the cheap food of choice is the 'shaorma,' or kebab. According to Daniel Iorgoveanu, who owns a kebab stall in the city center, the kebabs he sells shouldn't be considered unhealthy just because they can be served quickly.

"All the food we serve is fresh, at least most of it," he said. According to him, the only ingredient they buy ready-made and that might contain preservatives is the mayonnaise.

"We're a fast-food place, that's what we call ourselves, but we sell fresh Romanian products. I don't see how we could be putting the consumer's health at risk."

Instead of directly taxing fast-food, the government's proposed law would create a list of all the products considered unhealthy - a task requiring the analysis of some 40,000 products, which could then be taxed.

A government scheme to raise funds?

Instead of an effort to get Romanians healthy, the industry is up in arms about what it sees as another stealth tax.

"The fact that you can go out onto the street and see that there's a line in front of a restaurant simply gives the impression that you can get some more money out of them," said Fueriu. "It's got nothing to do with a concern for good health."

"I think that unfortunately, Romania is first when it comes to bad things and last when it comes to sensible things," Fueriu concluded.

Author: Tom Wilson (hf)
Editor: Ben Knight

EUbusiness: Romania's anti-graft crusader calls for change of mentality

25 March 2010

(BUCHAREST) - The change of mentality needed to eradicate graft in Romania "has not happened yet", the country's top anti-corruption prosecutor told AFP, two days after a critical EU report.

And by openly supporting colleagues condemned for graft and by criticising the anti-graft prosecutor's office, some Romanian politicians "do not give a very good example", Daniel Morar said during an interview.

In a report on Tuesday, the European Commission criticised Bucharest for not maintaining the pace of justice reforms, with Brussels deploring delays in high-level corruption trials and the "non-dissuasive penalties" doled out by courts.

But the report complimented Morar's office noting it "has maintained its good track record of impartial investigations into high-level corruption cases".

Since Morar's appointment in 2005, the National Anti-corruption Directorate (DNA) has indicted former prime minister Adrian Nastase, ex-ministers, mayors and judges accused of taking bribes or influence-peddling.

In 2009 alone, 244 high-ranking officials in the administration and politics were sent to court.

Hailing from a family of many lawyers, the 43-year-old Morar, who likes to play football in his spare time, has become Romania's "Mister clean".

Since his arrival at the DNA, "politicians have not been sleeping well any more", daily newspaper Romania Libera wrote recently.

It was social-democrat opposition senator Catalin Voicu's turn this week.

He is accused of having used his influence "to intercede with magistrates and high-ranking police officials in favour of two businessmen facing trial" in exchange for 289,000 euros (385,000 dollars).

In an unprecedented move for Romania, lawmakers gave their go-ahead on Wednesday to his arrest, as requested by the DNA.

However, in Morar's eyes "the fight against corruption should not be limited to arrests and convictions."

"We need an awareness campaign along with punitive measures to have a change of mentality. When people are less ready to receive or give bribes, then we will see the rate of corruption drop," he said.

"But this mentality change has not happened yet," he said, while adding he was "confident" for the near future.

"It could happen soon as we have started to see more convictions in high profile cases. People should get the idea that no one is above the law."

Since January, the mayors of two important cities, Ramnicu Valcea (southern Romania) and Baia Mare (northern Romania) have been sentenced to prison for graft.

Mircea Gutau, from the governing Liberal-Democrat party (PDL), was sentenced to three and a half years in prison and the Liberal Cristian Anghel (opposition) to two and a half years.

"I saw that although politicians were handed a final sentence, they still get support from their colleagues", Morar said.

Some politicians, be it in opposition or in power, also continued to attack the DNA, accusing it of playing political games.

"They do not give a very good example," Morar said, adding that despite the attacks, he does not receive direct pressure from politicians.

"They know it would be in vain with me," he says while noting that he came close to not having his mandate renewed at the end of his first term. European pressure probably helped him to stay.

The EU surveillance mechanism put in place after Romania and Bulgaria's entry to the bloc in 2007 is "necessary and useful", he says.

For the future, Morar wants to go on targeting high-level cases.

"Citizens feel less affected by high-level corruption. They complain more about day-to-day corruption. But high-level corruption can pervert a government's mission."

Wednesday, March 24, 2010


-UK Information Portal for Migrant Workers Continues to Expand-
(24 March 2010): myUKinfo, the UK information portal for migrant workers, their employers and those working with migrant workers, announces it has added Romanian as the fifth language on the portal. www.myUKinfo.com was launched in June 2009 with the initial languages of English, Polish and Portuguese. Six months after launching, myUKinfo added its fourth language; Slovak and with the continuous success of the site and the promise to continuously add new languages, Romanian has been added.  To visit the myUKinfo Romanian home page, click here.
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Eubusiness: EU criticises Bulgaria, Romania over corruption

(BRUSSELS) - The European Commission criticised Bulgaria and Romania Tuesday for a lack of progress in fighting corruption and organised crime, urging the EU's two newest members to prioritise the issues.

In a report on reforms in the countries, which joined the bloc in 2007, the EU's executive arm called on the authorities in both to intensify their efforts to see arrests translate into convictions.

The report took particular aim at Bulgaria, citing the "continuously poor results of the judicial system in investigating corruption and organised crimes cases," said commission spokesman Mark Gray.

