Tuesday, August 30, 2011

Romania suspended from Kyoto carbon trading

Published: 30 August 2011
Published on EurActiv (http://www.euractiv.com)


A UN panel has suspended Romania's right to trade its surplus carbon emissions after it breached rules on emissions reporting, Bucharest's environment ministry said on 28 August.

Background

The Kyoto Protocol allocated emissions caps to developed countries from 2008-12 through a quota system of carbon permits or credits. Governments that meet their targets can sell any difference in the form of Assigned Amount Units (AAU’s).

As well as actual emissions, other credits can be bought and sold. Land use changes brought about by reforestation can earn Removal Unit (RMU’s). Joint Implementation Projection investments can generate Emissions Reduction Units (ERU’s). And Clean Development Mechanism projects can accrue Certified Emissions Reductions (CER’s).

The EU carbon trading scheme was adopted under the Kyoto Protocol, which sets binding targets for 38 industrialised countries for reducing greenhouse gas emissions by 5% between 2008 and 2012 compared to their 1990 level.

The scheme allows around 12,000 companies including huge multinationals to buy and sell rights to pump industrial gases into the atmosphere.

The UNFCCC compliance committee, which had been meeting in Bonn for a week, found "irregularities" in Romania's 2010 greenhouse gas emissions data, and ruled that its national emissions inventory had been inadequately kept.

"Maybe tough measures will lead to more transparent information," Natalia Yakymenko, an analyst with Point Carbon, told EurActiv from Kiev.

"It's hard to evaluate whether Romania's projects have really generated anything."

At issue is the lightly regulated 'Track 1' procedure for trading Assigned Amount Units (AAUs), a carbon credit, under the Kyoto Protocol's Joint Implementation (JI) Mechanism.

'Track 2' agreements are supervised by the Joint Implementation Supervisory Committee (JISC). But 'Track 1' deals are bilateral agreements regulated only by former Soviet bloc countries, and developed nations that want to offset their carbon emissions in them.

Third-party verification of projects is hard to establish when countries such as Romania "do not publish any information anywhere," Yakymenko said.

Because the UNFCCC ruled that Romania had not met the six eligibility criteria for AAU trading under Track 1, it will now only be able to trade under Track 2.

Asked his opinion of the transparency of Romania's JI procedures, Benoit Leguet, a member of the JISC, told EurActiv: "I would be a liar if I told you that I was fully satisfied."

"But the real problem is that the whole [Track 1] process is not transparent," he added.

In some countries, up to 75% of carbon credits - such as the JI's Emissions Reduction Units (ERUs) - are generated by Track 1 projects.

The JISC proposed merging the two tracks for project approval into a single system at last year's UN climate conference in CancĂșn, Leguet noted. But consensus could not be agreed.

Last December, Bucharest had hoped to earn €1.5 billion by selling 300 million carbon credits to two Japanese companies, according to Romanian Environment Minister Laszlo Borbely.

But Romania has now been suspended from Kyoto's carbon market – with immediate effect – until it can put in place an adequate system for monitoring emissions.

Prime Minister Emil Boc said he would fire the head of the country's environmental protection agency. He also called for measures to allow carbon trade to be restarted within six months.

"Romania will prepare a revised version of the national inventory and send it to the UNFCCC and based on its evaluation will then ask to reinstall eligibility as soon as possible," the environment ministry said in a statement.

On 25 August, another Eastern European country, Ukraine, also had its carbon credit trading rights suspended after the UNFCCC found that it had under-reported its greenhouse gas emissions.

Kiev had reportedly failed to act on earlier warnings that it was in non-compliance.

Oleksii Khabatuik, the head of Ukraine's emissions inventory, said that the country would appeal the decision.


Romanian official quits after carbon market suspension

(AFP)

BUCHAREST — The head of Romania's environment protection agency quit Monday after the Balkan country was blocked from selling carbon credits over concerns about irregularities, the government said.

Iosif Nagy, named to the job in 2010, told Agerpres news agency he was paying for his predecessors' errors.

The committee monitoring Kyoto Protocol compliance has suspended Romania from the programme due to "irregularities observed" in Bucharest's 2010 greenhouse gas emissions data, the environment ministry said Sunday.

In December, Romanian Environment Minister Laszlo Borbely said the country hoped to earn some 1.5 billion euros ($2.2 billion) from selling carbon offsets.

Romania was in talks with two Japanese companies on selling parts of the 300 million carbon credits it had been granted by the Kyoto committee.

The suspension has immediate effect, and Bucharest must put in place an "adequate" system for monitoring emissions before it can resume selling carbon offsets, the ministry explained.

The environment ministry said it had already begun developing an improved emissions monitoring system so that it could re-enter the carbon market in the near future.

The carbon trading scheme was adopted under the Kyoto Protocol, which sets binding targets for 38 industrialised countries for reducing greenhouse gas emissions by five percent between 2008 and 2012 compared to their 1990 level.

The scheme allows around 12,000 companies including huge multinationals to buy and sell rights to pump industrial gases into the atmosphere.

Romania aims to sell 4.7 bln lei in Sept debt

Aug 29 (Reuters) - Romania plans to sell 4.7 billion lei ($1.59 billion) worth of leu currency bills and bonds in September, more than the 2.6 billion lei it sold this month, the finance ministry said on Monday.

Debt managers have sold a little under 38 billion lei so far this year, and have tapped foreign markets for 1.5 billion euros in five-year euro debt.

Yields have been rising steadily across maturities at tenders in August, reflecting market concerns over the euro zone's debt woes, and thefinance ministry has sold less paper than planned and even rejected all bids for one-year treasury bills.

Traders have said they expected the surge in yields over the past month to be temporary.

In September, the ministry plans to sell 2.2 billion lei in one-year paper and two tenders for six- and nine-month paper seeking to sell a combined 900 million lei. It has also scheduled tenders for three-, five- and 10-year bonds seeking to raise a combined 1.6 billion lei. ($1 = 2.955 Romanian Lei) (Reporting by Sam Cage)

Monday, August 29, 2011

Romania’s president backs controversial gold mining project in Transylvania

By Associated Press

BUCHAREST, Romania — Romania’s president says he supports a controversial gold mining project in western Transylvania, where 300 tons of gold and 1,600 tons of silver lie.

President Traian Basescu says “any country that has resources must use them” and the investment by Canada’s Rosia Montana Gold Corp. will bring jobs. He says Monday the project “has been buried since 1997” because of cowardly politicians.

Opponents say building the open-cast mine would damage ancient monuments and destroy a mountain face. They have also criticized the gold-extracting process for using cyanide.

Rosia Montana says it will be careful to preserve the environment. The company still needs to get certain permits to go ahead with the project.

Romania Natural Gas Prices to Rise 10% in October

Romanian prices of natural gas for industrial consumers such as chemical and steel plants will rise 10 percent in October, Mediafaxreported, citing unidentified government officials.

Prices of the commodity will probably rise for the second time this year after a 10 percent increase in July, according to the news service. The Romanian government approved in June a measure to keep natural gas prices for households unchanged from July until March next year, and to raise tariffs for industrial consumers by 30 percent.

To contact the reporter on this story: Andra Timu in Bucharest at atimu@bloomberg.net.

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

ROMANIA TO FORCIBLY EVICT HUNDREDS OF ROMA

Amnesty International
26 August 2011


Hundreds of Roma people could be made homeless as Romanian authorities reportedly prepare to demolish their houses in the north-western town of Baia Mare.

