Friday, July 30, 2010

NYT: Sarkozy Toughens on Illegal Roma


PARIS — President Nicolas Sarkozy has ordered the expulsion of illegal Roma and itinerant immigrants and the dismantlement of their camps in a move that has been labeled by human rights groups as xenophobic and criticized by his political opponents.

After a meeting late Wednesday, Mr. Sarkozy ordered the expulsion of Roma, with generational roots in Romania and Bulgaria, who had committed public-order offenses and said that illegal camps would be taken down. The Élysée Palace said legislation would be introduced before the end of the year to facilitate the process “for reasons of public order.”

Interior Minister Brice Hortefeux said Thursday on RTL radio that over the next three months he would use decrees to dismantle about 300 illegal camps, of which 200 belong to Roma. These camps are the source of “illicit trafficking, children exploited for begging, prostitution or delinquency,” he said.

Those in France illegally or who have committed public-order offenses will be sent “almost immediately” back to their countries of origin without the possibility of returning, Mr. Hortefeux said, promising the use of digital fingerprinting technology to ensure this end.

He said the government was not stigmatizing the Roma, also referred to as Gypsies, but rather responding to concerns about public safety.

The move follows several recent incidents that have alarmed the population about public security.

This month, there was rioting in a suburb of Grenoble, in southeastern France, after the death of a local man as he fled the police, allegedly after holding up a casino. There was also violence in the small town of Saint-Aignan, in the Loire Valley, after Roma attacked a police station following an incident in which a gendarme shot and killed a traveler who had driven through a checkpoint.

As interior minister under President Jacques Chirac, Mr. Sarkozy had a reputation for talking and acting tough against delinquency. In 2005, as he sought to counter an explosion of youth violence in the suburbs, Mr. Sarkozy fueled anger by referring to the culture of “racaille,” a derogatory term variously translated into English as “scum,” “thugs,” “rabble,” “scoundrels,” “lowlife” and “riffraff.”

But Mr. Sarkozy emerged from that episode with polls showing he took the right approach in putting down the unrest. Now, confronted by stubbornly high unemployment and pushing tricky financial and social reforms, Mr. Sarkozy faces declining popularity in opinion polls and an election in 2012 against a strengthening Socialist Party.

La Ligue des Droits de l’Homme, a rights group, said the steps would “reinforce negative repressive measures.”

The government is “mixing up the situation of the European Roma with the travelers who have French nationality” and, “as a result of a few cases, developing the idea that there is an ethnic solution to the problem of delinquency.”

Amnesty International estimates that there are 400,000 itinerants or travelers with French nationality, and 20,000 Roma, in the country. They are mainly more recent immigrants with roots in Central and Eastern Europe.

The crackdown on travelers is not in itself new. Since last year, a number of camps have been dismantled. In October 2009, 200 to 300 Roma were expelled by riot police officers from their camp north of Paris on the orders of a judge. Mr. Hortefeux, the interior minister, said 9,875 Romanian and Bulgarian Roma were expelled from France last year.

Communes with more than 5,000 inhabitants are obliged by law to set aside areas for travelers. According to Amnesty International, fewer than half of them actually do so. As a result, many travelers set up illegal camps, usually on scrub or waste land on the outskirts of towns. Such camps are a common sight in small towns in the Paris region and beyond.

According to advocacy groups, many legitimate travelers already suffered discrimination before this latest crackdown, for example regularly having to present themselves at police stations, facing steps to deny them their voting rights and having difficultly educating their children.

Compounding the sense of discrimination, representatives of French Roma said that they were not invited to the presidential meeting Wednesday.

Throughout Europe, Roma were persecuted by the Nazis during World War II, with many rounded up and sent to concentration camps. The U.S. Holocaust Memorial Museum estimates that 200,000 were killed in this way; some estimates are many times higher.

Romania has an estimated one million Roma, the most of any other European country.

Bulgaria and Romania joined the European Union in 2007, enshrining free movement of people. But citizens from Bulgaria and Romania are subject to transitional provisions in France, requiring them to obtain a permit in order to work in certain professions.

Romania’s prime minister, Emil Boc, said Thursday that all European countries had a “common obligation” toward the millions of Roma on the Continent, The Associated Press reported.

Mr. Sarkozy also proposed that France bring in Romanian and Bulgarian police officers to work in the Paris region and send the French police to Romania and Bulgaria to help fight trafficking and other crime by Roma.

Pouria Amirshari, the Socialists’ national secretary for human rights, told the Nouvel Observateur that the president was “following a xenophobic logic.” He described Mr, Sarkozy’s intervention as “populist and demagogic.”

Thursday, July 29, 2010

Sarkozy orders illegal Roma immigrants expelled


SAINT OUEN, France — French President Nicolas Sarkozy on Wednesday ordered authorities to expel Gypsy illegal immigrants and dismantle their camps, amid accusations that his government is acting racist in its treatment of the group known as Roma.

Sarkozy called a government meeting Wednesday after Gypsies clashed with police this month following the shooting death of a youth fleeing officers in the Loire Valley.

Sarkozy said those responsible for the clashes would be "severely punished" and ordered the government to expel all illegal Roma immigrants, almost all of whom have come from eastern Europe.

He pushed for a change in France's immigration law to make such expulsion easier "for reasons of public order." He said illegal Gypsy camps "will be systematically evacuated," calling them sources of trafficking, exploitation of children and prostitution.

The language has chilling undertones in a country where authorities rounded up Gypsies and sent them to concentration camps during the Nazi occupation in World War II. Former President Jacques Chirac, the first French leader to acknowledge the state's role in the Holocaust, condemned "the Nazi madness that wanted to eliminate the Gypsies."

Around Europe, some 250,000 to 1.5 million Roma were killed during World War II. Accurate figures are difficult to find, because so many Roma were rounded up away from public view, executed and dumped into mass graves.

French Roma representatives were not invited to Wednesday's presidential meeting, and said they are the only ethnic group that French authorities can openly target.

Interior Minister Brice Hortefeux insisted that Wednesday's measures "are not meant to stigmatize any community, regardless of who they are, but at to punish illegal behavior."

Romania and Bulgaria are members of the European Union, and their citizens can enter France without a visa, but they must get work permits to work here or residency permits to settle long term.

Community leaders contend the very principle of the meeting — which singled out an ethnic group in a country that is officially blind to ethnic origins — is racist and warn of grave consequences if their side isn't heard. France's government does not count how many of its citizens are of a certain ethnicity; everyone is simply considered French.

"Today ... I am afraid we're preparing to open a blighted page in the history of France, which could sadly lead to acts of reprisal in the days ahead," said lawyer Henri Braun said at a Wednesday news conference by French Roma leaders. "There is a huge problem of racism in France towards this population, there is enormous discrimination."

France's relationship with what it calls Gypsies is complex and complicated by divisions among the disparate populations.

One, formally given the administrative label of "traveling folk," includes several hundred thousand French citizens who have lived in France for centuries, and were traditionally nomadic but have become increasingly sedentary in recent years.