Improvements are required to achieve "shorter and more effective investigation and court procedures," he added.

The commission also said that "allegations into serious corruption in relation to appointments to high-level jobs in the judiciary need to be fully investigated."

Bulgaria's foreign ministry said the report "correctly reflects our progress as well as the need for further improvement," describing the document as "objective."

"Neither Bulgarian society, nor its partners are happy with the justice system," Bulgarian Justice Minister Margarite Popova told national radio. "The justice system must show it is independent and deliver concrete results."

While there have been numerous arrests in recent months for kidnapping and misappropriation of EU funds, the Bulgarian government has accused the courts of taking too long to sentence the culprits.

The justice system now has an "enormous responsibility" ahead of a report by Brussels, expected in June, that will look at the country's general progress, Popova noted.

The commission was less severe with, but still critical of, Romania where "the pace of progress has not been maintained" in terms of reforms.

It added that there had been no improvement in the quality of appointments to the judiciary while the system had been "undermined by net staff losses."

There were no "concrete results" visible that the judicial system was improving, with serious delays in corruption cases and too light sentences doled out by courts.

In general the two nations were exhorted to make the issue a "national priority," the commission said.

Romania's justice minister promised quick adoption of penal and civil codes, as well as a bill that would shorten court procedures.

"We will continue to back institutional stability to fight corruption and guarantee the independence of the justice system," Catalin Predoiu said.

The report will heighten the feeling among some that Bulgaria and Romania were allowed to join the EU before they were ready, in the euphoria that followed the fall of the Iron Curtain in Europe.

Romanian Government Keeps Euro-Adoption Goal of Jan. 1, 2015

By Irina Savu

March 23 (Bloomberg) -- Romania maintained its target to adopt the euro in January 2015, the government said in a statement on its Web site late yesterday.

The government also kept its economic growth forecast for this year at 1.3 percent and predicted expansion of as much as 3.7 percent in 2012.

“The commitment to adopt the euro as of Jan. 1, 2015 is maintained and represents an important anchor for the budget and structural reforms needed to increase the flexibility of the Romanian economy,” the Bucharest-based government said in the statement. “The strategy aims to strengthen short- and medium- term financial market confidence and the stability of public finances by promoting a mix of coherent measures which will lead to a narrowing of budget deficits.”

The eastern European country, which turned last year to a group led by the International Monetary Fund and the European Commission for a 20 billion euro ($27 billion) bailout package to stay afloat, plans to narrow the deficit to 5.9 percent of gross domestic product this year from 7.3 percent in 2009 and below 3 percent by the end of 2012 to meet euro criteria.

The economy suffered the worst recession in at least 20 years in 2009 as booms in construction and commerce collapsed. The recession wiped out gains made in 2008 when the economy grew 7.1 percent, the fastest pace in the European Union, which the country joined in 2007.

The leu was little changed at 4.0852 per euro after the announcement. The Bucharest Stock Exchange benchmark BET index fell 0.5 percent to 5867.68.

AP: Romanian authorities arrest cigarettes smugglers

Officials say they have arrested 16 Romanians who smuggled cigarettes from Ukraine to Romania.

Organized crime prosecutors said Monday more than 35,000 cigarette packets worth about euro60,000 ($81,000) had been confiscated. Authorities say the cigarettes were manufactured in Ukraine.

Cigarette smuggling has sharply increased since the government levied extra taxes on tobacco last year and prices shot up. Tobacco companies claim one in three cigarettes are counterfeit or smuggled.

Romanian authorities are working with Ukrainian counterparts to identify the Ukrainians involved in the smuggling.

Romania, which joined the EU in 2007, has among the cheapest cigarette prices in the 27-nation bloc -- roughly euro2.50 ($3.35) per packet.

Herta Müller dodged Romanian secret police by proofreading in forest

Nobel laureate Herta Müller met her proofreader in the woods to escape the attentions of Romania's notorious Securitate, she tells book fair audience

Alison Flood
guardian.co.uk, Monday 22 March 2010

Herta Müller, who won the Nobel prize for literature last autumn, was forced to edit her books in a forest to avoid the Romanian secret police, she told an audience at a German book fair this weekend.

Müller was awarded the Nobel prize for her depictions of the "landscape of the dispossessed" in novels that demonstrate "the concentration of poetry and the frankness of prose". Born in Romania, the author received death threats for refusing to become an informant for President Nicolae Ceausescu's department of state security, the Securitate, and eventually emigrated to Germany. From her novel Hertzier (published in the UK as The Land of Green Plums), the story of a group of young Romanians living under Ceausescu's regime, to last year's Atemschaukel (Everything I Possess I Carry With Me), about the exile of German Romanians in the Soviet Union, Müller returns again and again to the subjects of exile and dictatorship in her novels.

Speaking at the Leipzig book fair on Saturday, the author said that while she was writing books including her debut, the short story collection Niederungen (Nadirs), which was censored in Romania, she would meet her German proofreader in the woods to avoid discovery. "So nobody could listen, we always went to the forest and proofread there," she told the audience, according to a German news agency. "I was a young author from the end of the world, and she was a great proof-reader from the centre of the world — from Germany."

