Thursday, September 30, 2010

Roma in Romania and Bulgaria: despised and stigmatised

Romania and Bulgaria, the two most recent newcomers into the EU, have been accused by Western governments, especially by France, of not doing enough for the integration of their Roma population.

The two countries, while not contesting the size of the problem, have in turn underlined the need for a common EU Roma policy. For the time being, there is no such policy at the European level, and the magnitude of the Roma problem was not foreseen by the European institutions when the decision was taken to take Romania and Bulgaria on-board.

Roma children - the EU underestimated the size of the Roma problem when Romania and Bulgaria joined the EU (Photo: Council of Europe)

One of the obstacles to finding any solution to the Roma problem is the widespread indifference, often bordering on hostility, towards the Roma in Romania and Bulgaria. In both countries, the general attitude is one of collective denial, not just by the public at large, but also within civil society, the press and the political class.

In Romania, few people felt outrage upon hearing that President Traian Basescu had called a female journalist trying to interview him a "stinking Gypsy." A former foreign minister – Adrian Cioroianu - regretted publicly that he was not allowed to send delinquent Gypsies to some remote spot in the Egyptian deserts (a probable allusion to the origin of the word "Gypsy", from "Egyptian"), while the leader of the ultra-nationalist Romania Mare party, Corneliu Vadim Tudor, remarked that if the French sent the Roma back to Romania, then "Romania should send them back to India."

Still, Romania has protested officially at the collective expulsions of Romanian Roma from France, while Bulgaria was the only EU member state whose government not only would not do so, but even tried to justify the expulsions. Prime Minister Boiko Borisov insisted his country had no Roma problem with France because the latter had returned just 41 Bulgarian gypsies and they accepted the measure "voluntarily". Interior Minister Tsvetan Tsvetanov said the Bulgarian Roma community was "an incubator generating crime," and so France was right to expel its visiting members.

Mr Borisov's government is blaming the country's Roma problem on its predecessors. "For the past 20 years there has been no Roma integration policies in Bulgaria," Mr Tsvetanov told WAZ.EUobserver.

In Bulgaria, a state TV poll on Tuesday evening showed that 71 percent of the viewers disapproved of the setting up of government programmes for Roma integration and 45 percent approved the Roma expulsions from France, while 51 percent disapproved of them. More than 45 percent of respondents said there should be separate schools for Roma children.

Historically, Bulgaria has a reputation for ethnic tolerance. However, deepening economic problems during the transition have widened the social and cultural divide between the nearly half a million Roma and the Bulgarian majority, creating fertile soil for far right anti-Roma groups like Ataka, a crucial supporter of Mr Borisov's minority government. In Romania, the official figure of the Gypsy population is also half a million, although unofficial estimates put the figure at 2 million or 2.5 million.

In both countries, gypsies are considered to be different, or even "foreign," from other major minorities, like the Turks in Bulgaria, or the Hungarians in Romania. Very often, their assimilation is not really deemed desirable. Even Communism, with its egalitarian ideology, preferred to leave the Gypsies in a time warp. Many escaped collectivisation, and communist Romania remained the only country in Europe where real nomadism was practiced by whole tribes of illiterate gypsies roaming around the country in horse-driven chariots.

Politicians from different camps claim European financial aid has vanished in Roma slums with no visible result. Romanian and Bulgarian officials cannot say how much exactly has been spent on Roma and to what effect. In Bulgaria, Prime Minister Borisov has insisted that no more integration funds would be channelled through NGOs, but that EU aid for Roma would from now on be allocated straight to governments.

Wednesday, September 29, 2010

Romanian Central Bank Holds Benchmark Interest Rate Unchanged at 6.25%

Romania’s central bank left its main interest rate unchanged for a third straight meeting today as inflation triggered by a value-added tax increase prevented policy makers from acting to combat the lingering recession.

The Banca Nationala a Romaniei in Bucharest kept the monetary policy rate at a record-low 6.25 percent, matching the expectations of all nine economists surveyed by Bloomberg.

The government, which secured a 20 billion euros ($27 billion) of loans from the International Monetary Fund and European Union to stay afloat, raised the value-added tax by 5 points to 24 percent in July to cut the budget deficit and meet bailout conditions. The tax increase pushed inflation to 7.6 percent in August, the fastest in two years.

“It’s hard to expect any change in the interest rate,” Miroslav Plojhar, an economist at JPMorgan Chase & Co. in London, said before the rate announcement. “The economy is still weak, calling for lower rates, but it is unlikely to happen with inflation in the 7 to 8 percent range. I do not foresee any change until the third quarter of next year.”

The east European country’s economy, mired in the worst recession on record, will probably contract as much as 1.9 percent in 2010, as austerity measures damp consumer demand, the IMF and government forecast. The economy will return to growth in 2011, led by industry and exports, the IMF’s Romania mission chief, Jeffrey Franks, said Aug. 4.

Leu Steady

The leu was little changed following the interest rate decision and traded 0.1 percent lower on the day at 4.2727 per euro as of 12:33 p.m. in Bucharest. It has appreciated 3 percent from a record low of 4.4012 reached in June.

The cost of protection against the non-payment on Romania’s bonds for five years in the credit default swaps market dropped to 360.215 basis points yesterday, the lowest in more than three months, according to data compiled by Bloomberg.

Romania’s contraction may be worse than forecast this year as government spending cuts curb domestic demand, Central Bank adviser Lucian Croitoru said Sept. 23. Romania may miss its IMF- agreed budget deficit targets of 6.8 percent of gross domestic product for 2010 and 4.4 percent in 2011 because of the lingering recession, Croitoru said.

Central bank Governor Mugur Isarescu said July 8 he sees no reason to adjust the benchmark rate as a result of the tax increase, because the expected acceleration in inflation “isn’t monetary.” Policy makers halted rate reductions on June 30 after cutting rates four times in a row to combat recession.

The central bank forecasts inflation will end the year at 7.8 percent, above its target of 3.5 percent plus or minus 1 percentage point, before slowing to 3.1 percent in 2011 as the effect of the VAT increase dissipates, Isarescu said Aug. 6.

To contact the reporter on this story: Irina Savu in Bucharest at

To contact the editor responsible for this story: James M. Gomez in Prague

Thousands protest Romanian austerity measures

Bucharest, Romania (CNN) -- Thousands of protesters rallied Tuesday in Bucharest over government austerity measures that have cut state salaries.

About 8,000 people demonstrated in front of the main government building, unions and security forces said, and they represented a wide range of sectors.

The protesters were demanding the resignation of Prime Minister Emil Boc and his team for deciding on a 25-percent cut to all state employees' salaries as of July 1. The demonstrators want the money back and also want the government to raise the minimum wage stipulated in the current contracts.

They displayed red cards written with the words, "No to austerity."

A march then took place through the capital so the protesters could express their anger in front of other government ministries.

A delegation of protesters was due to meet Boc and the work minister later Tuesday, at the end of the protests, to discuss their demands, a government spokesman said.

The Bucharest protests were taking place a day before wider demonstrations over government austerity measures in more than a dozen other European countries.

The day of action Wednesday was being organized by the European Trade Union Confederation (ETUC), which includes trade unions from 36 European countries and says it has a total of 60 million members.

The main demonstration was planned for Brussels, Belgium, but a general strike was also planned in Spain, and workers were also expected to strike in Ireland, France, Spain, Portugal, Italy, Cyprus, Serbia, the Czech Republic, Poland, Lithuania, and Latvia, according to ETUC.