The Mayor of Baia Mare has told a local paper that plans to demolish the homes of hundreds of Roma living without identity papers in the town will go ahead by next week “at the latest”.

The Roma families say they have not been formally notified of the plans.

“Once again, Romanian authorities are openly discriminating against members of the Romani community,” said Jezerca Tigani, Amnesty International’s Deputy Director for Europe.

“Forcing out people who do not have a registered address in Baia Mare is a punitive measure that deliberately targets those with no official residence. The Mayor of Baia Mare must immediately put a stop to these plans.

“When the authorities evict Romani communities against their will, without proper consultation, notice or alternative housing, they are violating international treaties that the government of Romania has signed up to, ” she added.

The planned evictions will affect Roma people living in the Craica, Pirita, Ferneziu and Horea areas of Baia Mare, who will be sent back to their places of origin across Romania and prevented from returning to the town.

“Evicting these people and forcing them out of the area violates their right to live in a place of their choice. The authorities in Baia Mare need to start a dialogue with these families as soon as possible and provide them with proper alternative housing,” Jezerca Tigani said.

This is the second attempt by local authorities in Baia Mare to evict Roma.

In July last year, the then Deputy Mayor announced a plan to demolish the homes of approximately 200 Romani families from an informal settlement in the Craica area. He backtracked after national and international criticism.

Although those currently threatened with eviction live in informal settlements in poor conditions, they say they want to remain in the area because they have nowhere else to go.

One man in Ferneziu told Amnesty International: “We do not have proper drainage systems and when it rains the water gets into the houses. But we don't want to move, we would like to improve our houses here.

Many are struggling. A Roma woman told Amnesty International: "After my house burned down, the municipality official told me to build a shack here until I manage to rebuild my house again. But I have ten children and I don’t have any money,"
About two million Roma live in Romania, making up about 10 per cent of the total population.

According to government statistics, as many as 75 per cent live in poverty, compared to 24 per cent of Romanians in general.

Roma rarely own land and property and they are further disadvantaged by the lack of social housing in a country where 97 per cent of housing is private.

Although some Roma people live in permanent structures with legal tenancy, the authorities consider many longstanding Romani dwellings as “informal” or “illegal”, and their inhabitants do not have any documentary proof of tenancy, which makes them more vulnerable to evictions.

Currently, Romanian law does not protect these people from forced evictions.

Amnesty International and other NGOs have documented a series of cases where Roma communities had been forcibly evicted and resettled in a way that created or entrenched segregation.

Petrom Concludes Talks With Romanian Regulator on Licenses

By Andra Timu and Irina Savu

Aug. 24 (Bloomberg) -- OMV Petrom SA completed talks with the Romanian mineral resources regulator for an extension of its exploration licenses in the country and is waiting government approval, after giving up 25 percent of the initially contracted permits, according to a regulatory official.

Petrom, which has been in talks with the authorities to renew exploration licenses for 14 onshore oil and gas blocks, seeks a three-year extension of the permits and plans to stop exploring some blocks and portions of other blocks because of poor results it got during testing, Alexandru Patruti, the head of Romania’s Mineral Resources Agency said.

“We agreed with Petrom to extend some licenses until September 12, 2014,” Patruti said in a phone interview from Bucharest yesterday. “We signed the addendum to the contract and are waiting for the government’s approval,” he said, adding that the licenses Petrom gave up will be auctioned off “sometime in the future.”

The Romanian licenses, which OMV AG, central Europe biggest oil company, holds via Petrom, are due to expire on September 12 and were granted to Petrom before it was sold to OMV in 2004. A failure to renew the licenses or a renewal delay would have “a material adverse effect on Petrom’s business, results of operations and financial condition,” OMV said in May in the prospectus of a planned share sale.

Petrom’s “sustainable-exploration strategy has yielded tangible results and its ongoing projects absolutely need a three-year extension of the exploration period,” the regulator said in a draft law on its website. “It’s essential for Petrom to be granted adequate time to systematically explore the blocks to maximize its changes of obtaining oil and gas in a reasonable period of time.”

Petrom shares rose as much as 3.2 percent to 0.308 lei in early trading on the Bucharest Stock Exchange, the biggest intraday gain in almost two weeks. The shares were trading at 0.304 lei at 10:56 a.m. local time, while OMV shares rose 1 percent to 25.5 euros in Vienna.

Petrom, Romania’s biggest oil company, and Exxon Mobil Corp. said in July they will start drilling the first deep-water well in the country by the end of the year or the beginning of 2012, after the government extended a block exploration concession in the Black Sea by five years.

--Editors: Zoe Schneeweiss, James Kraus

To contact the reporters on this story: Andra Timu in Bucharest at atimu@bloomberg.net; Irina Savu in Bucharest at isavu@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

Thursday, August 25, 2011

Romania May Auction Black Sea Oil, Gas Blocks Permits Next Year

Romania may auction exploration licenses for six oil and gas blocks in the Black Sea as early as next year after the global crisis kept investors away at previous auctions, said Alexandru Patruti, the head of Romania’s Mineral Resources Agency.

“We have six more blocks to award in the Black Sea, but we will definitely not organize auctions this year,” Patruti said in an interview from Bucharest yesterday. “We haven’t receive any offers for these blocks so far, probably because the drilling requires large investments and we are in a global crisis.”

The eastern European country has enough oil and gas reserves to secure its internal consumption over the next 15 year in a region fueled by Russian resources, according to anenergy strategy draft on the Economy Ministry website. The country, which still has about 159 billion cubic meters of proven gas reserves and 72 million metric tons of oil after more than 100 years of exploitation, hasn’t estimated the reserves from the Black Sea blocks.

Romania awarded exploration licenses for five offshore blocks last year. OMV Petrom SA (SNP), Exxon Mobil Corp., Petro Ventures Europe BV and OAO Lukoil are among the companies searching for oil and gas in the Black Sea waters.

The Balkan nation may also have a “significant potential” for developing shale-gas fields as the country already awarded a license to Chevron Corp. (CVX) to explore three blocks in the southeastern region of Dobrogea, Patruti said.

“Normally, when a country has conventional oil and gas reserves, it should certainly have unconventional reserves also,” Patruti said. “These are yet to be confirmed, but I assume there is a huge potential.”

Eastern Europe may hold as much as 7.1 trillion cubic meters of shale gas, according to Energy Information Administration’s estimates. Poland, which according to EIA, may have about 5.2 trillion cubic meters of shale gas, already granted 86 exploration licenses, while Ukraine, Hungary and Bulgaria are among other countries in the region which decided to press ahead with shale exploration.

To contact the reporters on this story: Andra Timu in Bucharest at atimu@bloomberg.net; Irina Savu in Bucharest at isavu@bloomberg.net.

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

Wednesday, August 24, 2011

Romania gas consumption up 3.5 pct y/y in Jan-June

BUCHAREST Aug 23 (Reuters) - Romania's natural gas consumption rose 3.5 percent in the first half of the year to some 81.5 million megawatt hours, with imports accounting for roughly 25 percent on average, data from energy price regulator ANRE showed on Tuesday.

Romania is less reliant on Russian gas than other eastern European states. It imports around a third of its annual domestic consumption through intermediaries and produces the rest from local fields.