The other main Gypsy population is made up of recent immigrants who come mostly from Eastern European countries like Romania and Bulgaria, usually illegally, and are often seen begging on the streets of French cities.

Those in the more established communities say they are being unfairly lumped together with illegal new immigrants. Sarkozy's orders Wednesday targeted Roma, though the violence in Saint-Aignan earlier this month was in a community of traveling folk established in the region for years.

Alice Januel, whose organization represents Catholics among French Gypsies, warned that "If Mr. Sarkozy thinks that by clamping down he is going to calm the youth, I don't think that he will succeed. We have a youth that is rebellious."

Sarkozy also proposed that France bring in about 20 Romanian and Bulgarian police to work in the Paris region and send French police to Romania and Bulgaria, to help fight trafficking and other crime by Roma.

Associated Press writer Cecile Brisson in Paris contributed to this report.

Wednesday, July 28, 2010

Analysis: Disaster shines light on Romania ties

The Jerusalem Post

Bucharest supports Israel in EU, int'l forums

The tragic crash Monday of the Yasour helicopter that killed six IAF servicemen and a Romanian soldier revealed to many Israelis something few were aware of: the closeness of Israeli-Romanian ties.

One senior Foreign Ministry official said Tuesday that Romania, along with the Czech Republic, Slovakia, Poland, Hungary and Bulgaria, are the strongest friends Israel has in the European Union and on the Continent.

This friendship, the official said, is manifest not only in the country’s willingness to let the IAF train in Romanian skies, but also by diplomatic support Bucharest gives Israel in international forums and inside the EU institutions.

“Whenever there is an issue about us in the EU when there is not a consensus, Romania always sides with us,” the official said.

Romania’s president, prime minister and foreign minister all visited Israel last year, an expression of the close relations, and Foreign Minister Avigdor Lieberman visited Bucharest in April.

Before that visit, Lieberman characterized the relationship between Israel and Romania as “special and strong,” and said Israel “remembered that Romania was the only one of the former Eastern bloc countries that did not cut off diplomatic ties after they were established in 1948.”

There are also strong economic ties, with hundreds of Israeli investors active in Romania.

Regarding the military ties, the IAF first began training over Romanian skies in 2004, and signed an agreement in 2006 allowing Israel to deploy fighter jets in Romania. The IAF sent jets to Romania in 2007.

Following Operation Cast Lead and the sharp deterioration in ties with Ankara, Israel began looking for other countries where its pilots could train, since it became obvious that the days of being able to fly in Turkish skies were numbered.

Indeed, after the Gaza flotilla incident, Turkey banned all Israeli military aircraft from its airspace.

It was widely believed, but never officially confirmed, that Israel was training over Romania, as well as in other countries in the region, such as Bulgaria.

“Romania is one of the countries that allows us to train,” one senior government official said Tuesday.

“This has been going on for many years, and there are many other countries that allow us to do so as well.”

Bulgarian Foreign Minister Nikolay Mladenov avoided a direct answer last month when asked by The Jerusalem Post, during a visit, whether Israel had approached Sofia about conducting IAF exercises over Bulgaria to make up for Turkey’s refusal not to allow Israeli military planes in its airspace.

Mladenov said Bulgaria and Israel have “very good security and defense cooperation, and that an Israeli-Bulgarian defense cooperation memorandum was signed earlier this year.”

As to whether that memorandum included an agreement for IAF training in Bulgaria, he said, “I would imagine that it would include a lot of things.”

AP Interview: Romania: Gypsies need more EU help


BUCHAREST, Romania — The millions of Gypsies who live in Europe face widespread discrimination and need more EU funds and a better strategy to integrate them into society, Romania's foreign minister said Tuesday.

In an interview with the Associated Press, Teodor Baconschi said there are 9 million Gypsies, or Roma, living in the 27-member European Union. Romania has the largest Roma population, believed to be about one million, although many do not declare their ethnicity due to widespread prejudice.

Baconschi said more EU funds were needed for education, health and housing for Roma, who are often the poorest members of society. He said he discussed the Roma issue in a meeting Monday in Brussels.

"We need a strategy of social integration," he said in the interview at the Foreign Ministry headquarters in Bucharest. "If we have 9 million who are excluded, we have to include them."

In 2007, there were tensions between Romania and Italy following the brutal murder of a navy officer's wife by a Romanian Gypsy in Italy. In 2009, more than 100 Romanian Gypsies were attacked with bricks and bottles in Ireland and driven from their homes.

Baconschi said Romania has pressed for a EU strategy to integrate Gypsies since 2008, a year after it joined the EU.

"This is a problem ... of the whole European community. We need to undertake measures very quickly at a community level ... to include the Roma population," he said.

Tuesday, July 27, 2010

IMF reviews Romanian austerity measures

The Financial Times
By Chris Bryant in Vienna

Published: July 26 2010

An International Monetary Fund mission arrived in Romania on Monday to review the recession-hit country’s progress in implementing painful austerity measures.

Little more than a week after the suspension of budgetary talks with neighbouring Hungary led to a fresh bout of investor anxiety, the IMF’s negotiations in Bucharest are set to take place amid heightened market scrutiny of government debt levels.

In order to secure the latest tranche of its €20bn ($26bn) IMF/EU loan facility, Romania in May announced some of the continent’s toughest budget cuts, including a 25 per cent reduction in public sector pay.

The government was also later forced to raise value added tax by 5 percentage points (to 24 per cent) after the country’s constitutional courtblocked a blanket cut in pensions.

Tens of thousands of public sector job losses are also due to follow in the coming months as the government battles to keep this year’s budget deficit within a revised 6.8 per cent target.

In contrast to Hungary’s government which is resisting calls for fresh austerity, Bucharest is sticking to its fiscal obligations in spite of fierce resistance from opposition politicians and trade unions.

However, analysts warn that the public sector cuts and tax increases will hit domestic demand in the short term, harming the country’s economic growth prospects.

Neil Shearing at Capital Economics lowered his 2010 growth forecast on Monday from -1 per cent to -2.5 per cent, adding that the economy would also “do well to stagnate in 2011”.

Romania is reliant on IMF financing to help plug a shortfall in public spending but appears unwilling to pay what it considers high rates to borrow money on debt markets.

The finance ministry on Monday again reduced the size of a six-month treasury bill tender rather than accept yields above 7 per cent.

Romania vs Hungary: who deals best with the IMF?

The Financial Times
July 26, 2010 by Chris Bryant

The arrival of an International Monetary Fund mission in Romania on Monday, barely a week after its officials left neighbouring Hungary in a huff, is not without a certain irony.

Hungary, you’ll recall, was long the Washington-based lender‘s darling, owing to an ardour for austerity that began way back in 2006. But preferring the role of pugilist to that of poodle, Viktor Orban, Hungary’s new prime minister, told the IMF last week that it could keep its policy prescriptions. Or to put it another way: having got out, the IMF should stay out.