Romania Will Probably Sell 15% of Transelectrica by May 2011, Baicusi Says

Romania will probably sell 15 percent of Transelectrica SA, the state-controlled power grid manager, by May 2011, to help cover a budget deficit and finance investment, Chief Executive Officer Adrian Baicusi said today.

The government, which owns 73.7 percent of the utility, plans a secondary offering on the Bucharest exchange to increase Transelectrica’s traded equity to 27.8 percent, Baicusi told Bloomberg News in an interview.

“We’re expecting the sale via the secondary offering to happen by May if the process stays on track,” Baicusi said.

Romania plans to sell minority slices of its utilities and of OMV Petrom SA, the country’s biggest oil company, to meet international bailout conditions and to finance infrastructure investment. The country is relying on a 20 billion-euro ($27 billion) bailout led by the International Monetary Fund after recession and austerity measures reduced budget revenue.

Transelectrica’s shares were unchanged at 18.8 lei as of 2:07 p.m. local time in Bucharest, valuing the company at 1.38 billion lei ($435 million).

To contact the reporter on this story: Irina Savu in Bucharest at

To contact the editor responsible for this story: James M. Gomez in Prague

Tuesday, September 28, 2010

Many in Romania miss Ceausescu regime

BUCHAREST, Romania, Sept. 27 (UPI) -- Many Romanians miss the communist dictatorship ofNicolae Ceausescu and believe they were better off then, a survey found.

The study, carried out by CSOP along with the government's Institute for the Investigation of Communist Crimes and the Memory of the Romanian Exile, was released Friday, WAZ.EUobserver reported.

Only 27 percent of Romanians said communism was "wrong," while 47 percent answered "it was a good idea, but badly applied" and 14 percent thought it was a "good idea, and well applied." A striking 78 percent said neither they, nor their families, ever suffered under communism.

Life was better under communism, said 49 percent of Romanians, while only 23 percent said it was worse and 14 percent saw no difference. The main reasons given: everybody had a job (62 percent), decent living conditions (26 percent) and guaranteed housing (19 percent.

Some 25 percent of those interviewed thought Ceausescu was a good leader while 15 percent said the opposite and the rest professed mixed opinions.

The survey was carried out in August and September with a margin of error of 2.9 percentage points.

Romania Delays Reactor Decision to End of Year, Ministry Says

Romania postponed until the end of the year a decision on whether to keep its majority in two planned nuclear reactors or reduce its stake in the project, Economy Ministry officials said.

The Romanian state, which owns 51 percent in the venture to build and operator the reactors, was expected to make a final decision by Sept. 24, the deadline set in an agreement with four energy companies and a steelmaker, Economy Minister Ion Ariton said in an interview today in Bucharest. The partners agreed to the delay, he said.

Italy’s Enel SpA, Iberdrola SA of Spain, Belgium’s Electrabel SA, Germany’s RWE AG and steelmaker ArcelorMittal formed EnergoNuclear with Nuclearelectrica, Romania’s atomic energy administrator, two years ago to build and operate two reactors at a cost of about 4 billion euros ($5.4 billion). CEZ AS the Czech utility, which held 9.12 percent of the venture, said on Sept. 22 it plans sell its stake to focus on domestic investments.

“In the next three months, one or more investors involved in the project can decide to buy the stake” owned by CEZ, Doru Voicu, an adviser to the economy minister, said in a phone interview. “From the information we have until now, all the other investors are still interested in continuing the project and we don’t have any reason to try to search for others. Of course if some of them decide not to continue we will start negotiating with other investors.”

To contact the reporters on this story: Irina Savu in Bucharest at; Andra Timu in Bucharest at

To contact the editor responsible for this story: James M. Gomez in Prague

Romanian govt in uproar amid austerity protests

Associated Press Writer

(AP:BUCHAREST, Romania) The Romanian government was in an uproar Monday over austerity protests _ the interior minister resigned, the opposition demanded the prime minister go as well and top police officials held emergency talks with the president.

The chaos reflected social fallout from the sharp wage cuts, tax hikes and other austerity measures the government has taken to fight its budget deficit amid a deep recession.

President Traian Basescu's government has been unable to pay wages and pensions without a euro20 billion ($26 billion) bailout loan last year from the International Monetary Fund and other lenders, and the IMF is demanding strong action now to trim Romania's national debt. His two-party coalition government, which does not hold an absolute majority in the legislature, is further hampered by the need to find consensus on how to best turn around the economy.

Romania's turmoil is just one part of Europe's season of economic discontent. Widespread anti-government, anti-austerity protests have also erupted in France, Britain, Greece, Spain and other nations as governments struggle to balance budgets at a time of lingering economic weakness.

Thousands of public sector workers demonstrated Monday in Slovenia, another Balkan nation, in an open-ended strike to protest plans to freeze their salaries for two years. Last week, an estimated 1 million people marched in France against plans to raise the retirement age to 62.

And austerity-fueled protests continue to roil Greece, which only avoided bankruptcy in May because of a euro110 billion ($140 billion) rescue package from the IMF and European countries.

Romanians took to the streets of Bucharest, the capital, several times last week in protest but the government was most shocked when 6,000 police angry over a 25 percent wage cut marched Friday to the presidential palace and threw eggs at it. Some shouted "Get out, you miserable dog!"

On Monday, Interior Minister Vasile Blaga said the protesting officers had staged an illegal action and "forgot the oath they swore" when they earned their badges. Blaga, a close ally of the president, resigned, calling the move "one of honor."

Traian Igas, a little-known lawmaker from the Democratic Liberals _ the dominant government party _ was to be sworn in Monday evening as his replacement.

Crin Antonescu of the opposition Liberal Party, meanwhile, called on Prime Minister Emil Boc to resign along with Blaga.

Blaga, Romania's top police chief and the head of its anti-riot police all held an emergency meeting with Basescu on Monday. There was no immediate word on the substance of the talks.

The Romanian president had dismissed his police protection, saying Friday's protest had undermined state authority. Boc had followed suit. Both are now relying instead on security paid for by the presidential budget, one of the few areas of government not cut.

More anti-austerity protests are expected Tuesday in the capital, organized by two large trade unions. Thousands of medical workers, employees of Romania's national railway and others are expected to march.

Romania's main opposition _ the leftist Social Democratic Party _ appears happy now to be out of power as economic hardship hurts the popularity of the ruling Democratic Liberals _ and may even be using its traditional influence with labor unions to foment unrest.

Bucharest mayor Sorin Oprescu _ who does not belong to any party but is a Basescu critic _ insisted Friday's "spontaneous" march by police was legal and organizers could not be fined because there was no violence.

Amid the uproar there were lighter moments. Television cameras captured the president driving himself to work, puffing on a cigarette and speaking on his mobile phone in his Dacia Logan, a boxy, no-frills Romanian-manufactured car. Stuck in traffic like any regular commuter, Basescu joked with reporters.

It is rare for Romanian television to show the president smoking and it is against the law to be on a phone while driving _ although the rule is widely ignored by Romanians of all stripes.

Monday, September 27, 2010

Romanian Govt in Uproar Amid Austerity Protests

BUCHAREST, Romania (AP) — The Romanian government is in an uproar — the interior minister has resigned, the opposition is demanding that the prime minister join him and top police officials are holding emergency talks with the president.