State-owned gas producer Romgaz, which is currently unlisted, and oil and gas firm Petrom, majority-controlled by Austria's OMV , provided the bulk of domestic gas, ANRE said.

Prices of imports ranged from $391 to $431 per thousand cubic metres of gas during January-June.
Under a 5 billion euro aid package led by the International Monetary Fund, Romania has pledged to liberalise its gas and electricity markets in stages by 2015.

It has already hiked gas tariffs for industrial consumers by roughly 10 percent in July, with another hike seen later this year. Meanwhile, ANRE froze household tariffs until 2012, saying they will get more gas produced domestically, which is three times cheaper than imported gas. 

OMV Petrom Concludes Talks With Romanian Regulator on Production Licenses

OMV Petrom SA (SNP) completed talks with the Romanian mineral resources regulator for an extension of its exploration licenses in the country and is waiting government approval, after giving up 25 percent of the initially contracted permits, according to a regulatory official.

Petrom, which has been in talks with the authorities to renew exploration licenses for 14 onshore oil and gas blocks, seeks a three-year extension of the permits and plans to stop exploring some blocks and portions of other blocks because of poor results it got during testing, Alexandru Patruti, the head of Romania’s Mineral Resources Agency said.

“We agreed with Petrom to extend some licenses until September 12, 2014,” Patruti said in a phone interview from Bucharest yesterday. “We signed the addendum to the contract and are waiting for the government’s approval,” he said, adding that the licenses Petrom gave up will be auctioned off “sometime in the future.”

The Romanian licenses, which OMV AG (OMV), central Europe biggest oil company, holds via Petrom, are due to expire on September 12 and were granted to Petrom before it was sold to OMV in 2004. A failure to renew the licenses or a renewal delay would have “a material adverse effect on Petrom’s business, results of operations and financial condition,” OMV said in May in the prospectus of a planned share sale.

Petrom’s “sustainable-exploration strategy has yielded tangible results and its ongoing projects absolutely need a three-year extension of the exploration period,” the regulator said in a draft law on its website. “It’s essential for Petrom to be granted adequate time to systematically explore the blocks to maximize its changes of obtaining oil and gas in a reasonable period of time.”

Petrom shares rose as much as 3.2 percent to 0.308 lei in early trading on the Bucharest Stock Exchange, the biggest intraday gain in almost two weeks. The shares were trading at 0.304 lei at 10:56 a.m. local time, while OMV shares rose 1 percent to 25.5 euros in Vienna.

Petrom, Romania’s biggest oil company, and Exxon Mobil Corp. (XOM) said in July they will start drilling the first deep-water well in the country by the end of the year or the beginning of 2012, after the government extended a block exploration concession in the Black Sea by five years.

To contact the reporters on this story: Andra Timu in Bucharest at atimu@bloomberg.net; Irina Savu in Bucharest at isavu@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

Monday, August 22, 2011

Romania’s Wheat Production Rose 23% to 7.12 Million Tons in 2011

Romania’s wheat harvest increased 23 percent to 7.12 million metric tons this year on favorable weather that boosted grain quality, Agriculture Minister Valeriu Tabara said.

Wheat was planted on almost 2 million hectares (4.9 million hectares), and about 99 percent of harvesting is complete, Tabara said in a phone interview today. The wheat crop last year was 5.77 million tons, according to the ministry. This year’s crop was estimated by the ministry at 7 million tons in May.

Romania is seeking to take advantage of higher international grains prices and boost exports, and there are plans to put 4 million tons of wheat in reserve for overseas shipments, Tabara said.

“The corn harvest looks also very good and will most likely exceed 10 million tons, more than the 9 million tons harvested last year,” Tabara said. “The sunflower seeds output will also rise to about 1.6 million tons from 1.3 million tons last year.”

To contact the reporter on this story: Andra Timu in Bucharest at atimu@bloomberg.net.

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

Gold mine plans divide one Transylvanian town

By Alison Mutler, Associated Press
ROSIA MONTANA, Romania (AP) — This is fairy tale land and there's even a pot of gold buried beneath it.

But not everyone's happy.

With the precious metal at an all-time high, a Canadian company is eager to start blasting out mountains and demolishing parts of the ancient Romanian town of Rosia Montana to build an open-cast mine where 300 tons of gold and 1,600 tons of silver are buried.

The plan, which would use cyanide in the extraction process, faces fierce opposition from ecologists and many locals who want to preserve the region's unique heritage.

Transylvania, best known as the home of the Dracula legend, is a land of majestic mountains, never-ending forests, and meadows dotted with cones of hay, horse-drawn carts and medieval churches — scenes straight out of Grimms' fairy tales.

Supporters of this rural paradise are battling to preserve an ancient way of life, even as Romania's economy lingers in the doldrums.

But the lures of gold and cash-generating asphalt are reeling in hungry developers to a region beloved — among others — by Britain's Prince Charles, who hails Transylvania as a "national treasure" and Romania's "best export."

Canada's Rosia Montana Gold Corp., set up by a consortium of investors specifically to exploit the gold, says it will be careful to preserve the environment, and is committed to paying villagers compensation and investing in the restoration of historical monuments, including Roman galleries.

"The worst thing that could happen would be that one of the biggest opportunities that would give (locals) a chance for the future would be not to go ahead," said Catalin Hosu, the company's regional communications manager.

It says it has invested $400 million in the mine, in which the Romanian state has a 20 percent stake. The operation is estimated to create more than 2,000 jobs while the mine is built and keep about 150 people employed once it is running.

The town of about 4,000 has about 80 percent unemployment, although some residents, technically jobless, live off proceeds from small farms, while many are retirees.

Indrei Ratiu, a British-Romanian co-founder of Pro-Patrimonium, Romania's national heritage society, says juggling past and future is the key to Transylvania's prosperity.

"You have to get the balance right between conservation and development," he says in an interview from Petresti village, his family's ancestral home.

But he says the gold mine project goes too far.

"I think the shareholders of Rosia Montana all over the world have no idea what is happening here and I'd like to inform them," he said. Like others he believes less invasive mining methods combined with tourism is the best way forward.

Transylvania is also under threat further north after Romanian authorities granted a permit for a controversial highway that could destroy one of Europe's last areas of intact forest outside Russia and Finland, according to the World Wildlife Fund Danube Carpathian Program.

In Rosia Montana, tensions run high between supporters and opponents of the proposed gold mine.

Silviu Aida, a 40-year-old mechanic working for Gold Corp., as the company is known, sees the open-cast mine as a boon. The project will bring "many benefits, firstly jobs and it benefits the Romanian state ... will take it out of poverty."

Ileana Bordeianu, of the Pro-Dreptate mining union, which is funded by Gold Corp., says that without mining the future of Rosia Montana — Red Mountain in English — is bleak.

"It's what we have been doing for 2,000 years," she said, dismissing dangers of a cyanide spill and evoking ancient traditions of gold mining in the area.

However, the use of cyanide is sending jitters beyond Romania's borders.

Romania had one of the worst cyanide spills in 2000 when an estimated 100 tons of the lethal substance spilled from Romania into Hungary's Tisza River and the Danube, killing large numbers of fish in Hungary and Serbia in what was considered one of the worst environmental disasters of recent times.

Hungarian environment state secretary Zoltan Illes wrote to Romanian Environment Minister Laszlo Borbely this week telling him Hungary did not want the mine on its border with Romania because of the cyanide used in the extraction process.