Step forward Romania, which after dragging its feet at the start of the crisis, now seems hell-bent on stealing the mantle of fiscal rectitude that Hungary has cast off.

With a budget deficit threatening to top 9 per cent this year, ministers hastily agreed a savage packet of austerity measures in May, including a 25 per cent public sector wage cut.

Later they added a 5 percentage point hike in VAT to the cocktail mix, when some of the original measures failed to pass muster with the constitutional court. Tens of thousands of public sector job cuts are set to follow.

Neil Shearing at Capital Economics notes this morning that the fiscal cutbacks - worth a combined 2.3 per cent of GDP - may still not be enough to meet the revised 6.8 per cent target agreed with the IMF and EU.

Moreover, Shearing writes that the economy is likely to contract by 2.5 per cent this year and “will do well to stagnate in 2011 too.”

The only silver lining, he notes, is that “at least the government has shown enough commitment to austerity to keep its IMF deal alive - in stark contrast to recent developments in neighbouring Hungary.”

Jeffrey Franks, IMF mission chief in Romania, confirmed as much on Monday telling reporters that Romania was in no danger of facing a suspension of its bailout loan (unlike Hungary), according to Bloomberg.

With an economy set to grow by 0.6 per cent this year and around 2.5 per cent in 2011, Hungary may argue it is following the more sensible course.

But as Capital Economics noted last week, Hungary will at some point be forced to re-engage the IMF, except by then the conditionality will be far less favourable.

Financial markets will ultimately decide whether poodle or pugilist is the more effective strategy.

Monday, July 26, 2010

Romania plan to relax 2010 deficit target

July 23 (Reuters) - The International Monetary Fund on Friday said it supported Romania's proposal to relax the 2010 deficit target.

In its annual review of Romania's economy, the IMF applauded Romania's efforts this year to put its fiscal house in order under an IMF-supported bailout package, forecasting a pickup in growth to 3.5 percent in 2011.

An IMF mission is to visit Romania between July 26 and Aug. 4 to assess the country's performance under the 20 billion euro bailout. Finance Minister Sebastian Vladescu said on Friday the authorities will stick to a previously agreed budget deficit target for 2010 in the talks.

"(IMF) directors supported the proposed relaxation of the 2010 deficit target to accommodate the cyclical deterioration in the fiscal position since the last review," the IMF said in a statement.

Friday, July 23, 2010

Banks plan to increase exposure to Romania - IMF

July 22 (Reuters) - Several European banks plan to increase their exposure to Romania in coming months as economic activity in the country picks up, the International Monetary Fund and European Commission said on Thursday.

Officials from both institutions on Thursday met with nine of the largest European banks and credit agencies that have a presence in recession-hit Romania, the European Union's second-poorest member state.

The group has met regularly since Romania's economic crisis in 2009, which led to a 20 billion euro financial bailout from the IMF, EU and World Bank.

The IMF and EC did not elaborate on how the banks plan to increase their exposure.

An IMF mission is set to review Romania's performance under the terms of the bailout.

Among the banks that met with the IMF and EU was Erste Group Bank (ERST.VI), Raiffeisen (RIBH.VI), Eurobank EFG, National Bank of Greece(NBGr.AT), UniCredit (CRDI.MI), Societe Generale (SOGN.PA), Alpha Bank (ACBr.AT) , Volksbank International, and Piraeus Bank (BOPr.AT).

"With the global economy stabilizing, participants agreed that the improvement in Romania's external position since the beginning of the program allows for a degree of flexibility in the exposure commitments," the IMF and EC said in a joint statement.

"At the same time, several banks indicated their intention to increase their exposure to Romania in the coming months as economic activity begins to recover," it said.

Romania, Bulgaria spar over gas pipelines

BUCHAREST, Romania, July 22 (UPI) -- There is no competition with Bulgaria on hosting a leg of the South Stream natural gas pipeline from Russia, the Romanian government announced Thursday.

South Stream would carry around 2.2 trillion cubic feet of gas per year through southern European countries by 2015.

The Bulgarian government reassessed the profit potential for the South Stream project and agreed to host a section of the pipeline in early July. Several possible routes of the onshore section of South Stream are under consideration.

Romanian Economics Minister Adriean Videanu said his country wasn't competing with Bulgaria for the project.

"I would like to say that Romania is not in competition with Bulgaria," he was quoted by the Sofia News Agency as saying. "To the contrary, Romania considers partnership with Bulgaria on all energy projects to be very useful."

His comments followed a decision by the Bulgarian government Wednesday to host a section of the Nabucco pipeline.

Europe aims to build the Nabucco pipeline using non-Russia gas suppliers in an effort to bring diversity to the regional energy sector, though the consortium managing the project is slow to attract formal supply commitments.

Wednesday, July 21, 2010

DNA check on remains from grave of Romania's Ceausescu

BBC News
21 July 2010

Scientists in Romania have exhumed what are thought to be the remains of former dictator Nicolae Ceausescu and his wife in order to check their identity.

The exhumation follows a request from Ceausescu's family, who have questioned whether the couple were really buried in the Ghencea cemetery in Bucharest.

Nicolae Ceausescu ruled Romania from 1965 until he was toppled in the 1989 revolution.

He was caught and executed with his wife after the couple tried to flee.

It is believed the bodies were hastily buried in an unmarked grave in the military cemetery.

But the whereabouts of the corpses has been described as one of the great unsolved mysteries of the Romanian revolution, the BBC's Oana Lungescu reports.'Black winter coat'

The couple's only surviving son, Valentin, and their late daughter's husband have said they want the identity of the bodies verified.

On Wednesday pathologists and cemetery officials oversaw the exhumation, taking samples in plastic bags for DNA testing.

Son-in-law Mircea Oprean was quoted as saying that he thought the remains were probably those of the Ceausescus, though he could not be sure until the tests were done.

"I saw the bodies, my father-in-law's was quite well preserved, I recognized his black winter coat with some holes in it," he said, according to the AFP news agency.

Gelu Voican-Voiculesc, a former official from the government that took power after Ceausescu's fall, supervised the burial in 1989 and said the tests would prove that he had always been right.

"The Ceausescus' remains will definitely be found in those tombs," he said.

"I hope those who have harassed me for years with all sorts of accusations will now apologise."

The DNA tests could take up to six months, according to Romanian media reports.

"I hope that the DNA is not altered by water, fertilisers or acidic substances, because, if this is the case, it will be very difficult to obtain a very precise result," Dan Dermengiu, the head of Romania's national institute of legal medicine, told Realitatea TV.

NYT: E.U. Scolds Romania for Faltering on Reforms

July 20, 2010
E.U. Scolds Romania for Faltering on Reforms

BRUSSELS — Romania was publicly criticized on Tuesday as lacking in commitment to fight corruption as the European Union released a report that also praised Bulgaria for the growing momentum behind its reforms.