The chaos on Monday reflects the latest fallout from the sharp wage cuts and austerity measures the government has taken to fight its budget deficit amid a deep recession.

Interior Minister Vasile Blaga said police officers protesting a 25 percent wage cut last week had staged an illegal action and "forgot the oath they swore."

Later, the top police chief and the head of the anti-riot police went to meet with President Traian Basescu.

FT: Deported Roma return to poverty

By Chris Bryant in Petrosani, Romania

Published: September 24 2010

When police arrived at Alexandra Caldarar’s makeshift home near Grenoble at about 6am last month the Roma woman discovered that her time in France was up.

Officials told the 25-year old that they would return to take her into custody if she did not leave “voluntarily”. So she agreed to sign papers she did not understand, accepted a €300 ($404) handout and boarded an aeroplane back to her native Romania.

“We had to leave some of my son’s clothes behind in the rush. Later the authorities came and demolished everything,” she says cuddling her 10-month old infant son, who was born in France.

France’s campaign to expel Roma migrants has unleashed intense debate across the European Union, which is struggling to reconcile the right of free movement with sometimes populist-tinged concerns about crime and immigrant integration.

Although Roma communities are found in countries across central and eastern Europe, a particularly intense spotlight has shone on Romania, which joined the EU in 2007 and is home to the union’s largest Roma population – officially some 535,000 but thought to be roughly four times higher.

The bulk of France’s Roma deportees have returned here, including 34 families in Petrosani, a once proud mining community in the Jiu Valley, about a six-hour drive west of the capital Bucharest.

Roma account for about 3,000 of Petrosani’s 40,000 residents. Many live in “Colonie”, a community of tiny former mining cottages lacking a proper sewage system where Roma children instinctively greet strangers with cries of “Bonjour”.

The Roma once found plentiful jobs in Petrosani’s mines but these began closing in 2005 and the social and economic fallout was magnified by a prolonged recession.

Eleven per cent of Petrosani’s residents are unemployed and the proportion of Roma out of work is thought to be considerably higher.

In France Ms Caldarar was paid up to €8 an hour as a cleaner while her husband, Cristinel Muntean, pocketed about €30 a day washing cars. They say there is nothing for them in Petrosani.

“I really don’t know what we’ll do now. If I had a job or a place to live I would stay here,” says Mr Muntean, folding his scarred and tattooed arms. “Given the chance, I’d go back to France.”

So far, however, only one Roma from Petrosani has gone back, locals say, with others too traumatised to repeat the trip.

Mircea Dragoi, 36, says he had been afraid of the French police but has given up finding work in Romania. “It’s too much. I just don’t know what to do anymore,” he says.

France, as well as some non-governmental organisations, views Roma migration as a national problem that countries such as Romania should tackle by better integration as citizens – for example, by improving access to health, education, employment and housing.

“They go [to France] for a better life. The job situation here is a real problem,” acknowledges Tiberiu Iacob-Ridzi, mayor of Petrosani. Romania’s government, while pushing for EU-wide Roma policies, has taken some important steps over the past decade, including affirmative action for Roma in higher education and a drive to end school segregation.

Yet since Romania joined the EU, progress on Roma integration has slowed. For example, scores of health mediators who were part of a widely praised scheme to boost Roma access to the medical system have been laid off as local authorities cut costs in a government drive towards decentralisation.

“We don’t want to take the responsibility away from the Romanian government. [But on Roma monitoring] the EU also has to be more active,” David Mark, executive director of the Roma Civic Alliance of Romania, says.

In Petrosani, the mayor promises to find homes for Roma returning from France and boasts of having renovated housing and repaired roads in Colonie.

Cristinela Ionescu, head of Thumende, a local NGO, produces a weekly hour-long television show in Petrosani on gypsy issues and culture in order to foster better understanding and acceptance of the community. She also organises professional training for local Roma but acknowledges that these barely scratch the surface of a much bigger problem.

“This is a culture of poverty,” she says. “Improving Roma education is the most important thing. It’s the key to everything.”

To the chagrin of French politicians, Romania has failed to spend hundreds of millions of euros of EU funding earmarked for Roma and other vulnerable groups, which might have been put to good use in poor communities. The complexity of the application process, worries about co-financing and bureaucratic delays prevent projects getting off the ground. The issue is set to be addressed by a conference in Bucharest next month.

But one reason for the foot-dragging is that Roma projects are not a priority for ordinary Romanians. Even liberal-minded citizens bemoan their failure to integrate and the embarrassment caused by criminality at home and abroad. Surveys show that many Romanians would not want a Roma neighbour or their child to sit in the same class as Roma children. A crowd in Bucharest booed Madonna, the pop singer, last year when she urged greater toleration of the Roma.

Highly educated, successful Roma commonly opt not to reveal their ethnic background in Romania for fear of harming their careers.

“We don’t have so many positive role models,” says Marian Mandache of Romani Criss, an NGO. “It makes it more difficult to change perceptions.”

Connect-R, a Romanian rap star, broke a taboo at an awards ceremony in July when he opened his jacket to reveal a T-shirt bearing the slogan “SUNT TIGAN” (“I am a Roma”).

Until Romania ends the demotivating cycle of poverty and discrimination, actions like this could remain a rarity and many Roma are likely to look for better lives elsewhere.

Romanian Civil Servants Strike, Testing Cabinet's Will to Meet IMF Goals

By Irina Savu and Andra Timu - Sep 26, 2010

Romanian government office workers go on strike today to overturn pay cuts amid a wave of protests that are testing Prime Minister Emil Boc’s will to continue austerity measures in the face of efforts to topple his Cabinet.

About 34,000 clerical employees plan to remain idle at their desks until the government reverses a 25 percent cut in wages designed to narrow the budget deficit and comply with terms of an International Monetary Fund-led bailout.

The opposition Social Democrats and Liberals say they will try to oust Boc in the second half of October as the IMF forecasts the economy will shrink 1.9 percent this year, extending Romania’s worst recession since the end of communism. Boc’s coalition, with 258 seats in the 471-member parliament, survived a June no-confidence vote by eight votes.

“If the unions manage to get many people out into the streets, this may create pressure on government lawmakers,” said Cristian Parvulescu, a political analyst at Asociatia Pro Democratia, a Bucharest-based non-profit that promotes democracy. Boc’s party includes “former union leaders who may feel extra pressure to vote against the government.”

Romania, which joined the European Union in 2007, is relying on 20 billion euros ($26 billion) of loans from the IMF, European Union and others to fuel an economic recovery.

To qualify for the loans, Boc’s government has cut state wages, increased the value-added tax by 5 points to 24 percent and boosted the retirement age for men and women to 65. The Cabinet has also announced plans to eliminate 74,000 jobs.

Opposition Support

As many as 8,000 police demonstrated outside the prime minister’s office in Bucharest on Sept. 24, demanding Boc’s resignation and a reversal of the austerity measures. Two days earlier, almost 10,000 public employees staged a protest in front of the Labor Ministry.

Anger over the government’s program has boosted support for the opposition.

The Social Democrats were supported by 37.1 percent of voters, compared with 14.6 percent for Boc’s Liberal Democrats in a survey of 1,093 people conducted Sept. 9-13 by GSS 2000. The poll, commissioned by the opposition Liberals, had a margin of error of 3 percent.

Raffaella Tenconi, an economist at Bank of America/Merrill Lynch in Bucharest, said she expects Boc’s government will survive the confidence vote, though further fiscal consolidation will be “very challenging” given the depth of the recession.