Müller's lecture on winning the Nobel saw her lay out in detail the moment when the Securitate attempted to force her to sign a document describing herself as a collaborator. "He called me stupid, said I was a shirker and a slut, as corrupted as a stray bitch," Müller said. "Without sitting down, I wrote what he dictated — my name, date of birth and address. Next, that I would tell no one, no matter how close a friend or relative, that I ... and then came the terrible word: colaborez — I am collaborating. At that point I stopped writing."

She told the man that she didn't "have the character for this". "The word character made the Securitate man hysterical," she said. "He tore up the sheet of paper and threw the pieces on the floor. Then he probably realised he would have to show his boss that he had tried to recruit me, because he bent over, picked up the scraps and tossed them into his briefcase. After that he gave a deep sigh and, defeated, hurled the vase with the tulips against the wall. As it shattered it made a grinding sound, as though the air had teeth. With his briefcase under his arm he said quietly: 'You'll be sorry, we'll drown you in the river'. I said as if to myself: 'If I sign that, I won't be able to live with myself anymore, and I'll have to do it on my own. So it's better if you do it'."

The Leipzig book fair event also saw Müller speak of how literature helped persuade her to leave the village where she was born, praising the writing of Austrian author Thomas Bernhard. "After reading him you don't return to a Banat-Swabian village the same as you left it. That hurts, too," she said. "My affiliation to the village was destroyed by reading, by books."

Eubusiness: Young Romanian magistrates hopeful of change

(BUCHAREST) - They are the new judges and lawyers of Romania, a country plagued by graft and under EU surveillance because of slow justice reforms.

But for this new generation, the verdict from Brussels represents not a threat, as portrayed by some Romanian politicians, but a challenge.

With the European Commission expected this week to publish its interim report analysing the progress of Bucharest and Sofia in fighting corruption, they say the critical eye of Brussels is crucial.

"Looking at our communist past, we have come a long way as far as justice is concerned," 24-year-old final year law student Gabriela Olariu told AFP.

The 45 years of communist dictatorship "killed the idea that ordinary people could get justice" in Romania, said the soon-to-be lawyer.

But since the fall of dictator Nicolae Ceausescu 20 years ago, she said, "a lot of beneficial structural changes have been made" thanks to the European Union integration process.

But those changes needed to be enforced, she said, and that will be down to her generation of legal professionals.

Another young lawyer, Anca Cernat, agreed.

Their generation could make a difference, she said, if they could just rid themselves of the communist-era mentality that "things are like this" and could not change.

"I feel deep inside that things will be better in Romania," she added.

Anca, Gabriela and another 16 young judges, prosecutors and lawyers have been selected to follow a new training programme called Leaders for Justice, designed by Germany's Konrad Adenauer Foundation.

Its main aim is "to create a pool of young individuals who understand the importance of values and integrity and who are ready to take the lead in promoting rule of law principles through their work".

A demanding selection process focused on the candidates' ethical values said Corina Rebegea, who led the process.

"We want to support the Romanian elite of tomorrow," said Stefanie Ricarda Roos, director of the foundation's Rule of Law Programme South East Europe.

And by the elite she is referring not to people who enjoy a privileged position in society, but to those individuals who were qualified -- and motivated -- to serve the public interest, she added.

According to pollsters, there is still a lot of work to be done to win public confidence in the system: recent surveys suggested that only 20 to 26 percent of Romanians trust their justice system.

In 2009, six judges and prosecutors were found guilty of taking bribes ranging from 100 to 45,000 euros.

"Corruption of judges is not as widespread as people believe," Daniel Mitrauta, a young criminal court judge from Iasi, in the north, told AFP.

"But I have encountered a lot of formalism which is often delaying trials."

He hoped the programme would give him the tools -- and the courage -- to make things change.

Law student Olariu expected the training to help her deal with potentially tricky real-life situations.

"What can I do if I am a judge and the president of my court is putting pressure on me to hand out a certain verdict?"

Some of the more reformist-minded judges feel that the old guard still needs to be confronted.

In January, Florica Bejinariu, a judge accused of having collaborated with the former communist secret police Securitate, was elected as head of the Supreme Magistrate's Council (CSM).

Bejinariu was elected by other magistrates from the CSM, but reformist judges denounced the move as "the most severe blow" to justice in Romania since the communist era more than two decades ago.

Some of these same reformist magistrates will be among those teaching their young colleagues at the Adenauer Foundation's programme.

"We wanted to show that there are excellent people who work in the judiciary system in Romania. They can be role models," the foundation's Ricarda Roos said.

The hope is that this new generation of jurists, fluent in English and internationally oriented, will remain sufficiently motivated to stay in Romania rather than taking their skills abroad.

Romanian Orthodox Church defrocks divorced priests

Associated Press

The Romanian Orthodox has decided to strip clergymen who divorce of their priestly duties.

Church spokesman Constantin Stoica says the decision to defrock priests who divorce will apply to all. But he says that those whose marriages broke up because their wives committed adultery will find other employment within the church.

Stoica said Friday that the decision was triggered after the number of divorced priests reached 500 out of a total of 16,000.

Those already divorced or remarried will not be defrocked. But they will not be promoted to high positions and will not be able to teach at theological schools and universities.

More than 85 percent of Romania's 22 million population are Orthodox believers.

Romania defence body backs F16 purchase plan

BUCHAREST, March 23 (Reuters) - Romania's Supreme Defence Council on Tuesday approved the acquisition of 24 second-hand F16 fighters produced by Lockheed Martin Corp (LMT.N) to modernise its air force.