The document, from the European Commission, detailed how Romania and Bulgaria, which joined the European Union in 2007, were fighting rampant fraud, corruption and organized crime.

In doing so, it outlined some of the reasons behind doubts about whether either country was ready to become part of the European Union, which now has 27 members. While Bulgaria’s government was complemented on its efforts to root out serious problems, Romania was told that its performance revealed “important shortcomings.”

“Romania did not show sufficient political commitment,” the report said, “to support and provide direction to the reform process, and demonstrated a degree of unwillingness within the leadership of the judiciary to cooperate and take responsibility.”

Until recently, European officials had been more concerned about the failings in Bulgaria. Only last week, a separate report on fraud underlined the fact that Bulgaria remained a serious problem. It showed that one in five E.U. farm subsidy payments was subject to fraud.

Bulgaria and Romania have been under special scrutiny since they joined the Union because of concerns over high levels of corruption.

The very public criticism of Romania provoked an immediate response from its president, Traian Basescu, who acknowledged shortcomings but said the European Commission had gone too far in saying Romania was not meeting its E.U. obligations. “I think the phrasing is unfair, and therefore I must react and show that Romania is meeting its commitments, that we are determined to see them through,” he said at a news conference, Reuters reported.

The main reason for the severity of the commission’s language appears to be its anger at efforts in Romania to undermine the National Integrity Agency, which has been examining conflicts of interest and investigating people with unexplained wealth in Romania.

Amendments approved by the Romanian Parliament made it impossible to do the work the agency was set up to do and broke a promise Romania made when it joined the bloc, the commission said. The action on the amendments represents “a significant step back in the fight against corruption and breaches commitments Romania has taken upon accession,” the report said.

The report urged Romania to improve its judicial system and increase prosecution of high-level corruption and to improve the public procurement process. Similar recommendations were also made for Bulgaria, though they came accompanied by praise.

“For the first time, we see real political will in Bulgaria to push through reform,” said Mark Gray, a spokesman for the European Commission, the executive arm of the European Union.

Bulgaria’s prime minister, Boiko Borisov, described the report on his country as the most positive so far from the commission. “But I also want to see where the criticisms are and prepare a plan to overcome them,” he added, according to Reuters.

Radu Mihaileanu’s cinema of deception and identity.

‘I’m Always Hiding Behind My Stories’

Radu Mihaileanu’s latest film carries a familiar theme, of hidden identity and yearning for freedom.
Tuesday, July 20, 2010
Steve Lipman
Staff Writer

For the first years of his life in communist Romania, Radu Mihaileanu couldn’t understand why his grandmother, who lived with his family, prepared her own meals in her own pots and pans.

At 5, he suddenly understood.

His father, Ion, called the family together one day to reveal a family secret. The Mihaileanus were really the Buchmans, Ion was really Mordechai. The family was Jewish, the grandmother kept kosher and several members of the family had died in the Holocaust.

Mordechai Buchman, a journalist, had changed his obviously Jewish name to a typically Romanian one when he escaped from a labor camp in Nazi-allied Romania during World War II. After the war, he kept the adopted name — under Nazism and Communism, asserting one’s Jewish identity was not good for one’s health or one career.

That day when he was 5 colored the rest of Radu Mihaileanu’s life.

“I remember it like it was yesterday,” he says. “It changed everything inside me.”

Now a resident of Paris and a successful film director, he has written and directed a series of films that center around the themes of lies and false identity, escaping one life and seeking another, humor and a Jewish point of view.

In “Train of Life,” the inhabitants of a doomed shtetl fake their own deportation in an attempt to travel to safety. In “Live and Become,” a young Ethiopian Christian boy pretends, at his mother’s insistence, to be a Jew in order to escape his poor homeland and immigrate to Israel.

Now, in “The Concert,” Mihaileanu explores a similar theme — a prominent conductor in Moscow who lost his job during Communism because he would not fire his Jewish musicians, reassembles them, pretending to be the Bolshoi orchestra, in order to play a concert in Paris.

Like his earlier films, he says, “The Concert” is not the linear story of Mihaileanu’s life, but an autobiography of his soul. “I’m a storyteller. I’m always hiding behind my stories,” he says in a telephone interview from Paris.

Always with some deception.

All his scripts, Mihaileanu, 52, says, are based on two lies — the lie about his father’s name and identity that helped save his father’s life; and the lie that helped Mihaileanu leave Romania in 1980.

An aspiring actor who had performed with the Yiddish theater in Bucharest, he was leading a clandestine play about a 15th-century king and queen that was a thinly disguised attack on Nicolae and Elena Ceausescu, the despised ruling couple who met their death at their countrymen’s hands when Romania’s communist regime was overthrown in 1989.

Mihaileanu’s play was the last of several, all anti-government, he had helped produce, he says.

In a police state, where criticism of the leaders was forbidden, it would be dangerous for Mihaileanu to stay. “You have to leave,” his father warned.

He would have left, “anyways,” Mihaileanu says. “I was not a hero. I needed to be free, it was not my way to shut up” otherwise, “I would find a prison.”

At 22, he applied for permission to go to Israel on a short visit.

The second lie — “I knew I would never come back.”

After a short time in Israel, he moved to Paris, studied at the Institute for the Advanced Cinematographic Studies, worked as an assistant for prominent directors, then began directing his own films.

Each of Mihaileanu’s films is influenced by a sense of outsider-ness. His father, who was a communist under Nazism and an anti-communist under Communism, was, the filmmaker says, “always on the wrong side.” And he himself — a dissident in his communist homeland and an émigré in France — easily wore an outsider’s clothes.

“In all my movies, people become imposters in some way, simply to survive,” he says. “All my movies are about escaping, surviving, fighting, searching for identity, racial integration.”

Mihaileanu walks, as a director, in the footsteps of Abraham the Patriarch, the first Hebrew, he says. Hebrew comes from the word for someone who has crossed over, who is on the other side.

Now, Mihaileanu says, he appreciates his days as an outsider. People who had to hide their true identity at one time “are richer,” more appreciative, more sensitive when they are free to be themselves, he says.

Hence, in “Train of Life,” whose depiction of Jews’ freedom exists in the narrator’s imagination, salvation turns out to be a fantasy.

“You have to be free,” Mihaileanu says, “even if in a dream.”

Optimist or pessimist?

“I am very sad but optimistic,” he says. Life presents problems, “but you can’t give up.” It amounts, he says, to a Jewish attitude. “I’m deeply happy to be alive.”

“The Concert,” like his earlier films, has elements of humor, sometimes mocking, sometimes bittersweet.

“I’m not a violent person … humor is the ultimate weapon I have against the dictators that have marked my life and the lives of my loved ones,” he said in a 2009 interview with the Cineuropa website. “I use it to battle barbarism and death, to show that we’re stronger than they are, that we’re still alive so we’ve won.”

His goal: “To make people laugh, to make people happy.”

His next film, about Arab women and their rights, has no obvious theme of Jewish identity.