“We are not surprised to see growing popular discontent given the recently announced austerity measures,” she said. “We expect this trend to continue in coming months, accentuating the low popular support for the ruling party PDL.”

European Discontent

Workers across eastern Europe are taking to the streets to protest budget cuts after the global financial crisis slashed tax revenues and investment flows. The EU is demanding that all of its members bring their budget deficits in line with the bloc’s limit of 3 percent of GDP after Greece’s ballooning debt undermined confidence in the euro.

Tens of thousands Czech firemen, policemen and other state workers rallied Sept. 21 in Prague to protest planned wage cuts, while Slovak unions plan demonstrations against proposed tax increases. Serbian union leaders plan protests before the end of the month against a proposed overhaul of pensions that would include benefit cuts and raise the retirement age.

“It’s an experience from all over Europe that austerity measures, which very often include budget cuts, are leading to similar demonstrations,” Czech Prime Minister Petr Necas said at the rally against his government’s plans. The moves “are quite naturally unpopular.”

‘Delicate Situation’

The decline of Romania’s economy, which contracted a 7.1 percent last year, slowed in the second quarter as demand for goods such as cars, chemicals, steel and textiles increased in western Europe. GDP shrank 0.5 percent from a year earlier, after a 2.6 percent decline in the previous three months, according to the National Statistics Institute in Bucharest.

Parliament approved Boc’s government in December, ending a stalemate that had left Romania without leadership for more than two months and delayed payments from international lenders. Boc replaced six members of his Cabinet, including the finance and economy ministers, on Sept. 2 in an effort to shore up support for his program in the face of increasing protests.

Romania’s political squabbles have helped weaken the country’s currency. The leu has dropped 1 percent against the euro during the past 12 months, the second-worst performance among 25 emerging-market currencies tracked by Bloomberg.

“Boc’s Cabinet is already facing an extremely delicate situation, and it will lead a hard life if it survives the planned confidence motion,” said Alexandru Cumpanasu, political analyst and deputy head of the Association for Implementing Democracy, in a phone interview. “If we see more protests on a bigger scale in October, then the pressure on lawmakers to vote for the motion will be huge.”

To contact the reporters on this story: Irina Savu in Bucharest at; Andra Timu in Bucharest at

To contact the editor responsible for this story: James M. Gomez in Prague at

AP: Romanian president gives up police protection

BUCHAREST, Romania – Romania's president has withdrawn police protection in response to an "illegal" protest by 6,000 officers facing wage cuts.

Traian Basescu accused officers on Sunday of staging an illegal march outside his office on Friday, which he said undermined the state's authority.

Basescu asked the interior ministry to withdraw his police protection shortly after the Friday protest. Basescu retains his own separate security outfit.

The officers were protesting plans to cut their wages by 25 percent, part of government's austerity measures to reduce the budget deficit.

Prime Minister Emil Boc also asked Sunday for his police protection to be withdrawn. After arriving from a trip to New York, Boc traveled to his residence without police escort.

There has been no reaction from police chiefs, but Interior Minister Vasile Blaga said the organizers of the protest would face legal consequences.

Thursday, September 23, 2010

Romania needs to borrow $7.9 billion in 2011

BUCHAREST, Romania — Romania needs to borrow almost euro6 billions ($7.9 billion) next year to cover its budget deficit and plans to sign a new deal with the International Monetary Fund in 2011 to shore up the ailing economy, the president said.

On Wednesday, authorities said some 5,000 people had gathered to protest in the capital of Bucharest against wage cuts and other austerity measures. They were demanding the government increases salaries to the 2009 level and stop layoffs of public workers.

Authorities slashed public sector wages and hiked sales tax to reduce the budget deficit, as the International Monetary Fund requested.

Romania needed euro20 billion (US$26 billion) in bailout loans from the IMF, the European Union and the World Bank in 2009. Part of the funds helped pay state wages and pensions last year, when the country's economy shrank by 7.1 percent.

President Traian Basescu said the country still needed help with its finances.

"Romania still needs to borrow financial resources," Basescu said late Tuesday in his address to the Parliament. "This is the reason why in 2011 we will sign a new accord with the International Monetary Fund."

The country signed a euro20 billion ($26.2 billion) loan agreement with the IMF, the European Union and the World Bank in 2009, when its economy shrank by 7.1 percent. Some of the money was used to pay salaries and pensions. The agreement ends next year.

The government took harsh austerity measures this year, slashing public sector wages by one-fourth, hiking the sales tax and pledging to cut jobs in the public sector.

Basescu said the country will have to borrow euro5.7 billion ($7.47 billion) in 2011 just to cover the budget deficit, which will be 6.8 percent this year.

During a meeting with IMF mission chief to Romania earlier this month, Basescu said the two sides should assess in October whether Romania should extend the current agreement with the IMF or sign a precautionary agreement. In July, Basescu said he would prefer a precautionary agreement, which would allow the country to access funds only if it faces a critical situation.

However, on Tuesday, Basescu said the forecasts for 2011 show that Romania will only return to growth if reforms are implemented and the budget deficit is reduced.

He said although Romania has seen the peak of its economic crisis, it had not yet reached the peak of its "social crisis" from the recession.

Romanian Parliament Condemns France's Roma Expulsion as Rights Violation

Romania’s parliament condemned the expulsion of Roma from France and other European states, describing it as a “serious violation” of European Union directives and human rights.

The legislators said expelling the Roma, as gypsies from Eastern Europe are known, violates “the right of free movement for all European citizens regardless of nationality or race,” according to an e-mailed statement today.

France’s policy has been denounced by the European Parliament, the Catholic Church and editorials in newspapers such as Le Monde, the Financial Times and the New York Times. EU Justice Commissioner Viviane Reding compared the dismantling of illegal camps to events during World War II, though she later apologized for doing so.

French police were sent into the camps in July after travelers went on a rampage in central France. The riot was in response to a killing by a policeman during an identity check. More than 500 illegal camps have been dismantled in France since then, President Nicolas Sarkozy said recently.

The Romanian parliament requested President Traian Basescu and the government to “take all the political and diplomatic measures needed for protecting the rights of Romanian nationals as European citizens.”

To contact the reporter on this story: Andra Timu in Bucharest at

To contact the editor responsible for this story: James M. Gomez in Prague

Romania Gets $1.6 Billion Payment to Support Deficit as Program `On Track'

Romania received a 1.2 billion-euro ($1.6 billion) loan payment from the European Union today as the bloc said a “much-needed fiscal adjustment is in place” and the country is making progress on its bailout agreement.

The money will help finance Romania’s budget deficit as it struggles to sell debt on the domestic market. The payment came after Romania streamlined its pension system and raised the retirement age to 65 to comply with terms of a 20 billion-euro aid package led by the International Monetary Fund.

The EU and IMF “are happy about what happened under the program, and it’s definitely on track,’’ Laurent Moulin, the bloc’s mission chief in Bucharest, said today. “It’s fair to say a lot of positive things have been done. This program is on track, and the much-needed fiscal adjustment is in place.”

Romania, mired in its worst recession on record, also cut wages for government workers by 25 percent and increased the value-added tax by 5 percentage points to help rein in its budget deficit. Prime Minister Emil Boc faces a confidence vote over the austerity measures next month, prompting investors to demand higher yields on the country’s debt.