"Taking into account that Romania does not have the needed financial resources to buy new ... planes, the Council okayed a defence ministry proposal to acquire 24 F16 used planes," the council said in a statement.

It said the plan would be subject to parliament's approval.

Romania is a U.S. ally and some analysts had said the F16 was a likely choice.

The economic crisis complicated the NATO member's effort to seal a planned multi-billion euro fighter purchase, a deal aimed at replacing its elderly Soviet-era MiGs.

Five aircraft were in the running, and the cost of the deal has been estimated at over 4 billion euros.

Romania's choices also included the F-18 from Boeing Co (BA.N), the Rafale from France's Dassault (AVMD.PA), the Grippen from Sweden's SAAB (SAABb.ST) and the Eurofighter from EADS (EAD.PA). (Reporting by Radu Marinas; editing by Tim Pearce)

Thursday, March 18, 2010

Romanian mayor sentenced to prison for corruption

BUCHAREST, Romania (AP) — A Romanian mayor has been sentenced to 2 1/2 years in prison for buying a property for city hall at a vastly inflated price.

Cristian Anghel, the mayor of Baia Mare, was sentenced Wednesday for misspending public money in the 2006 transaction. He is a member of the opposition Liberal Party.

Agerpres news agency reported that the Baia Mare court ruled Anghel had bought a building for €500,000 ($550,000) — more than three times its market value with public money. He is to start the sentence immediately.

Romania has seen a crackdown on mayoral corruption. One mayor was jailed for taking bribes and another mayor was arrested in a bribery and false documents case.

Romanian subway workers call off strike

BUCHAREST, March 17 (Reuters) - Romanian subway workers called off an indefinite pay strike planned to start on Thursday after the centrist government approved the state company's 2010 budget including wage rises of up to 10 percent.

"Luckily for subway employees and the public, there's not going to be any strike tomorrow," trade union leader Ion Radoi told state news agency Agerpres. "We've got a pay rise above 3.7 percent...this won't exceed double digits."

Some 5,000 subway workers in Bucharest had planned to stop work, demanding a 20 percent pay rise in the first major union action this year, which could have caused traffic gridlock in the capital city of some 2.2 million people.

Other public workers plan a series of strikes in the coming weeks, cranking up pressure on a new government struggling to claw its way out of recession by slashing spending.

Romanians' mounting discontent with IMF-backed austerity measures may stand in the way of the government implementing reforms, analysts say.

Public workers to strike over Romania budget cuts

By Radu Marinas

BUCHAREST, March 17 (Reuters) - Romania's public workers plan a series of strikes starting this week, piling pressure on a new centrist government trying to claw its way out of recession with spending cuts. 

Hundreds of thousands of subway workers, teachers and civil servants plan to show mounting discontent at pay cuts and mass layoffs in the country's bloated administration. The strikes may hamper Bucharest's bid to rein in the budget deficit.

The three-month-old cabinet in Romania, the European Union's second poorest country, has put a vital 20 billion euro International Monetary Fund aid deal back on track by promising to cut spending, including up to 100,000 public sector job cuts.
But analysts warn a combination of social unrest and an unstable government could yet put the brake on reforms.

"The country is living dangerously ... rising protests have potential to complicate the government's job," said political analyst Cristian Patrasconiu. "Being afraid of escalating protests, they can be tempted to make concessions." 

Some 5,000 subway workers in Bucharest are due to stop work from Thursday, demanding a 20 percent pay rise in the first major action this year, which could cause indefinite traffic gridlock in the capital city of some 2.2 million people.

Meanwhile, school teachers in some poorer eastern regions have started boycotting classes at about 160 schools, protesting against a decision to reschedule overdue wage payments over a three-year period.

The move has angered powerful education unions, who are holding consultations this week to decide on whether to stage a strike. Union leader Aurel Cornea says a nationwide referendum among teachers would take place in April.

And there could be more to come, with analysts warning recently drafted plans to sack 10,000 railway staff this year could also provoke strike action.

"Social temperature is rising ... We face the danger of social explosion in Romania and thousands of impoverished workers taking to streets, like in Greece or the Baltics," said independent political analyst Bogdan Teodorescu.

"This can severely affect the country's stability, as much-needed investors look mostly at social stability indicators when pouring money into the economy."


Romania's huge state sector accounts for a third of the country's jobs, employing 1.3 million workers. Its payroll swallows 9 percent of gross domestic product and experts say the cost is twice as high as it should be.

The cabinet of Prime Minister Emil Boc has so far insisted it would not go back on fiscal reforms, including revamping the outdated pension system, which have earned IMF praise and helped Romania avoid plunging deeper into recession.

"The road of reforms should not be stopped," Boc said earlier this week after meeting trade unionists. "If we do so, we may end up in Greece's situation."

Analysts say signs of leniency have surfaced as the cabinet showed willingness to alter IMF-backed pension reform plans by considering a reduction in the retirement age for women with more than two children by up to two years, from the current 65.
The next battlefield will probably be the southeast European country's minimum wage, which unions have long demanded should be raised to 705 lei ($236) per month from the current 600 lei.

State employees, however, may well stick to their guns.

"It's good to demand your rights ... this government is not able to offer social protection," said Mariana Balan, a 43-year-old state legal adviser at a major subway station next to government headquarters. "I'm afraid I will be laid off and not be able to find a new job because of this crisis."