“The culture is Arabic. The film is still me — Jewish, Romanian, French,” Mihaileanu says; some familiar references are sure to surface.

In Mihaileanu’s home, he says, there are no secrets. His children were raised with Jewish educations, with Jewish identities, with the family’s stories of name changes and hidden identities. “They know everything.”

Knighted in 2006 by Romania and in 2007 by France, Mihaileanu discusses all his movie ideas with his father, who has become a trusted adviser.

Mihaileanu has drawn criticism for using humor where some people think humor doesn’t belong, in productions about totalitarian societies.

His father approves all his films, he says, “He loves them. Because he is subjective. He’s a Jewish father.”


Monday, July 19, 2010

AFP: Romania's rail transport victim of neglect

18 July 2010

(BUCHAREST) - Romania used to have one of the most extended rail networks in Europe, but after years of neglect many of its 11,000 kilometres of track are in a "catastrophic state," experts say.

While the European Union promotes a shift from road transport to rail in order to preserve the environment, Romania seems to follow the opposite path.

Between the fall of the Communist dictatorship, at the end of 1989, and 2009, the number of passengers travelling by train was cut 407.9 million to 70.3 million, according to the National Statistics Institute (INS).

And the fall is set to continue this year, experts say.

"Passenger traffic could drop by 10 percent in 2010," Liviu Pescarasu, director general of CFR Calatori, the passenger branch of the national railway company, told AFP.

By contrast, the number of personal cars more than tripled in 20 years, from 1.3 million in 1990 to 4.24 million in 2009, according to the INS.

"Under Communism, cars were a luxury. People had to wait for years to get one," Pescarasu said, explaining the recent fascination with road transport.

"What happens in Romania is a bit similar to what happened in the second half of the 20th century in France, where tramlines were dismantled because everyone thought the car was the future," noted Stefan Roseanu, secretary general of the Romanian railway industry association.

France then started re-installing costly tramlines decades later, when the environment became a major concern, he added.

Besides the "cultural" change, Romanians are also reluctant to take the train because of the deterioration in travelling conditions.

"The infrastructure is in a castastrophic state and that slows down the speed on many routes," Roseanu said. Or causes long detours.

Trains are often delayed by one, two or three hours. The average commercial speed is 50 kilometers an hour when the standard set by the EU on key pan-European corridors is 160 km/h.

Despite major improvements in the confort level of carriages and fresh raspberries being sold on board in the summer, passengers are gettting weary.

For months, a bridge seriously damaged by torrential rains severed the direct rail link between two of Romania's tourist highlights, the medieval cities of Sibiu and Brasov.

According to official figures, 40 percent of the tracks and 96 percent of the bridges need to be fixed.

"Romania needs to invest more in its rail infrastructure which is rapidly declining because of a lack of adequate maintenance," the European Commission told AFP.

"The lack of dynamism of the rail sector in Romania is certainly not good news for the overall economic climate."

Giant car maker Ford is an example.

"Ford invested in a new plant in Craiova (south). They want to produce 1,000 cars a day in the future. But at this point, they cannot move 1,000 cars a day out of the factory because the road and railway infrastructure is not sufficient," the US ambassador in Bucharest, Mark Gitenstein, said recently.

Some progress is expected as railways are being modernised with funds from the EU, as for instance the line between Bucharest and Constanta, on the Black Sea coast. Today it takes about five hours to make the 225-kilometer journey, more than in the Communist period.

Travel time should be cut to two hours and a half by mid-2011, Transport minister Radu Berceanu said on Thursday.

However, speed will still be reduced on certain segments as two bridges on the Danube were not included in the initial renovation plan, said Radu Irimia, deputy general manager of the European project for the national railway company CFR SA.

Work to modernise the bridges is expected to last until 2015, added the manager, who has been trying to speed up some key projects since his appointment earlier this year.

A hard task. On the Bucharest-Campina route, recently modernised with EU funds, the lack of maintenance has already led to speed limitations, a source close to the project told AFP.

The Transport ministry, which did not reply to AFP questions, usually invokes the lack of funds in times of crisis to explain the lack of investment in infrastructure.

Romania has so far received 610 million euros from the European ISPA Fund but it "has not received any amount yet from the Cohesion Fund or the Structural Funds for the period 2007-2013," according to the European Commission.

Around 1.85 billion euros of these funds is meant for rail infrastructure.

Prime Minister Emil Boc last week called on the transport minister -- sometimes called the "minister of roads" by railway employees -- to improve the absorption of European funds.

"For years, there was no real political will to invest in the rail in Romania," Roseanu said.

Wednesday, July 14, 2010

Entering the EU Through the Back Door

Romanian Passports For Moldovans
Entering the EU Through the Back Door

By Benjamin Bidder in Chisinau, Moldova

Romania's president wants to increase his country's population and is using an odd means to do so. The country is generously bestowing hundreds of thousands of Romanian passports on impoverished Moldovans. They are gratefully accepting the offer from the EU member state and are streaming into Western Europe to work as cheap laborers.

The latest would-be European Union citizens get up early in the morning. Before dawn hundreds of Moldovans, most of them young, are gathered in front of the Romanian consulate in Chisinau, capital of the Republic of Moldova, which is often labeled the "poorest country in Europe."It is love that has brought Denis Rotari, a trained tiler in a light blue T-shirt, with a dragon tattoo on his elbow, here. "I need money for the wedding," the 21-year-old explains. Like everyone else in this queue, he is applying for a Romanian passport. The passport means potential employment as a day laborer somewhere between Rome and Lisbon.

Almost 1 million Moldovans have already turned their backs on their homeland, where the per capita economic output has only just matched that of Sudan's. They hire themselves out as immigrant labor, mostly illegally. Around 120,000 of the 3.6 million inhabitants have passports that originate from the neighboring nation, and the Romanian government says that another 800,000 are waiting to have their applications for passports granted. In order to cope with the rush, Romania's foreign minister opened two new consulates in the provincial cities of Balti in the north and Cahul in the south on Friday -- at the EU's expense.

Creeping Expansion from the East

The calculation behind the move: Romania's patriotically minded President Traian Basescu wants to increase the number of his subjects and agreed to increase the number of naturalizations that take place each month to 10,000 this year.

In this manner, the EU, which is already suffering from enlargement fatigue, is stealthily being expanded from the east -- without a referendum or any agreements from Brussels, Berlin or Paris. The Moldovans are voting with their feet and marching into the EU's economic paradise -- through the back door.

Since the Alliance for European Integration -- a coalition formed by four political parties -- pushed the pro-Russian Communist Party out of power in Chisinau in 2009, Romania has accelerated its naturalization offensive in its small neighboring country. Bucharest has sponsored officials from Moldova's Foreign Ministry on courses on Euro-Atlantic integration and it pays for the translations of EU laws. Even though Romania itself has been hard hit by the financial crisis, the nation has granted generous loans to its neighbor in the past year. The barbed wire along the border has been taken down and, since autumn, Moldovans living within a 30-kilometer radius of the border have been able to visit Romania without a visa.