Moulin also said Romania’s currency is trading in line with fundamentals after falling during the global economic crisis. The leu has dropped 14 percent against the euro over the past 24 months, the third-biggest decline among the 25 emerging-market currencies tracked by Bloomberg.

The leu “is broadly fairly valued, and I think the colleagues in the IMF share this assessment,” Moulin said at a conference in Bucharest. “The exchange rate was much better controlled than in other countries.”

Monetary Policy

Romania will ease monetary policy once the inflation rate drops to the level it was at before the VAT increase in July, Moulin said. The central bank kept its main interest rate at 6.25 percent for a second meeting Aug. 4, after cutting it by a quarter point in May.

Inflation accelerated to a two-year high of 7.6 percent in August, from 4.4 percent in June. The IMF forecasts it will slow to about 3 percent by the end of 2011.

“Romanian monetary policy will be prudently eased once inflation slows down to the levels preceding a government increase in the value-added tax,” Moulin said.

To contact the reporters on this story: Andra Timu at Irina Savu in Bucharest at

To contact the editor responsible for this story: James M. Gomez in Prague

BBC News: Romanian leader 'asked Sarkozy to stop deporting Roma'

Romania's president has personally asked his French counterpart to "try and stop" the process of expelling illegal Roma (Gypsy) settlers.

Traian Basescu said he had asked Nicolas Sarkozy during a "friendly conversation" at an EU summit last week but had received no clear answer.

France has fiercely defended its expulsion of at least 1,200 foreign Roma since July.

But it has come under heavy criticism from EU partners.

Romania has the largest Roma population in the EU, followed by Bulgaria.

France has been dismantling illegal camps set up by foreign Roma who break the country's residency and employment rules, and flying them to their home countries.

Spanish Prime Minister Jose Luis Rodriguez Zapatero voiced support for the French government on Wednesday in an interview with the Wall Street Journal.

"They haven't been deported because of their ethnic origin," he said.

"The measures were adopted within the rule of law. Integration principles must work, but also public order must be respected in suburban settlements lacking sanitary or security conditions."'Right to move freely'

There was no immediate comment from the French government on President Basescu's remarks.

The Romanian leader told journalists in the Romanian capital Bucharest that Mr Sarkozy had promised to discuss the issue when the two met again in Paris, probably in the next few weeks.

He denied any tensions with Mr Sarkozy, saying: "It was an amicable discussion."

Romania's leader estimated that there were about 1.5 million Roma in his country, "one million of whom are fully integrated, while half a million are not".

"Romania will always defend the Roma's right to move freely in Europe," he said.

"They are European citizens and as long as there is no evidence they broke the law, they should enjoy the same rights of any European citizen."

When Romania and Bulgaria joined the EU in 2007, France and nine other EU states imposed special rules on work and residency which do not expire until January 2014.

Monday, September 20, 2010

DPA: Nobel literature winner Mueller shocked: hero was enemy spy

Berlin - Herta Mueller, current holder of the Nobel Prize for Literature, was in shock Friday after the revelation that the real-life hero of her latest anti-totalitariannovel had actually been a communist spy.

Romanian-born Mueller, who lives in Berlin, received the prize last December for her chilling booksabout the cruelty of communism and her own persecution by Romania's Securitate secret police.

Last year, she published a novel, entitled Atemschaukel (rocking of breath) in German, about a homosexual Romanian who is locked up by the Soviets in a Ukrainian gulag where many people starve to death.

Her close friend, Oskar Pastior, helped her till his sudden death in 2006 to write it. It was based on his true story.

On Thursday, a literary scholar revealed that Pastior, a poet and an ethnic German like Mueller, had been a traitor.

Using the code name 'Otto Stein,' he worked as an informer from 1961 to 1968 for the Securitate, documents in Bucharest show.

Stefan Sienerth, the scholar, disclosed Pastior's involvement in the literary quarterly Spiegelungen, publishing the June 8, 1961 document signed by Pastior in which he agrees to pass on information about his friends and associates to the secret police.

The document offered rehabilitation to Pastior. After his 1949 release from the gulag, Pastior wrote poetry in German, married and become a radio reporter. The spying ended when he was allowed through the Iron Curtain to live in the West in 1968.

The German daily newspaper Frankfurter Allgemeine quoted Mueller on Friday saying that she had learned of the document's discovery several weeks ago, and 'felt both horror and rage.'

'It was like being slapped in the face,' she said.

Mueller said she had since progressed to a state of mourning.

During a Thursday evening literary reading, Mueller seemed to have bottled up her feelings again, speaking only of Pastior's ordeal in the gulag. They visited the former concentration camp site together before his death.

Over the years the writer has clashed with Romania's post- communist intellectuals with her remorseless campaign against former Securitate informers, demanding that writers and theatre people who were on the police payroll be unmasked and punished.

A Romanian poet Mircea Dinescu said Friday he was saddened by the disclosure of Pastior's involvement.

'It's just as well he is dead and does not have to live through his unmasking,' Dinescu told the German Press Agency dpa.

Sienerth, the Munich academic, said Pastior must have been put under immense pressure from the Securitate to collaborate.

'One should not forget that Pastior's contributions to literature were quite large,' he said.

The Securitate was one of eastern Europe's nastiest secret police agencies till communism collapsed in 1989. Scholars estimate Securitate officers made 10,000 people 'disappear' during its 40-year reign of terror.

It had 18,000 regular employees, plus a 50,000-strong paramilitary force and 162,000 informers under contract.

Romanians seek halt to Canadian gold mine project


BUCHAREST — Opponents of a Canadian gold mine project in a Romanian village on Saturday called on the Romanian culture ministry to save a threatened ancient site in the area.

"The universal value of the Rosia Montana site and especially of the Roman mining tunnels of the Carnic mountains has been acknowledged by numerous specialists around the world," local NGO Alburnus Maior said.

"Issuing an archaeological discharge certificate would lead to the destruction of the site and would seriously alter this cultural heritage," the NGO added.

Alburnus Maior says it represents hundreds of locals opposed to the open-cast gold mine project by Rosia Montana Gold Corporation (RMGC), the daughter company of Canadian firm Gabriel Resources -- which holds 80 percent of RMGC.

RMGC recently sent a request to the Romanian culture ministry for a new archaeological discharge for Carnic, one of the mountains where it intends to extract gold.

A previous certificate, given in 2004, was cancelled in court.

The National Commission for Archaeology is to look into the new demand though no date has been set for a decision.

Rosia Montana's green hills are said to hold more than 300 tonnes of gold, one of the biggest deposits in Europe.

For years, archaeologists and historians from around the world have said that the mine would damage one of the most extensive remaining networks of Roman mining tunnels -- an allegation rejected by RMGC.

The International Council for Monuments and Sites, one of the three formal advisory bodies to the World Heritage Committee, recently supported moves to put Rosia Montana on Romania's tentative list for UNESCO, a first step in the long process towards a World Heritage listing.

Gabriel Resources obtained a concession license to exploit the local gold in 1999. More than a decade later, the firm has still not been granted all the required environmental and archaeological permits.

Gabriel Resources said on Friday that a review to determine the environmental impact of the Rosia Montana gold mine project would restart under the supervision of the Romanian environment ministry.

Friday, September 17, 2010

Romanian media owner arrested on charges of helping man convicted of fraud, is freed

By The Associated Press

BUCHAREST, Romania — The owner of an influential Romanian TV station, charged with helping a man convicted of fraud, is being released from jail.