Romania's President Traian Basescu dismissed Hungary's position on Wednesday, saying Romania was "a sovereign state" and his country needed the business, with gold prices soaring.

"I support the project like I support any kind of industrial development," he said Wednesday. "What country sits on a gold mine without seeking to exploit it?"

News of Hungary's position was not reported in the Romanian media which is heavily reliant on advertising from the mining company.

Some parts of the town will be blitzed, as will mountain faces, but the company says it's trying to cooperate with the community, and has already made dozens of modifications to its original project.

Douglas Mcfarlane, a British resident of Transylvania and editor of the Romanian Environmentalist News, is skeptical.

"Once the mining company gets what is wants, nobody will be able to stop them. They will do what they want here," he said during an annual Hay Festival.

Father Arpad Palfi, a Hungarian priest at the Unitarian Church, is the chaplain of the town's 18th-century church whose damp, peeling walls are sorely in need of repair. He is one of the few villagers to reject the Canadian company's compensation offer.

It was a substantial sum: tens of thousands of euros (dollars) to repair his 18th century church and financial aid for his family.

"They can't buy me. I am independent," he said speaking after the Sunday service. "I have no price."

Romania May Set Higher Fees to Raise $371 Million in Four Years

Romania’s government wants to increase royalties for natural-gas storage, crude-oil transport and mineral resources and raise about 1.1 billion lei ($371 million) over the next four years.

The government plans to increase the royalty to 15 percent of revenue from crude-oil transport from the current 10 percent and to 5 percent for underground gas storage from 3 percent, according to a draft lawpublished on the Finance Ministry’s website. It also wants to raise mineral royalty payments, without specifying percentage changes.

“The proposed changes to the mineral and oil laws will increase royalty payments and have a positive financial impact,” according to the draft. “Budget revenue from the proposed royalty payments would rise by about 117 million lei in the last five months of this year.”

The Balkan nation is trying to bring in more revenue from the energy industry to the state budget as it cuts spending to meet pledges to the International Monetary Fund and the European Union and reduce its budget deficit to below 3 percent of gross domestic product from next year.

It plans to sell minority stakes in two utilities, natural- gas producer Romgaz SA and oil companyOMV Petrom SA (SNP) this year and next to raise funds for infrastructure projects. State-owned Romgaz and Petrom together hold about 83 percent of the gas market, while the rest comes from imports. Conpet SA is the operator of the national oil-transport grid.

To contact the reporter on this story: Irina Savu in Bucharest at isavu@bloomberg.net.

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

Blaze rips through Danube delta in Romania

(AFP)

BUCHAREST — Wildfires ravaged an area of the Danube delta in southeastern Romania, destroying more than 300 hectares of vegetation, authorities in the Dobrogea region said Sunday.

The blaze broke out on Saturday in a marshy area which was difficult to reach, local authority spokeswoman Paula Anghel said.

"The fire is being extinguished," Anghel said, adding that investigators would later begin a probe into the cause.

The Danube delta, home to a rich population of birds, fish and vegetation, has UNESCO world heritage status.

Wildlife reserve authorities said the blaze did not occur in a strictly protected area.

Friday, August 19, 2011

Romanian Prime Minister Names Doctor to Head Health Ministry

Laszlo Ritli, a doctor backed by Romania’s junior governing coalition member, pledged to streamline health-care spending to meet the terms of international loan agreements after he was appointed by Prime Minister Emil Boc to head the Health Ministry.

Ritli, 63, replaces Attila Cseke, 38, who resigned on Aug. 4, saying his ministry received insufficient funds in a budget revision. Ritli, who was sworn in late yesterday by President Traian Basescu, took over his post today and told reporters today in Bucharest that he plans to rein in hospital costs, the biggest in the health-care system, to help the country cut its budget deficit to 4.4 percent of gross domestic product this year, the target agreed with the International Monetary Fund and the European Union.

To contact the reporter on this story: Irina Savu in Bucharest at isavu@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

Romania to promote Ceausescu tourist trail

(AFP)
BUCHAREST — Tourists travelling to Romania will soon be able to follow the trail of former communist dictator Nicolae Ceausescu, tourist minister Elena Udrea said Wednesday.

"We are working on a 'red circuit' that would follow the traces of communism and the dictatorship," Udrea said in an interview with B1TV channel.

The circuit will include Ceausescu's native village of Scornicesti and the Doftana prison where he served two years for "subversive activities" between 1936 and 1938.

The tour will take in the balcony of the communist party headquarters where he delivered his last speech on December 21, 1989, before being ousted from power, and the military barracks in Targoviste where he was executed with his wife Elena on December 25, 1989.

The couple's official residence in an upmarket district of Bucharest will also be opened to visitors.

"Western tourists are very interested in Ceausescu's history, provided we can sell it properly," Udrea said.

The son of a poor farmer, Nicolae Ceausescu ruled Romania with an iron fist from 1965 until 1989.

In December that year, as communist regimes crumbled across eastern and central Europe, the Ceausescus fled massive protests in Bucharest and other cities.

They were arrested and executed on December 25 after a short show trial.

Guest post: reforming Romanian farming

http://blogs.ft.com/beyond-brics/2011/08/17/guest-post-reforming-romanian-farming/#ixzz1VSFadPUL

By Lucian Anghel of BCR

Few people know that Romania used to be the ‘granary of Europe’ before World War II, the second largest cereals producer after France. The situation has changed since then, for the worse unfortunately, and Romania is currently reporting significant deficits in the food product balance, of more than €1bn even in good agricultural years.

This is embarrassingly low for a country that could feed around 80m people – four times Romania’s population. The answer lies in investment, including foreign investment. But first the authorities need to implement serious land reforms to make local agriculture more competitive.

Agriculture is high on the global agenda today, with population growth and urbanisation driving demand for food.

Romania, which wallowed in a painful recession for two years, would have done much better had it had a modern agriculture sector capable of exploiting the surge in world demand.

The seventh largest EU country in terms of inhabitants and the fifth largest by arable land struggles to feed itself properly, with meagre food supplies often generating significant pressures on inflation. Agriculture contributes around 6 per cent of GDP and accounts for around 20 per cent of employment.

Now agriculture could help boost the feeble economic growth anticipated for 2011. If the weather holds up, agriculture could push local GDP up by around 0.4-0.5 percentage points this year.

But Romanian agricultural needs more than good weather. It requires comprehensive reform and restructuring.

The vast majority of holdings are poorly endowed with machines or irrigation equipment – in France for instance, an average farm is 32 times better equipped than in Romania.

The ownership map shows that property is atomized, while subsistence and semi-subsistence make up most of the local agricultural landscape. According to Eurostat, arable land per farm in Romania is less than five hectares – a tenth of that in France – while tiny family farms, of which 45 percent are run by people that are at least 65 years old, work 38 percent of the country’s total arable land.

Energy consumption per hectare in Romania is one sixth of that in France; the consumption of pesticides and fertilizers one third of French levels. If we add the fact that less than 1 per cent of the total holdings are managed by farmers with full agricultural training (43 percent in France), the reader can get a fair picture of what Romanian agriculture is all about.

Significant delays in merging small plots into larger ones, more suitable for both being exploited efficiently and attracting european funds have been an important drag on Romanian agriculture, holding off foreign investors that might have wanted to start a new business in the country.