'A Future Together'

Romanians and Moldovans may live in two separate countries but, as Basescu says, "We are one people and this people has a right to unity and a future together." He dreams of "Romania Mare" -- which, translated into English, means the ressurection of "Greater Romania" with the borderes that existed in 1940, which also included Moldova. At the time, the smaller country, formerly known as Bessarabia, was ceded to the Soviet Union as part of a German-Russian Molotov-Ribbentrop Pact. After the fall of the Soviet Union, Romania became the first country to recognize Moldova's independence in 1991 -- even though Romania remains reluctant to accept "the border that Hitler and Stalin drew" along the Prut River even today.

Moldova's new government is not averse to these Romanian advances, either. Of the 53 members of the governing coalition, nine have a second passport that is Romanian and 11 others have applied for one. And with Mihai Ghimpu as acting president of Moldova presently, there is a "Unionist" -- as the advocates of reuniting Romania and Moldova are known -- as head of state.

Chisinau Mayor Dorin Chirtoaca, who is also Ghimpu's nephew, has also stated that, "Romania and Moldova are closely linked, like Germany and Bavaria." He says the idea that the two states were independent of each other was "an illusion of the Soviet powers."

Moldovans Want Europe, not Romania

However, the majority of Moldovans aren't attracted by the prospect of reunification with Romania, which, after Bulgaria, is the second-poorest EU member state. According to polls, two-thirds want to be part of the EU, but only 2 percent self-identify as Romanian.As the tiler Denis Rotari, who is waiting in front of the Romanian consulate, puts it: "I want to go further West with this passport. I don't care about Romania." His cousin works in an abattoir in Madrid. And when Romania joins the Schengen zone, an area without border controls incorporating 25 European countries, in March 2011, hundreds of thousands of Moldovans with Romanian passports will finally get free entry to the EU.

In the meantime, Brussels has also become aware of the stream of Moldovan migration. Right-wing populist politicians are exploiting the situation. Andreas Mölzer, a member of the European Parliament from the right-wing populist Austrian Freedom Party (FPÖ) has already asked the European Commission, the EU's executive, to state what it could do to stop the Romanian drive.

Politicians in Germany have also been considering the development. "Germany has no cause for concern yet," explained Manfred Grund, a member of parliament with Angela Merkel's conservative Christian Democratic Party and also an authority on Moldova. "Most are moving to Italy and Spain."

Leu Weakens for 3rd Day on Concern Romania’s Economy to Worsen

July 13 (Bloomberg) -- The leu depreciated for a third day against the euro, headed for its biggest drop in two weeks, on concern Romania’s recession will be deeper than forecast as the government cuts spending and raises taxes to cut its deficit.

The second-poorest European Union country needs to extend its loan program with the International Monetary Fund until 2013 from a 2011 expiration if it is to emerge from the worst recession in 20 years, Ziarul Financiar reported, citing Finance Minister Sebastian Vladescu. The economy will probably contract more than 1.5 percent this year after the tax increase, he said.

“The deterioration of the economic perspectives reinforces our view that the leu has no upside potential left even in favorable global market conditions,” London-based analysts at Societe Generale SA wrote in a report today.

The leu depreciated as much as 0.4 percent and traded down 0.3 percent at 4.2609 per euro as of 5:10 p.m. in Bucharest.

Prime Minister Emil Boc’s administration raised the value- added tax last month to 24 percent from 19 percent and made more cuts to public-sector wages to secure further disbursements from an IMF-led 20 billion-euro ($25 billion) bailout program. The IMF wants the budget deficit to be 6.8 percent of gross domestic product or less this year.

Current Account

Bank of America Merrill Lynch lowered its outlook for the country’s 2010 economic performance to a 1.3 percent contraction from a previous forecast of a decline of 0.7 percent, according to a report yesterday that cited the reduction in government spending and increased VAT. The IMF and the government estimate the economy will shrink as much as 0.5 percent this year, after contracting a record 7.1 percent in 2009.

Romania’s current-account deficit widened to 2.87 billion euros ($3.6 billion) in May from a shortfall of 2.06 billion euros in April and a gap of 1.97 billion euros a year earlier because of smaller remittances from Romanian citizens working abroad, the central bank said today.

The Czech koruna ended three days of gains, dropping 0.3 percent to 25.392 per euro. Poland’s zloty was little changed at 4.066 per euro, erasing earlier losses of as much as 0.3 percent after an unexpected increase in inflation prompted speculation the central bank will raise interest rates. The Hungarian forint traded less than 0.1 percent stronger at 278.16 per euro.

Tuesday, July 13, 2010

Romanian government plans to raise income taxes, scrap 16 percent flat tax

BUCHAREST, Romania (AP) - Romania's finance minister says the cash-strapped government plans to scrap the 16 percent flat tax and introduce higher income taxes starting next year, according to a financial newspaper.

Sebastian Vladescu says in an interview published in Ziarul Financiar on Tuesday the government can't raise enough revenue from the current income tax, which was introduced in 2005.

Romania is in a deep recession with its economy due to contract by at least 1 percent this year. The economy shrunk by 7.1 percent in 2009.

In 2009, Romania negotiated a euro20 billion ($25.16 billion) loan with the IMF, the European Union and the World Bank.

All public sector wages were reduced by 25 percent starting July 1, while the sales tax was hiked from 19 percent to 24 percent.

Bloomberg: Romanian Recession Will Deepen on Government Cuts, BOA Merrill Forecasts

Romania’s recession this year will be deeper than previously seen as the government cut spending and raised the value-added tax to curb a swelling budget deficit, Bank of America Merrill Lynch said.

BOA Merrill lowered its forecast for the European Union member’s 2010 economic performance to a 1.3 percent contraction from a previous forecast for a decline of 0.7 percent, Mai Doan, a London-based analyst at the bank, wrote in an e-mailed note. The economy shrank a record 7.1 percent in 2009.

“As spending cuts and a VAT hike become effective in the second half of 2010, while euro-zone demand slows into 2011, there is little support for economic growth in Romania,” Doan wrote. “Private consumption and investment continued to subtract from annual growth” in the first quarter, “a reflection of high unemployment and stagnant lending.”

Prime Minister Emil Boc’s administration, raised the value- added tax as of July 1 by 5 percentage points to 24 percent and made further cuts to public-sector wages to secure further disbursements from a International Monetary Fund-led 20 billion- euro ($25 billion) bailout program. The IMF backs a budget- deficit target of 6.8 percent of gross domestic product this year.

‘Fiscal Slippage’

Even with the additional measures, “fiscal slippage” is likely to occur, according to Doan, who forecasts the budget shortfall at 7.3 percent of GDP. Political wrangling over the cutbacks risk delays in unlocking further installments of the loan, threatening the stability of financing, Doan wrote.