Critics have charged that the case against Sorin Ovidiu Vantu is politically motivated, as President Traian Basescu tries to divert attention from economic problems. Vantu's Realitatea TV reports critically on the government. He also owns several newspapers.

Bucharest's Appeal Court ruled Thursday that Vantu can be released during the investigation. He was arrested Sept. 10.

Vantu is charged with helping Nicolae Popa leave Romania illegally in 2002 before Popa was sentenced to 15 years in prison for fraud in connection with the collapse of an investment scheme. Vantu also allegedly helped Popa financially while he was abroad.

Wednesday, September 15, 2010

AP: Romanian public sector workers to go on strike


A union leader says more than 30,000 public sector workers in Romania will go on strike over wage cuts.

Sebastian Oprescu, chairman of the National Union of Public Workers, said Tuesday workers from hundreds of state institutions will start their strike on Sept. 27.

The government slashed public sector wages by 25 percent in July to meet the conditions of a euro20 billion ($25 billion) loan from the International Monetary Fund, the World Bank, and the European Union.

Romania's economy is expected to shrink by more than one percent this year, after it declined by 7.1 percent in 2009.

Romania Is Ready to Sell Medium-Term Notes After Mid-October, Dragoi Says

Romania will be ready to sell its first euro-denominated medium-term notes after mid-October, part of a three-year plan to sell as much as 7 billion euros ($9 billion)of foreign debt, Deputy Finance Minister Bogdan Dragoi said.

“We are still working on getting the documents for the Euro Medium-Term Notes, or EMTN, ready,” Dragoi said in a phone interview in Bucharest today. “We expect the procedures to be finalized by mid-October. From that moment on, we’ll keep a close watch on the market and issue when the time is right.”

Romania is seeking to raise funds on international markets in its second offering this year, following the Czech Republic, which last week sold 2 billion euros of bonds due in 2021 and attracted 5.3 billion euros in bids. Romania wants to make up for its failure to sell leu-denominated treasuries on the domestic market. Poland may sell bonds in euros as early as this month because of “favorable” market conditions, Deputy Finance Minister Dominik Radziwillsaid yesterday.

The government, which turned to the International Monetary Fund and the European Union for a 20 billion-euro bailout last year, may raise at least 1 billion euros in euro-denominated bonds from the first sale this year in the EMTN program, former Finance Minister Sebastian Vladescu said on Aug. 26. The Finance Ministry selected Vienna-based Erste Group Bank AG and Paris- based Societe Generale SA to manage the sale.

Romania sold 1 billion euros of five-year bonds paying a 5 percent coupon in March in the country’s biggest debt offering. The government revived the sale, which was canceled in November, to take advantage of renewed investor confidence after Prime Minister Emil Bocpledged austerity measures in the 2010 budget.

Rising Yields

The bonds have dropped since the sale, lifting the yield to 5.793 percentage points today, from 4.91 percentage points when they were sold, Bloomberg data show. The leu rose 0.6 percent to 4.2350 per euro as of 1:21 p.m. in Bucharest trading, and the Bucharest Stock Exchange’s benchmark BET index rose 0.2 percent to 5,177.80.

The European Union’s second-poorest country after Bulgaria is struggling to find buyers for its leu-denominated debt to cover its budget deficit of 6.8 percent of gross domestic product this year, after a July increase in a value-added tax boosted consumer prices. The government has raised only 25.8 billion lei from the sale of Treasury bills and bonds from the domestic market so far in 2010, compared with a planned 36.55 billion lei.

An opposition plan to file a no-confidence motion against the government by year-end prompted investors to demand higher borrowing costs on concern the unpopular austerity measures weakened theruling government majority.

To contact the reporters on this story: Irina Savu in Bucharest at; Andra Timu in Bucharest at

Monday, September 13, 2010

Romanian Political Turmoil Won’t Derail Budget Cuts, S&P Says

Sept. 9 (Bloomberg) -- Romania’s political turmoil won’t reverse the changes made by the government under the terms of its International Monetary Fund-led bailout package or affect its credit rating, Standard & Poor’s said.

“We don’t expect that political disagreements could impede the country’s compliance with its structural reform and budgetary targets,” Marko Mrsnik, an S&P credit analyst, said yesterday in a phone interview from London. “Our current outlook is stable, implying the risks are balanced at this rating level.”

Prime Minister Emil Boc replaced six members of his Cabinet, including the economy and finance ministers, on Sept. 3 after the opposition said it would seek to topple the government this year by filing a motion of no-confidence. Boc survived a similar motion in June by eight votes.

The European Union’s second-poorest member is relying on the 20 billion-euro ($26 billion) bailout to stay afloat after its worst recession on record. Boc has faced months of criticism from unions and opposition leaders for implementing austerity measures, including a 5 percentage point increase in the value- added tax and a 25 percent cut in public employee wages, to qualify for the loans.


Mrsnik said Romania’s BB+ credit rating, the highest junk grade, may “eventually” be raised if the government pushes ahead with reforms beyond the current IMF-agreement, which expires in May 2011. S&P gives Romania the same rating as Greece and Azerbaijan.

If Romania builds “a sustained track record of fiscal performance, including improvement in the fiscal framework and ensuring an orderly containment of vulnerabilities in the financial sector, we could eventually raise the ratings,” he said. “Structural improvements in the economy, more than cyclical recovery in growth, are key for improvement in the rating outlook.”

Romania’s economy contracted 7.1 percent last year after growing the same amount in 2008 as a lending boom turned to bust. The economy is expected to shrink 1.9 percent in 2010 before expanding 2 percent in 2011, according to the IMF.

“We do expect economic growth to recover gradually and to be more balanced than in the run-up to the crisis, when it was predominantly credit-fueled,” Mrsnik said. “As a consequence, while Romania preserves high-growth potential, we expect growth rates over the medium term to be lower than previously, when they reached 7-8 percent per year.”

--Editors: Alan Crosby, James M. Gomez

To contact the reporter on this story: Irina Savu in Bucharest at Andra Timu in Bucharest at

To contact the editor responsible for this story: James M. Gomez in Prague at

Romanian Trade Deficit Widened in July on Year for Third Month

Sept. 9 (Bloomberg) -- Romania’s trade deficit widened in July for a third consecutive month on higher imports as demand from western Europe for the country’s exports shrunk.

The gap widened to 624.4 million euros ($793 million) from 552.1 million euros a year earlier, the Bucharest-based National Statistics Institute said in an e-mail today. The deficit was a revised 897.1 million euros in June.

Export growth slowed to 19 percent on the year in July from 31 percent in the previous month, while imports increased 18 percent, the institute said. The trade gap is the main component of Romania’s current-account deficit, which prompted the International Monetary Fund to lead a 20 billion-euro international bailout package to Romania last year.

Romanian media owner arrested over fraud case

(AP:BUCHAREST, Romania) One of Romania's most influential media owners was arrested Friday on allegations he aided a man convicted of fraud in the collapse of an investment scheme.

Prosecutors arrested Sorin Ovidiu Vantu, who owns Realitatea TV news channel, and he can be held for 29 days pending an investigation. Vantu's driver was also arrested in connection with the case.

Vantu is charged with helping Nicolae Popa leave Romania illegally in 2002 before he was sentenced to 15 years in prison for fraud. He also allegedly helped him financially while he was abroad.