(Additional reporting by Ioana Patran; Editing by Charles Dick)

Wednesday, March 17, 2010

Bird flu outbreak in Romania, EU's first in a year

BUCHAREST (AFP) – The first outbreak of the deadly H5N1 bird flu in Europe for a year has been identified in a backyard poultry farm inRomania, the European Commission said Tuesday.

The outbreak, in Tulcea county, close to the Ukrainian border, was discovered on Monday and prompted immediate security measures, the EU's executive arm said in a statement.

These include the killing of all poultry in the infected farm and the establishment of a three kilometre (two mile) protection zone and a wider "surveillance zone" around the farm with strict controls on movements in or out.

"The presence of the virus was confirmed on two hens that were found dead on a small private farm," Raul Balogh, spokesman of the Romanian Sanitary and Veterinary Authority, told AFP.

"No other case has been discovered since," he added.

Balogh said tests are regularly conducted on poultry in the Danube delta, given the proximity of migratory birds, considered to be carriers of the virus.

Romania was hit by massive bird flu outbreaks in 2005 and 2006, when more than a million poultry were slaughtered.

Avian influenza or "bird flu" is a highly contagious viral disease which primarily affects birds, but on rare occasions can also be contracted by humans and other mammals.

The strain of avian influenza which is currently causing concern is the highly pathogenic H5N1 which has affected many countries worldwide, including parts of Asia, Africa and Europe.

H5N1 can spread rapidly through poultry flocks and wild birds are considered to be contributing to its spread around the globe. It does not jump easily from birds to humans.

However around 290 people have died of the human form of avian flu since 2003, according to the World Health Organisation.

The Romanian case is the first detection of the highly avian influenza H5N1 in the European Union in a year.

The last case, confirmed in March 2009, was discovered in a wild duck shot during a hunt near Starnberg, in Bavaria, southern Germany.

On Sunday at least 117,000 chickens were destroyed in northern Bangladesh after an avian flu outbreak on one of the country's largest poultry farms.

European Goldfields gets key Romania permit

LONDON, March 16 (Reuters) - European Goldfields Ltd won a key environmental permit for its Certej gold-silver project in Romania, which may give confidence to investors the group can become a significant gold producer.

The London shares jumped 5 percent to 501.25 pence at the open on Tuesday, outperforming a 0.6 percent rise in the UK mining index. The shares have gained 12 percent this year after doubling last year.

The permitting process for both Certej and its bigger projects in Greece has been dragging on for years, creating disappointment among investors and hitting the firm's valuation, analyst Dominic O'Kane at Liberum Capital said in a note.
"We feel this trajectory changed when the old CEO departed to be replaced by a more credible executive chairman, Martyn Konig," he said.

"With his first promise on Certej delivered today, we are hopeful that the market will begin to realise that current guidance on remaining permitting is both realistic and reassuringly close at hand."

The AIM-listed company produces a modest amount of silver, zinc and lead at its only producing mine, Stratoni, in Greece and is in the process of getting permits for its Skouries and Olympias projects. The firm also produces some gold concentrates from stockpiles at Olympias.

If the remaining permitting process goes smoothly, European Goldfields could ramp up to production of 436,000 ounces of gold by 2013, O'Kane said.

FT: Romania pushes ahead with tough reforms

By Chris Bryant in Bucharest
Published: March 15 2010

Romania will push ahead with tough reforms in order to meet its obligations to international creditors but does not want to raise taxes on business, says its prime minister.
Emil Boc told the Financial Times that public sector job cuts, wage restraint and pension reforms were essential to help narrow the budget deficit and modernise the former communist state as it battles to restore economic growth.

“I know that not all these measures are very popular. We are not here to take popular measures, we are here to take necessary measures that are good for Romania,” he said.

Twenty years after the fall of communism, Romania’s 22m inhabitants were last year exposed to the full fury of a capitalist downturn. A period of impressive economic growth and foreign investment came to a sudden halt when capital inflows dried up and one of the European Union’s poorest member states was plunged into deep recession.

Romania was forced to turn to the International Monetary Fund for a €20bn bail-out, which shone a glaring spotlight on years of profligate public spending and widespread corruption.

Investors took fright again in October when Mr Boc’s previous government collapsed. But the re-election of Traian Basescu, the president, in December, the formation of a new government and passage of the 2010 budget persuaded the IMF and EU last month to unblock €3.3bn ($4.5bn, £3bn) in loans. Citing successful budgetary reforms, Standard & Poor’s this week raised Romania’s credit ratings outlook from “negative” to “stable”.

Still, some concerns remain. Mr Boc relies on independents for a thin parliamentary majority, which could hamper his ability to implement further austerity policies if leftwing parliamentarians and trade unionists oppose them.

“We do not have a strong majority in parliament right now . . . but we have a majority,” he said. “What worse can happen to us than happened in 2009?”

The government has pledged to cut the budget deficit from 7.2 per cent to 5.9 per cent this year, by slashing up to 100,000 public sector jobs, freezing wages and scrapping thousands of “privileged pensions”. A fiscal responsibility law is going through parliament.“Respecting the IMF agreement . . . is one of Romania’s top priorities,” Mr Boc said. “If Romania were to stop these reforms, that would be a disaster  . . . We need a normal state, with normal spending, and [we’ll make] reductions where necessary.”