“Financing in the short term is covered with the fifth disbursement from the IMF and EU, but remains a concern in the medium term,” Doan said. “Continued blocks by the opposition and challenges at the Constitutional Court against austerity measures risk delaying future IMF aid, with early elections a possible scenario.” A materialization of that risk would also make it difficult for the country to borrow in international bond markets, Doan said.

The value-added tax increase will push the inflation rate above 8 percent by year-end and halt the central bank’s interest rate cuts until next year, according to Doan. Inflation was unchanged at 4.4 percent in June, a month before the tax increase, the Bucharest-based statistical office said today.

The central bank’s inflation target is 3.5 percent, with a percentage point divergence allowed on either side. The Banca Nationala a Romaniei left the monetary policy rate at a record-low 6.25 percent on June 30. While central bank Governor Mugur Isarescu said there’s “no reason for the interest rate to react” to the value-added tax increase, Bank of America Merrill predicts it will prevent any reduction to borrowing costs until next year.

The central bank’s “hands are tied,” according to Doan. “The easing cycle has likely come to a halt as the VAT hike will likely see inflation overshoot the target, but further cuts may resume in 2011 to counterbalance fiscal austerity and support economic growth,” she wrote.

To contact the reporter on this story: Agnes Lovasz in London at

Thursday, July 8, 2010

AP: Romania says new IMF deal is needed

July 7, 2010

BUCHAREST, Romania --Romania needs a new deal with the International Monetary Fund, a standby loan to draw upon in case of need once the current loans expire, President Traian Basescu said Wednesday.

In 2009, Romania negotiated a euro20 billion ($25.16 billion) loan with the IMF, the European Union and the World Bank. The agreement ends next year. Part of the funds helped pay state wages and pensions last year, when the country's economy shrank by 7.1 percent.

"Categorically, Romania needs a new accord with the IMF," Basescu said in an interview with the public radio station. He said he would prefer a precautionary agreement, which would allow Romania to access funds only if it faces a critical situation.

He warned that a new loan would need to be used as investment rather than to help pay for pensions and wages.

"I would agree to a new loan in 2011, if all the money goes into development," Basescu said.

News agency Mediafax quoted IMF mission chief Jeffrey Franks as saying that a new accord with Romania could be a standby or precautionary type agreement. He said the government must give a clear signal for talks to start on the issue.

Last week, the IMF board approved to disburse an installment of euro913 million to Romania after the country adopted austerity measures to rein in the budget deficit to 6.8 percent of GDP. All public sector wages were reduced by 25 percent starting July 1, while the sales tax was hiked from 19 percent to 24 percent. 

Wednesday, July 7, 2010

Romania awards 20 oil exploration licenses

BUCHAREST, July 7 (Reuters) - Romania granted 20 oil exploration licenses in July, including five in the Black Sea, to firms including to Russia's Lukoil (LKOH.MM: Quote), Hungarian oil
and gas group Mol (MOLB.BU: Quote) and Chevron Romania (CVX.N: Quote) the national agency for mineral resources said. 

The awards were the first for Romania since the International Court of Justice in February 2009 drew a new maritime border between it and Ukraine to settle a Black Sea
dispute affecting rights to drill for oil and gas.

Countries in the region are keen to tap new energy suppplies to reduce their dependence on Russian gas, highlighted by a pricing dispute between Moscow and Kiev in winter 2009 that cut gas supplies to much of Europe. Romania has said the new border, included in the tender, provides access to an estimated 70 million cubic metres of natural gas and 12 million tonnes of crude oil.

The agency, which received bids from 21 firms, granted licenses to 10 of them. They must now negotiate with the agency, which estimates contracts could be signed in up to 6 months. The licenses are for 30 years with an option to extend by 15 years if hydrocarbons are discovered. Companies will pay royalties ranging from 7 percent to 13.5 percent of production, depending on the concession.

The winning bidders were:

Australian Audax Resources Ltd (ADX.AX: Quote)
Canada's Avere Energy Inc (AVOh.V: Quote)
Chevron (CVX.N: Quote) Romania E&P
UK's Clara Petroleum Ltd
Lukoil Overseas in partnership with U.S.-based Vanco
International [ID:nnLDE66519I]
UK's Melrose Resources (MRS.L: Quote) and Petromar Resources
Irish Moesia Oil and Gas
Mol Hungarian Oil & Gas in partnership with Romanian Expert
Petro Ventures
Universal Premium

Monday, July 5, 2010

IMF ‘Impressed’ With Romania’s Deficit Commitment, Franks Says

By Irina Savu

July 3 (Bloomberg) -- The International Monetary Fund was “very impressed” with the Romanian government’s commitment to its bailout agreement after it raised a sales tax to win approval, said Jeffrey Franks, the fund’s mission chief to the country.

The lender’s board of directors agreed yesterday to disburse $1.15 billion to Romania, which increased its value- added tax rate by 5 percentage points and cut wages as of July 1 to reach the deficit target attached to the loan. The European Commission, one of the country’s other lenders, will probably unlock 1.15 billion euros ($1.45 billion) in payments in September, Franks said in a phone interview from Washington today.

The government, relying on 20 billion euros in loans from the IMF and the European Union to finance its deficit, raised the VAT to 24 percent after the constitutional court threw out a proposal to cut pensions to narrow a budget deficit target to 6.8 percent of gross domestic product. The austerity program is undercutting the government’s support at a time it is struggling to pull the country out of a stubborn recession.

“Broadly speaking,” IMF directors “were very supportive of Romania’s efforts, in particular, several directors mentioned that they were very impressed,” said Franks. “There are certain concerns that the economy is continuing to be very sluggish and they want to make sure that the authorities continue in their efforts to maintain the reform process going forward.”

2010 Contraction

The east European country’s economy, mired in the worst recession in two decades, will probably contract at least 1 percent in 2010, more than previously forecast, Finance Minister Sebastian Vladescu said on June 29. There will probably be “higher inflation and a different exchange rate” because of the increase in VAT, according to Vladescu, who declined to give a figure because the ministry is still working on a new forecast.

The IMF and the government estimate GDP will contract as much as 0.5 percent this year after shrinking a record 7.1 percent in 2009. The central bank forecasts year-end inflation will be 3.7 percent.

In addition, the VAT increase will have a “significant one-time effect on inflation,” Franks said. The inflation rate will probably rise to 7 percent to 8 percent at the end of 2010 from 4.4 percent in May, he said, with the impact probably disappearing in 12 to 18 months.

Maintaining Forecast

Franks said the IMF is maintaining its economic contraction forecast. A mission will visit Romania at the end of July to review the country’s progress under the bailout loan and will do a revision at that time.

“We do not think there will be much additional negative effect on GDP growth from VAT compared with the expenditure cuts that were previously planned,” Franks said. “So the impact may be actually slightly less negative and the reason for this is because pensioners are quite likely to spend all the money that they receive whereas if you put a tax on the broader population then they cut spending by somewhat less.”