Popa was tried in absentia for defrauding hundreds of thousands of people many of whom were left without their savings. He was arrested on an international warrant in Jakarta, Indonesia in December, and Romania has reportedly been trying to extradite him since.

Critics say the case is a politically motivated attempt to distract from the country's deep economic problems. Vantu is often criticized by President Traian Basescu, and Vantu's news channel reports critically on the government.

The government says it is tackling endemic corruption.

Tuesday, September 7, 2010

EU money helps Roma get jobs and fight stereotypes

By Mihaela Rodina (AFP)
FRANCESTI, Romania — The Roma minority are targets of a security crackdown in France, but an EU-funded project has given two dozen members of the community new jobs and new hope at a troubled time for gypsies.

"We want to prove that we too can work hard," Robert Apostolache, 37, told AFP, who is one of 19 Roma men and four women who have been employed since June in a double-glazing workshop in the village of Francesti, west of Bucharest.

"Usually, when people see us they think all we want to do is steal," he said, but now the father of four who used to make a living as an occasional mason, has the opportunity to beat the stereotypes.

So far local Romanian authorities have submitted 26 programmes aimed at Roma inclusion to the European Union, which has unblocked 85 million euros (110 million dollars) of funding.

On Tuesday the European Parliament will debate the subject of the Roma minority in the wake of France's controversial deportation of hundreds of gypsies.

Dressed in purple overalls, the workers in Francesti, a village where more than 40 percent of the 5,800 inhabitants are Roma, move around like real professionals, cutting the glass sheets and assembling the metallic frameworks.

"All of them are putting a lot of soul in what they are doing," Meda Badita-Zarnesti, the project manager, said.

The French government blames Romania for not using more EU funds to improve the plight of its 2 million Roma, but "money has been very slow in coming", Badita-Zarnesti said, complaining about the large amount of red tape.

Out of a total of 360,000 euros (464,000 dollars) promised for the workshop, an instalment of barely 30,000 euros was disbursed last week.

The Romanian government, which should come up with 15 percent of the total, has not delivered either.

This means the workers must wait four months for their 260-euro monthly wages, while the windows and doors will continue to be loaded onto a horse-drawn cart instead of a pick-up truck.

The average salary in Romania is 350 euros, or 450 dollars.

"I could work day and night for a week only to see this programme on track," the 45-year-old mayor of Francesti Daniel Nicolaescu said.

The former army officer has been battling hard to secure EU funds to modernize the local infrastructures and create jobs, especially for the Roma.

Apart from the workshop, he has also created an activity centre, a day nursery and plans to open a sports complex, a furniture workshop and a brick plant, both of which which will capitalize on the Roma's traditional skills.

"Many of the Roma here have been making bricks in their backyard. If I can open this plant, they will be able to work in a more organized way," Nicolaescu said.

However, of the 15 or so projects he has submitted to the EU, only a couple have got the green light.

But while Nicolaescu said he would not give up whatever the obstacles, Florian Vatafu, mayor of the nearby village of Voicesti, is ready to throw in the towel.

"It's terribly hard to make things work," said the Vatafu, who planned to set up a workshop employing 18 Roma. "If I were to start all over again I wouldn't do it."

Romania Sells Fewer Six-Month Bills Than Planned on Government Demand

Romania sold less debt than planned at an auction of six-month Treasury bills today, as investors sought higher yields than the government was willing to pay on mounting concern about political instability.

Prime Minister Emil Boc’s administration raised 279 million lei ($84 million) today, failing to sell 1 billion lei of notes due March 9, 2011, the Bucharest-based Banca Nationala a Romanieisaid on its website. The average yield was 7 percent, unchanged from the last similar auction of the notes on Aug. 23.

“The government still sticks to the 7 percent threshold and the market pressure is now intensifying even on the shorter maturities,” said Gyula Toth, a Vienna-based emerging-market strategist at UniCredit SpA. “The recent political noise did not help either. The most important thing is to keep the” International Monetary Fund “program on track.”

Romania, which relies on a 20 billion-euro ($26 billion) bailout led by the IMF, is struggling to raise funds from the domestic market to cover its budget deficit after an increase in a value-added tax boosted consumer prices. An opposition plan to file a no-confidence motion against Boc’s government by year-end also prompted investors to demand higher borrowing costs.

Government Limits

The government increased VAT by 5 percentage points to 24 percent from July and inflation accelerated to the fastest pace in almost two years, above the 7 percent yield the government signaled it is willing to pay. Investors submitted 1.47 billion lei of bids today for the six-month bills at the auction, according to the central bank.

“The Ministry of Public Finances rejected all the bids which exceeded a 7 percent yield,” the central bank said.

Romania stands to receive 1.2 billion euros from the European Union this month as the next bailout payment. The Finance Ministry has raised 28 billion lei from the sale of Treasury bills and bonds from the domestic market in 2010, compared with a planned 34.25 billion lei.

“The Finance Ministry has two options to succeed in borrowing in lei,” said Vlad Muscalu, an economist at ING Bank Romania SA. “Either shorten maturities or start paying more. After today’s auction, it’s getting even more difficult for the Finance Ministry to maintain the 7 percent threshold.”

To contact the reporters on this story: Irina Savu in Bucharest at Andra Timu in Bucharest at

Friday, September 3, 2010

Romanian PM shakes up cabinet

BUCHAREST, Romania (AP) -- Romania's unpopular government plunged temporarily into turmoil Thursday after the prime minister fired five Cabinet ministers and named new ones, with the economy minister also saying he will quit.

Romania is mired in recession and the government has slashed public sector wages by a quarter and hiked sales tax from 19 to 24 percent on July 1 to reduce the budget deficit -- measures derided by Romanians but requested by the International Monetary Fund.

The cutbacks are aimed at meeting conditions for a euro20 billion ($26 billion) loan from the IMF, the European Union and the World Bank to bail the country out of serious financial difficulty it encountered last year, when its economy contracted by 7.1 percent. Some of the money was used to pay pensions and wages.

Prime Minister Emil Boc fired the finance minister, labor minister, agriculture minister, transportation and communications minister, saying it was necessary to continued economic reforms. Economy Minister Adriean Videanu has told Boc he wants to quit the government to return to party business.

Boc said he chose the new Cabinet based on professional merits, but critics accused him of firing the ministers to strengthen his own hand.

Boc named six replacements, relieving some of the immediate political instability. But there were concerns that the new economy and finance ministers are little known names in Romania. Boc did not fire any of the ethnic Hungarian ministers, likely because he counts on the support of their party in Parliament.

Finance Minister Sebastian Vladescu criticized his firing saying it was politically motivated. Earlier this summer, he was chastened by Boc for saying that Romania would scrap the flat personal income tax in favor of a progressive tax system that taxes top earners at a higher rate. Vladescu had played a key role in IMF negotiations.

David Oxley, an emerging market economist for Capital Economics in London said: "The question is whether there is the political will to make the cutbacks. Will (the firings) affect the political will?" he told the Associated Press.

Several key members of the governing Democratic Liberal Party called for Boc to resign. The government's popularity has plummeted in recent months because of spending cuts, but also due to a growing dissatisfaction with President Traian Basescu, who is seen as playing a key though informal role in government affairs.

The leu, Romania's currency, dipped by 0.3 per cent following the news.

The IMF has predicted that Romania's economy will shrink by 1.9 percent this year, in 2009, before returning to growth in 2011.