However, he was against raising taxes to boost government revenues, describing the 16 per cent flat tax as an incentive to foreign investment that would help create jobs. Romanian taxes are among the lowest in the EU and some economists question whether efforts to combat tax evasion will suffice as rising unemployment puts further pressure on the budget.

In a separate interview, Mugur Isarescu, Romanian central bank governor, said he was concerned not to let the leu appreciate too far, which would discourage an export-led recovery. “We do not need a spectacular recovery,” he warned, referring to projections that the economy would grow by 1.3 per cent this year.

The Russian oligarchs in Romania




As business at home is coming under uncomfortably close Kremlin surveillance, many Russian oligarchs have moved away and expanded their activities into eastern European countries - one of them being EU member Romania.

Experts claim that the Romanian metal market is dominated by a quartet of Russian and Ukrainian companies. First comes the Ukrainian, Sergey Taruta, a man close to the new, pro-Russian, Ukrainian president Viktor Yanukovich. Mr Taruta bought the steel plant Fortpres CUG in the Transylvanian city of Cluj.

Second is Oleg Deripaska, one of the wealthiest Russians known to be in Russian Prime Minister Vladimir Putin's grace. The other two companies are administered by Russians through Western registered companies: the Swiss-based Conares Trading, acting for Igor Zyuzin, and the German-registered Sinara Handel, run by a group of businessmen.

The ex-Soviet oligarchs have thus come to control an important slice of the Romanian metal industry. And, in addition to its part in steel production, Mr Zyuzin's company controls around 80 percent of the Romanian output of reinforced concrete.

Now, hard hit by the crisis, the metal sector is stagnating. Fortpres CUG in Cluj is one example. Under Communism, the state-owned complex employed 10,000 people. In the 1990s, it was divided into five units, one of which was bought by Mr Taruta. In the meantime, the production site have been shut down. Only five employees remain to guard the premises.

Still, Viktor Yanukovich's victory in the Ukrainian elections could mark a change in fortune for Mr Taruta's Romanian metal business. The Ukrainian press has speculated that the Cluj factory could manufacture rail tracks for the Ukrainian railways.

The most badly affected of the Russian oligarchs seems to have been Oleg Deripaska, who in 2008, with a fortune of $28 billion and companies worth $45 billion at the time, was estimated to be among the 10 richest men worldwide.

In Romania, he bought the aluminium plant in Oradea with the intention of building spare parts for his airplane factory in Russia. Now the Oradea plant is closed and for sale. It is unknown what kind of a dent this has put in Mr Deripaska's fortune.

Another Russian magnate, Mikhail Prokhorov, ranked by Forbes magazine as Russia's richest man today, has bought the "Aurul" ("Gold") gold reprocessing plant in the northern city of Baia Mare. He wants to begin the extraction of gold by using cyanide.

The method is controversial, especially in Romania, where the same "Aurul" plant was in 2000 the source of an environmental disaster, after a dam at the goldmine released huge quantities of cyanide and heavy metal waste into the river Tisza in neighbouring Hungary and down the Danube.

The plant has been closed since. Mr Prokhorov has already announced an investment of €100 million and the authorities are preparing to give him the go-ahead, while a similar project, in the region of Rosia Montana and backed by US and Canadian investors, has been blocked for years.

Alexandru Benea, an economics expert, says that a key reason for Russian oligarchs' interest in the Romanian metal industry is the EU's comparatively low import duties on raw metal ore, intended to secure supply to the 27 member states. On the other hand, the EU imposes high tariffs on finished metal products, in an effort to protect its own producers.

"The Russian oligarchs have for a time very well exploited this situation," said Mr Benea. "They bought factories and industrial units cheaply in Romania. Those who have mines in Russia or Ukraine bring the ore to Romania. The semi-finished products are then sold on the EU internal market at comparatively low prices, given that the salary of a Romanian worker is much lower than that of a worker from Luxembourg or UK. It is legal and it is also a very clever way of profiting from the EU legislation, while staying outside it."

Friday, March 12, 2010

Romania Sells Biggest Bond With Yield Above Croatia’s

By Piotr Skolimowski and Sonja Cheung

March 11 (Bloomberg) -- Romania sold 1 billion euros ($1.37 billion) of five-year debt, setting yields above similarly rated Croatian notes to lure investors to its biggest offering of bonds to international investors.

The bond maturing in March 2015 and carrying a 5 percent coupon was priced to yield 268 basis points above the benchmark mid-swap rate, according to Bloomberg data. That’s higher than the spread of 227 basis points today on bonds due in 2015 sold by Croatia, which has the same Baa3 rating, the lowest investment grade, from Moody’s Investors Service, and ranks BBB- at Fitch Ratings, one level above Romania’s BB+.

Romania revived the bond sale it canceled in November after the government’s collapse, taking advantage of improved investor confidence since Prime Minister Emil Boc put together a Cabinet on Dec. 23 and lawmakers on Jan. 14 approved a plan to narrow the 2010 budget deficit. The International Monetary Fund, which suspended a 20 billion-euro bailout package after the previous government failed in October, resumed payments last month, releasing $3.3 billion.