Reform and investment would help Romania increase its absorption of EU funds at a time when the country has so far absorbed only 25 per cent of the total 2007-13 EU aid allocation.

The results would be well worth the effort – and not just for Romania. Last year, with 9m tonnes of corn harvested, Romania was the world’s 10th largest producer in the world. The international implications of ‘unlocking the huge potential’ are clear.

The recent global turmoil has hit business confidence. The main risk now is for the world to shift to some sort of over-pessimism which is likely to linger for quite a while.

After the past excesses, the link between the financial economy and the real economy should definitely be restored, while the rush for quick profits should take a backseat.

Investors should put their money into the real economy. ‘Getting back to basics’ and ‘start small to grow big’ are the keys to a fresh new start at this moment. Agriculture is an obvious place to start.

Without painting an overly rosy view, Romania will sooner or later converge towards EU productivity standards. So, agricultural production will double and agricultural exports – worth €1.9bn last year – will triple in the long run.

Romania has the potential to become a real top dog in terms of cereals production in Europe and rise from fourth place in the European output rankings to second place, after France.

Romania’s local authorities – at long last – seem to understand that land reform should be pushed forward, as this is the only way the foreign capital will start flowing. Foreign investors with an interest in agricultural should start looking now.

Lucian Anghel is chief economist of BCR, Banca Comerciala Romana

CEE MONEY-Pre-poll nerves for Romania govt if new austerity wave

By Radu Marinas and Sam Cage

BUCHAREST, Aug 16 (Reuters) - Romanian Prime Minister Emil Boc has been a model student of IMF-prescribed austerity, but global market turmoil, weak growth and stalled privatisations could force him to cut deeper and hurt his 2012 electoral prospects.

Boc has already suffered heavily in opinion polls, with the parties of his centre-right ruling coalition garnering only 25 percent support, versus a comfortable 60 percent for a loose alliance of opposition parties led by leftist Social Democrats.

Many political analysts, however, have said Boc's close ties to President Traian Basescu, a solid reform record, and the weak links among the opposition parties could allow him to hold onto power even if he does not win next year's general poll outright.

Under his stewardship, the Balkan state of 22 million has returned to economic growth after an 8.3 percent contraction over two years and is on its way to stabilising its budget under a 5 billion euro, International Monetary Fund-led loan package.

Boc froze pensions, cut public sector salaries by a quarter and raised national sales tax by 5 percentage points. He was on track to cut the budget deficit to below the European Union's prescribed ceiling of 3 percent of annual output next year.

But that hit a speedbump in June, when the deficit jumped 50 percent from the previous month to 2.1 percent of gross domestic product, putting this year's target of 4.4 percent at risk.



Missing the target could prompt the IMF to push for a new round of austerity measures in the EU's second-poorest state, ahead of municipal elections next summer and the general election later in the year.

"If the global economy is heading to a slowdown they will need to further cut public spending to offset a potential revenue decline," said Georgiana Constantinescu, analyst at Credit Europe Bank in Bucharest.

"I do believe they will try to meet the deficit target, but they might need to enforce cost-cutting measures, including layoffs, and further pursue the restructuring of loss-making state firms."

GLOBAL WOES WEIGH

June's deficit jump was worrying because Romania's fiscal gap usually expands at a much faster rate as the year draws to a close.

More headwinds are building. Market turmoil and the euro zone slowdown mean growth will probably miss the centre-right government's 1.5 percent forecast for this year, which will in turn hit budget revenues.

Boc said as much this week when he said second quarter growth data "may not look as good as we originally expected" following a 2.2 percent fall in June industrial output.

Data published on Tuesday showed Romania's economic growth slowing down to 1.4 percent on the year in the second quarter after 1.7 percent growth in January-March.

Another plan to raise cash by selling off state firms also hit a snag in July when the $840 million sale of oil and gas group Petrom collapsed .

With markets now sliding across the world, analysts say it is unlikely that this year's other plans to raise about $1 billion in privatisations will go ahead, even as the government's need for the cash increases.

Daniel Hewitt at Barclays Capital says he sees downside risks to his growth forecast of 1 percent this year and estimates the budget gap could hit 5.0 percent of GDP.

And although it has given Bucharest wiggle room in the past, the IMF will probably prefer that Boc buckle down next year instead of risking the type of vote-boosting spending spike that has accompanied many elections across the region.

"It looks like things are going badly on growth," said Hewitt. "I think the IMF would be making a huge mistake to put everything on 2012."



MORE AUSTERITY

The three opposition parties have a loose alliance, but analysts say there is little chance that they will maintain their cooperation and win the election as a coherent force.

Boc's advantage lies with President Traian Basescu, who will appoint the next prime minister in late 2012. Despite his largely ceremonial official role, he wields broad influence over Boc's Democrat-Liberals and the country.

That means that unless the opposition can achieve an outright majority in parliament next year Basescu is almost certain to use his power to reappoint Boc.

But new cuts, such as accelerated layoffs in the public sector, will hurt Boc, especially since his government has already axed about 200,000 posts since 2009 and plans another 200,000 cuts by 2015.

"Now people see that there's no milk and honey in Romania so it's clear the government would not be able to recoup its lost ground," said independent political analyst Bogdan Teodorescu.

By comparison, the leftists have made it clear that fresh cost-cutting is not an option and they would probably not engage in a new deal with the IMF -- a stance that will keep markets on edge ahead of the vote. ($1 = 3.009 Romanian Lei) (Editing by Michael Winfrey and Stephen Nisbet)

Saturday, August 13, 2011

Romania and the Avant-Garde

Valery Oisteanu
http://www.nyartsmagazine.com



Art lovers in Bucharest and Amsterdam have recently found themselves challenged by two shows reclaiming the roots and sources of the European Avant-garde.

“From Dada to Surrealism: Jewish Avant-Garde Artists in Romania, 1910-1938” is a scholarly exhibit that presents the merits of some great artists and their masterpieces. The viewer is confronted with a Jewish sensibility used to capture and translate influences from Romanian folklore, Modernist sculpture, and early Dada literature. This revolution in art started among the cosmopolitan, sophisticated, sometimes self-doubting Romanian Jewish literary and theatrical community in Bucharest.

As curators, art historian and rabbi Edward van Voolen and learned art collector Dr. Radu Stern trace a large cluster of artsy Semites—pre-Dada, proto-surrealist, and avant-avant-gardes—to Romania. In the well-installed exhibit and multimedia presentation at the rotunda of Jewish Historical Museum in Amsterdam, they give us a fascinating look at an innocent moment in the development of Romanian art called “Integralism,” when revolutionary optimism and innovation flourished.

Facts reveal that Dada is universal. It appeared in New York City, Zurich, and Berlin almost at the same time. Dada was not suddenly blown over from the East, but was rather a series of tornados created by a collision of old and new civilizations, a collision that was not provincial, but international, not ethnic, but arising from the epic scope of a “man of the world.”

The show opens with two of Marcel Janco’s pivotal dada-theater props, which later blossomed into important objets d’art from the Cabaret Voltaire in Zurich. In the 1920s, Janco (1895-1984) and, later, Victor Brauner (1903-1966), affirmed experimentalism: surrealism, abstract, expressionistic works, picto-poetry, Constructivism—nothing was too radical.