The opposition Social Democrats have said they will file a motion of no-confidence, but it is not clear whether it can succeed because Boc's Democratic Liberal Party has the support of minority ethnic Hungarians whose party is also in government.

Political instability has plagued Romania in the last year before presidential elections that Basescu won. Boc's previous government collapsed last year which led to the temporary suspension of Romania's IMF agreement

Thursday, September 2, 2010

Romanian Premier Plans Cabinet Reshuffle Amid Confidence Vote

Sept. 2 (Bloomberg) -- Romanian Prime Minister Emil Boc plans to reshuffle his cabinet as his government faces a motion of no-confidence from two opposition parties.

Boc announced the plan late yesterday in Bucharest after meeting with lawmakers from his Liberal Democrat Party. The premier said he will meet with President Traian Basescu and party leaders before making the changes. He provided no details on what the changes would be or when they would take place.

The opposition Social Democrats and the Liberals said earlier that they plan to file a no-confidence motion by year- end as they seek to form a government that will reverse Boc’s increase in the value-added tax and revive the economy. The two parties have 214 votes in the 471-seat legislature.

Boc’s government cut public-employee wages by 25 percent and raised VAT by 5 percentage points to help meet conditions for a 20 billion-euro ($26 billion) bailout led by the International Monetary Fund. Those moves triggered a June no- confidence motion that the ruling coalition won by 8 votes.

“We aim to end Boc’s incompetent government,” Liberal leader Crin Antonescu said yesterday at a news conference. “We agreed to file the motion as soon as possible, but we’ll choose the appropriate timing.”

Under Romanian law, the opposition may file one no- confidence motion during each parliamentary session.

The European Union’s second-poorest member is relying on the bailout from the IMF, EU and other international lenders to stay afloat. Romania’s economy, mired in the worst recession on record last year, will probably contract again in 2010 as government austerity measures damp consumer demand, IMF Mission Chief Jeffrey Franks said Aug. 4.

Ponta said the Socialists and Liberals will try to form a government that will seek to introduce a separate 5 percent value-added tax on food and construction and cancel Boc’s VAT increase, bringing the rate back to 19 percent on other items. A new government could be led by an independent prime minister who would take other steps to bolster the economy, Antonescu said.

--With assistance from Andra Timu in Bucharest. Editors: Alan Crosby, Willy Morris

To contact the reporter on this story: Irina Savu in Bucharest at

To contact the editor responsible for this story: James M. Gomez in Prague at

Wednesday, September 1, 2010

Fossil of stocky new predatory dinosaur unearthed in Romania


WASHINGTON — The fossil of a stocky new dinosaur with two sets of claws on its feet unearthed in Romania has given researchers a window into what European predators looked like in the final years of the Age of Dinosaurs.

"We've all been waiting for something like this," said study author Mark Norell, chair of the Division of Paleontology at the American Museum of Natural History.

"Balaur bondoc is heavy, with unexpectedly stocky limbs and fused bones. It shows just how unusual the fauna of the area was during the waning years of the dinosaur era."

Balaur bondoc -- which means "stocky dragon" -- is related to the Velociraptor but has 20 unique characteristics.

It was relatively small -- about 1.8 to 2.1 meters long including its tail, with a body about the size of an oversized turkey -- and walked on powerful hind legs. Enormous muscles attachment areas in the pelvis indicated it was adapted for strength over speed.

Its hand was atrophied and some of the bones were atrophied, which would have made grasping difficult and indicates that the lower limbs were used to grasp and disembowel prey.

"Balaur is a new breed of predatory dinosaur," said co-author Stephen Brusatte, a graduate student at Columbia University.

"Its anatomy shows that it probably hunted in a different way than its less stocky relatives," he said in a statement.

"Compared to Velociraptor, Balaur was probably more of a kickboxer than a sprinter, and it might have been able to take down larger animals than itself, as many carnivores do today."

It prowled Romania during the Late Cretaceous period -- about 90 to 65 million years ago -- when warm temperatures and high sea levels fragmented Europe into small islands.

Herbivores unearthed from the period were also dwarfed -- like sauropods the size of cows and tiny duck-billed dinosaurs -- but Balaur bondoc is the first reasonably complete skeleton of a carnivorous dinosaur discovered which was dated to that time.

"Balaur might be one of the largest predators in this ecosystem because not even a big tooth has been found in Romania after over a hundred years of research," said co-author Zoltan Csiki of the University of Bucharest.

Fragments of Balaur had been discovered more than a decade ago, but its body was "so weird we didn't have any idea where to fit them," he added.

"As European dinosaur faunas were known to be peculiar, we half-expected to find peculiar predators as well," Csiki said. "But, as the first good record of these, Balaur surely exceeds our most daring expectations."

The new dinosaur was described in a study published Monday in the Proceedings of the National Academy of Sciences.

Romania Must Pay Debts, Pass Pension Changes to Get IMF Payment

By Andra Timu and Irina Savu - Aug 31, 2010

Romania must prove it paid overdue debts to private companies and approve changes in its pension system by the end of September to unlock the next installment of its bailout loan, the International Monetary Fund

The government will have to produce documents showing it has made 1.9 billion lei ($567 million) in payments to health- care companies before the IMF board meets in late September, Tony Lybek, the fund’s representative for Romania and Bulgaria, said in an interview yesterday.

Romania is scheduled to receive about 900 million euros ($1.1 billion) as the next tranche in a 20 billion-euro bailout from the IMF, European Commission and other international lenders. The European Union’s second-poorest country took the loan last year because of dwindling budget revenue and pressure on its currency.

The government has “committed to make payments on arrears of 1.9 billion lei,” Lybek said at the Palace of Parliament in Bucharest. “This is a prior action for the review, thus we need to see the documentation that these payments have been made.”

Prime Minister Emil Boc’s government raised the value-added tax by 5 percentage points to 24 percent and cut public wages by 25 percent from July to meet an IMF-agreed budget deficit target of 6.8 percent of gross domestic product and win approval for the previous loan payment.

‘Very Concerned’

The IMF allowed Romania to forgo the overdue debt payments before approving the previous five installments totaling 10.7 million euros.

The Washington-based lender has “been very concerned with the arrears problem because it’s a vicious circle when the government doesn’t pay its bills,” Lybek said.

Lawmakers must also adopt a law streamlining the public pension system and increase the retirement age by late September to qualify for the next payment, Lybek said. The next IMF mission will come to Bucharest in late October or early November, and the fund’s board will meet to decide on that review of the loan program in the second half of December.

“Right now it seems that the economy will be picking up in 2011, which will help revenue and make some room for dealing with the arrears problem,” Lybek said. “The suppliers of goods and services can’t pay their own bills and can’t pay taxes.”

Romania’s economic contraction slowed to an annual rate of 0.5 percent in the second quarter, after a 2.6 percent decline in the previous three months, the National Statistics Institute said Aug. 13. The economy expanded 0.3 percent from the previous period, its first quarterly growth since 2008.

“There could be a smaller decline again in the third quarter because these necessary measures that the government has taken can have a temporary negative effect on economic activity,” Lybek said. “But then, as that effect is being phased out we will see growth picking up.”

The IMF estimates Romania’s economy will contract for a second year in 2010, shrinking by as much as 1.9 percent because of weak domestic demand, before growing by as much as 1.5 percent in 2011.

To contact the reporter on this story: Andra Timu in Bucharest at To contact the reporter on this story: Irina Savu in Bucharest at