“The issue looks like a very good value,” said Thomas Kirchmair, who helps oversse fixed-income assets at Frankfurt- based Deka Investment GmbH, which manages the equivalent of $18 billion worldwide. “Romania’s credit quality is improving and with the stable government in place and the IMF package they can resist the stress in the market.”

Bond Risk

Turkey said today it plans to sell 11-year dollar bonds in its first test of investor demand since announcing the end of talks yesterday with the IMF, saying the country can handle its finances without the institution’s help. Israel is selling its first bonds in euros since 2005 as the country seeks to diversify its sources of funding, according to a banker involved in the transaction.

Standard & Poor’s this week raised its outlook on Romania’s BB+ rating to “stable” from “negative,” citing a “sustained budgetary reform program,” and Fitch did the same on Feb. 3. Five-year credit default swaps fell to 205 basis points yesterday, making the cost of protecting against a default by Romania the cheapest since Sept. 30, according to CMA DataVision prices available on Bloomberg.

The country planned to sell about 1 billion euros of bonds and may offer more debt before yearend, Finance Minister Sebastian Vladescu said on March 2. Today’s sale is the biggest ever of euro-denominated bonds for the country, according to Bloomberg data. The sale was more than 4.5 times oversubscribed, according to a statement from Deutsche Bank AG, EFG Eurobank and HSBC Holdings Plc, who managed the offer.

Dollar Sale

“Romania can still do the dollar sale later this year,” said Jeremy Brewin, who helps manage $1 billion of emerging- market debt at Aviva Investors Ltd. in London. “It would be a smart move. They could easily sell $1 billion.”

Bondholders returning to Romania have driven down the extra yield on government notes due 2018 to 276 basis points above similar-maturity German bunds, from more than 340 basis points in December and 961 basis points at the beginning of 2009, according to data compiled by Bloomberg.

The BET Index of Romanian stocks gained 0.1 percent to close at 5,548.99, bringing its gain this year to 18 percent. The leu lost 0.l percent to 4.0969 per euro as of 4:50 p.m. in Bucharest, for an appreciation of 3.3 percent in 2010.

The government’s budget plan attempts to cut the deficit to 5.9 percent of gross domestic product from 7.2 percent last year.

EU pays 1 bln euro loan tranche to Romania

BRUSSELS, March 11 (Reuters) - The European Commission said on Thursday it had paid Romania 1.0 billion euros ($1.36 billion), the second tranche of an international aid package.

"I am happy to report that Romania has complied with the policy conditions for the second EU disbursement," European Union Monetary Affairs Commissioner Olli Rehn said in a statement.

Thursday, March 11, 2010

Romanian Industrial Sales Rose for a Second Month in January

By Irina Savu

March 11 (Bloomberg) -- Romanian industrial sales rose in January for a second consecutive month because of an increase in west European demand for manufactured goods such as cars, chemical products and textiles.

Industrial sales advanced 6.5 percent from a year earlier after rising 2.8 percent in December, the Bucharest-based National Statistics Institute said in an e-mail today. On the month, sales fell 15.6 percent, after dropping 5.4 percent.

The economy contracted an annual 7.1 percent last year after the global recession cut demand for industrial exports. A recovery in western Europe will help the European Union’s second-poorest member return to growth as early as this quarter, the International Monetary Fund estimates.

The IMF, which is leading a 20 billion-euro ($27 billion) bailout package for Romania, predicts the economy will grow 1.3 percent in the full year.

Exports, which account for a third of economic output, increased 7 percent on the year in December for a second consecutive month of growth, the institute said last month. Imports dropped 18.4 percent.

Wednesday, March 10, 2010

Romania declassifies all 1989 revolution documents


BUCHAREST, Romania — The Romanian government will declassify all remaining secret documents relating to the country's 1989 anti-communist revolution.

Prime Minister Emil Boc said the move would allow the truth to come out without endangering "state secrets" 21 years after the bloody uprising.

The defense ministry said it would declassify over 8,000 pages of information pertaining to the revolution where late dictator Nicolae Ceausescu was toppled and executed. More than 1,100 people died in the bloody revolt. Just two people have been convicted.

The European Court of Human Rights ruled last year that all documents relating to the revolution should be handed over to an association of former revolutionaries who are seeking to find out who shot unarmed demonstrators in 1989.

Romanian street sign warns drivers of 'drunk pedestrians'

Street signs warning Romanian drivers to be careful of drunken pedestrians lying on roads were erected by road safety chiefs worried about the "despairing" levels of accidents.

By Andrew Hough

Officials in Pecica, a village town about 13 miles from the Hungarian border in the country’s west, ordered the bright red signs, complete with the phrase “Attention - Drunks”.

The 10 road signs, which also show a person crawling on their knees while clutching a glass in one hand, were erected in popular nightspot areas close to the city's bars and restaurants.

Peter Antal, the Pecica Mayor, said the idea came after he visited an unnamed town in Germany, which had installed similar signs.

He said officials took action after a “despairing” number of accidents in the town, which has a population of about 13,000, caused by drunken revellers, with some even resulting in fatalities.

He said it was not motorists’ fault but blamed the town’s pedestrians, many of whom were not able to look out for themselves as they walked around the town, which is more than 300 miles west of the Romanian capital Bucharest.

"We are a border town and have lots of cars thundering through here all the time," he told local media.

"But we also have a very vibrant nightlife and the two don't mix.

“We have to target the drivers because by the time they get to this state, the pedestrians are beyond caring.”