Of course, Eastern European influences were crucial for Global Dada. But Tristan Tzara and his cabaret were trying to catch up with the antics by Marinetti and Alfred Jarry. The big influence of Jewish anti-philosophical and anti-religious discourse was soon over taken by the German and French surrealists with more political posture, and Dada/Surrealism became truly international.

Arthur Segal’s works (1875-1944) represent an earlier generation of inventors of contemporary art. The works reveal early pointillism, cubism, and abstraction. His student, Max Herman Maxy (1895-1971), one of the great painters and teachers for avant-garde artists, was also breaking away from bourgeois tastes with his cubist nudes voluptuous and sexy. The works of Segal, Maxy, Victor Brauner, Jules Perahim, and Paul Paun are iconic masterpieces of the 20th century; these Romanians predate more widely known Italian Futurists, Russian Constructivists, and German Expressionists.

Surrealism and post-surrealism marked the ongoing revolt of the international spirit. Dada’s forefathers in Bucharest are bundled together here for the strengthening of national pride. Such subdivisions may only be good for the popular culture of “turnstile” museums, but go against the grain of avant-garde’s underground spirit of cosmopolitanism. The dadaists would have said: That is insufficient Dada! The sources of such confusion about this infusion of Jews in the avant-garde—and we must also factor in educated Jews from Transylvania and Moldavia arriving in Bucharest in the early 20th Century— has little to do with ethnic and religious Jewishness and more to do with the advancement of secular Jewish thought exemplified by Sigmund Freud, Franz Kafka, and Albert Einstein. The idea of an open, non-religious spirituality in artistic practice seemed more inspiring and attractive, although “that good old Jewish-radical quarrelsomeness” was a big part of it. Eventually they all saddle up for nothing. Dada is Nada!

The curators’ conclusion is that Bucharest was an important epicenter of the avant-garde. Even Marinetti came to Romania (Craiova) in 1909 to launch international Futurism and enact his manifesto; indeed, a great number of literary and avant-garde magazines and books flourished in Bucharest. Ironically, however, most of the artists quickly escaped the “Dada nursery” and affirmed themselves elsewhere, in cities such as Paris, Zurich, London, and Tel Aviv. The Romanian avant-garde “brain drain” and diasporisation continued five decades after the war: Eugene Ionesco, Stefan Baciu, Sesto Pals, Paul Paun, Oscar Pastior, Jules Perahim were among some1000 artists and literati who moved out of Bucharest, not so much because of anti-Semitism, but to pursue a more free way of life in non-dictatorial societies.

What’s most striking is how contemporary and fresh the works in this exhibit still look today. There is a common undercurrent of a need for experimentation by most of these extraordinary artists. One caveat: Jacques Herold—considered by R. Stern to be “more French avant-garde” than Romanian—and Gherasim Luca, poet and inventor of Cubomania (collages of squares), both surrealist artists and Romanian Jews, are conspicuously absent from this show.

The second exhibit, in Bucharest, is “The Roots and Echoes of the Avant-garde,” from the permanent collection at the Library of the Romanian Academy under the guidance of Catalina Macovei, who introduces and displays the paintings and the illustrated books. These graphic contributions of Romanian artists, a treasure trove of 72 artworks, 40 vintage books, and “micrographie” (images created from text by Tristan Tzara) is an academically laid-out exhibit, probably the first of its kind after the fall of Communism.

Here, the inclusion of several Romanian women artists such as Milita Petrascu, Margareta Sterian, and Nina Arbore, and some forgotten names like Lazar Zin, Iosif Ross, Corneliu Mihailescu, and Jean David, have created an important show of largely unknown works. One rarity, not to be missed, is 40 Chansons et Dechansons by Tzara, as illustrated by Jacques Herold.

The catalogue opens with an essay by Magda Cirneci, “The Jews of the Romanian Avant Garde,” which balances regional with ethnic pride and presents valid observations about the disproportionate number of Jews involved, introducing the idea of a “high standard” in art as well.

These kindred exhibits in two European countries with, joined by the common thread of Dada, might seem improbable but are clearly not impossible. Amsterdam and Bucharest are still fully in the avant-garde mode.

From Dada to Surrealism: Jewish Avant-Garde Artists in Romania, 1910-1938 Jewish Historical Museum, Amsterdam June 1 - October 2, 2011

The Roots and Echoes of the Avant-garde Graphic Collection of The Library of Romanian Academy, Bucharest Spring, 2011

Spain to curb flow of Romanian workers

http://www.ft.com/cms/s/0/3c8b9dba-c41b-11e0-b302-00144feabdc0.html#ixzz1UtuVJXYi

By Stanley Pignal in Brussels

Spain is to introduce temporary restrictions on Romanians seeking to work in the country, the first time barriers to free movement of workers have been reimposed within the European Union.

Madrid indicated two weeks ago it would seek to stem the flow of Romanian labour, amid record unemployment. Its plan was approved on Thursday by the European Commission and will come into force immediately.

Spain’s move comes amid increasing doubts in some countries about the benefits of open European borders, reflected in the rise of populist anti-EU parties in Finland and the Netherlands. The passport-free Schengen travel area is in the process of being revised to allow the reimposition of internal EU borders in exceptional circumstances.

European Commission officials stressed the restrictions – to be in place until the end of 2012 – would not impact on the more than 800,000 Romanians living in Spain and were allowable only because of the “dramatic” employment situation there.

“We hope this move will be limited in time as much as possible and an overall positive attitude towards free movement in Europe will continue to prevail,” said Laszlo Andor, social affairs commissioner.

Spanish joblessness was 21 per cent in June, the highest figure ever recorded in any eurozone country since the single currency was adopted in 1999. Youth unemployment stands at 45 per cent, according to the EU’s statistical arm.

Jose Luis Zapatero’s Socialist government first mooted the restrictions on July 28, on the eve of announcing early general elections to take place in November.

“This sends a clear political message to the electorate,” said Sergio Carrera, of the Centre for European Policy Studies, a Brussels-based think-tank. “Labour market problems in Spain are caused by structural and institutional problems, not by Romanian workers.”

The Spanish move targeting Romanians was only possible because Romania is a new joiner to the EU – it was the last country to accede along with Bulgaria in January 2007.

Existing EU members can opt to keep labour market restrictions on citizens from new member states for up to seven years, or 2014 in Romania and Bulgaria’s case. France, the UK, Germany and Italy are among those countries that have kept requirements for migrants from those countries to obtain work permits, usually linked to shortages of labour in certain sectors.

Spain opted to lift those restrictions from 2009 but has now effectively reversed that decision under a “safeguard clause”. It is the first time a country has reimposed a system of work permits having liberalised its labour market.

Neither Spain nor any other country has the ability to restrict workers from other EU countries bar Romania and Bulgaria. However, the Netherlands is leading a push to make it easier to kick out unemployed EU migrants who are deemed a burden on the social security system.

France last year carried out large-scale expulsions of Roma travellers, mainly Romanian and Bulgarian nationals, a move for which it was castigated by the European Commission.

EU figures show that the number of Romanians moving to Spain has risen rapidly in recent years, reaching 823,000 at the start of 2010. Romanians, many of whom worked in the overheated construction sector prior to the 2008 economic crash, now outnumber Moroccans, Ecuadoreans and Britons living in Spain.

Under European rules, the Romanian migrants are eligible to the same unemployment benefits as other EU citizens, including Spaniards. Latest figures show 30 per cent of Romanians living in Spain were unemployed, compared with 11 per cent before the downturn.