Frank said Romania has “already done very, very large measures to attempt to reach the deficit target,” including cutting public sector wages by 25 percent and some transfer payments by 15 percent,

“Those are very significant measures,” Franks said. “At this time, I think we’ve seen very important steps from them, it’s likely to be sufficient, but we’ll have to calculate this during our next mission, as we always do, to see what is happening with revenue and expenditure as they come in.”

Leu Recovery

The leu strengthened as much as 1.2 percent to 4.2891 per euro, the most since May 2009, and traded 1.1 percent higher at 4.2943 in Bucharest yesterday, the largest rally among more than 170 global currencies tracked by Bloomberg.

The currency tumbled 3.5 percent in three trading days ending June 29 to its weakest level against the euro on record after the court ruled the proposed pension cuts were illegal, sparking speculation the next disbursement of the IMF loan will be delayed.

The currency has since recovered almost two-thirds of those losses on speculation today’s IMF meeting indicated Romania may be nearer to getting funding.

“The markets have been nervous because they were concerned whether the measures will be approved, whether they would be implemented, whether the IMF disbursement will go ahead,” Franks said. “I would anticipate that the vote of the IMF board yesterday would give them some confidence in believing that the program is on track and that the authorities will execute the measures they had agreed and therefore there is no reason for concern at this time.”

IMF to Disburse $1.15 Billion to Romania After VAT Increase

By Irina Savu and Sandrine Rastello

July 3 (Bloomberg) -- The International Monetary Fund’s board of directors agreed to disburse about $1.15 Billion to Romania, which last week increased its sales tax to help meet deficit targets attached to the loan.

Romanian authorities “are taking ambitious adjustment measures to contain the weakening of the fiscal position and set the stage for a sustained improvement in public finances,” IMF First Managing Director John Lipsky said in an e-mailed statement late yesterday. “Balancing the fiscal adjustment between expenditure cuts and tax increases will help cushion its social impact, while at the same time reversing excessive past increases in public wages. ” The IMF had postponed the meeting on Romania after its constitutional court rejected the government’s plan to cut pensions by 15 percent. Romanian authorities decided to raise the value-added tax to meet the 2010 budget deficit.

The government, relying on 20 billion euros ($25 billion) in loans from the IMF and the European Union to finance its deficit, raised the VAT to 24 percent on June 26. While rejecting the pension cuts, the court on June 25 upheld a 25 percent reduction in wages for public workers.

The leu strengthened as much as 1.2 percent to 4.2891 per euro, the most since May 2009, and traded 1.1 percent higher at 4.2937 in Bucharest yesterday, the largest rally among more than 170 global currencies tracked by Bloomberg.

Economic Impact

Romania’s economy, mired in the worst recession in two decades, will probably contract at least 1 percent in 2010, more than previously forecast, because of the VAT increase and wage cuts, Finance Minister Sebastian Vladescu said on June 29. There will probably be “higher inflation and a different exchange rate” because of the tax increase, according to Vladescu, who declined to give a figure because the ministry is still working on a new forecast.

The IMF said it granted Romania a waiver for not meeting end-of-June criteria for the loan.

The IMF and the government estimate GDP will contract as much as 0.5 percent this year after shrinking a record 7.1 percent in 2009. The central bank, which left its benchmark rate unchanged at a record-low 6.25 percent to contain inflation, forecasts year-end inflation will be 3.7 percent. It will discuss a new forecast on Aug. 4.

Thursday, July 1, 2010

Petrom to Sell Licenses in 20 Romanian Oil Fields

By Irina Savu and Zoe Schneeweiss

June 30 (Bloomberg) -- OMV Petrom SA, Romania’s largest oil and gas company, plans to sell exploration licenses in about 20 mature oil fields in Romania.

Petrom will auction off the licenses, Zanfirescu said. Companies wishing to participate in the auction must be registered with the Agency for Mineral Resources and can’t have debts to the Romanian government.

At the end of 2009, Petrom had exploration licenses for 256 oil and gas fields on 15 onshore perimeters and 2 offshore perimeters in Romania. Production from the fields in 2009 fell 4 percent to 180,815 barrels of oil equivalent a day from 188,476 barrels the previous year.

“It definitely makes sense for Petrom to concentrate on the high-yield licenses while selling those of which little returns can be expected,” said Philipp Chladek, an analyst at Raiffeisen Centrobank AG in Vienna, who rates Petrom at “hold.”

OMV AG at its Capital Markets Day said that it took its experts five years of majority ownership in Petrom to come up with a “funded estimate of how much oil there really is still left in Romania,” Chladek said. “This explains why OMV recently revised its production targets downward, and the sale of the least-rewarding fields can also be seen in this respect.”

OMV, central Europe’s biggest oil company, holds a 51 percent stake in Petrom.

AP: Romania's interest rate unchanged

BUCHAREST, ROMANIA Romania's central bank kept its benchmark interest rate at 6.25 percent Wednesday, after already cutting it four times this year in an attempt to revive the country's ailing economy. 

Analysts had predicted the interest rate would stay unchanged after officials announced sales tax would increase from 19 percent to 24 percent. The cuts in interest rates were meant to stimulate investment and consumption, which have shrunk during the economic crisis. The recent move is meant to keep inflation under control. 

The inflation target for 2010 is 3.5 percent, but it is expected to grow due to the increase in value-added tax. Romania is struggling to come out of recession when booms in construction and commerce collapsed last year. Its economy contracted by 7.1 percent in 2009. The country negotiated a euro20 billion ($24 billion) bailout led by the International Monetary Fund. 

The IMF board will meet Friday to discuss the loan disbursement to Romania, after the country adopted tough austerity measures to keep the budget deficit at the agreed 6.8 percent of GDP. Public sector wages were cut by one-fourth while the VAT was hiked to 24 percent, after plans to slash pensions by 15 percent were turned down by the Constitutional Court.

Romanian wind energy unit starts producing electricity


FANTANELE, Romania — A wind energy unit in Romania expected to become the biggest in Europe next year has begun producing electricity, an official said Wednesday.

"Twenty-one turbines are functioning by now. They are connected one by one to the national electricity network", project manager Ondrej Safar told reporters on the site, in Fantanele near the Black Sea.

Every windmill in the unit, run by the Czech electricity company, has a capacity of 2.5 megawatts, he added.

A hundred and thirty nine turbines are to be installed on the Fantanele site and 101 to another location nearby.

The 1.1-billion-euro (1.45-billion-dollar) wind energy farm will have a capacity of 600 megawatts and will be completed before the end of 2011, Safar said.

Romania currently produces barely 14 megawatts of wind power, while its potential stands at 14,000 megawatts, according to several studies.

Apart from the Czech windmill project, Spain's Iberdrola has announced plans to build the world's biggest onshore wind farm in southeastern Romania. The 1,600-megawatt project should be ready in 2017.

Other major groups like Romania's Petrom (OMV) and Italy's Enel also plan to invest in wind-power generation in this country.