He added: “In recent years… some traffic accidents (have) resulted, in some cases, even with deceased (people).

“We have thought about different options (on how) we can stop this and we decided that first step was to mount these signs.

“We must warn drivers that sometimes people who have little control over their actions can suddenly appear in the road.”

He denied the signs would send out the wrong message to the town’s residents, claiming they were a “positive contribution”.

Residents said they found the signs amusing.

Prosecutors seek Romanian senator's arrest

BUCHAREST, Romania -- Prosecutors are requesting an arrest warrant be issued for a Romanian senator on suspicion of taking bribes from businessmen to influence court cases.

The anti-corruption prosecutors' office asked Justice Minister Catalin Predoiu on Tuesday to request that parliament allow for the arrest of lawmaker Catalin Voicu of the opposition Social Democratic Party.

Prosecutors say Voicu received bribes worth about 260,000 euros ($355,000) from July to September from an unidentified businessman allegedly to pay judges for a favorable outcome in a court case. Prosecutors also say Voicu received a bribe in August from another businessman allegedly to bribe justice officials. Voicu denies the allegations.

Romanian NGOs alert EU to 'violations' of protected areas


BUCHAREST — Three Romanian environmental organisations filed complaints to the European Commission targetting several "violations" of protected areas in Romania, they said Tuesday.

"We are here to send a very strong message to those assaulting the environment in an irrecoverable way, and to authorities whom, by their passivity, are accomplices", said Gabriel Paun, chairman of Agent Green NGO, in a press conference.

His association, a WWF partner, together with the NGOs Milvus and the Society of Carpatians in Ardeal, alerted Brussels to nine cases, concerning environmental alterations done without authorisation or proper impact study, according to them.

They criticised the construction of a national road to cross two national parks, Retezat and Domogled-Valea Cernei, in a south-western area home to one of the last "intact forest landscape" in Europe, according to Paun.

Another complaint targets the location of a windfarm in a south-eastern area through which 10,000 predatory birds and 20,000 storks pass each autumn, according to Tamas Papp, who heads Milvus.

"Investors, with a few exceptions, don't consider environmental protection laws as an obligation which they have to follow, but they see them as obstacles they need to avoid, by using more or less legal solutions", Paun said.

Contacted by AFP, the Romanian National agency for environment protection declined to make immediate comment on the issue, but said that it was preparing a press conference to address the subject.

Romania’s Rating Outlook Raised to Stable at Standard & Poor’s

By Tasneem Brogger

March 10 (Bloomberg) -- Romania’s credit rating outlook was raised to stable at Standard & Poor’s after the government showed its commitment to fulfilling the budgetary terms of an international bailout.

The outlook on Romania’s BB+ credit rating was raised from negative, the ratings company said in a statement late yesterday.

“The outlook revision reflects our view of Romania’s sustained budgetary reform program and our belief that the government is likely to continue to comply with the International Monetary Fund and European Union standby agreement, thereby easing external financial pressures,” Standard & Poor’s credit analyst Marko Mrsnik said in the statement.

The economy of the European Union’s second poorest member is relying on a 20 billion euro ($27 billion) IMF-led bailout to finance its budget and current account deficits after the global credit crisis undermined its exports and investments. Parliament was turned its attention to passing a budget after President Traian Basescu appointed a government late last year, unfreezing the IMF loan and restoring international investor confidence.

Economic output contracted about 7.1 percent last year and may “recover slightly in 2010, thanks mainly to the recovery we anticipate in external demand,” the rating service said. Domestic demand “is likely to remain subdued,” S&P said.

The government wants to reduce the budget deficit to 6.4 percent of gross domestic product this year from 7.8 percent in 2009, a target it can reach if planned wage and pension reforms are pushed through, S&P said.

Tuesday, March 9, 2010

Romania Inflation Rate Fell as Leu Strengthened, Survey Shows

By Adam Brown

March 9 (Bloomberg) -- Romania’s inflation rate probably fell in February as a stronger currency pushed down prices of imports and other items sold in euros, according to a survey.

The annual inflation rate fell to 4.7 percent in February from 5.2 percent in January, according to the median estimate in a Bloomberg survey of nine analysts. The monthly rate probably fell to 0.3 percent from 1.7 percent, it showed. The statistics office publishes inflation data tomorrow at 10 a.m. in Bucharest.

“The stronger leu probably helped slow inflation last month,” Vlad Muscalu, a Bucharest-based analyst at ING Bank Romania, said in a telephone interview today. “We will probably see lower inflation rates for the next few months.”

Romania’s leu has strengthened 3.4 percent against the euro this year, reducing prices of imports and items such as telephone bills, rent and gasoline.

Inflation accelerated from October of last year through January as tobacco and alcohol producers raised prices in anticipation of a new tax that took effect on Jan. 1. Tobacco accounts for 4.6 percent of the basket of goods in the consumer price index.

The Banca Nationala a Romaniei raised its year-end annual inflation forecast last month to 3.6 percent from 2.6 percent and cut its main interest rate to 7 percent from 7.5 percent to spur economic growth. The bank next meets to decide on its interest rate on March 29.

--With assistance from Zoya Shilova in Moscow. Editor: Tasneem Brogger.

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

To contact the editor responsible for this story: Chris Kirkham at ckirkham@bloomberg.net