Romania to correct anti-Semitic definition

(AFP)

BUCHAREST — The Romanian Academy, the country's linguistic watchdog, on Thursday promised to change the definition of an anti-Semitic word included in a widely-circulated dictionary, after a Jewish group slammed it as "shameful".

The Centre for Monitoring and Combating Anti-Semitism in Romania (MCA) had denounced the dictionary definition of the word 'jidan', a pejorative term for Jew, as merely a "familiar" term.

"Unfortunately, when the most recent edition of the dictionary was compiled, an error was made," the academy, which serves as the custodian of the Rominian language and culture, said in a letter.

"In future editions of the dictionary, definitions will be worded so as not to leave room for discriminatory interpretations."

MCA said that the definition was "harmful to Romanian society and likely to encourage nationalist and chauvinist propaganda".

"'Jidan' was the last word to be heard by the hundreds of thousands of Jews whose belongings were stolen and burnt and who were themselves crammed into death trains or killed like animals simply because they were born Jewish," the group stressed.

Between 280,000 and 380,000 Romanian and Ukrainian Jews died in the Holocaust in Romania and the territories under its control, according to an international commission of historians headed by Nobel Peace Prize laureate Elie Wiesel, himself a Romanian-born Jew.

Romanian Stocks Jump Most in 15 Months on Bucharest Upgrade

Romanian stocks soared the most in almost 15 months as Fitch Ratings upgraded the city of Bucharest’s foreign-currency ranking.

Romania’s Bucharest Exchange Trading Index rose 4.6 percent to 4,678.71 at the end of trading, the biggest daily surge since May 26, 2010.

Fondul Proprietatea SA and Banca Transilvania (TLV), which together comprise more than 42 percent of the 10-member index, jumped 5.8 percent and almost 5 percent, respectively.

Fitch, a New York-based credit rating company, raised its short-term foreign currency rating for the city of Bucharest to F3 from B, while the long-term measure was increased to BBB- from BB+ with a stable outlook.

“The ratings take into account the city’s improvement in budgetary performance and its good track record of debt coverage ratios,” Fitch said in a statement today. Bucharest’s debt is “prudently managed,” the company said.

To contact the reporter on this story: Kira Savcenko in London at ksavcenko@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

Thursday, August 11, 2011

Transelectrica Posts 1st-Half Profit on Higher Consumption

Transelectrica SA (TEL), the Romanian power-grid operator, said it turned to profit in the first half of the year, as the company cut costs and an industry-driven economic recovery boosted electricity demand.

Transelectrica reported net income of 178.6 million lei ($59 million) in the first half compared with a loss of 58.1 million lei, the Bucharest-based company said in a filing to the capital’s stock exchange. Revenue rose 13 percent to 1.44 billion lei, while costs dropped 8.3 percent to 1.22 billion lei.

The first-half “profit was mainly the result of additional revenue stemming from higher electricity consumption, but also from a diminished volume of expenses,” according to the statement.

Romania’s economy exited a two-year recession in the first quarter, helped by surging exports and industrial output, which boosted electricity consumption by 5.6 percent in the first half of the year and production by 11.4 percent compared with the year-ago period, Transelectrica said. Electricity consumption and production will continue to grow at the same pace in the second half, it said.

Energy consumption will probably grow about 5 percent in the second half compared with the same period of last year, while production will probably increase about 10 percent in the same period, Transelectrica said.

To contact the reporter on this story: Irina Savu in Bucharest at isavu@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

Wednesday, August 10, 2011

Romanian Academy redefines word in dictionary to label it an anti-Semitic slur

By Associated Press

BUCHAREST, Romania — The Romanian Academy will alter its definition of an anti-Semitic slur in a dictionary to make it clear the word is pejorative.

The academy wrote to the Center for Monitoring and Combating Anti-Semitism on Wednesday, saying it should have described the word as pejorative. The DEX dictionary says the term is used in a “familiar” sense but omits that it is an anti-Semitic slur.
The academy said in a letter “we will do all we can to make an immediate and permanent correction of its definition.

The center had protested the usage of the word, saying it was “heard by Jews when they were put on the trains of death,” referring to the massacre of hundreds of thousands of Romanian Jews in World War II.

Jewish group urges Romania to change anti-Semitic definition

BUCHAREST (AFP)---A Jewish group on Tuesday urged Romania to change the definition of an anti-Semitic word included in a widely-circulated dictionary, saying it was "an expression of racism in its purest form."

"We are calling on the Academy to correct without delay the shameful and offending definition of the word 'jidan'," the Centre for Monitoring and Combating Anti-Semitism in Romania (MCA) said in a letter.

Defined in an earlier edition as a "familiar and pejorative" term, the word is described as a "popular" alternative name for Jew in the 2009 edition.

"This definition turns the most abject expression of anti-Semitism into a mere synonym for Jew," MCA stressed.

The group said that "'Jidan' was the last word to be heard by the hundreds of thousands Jews whose belongings were stolen and burnt and who were themselves crammed into death trains or killed like animals simply because they were born Jewish."

"This definition is harmful to Romanian society and likely to encourage nationalist and chauvinist propaganda," MCA said.

Between 280,000 and 380,000 Romanian and Ukrainian Jews died in the Holocaust in Romania and the territories under its control, according to an international commission of historians headed by Nobel Peace Prize laureate Elie Wiesel, himself a Romanian-born Jew.

Romanian June Industry, Export Growth Slows, Recovery May Weaken

Romanian industrial output and export growth slowed in June on muted demand for manufactured products, a sign the Balkan country’s economic recovery may be weakening.

Production grew a seasonally adjusted 3.2 percent from a year earlier after an 8 percent rise in May, the Bucharest-based National Statistics Institute said in an e-mailed statement today. Output fell 2.2 percent on the month. Exports rose 12 percent in June on the year, compared with 27 percent growth in May, according to a separate statement from the institute.

Polish, Czech and Hungarian manufacturing indexes in July signaled a slowdown in economic growth, pointing to a region- wide weakening in economic momentum, as the U.S. and euro-area economies lose steam.

Demand for Romanian exports such as Dacia SA cars and industry, which grew 10 percent in the first quarter, pushed the country’s economy out of the worst recession on record. The economy grew 1.7 percent in the first quarter, ending a two-year contraction.

Exports and industrial output will drive the economy’s 1.5 percent expansion this year after shrinking 1.3 percent in 2010, according to the International Monetary Fund. A good harvest in 2011 may boost growth beyond the central bank’s 1.5 percent growth forecast, Governor Mugur Isarescu said yesterday.

Production of manufactured goods rose an annual 2.8 percent in June from 7.8 percent in May on the year, while mining output growth slowed to a yearly 5.7 percent from 16 percent. Electricity and thermal energy output increased 5.2 percent.

Romania’s trade deficit narrowed in June to 850 million euros ($1.2 billion) from a year earlier, compared with a revised 1.2 billion-euro gap in May, the institute said today in a separate statement.

To contact the reporter on this story: Irina Savu in Bucharest at isavu@bloomberg.net.

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

Romania cbank cuts 2011 inflation forecast to 4.6 pct y/y

Aug 8 (Reuters) - Romania's central bank expects annual inflation to slow to 4.6 percent at the end of 2011 due to a good harvest and as the impact of higher value added tax washes out, its governor said on Monday.

The central bank sees annual inflation at 3.5 percent at the end of 2012, Mugur Isarescu told a news conference, in remarks which may indicate leeway to cut interest rates next year.

The central bank had previously forecast 5.1 percent annual inflation at the end of 2011 and 3.6 percent at the end of 2012. (Reporting by Radu Marinas and Luiza Ilie; Editing by Sam Cage)

Sunday, August 7, 2011

Romania to Pay $661 Million of CFR’s Electricity Debt This Year

Romania will this year pay 1.98 billion lei ($661 million) that CFR SA, the state-owned railway company, owes to its electricity suppliers, including CEZ AS (CEZ), E.ON AG (EOAN) and Enel SpA (ENEL), Transport Minister Anca Boagiu said.

The price of 476 lei per megawatt-hour that CFR is paying for the electricity is triple the production cost, Boagiu said, adding that almost half of the debt represents penalties for delayed payments for used electricity “which is not normal.”

“I would recommend to all the electricity suppliers to look very carefully at the prices CFR is paying them” and “don’t assume Romania is a no-man’s land,” Boagiu told a news conference in Bucharest today. “We don’t plan to erase CFR’s debt and we will pay it this year. Afterwards CFR will be able to buy electricity from the free market.”

Jan Veskrna, the chief executive officer of CEZ’s Romanian unit, said yesterday the company may have to ask for bankruptcy of its unprofitable sales unit, CEZ Vanzare, or stop investing in it if it fails to recover a 330 million-lei debt from CFR.

Prime Minister Emil Boc’s government, which plans to sell a 20 percent stake in CFR’s freight unit, CFR Marfa, seeks to select a manager for the sale by November, Boagiu said. It may also select a manager for a 20 percent stake sale in the national carrier Tarom, by the same month.

To contact the reporter on this story: Andra Timu in Bucharest at atimu@bloomberg.net

To contact the editor responsible for this story: James M. Gomez in Prague atjagomez@bloomberg.net

Friday, August 5, 2011

Romania stocks hit 1-year low on global risk aversion

Aug 5 (Reuters) - Romania's blue chip stock index fell as much as 6.2 percent on the day in early trade on Friday, leading losses in emerging Europe as investors dumped risky assets and world stock markets fell for the eighth straight session.

By 0710 GMT, the Romanian index was down 6.2 percent, hitting its lowest in just over a year, when the government's fiscal deficit and harsh austerity measures hammered Romanian assets. The index has since narrowed losses slightly, trading almost 5 percent down on the day at 4873.15. (Reporting by Luiza Ilie; Editing by Sam Cage)

EBRD, IFC Sign ‘Landmark’ $266 Million of Romanian Wind Loans

The European Bank for Reconstruction and Development and International Finance Corp. loaned 188 million euros ($266 million) forRomania wind power, including funds from CaixaBank, Societe Generale (GLE) SA, and UniCredit SpA. (UCG)

“Commercial banks were looking for a landmark Romanian wind-farm transaction so we had quite a lot of interest linked to the presence of a lead-lender like ourselves,” said Adam Schwartzman, a senior investment officer at the IFC.

The deal shows Romanian projects are able to get commercial loans, Schwartzman said by phone today in Istanbul. The European Union has approved an incentive program for renewable energy technology in Romania as the country seeks to meet a goal of generating 24 percent of its power from green sources by 2020.

The IFC, the World Bank’s private-sector lending unit, and EBRD are each loaning 36.7 million euros to Pestera Power SA, a wind company majority owned by a Romanian unit of EDP Renovaveis SA (EDPR), Schwartzman said. The institutions will also each lend 57.4 million euros to fund the Cernavoda I and II wind parks, majority held by the local unit of EDP-Energias de Portugal SA.

The agencies are syndicating 50 million euros of the total loans to banks, Schwartzman said. “The commercial banks were skeptical about Romania but as time went on everyone could sense that the sector was ready to take-off,” he said.

The EU’s program grants producers of electricity from clean sources so-called Green Certificates for each megawatt-hour generated. Wind projects receive two certificates for each megawatt-hour until 2017 and one thereafter, Schwartzman said.

“We like to do strategic investments in one way or another that transform the market,” he said, declining to give the terms of the loans, except to say the tenure is “long-term.”

Pestera and Cernavoda are in Dobrogea region and jointly form one of the country’s largest wind farms at 228 megawatts.

To contact the reporter responsible for this story: Sally Bakewell in London atSbakewell1@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

Thursday, August 4, 2011

Romania re-negotiates contract with US company Bechtel for highway

By Associated Press

BUCHAREST, Romania — Romanian and American authorities say the U.S. company Bechtel has re-negotiated a contract to build a 400-kilometer (245 mile) highway from central Romania to the Hungarian border.

Transportation Minister Anca Boagiu said late Wednesday the deal, which ends a standoff over costs and the pace of work, will save Romania €6 billion (US$8.58 billion).

Under the agreement, Bechtel will build a total of about 115 kilometers (70 miles) of the highway, with the remaining stretch offered through tender to other companies.

Romania signed an agreement with Bechtel in 2004 to build the entire highway, but costs rocketed and it has only built 54 kilometers (34 miles).

U.S. Ambassador Mark Gitenstein on Thursday praised the breakthrough.

Romania cbank holds rates at 6.25 pct,as expected

Aug 3 (Reuters) - Romania's central bank left its benchmark interest rate ROINTR=ECI unchanged at 6.25 percent as expected on Wednesday, the highest among its neighbours to help soften the effect of the euro zone debt crisis.

All 16 analysts polled by Reuters see the central bank holding rates. The median forecast until the end of the first quarter of 2012 is also for rates to stay on hold.

The central bank is expected to cut rates in April-June 2012, with the median forecast for a cut to 6 percent.

Although June inflation came below market expectations at 7.9 percent and the central bank currently sees it at 5.1 percent at end-2011, the bank has limited scope to ease off this year mainly because of planned hikes in regulated prices and a debt crisis in the euro zone.

The central bank, which has kept rates unchanged since May 2010, is expected to issue a detailed statement at around 1200 GMT.

Romania’s Central Bank Leaves Rate on Hold for 10th Meeting

Romania’s central bank left its benchmark interest rate unchanged at a record low for a 10th meeting as inflation slows and policy makers seek to boost a recovery amid the U.S. and European debt crises.

The Banca Nationala a Romaniei left the main interest rate at 6.25 percent, matching the forecast of all 11 economists surveyed by Bloomberg. The bank left its minimum reserve requirements on foreign-exchange deposits at 20 percent and the ratio for leu deposits at 15 percent.

Central and east European policy makers have kept rates steady over the past month, with Poland and Hungary halting monetary-policy moves to assess a slowdown in inflation. Romania, which has left the rate unchanged for more than a year, is also weighing whether the effect of last year’s tax increase on inflation has waned, while seeking to spur economic recovery.

“I think it’s the correct decision by the central bank because inflation will create further positive surprises, especially due to a very good agriculture output,” Lucian Anghel, chief economist at Banca Comerciala Romana SA, said by phone. “I think the central bank shouldn’t hurry with a tightening as the external environment is still uncertain.”

The Magyar Nemzeti Bank kept the two-week deposit rate at 6 percent on July 26 after the sovereign debt crisis weakened the forint to a record low against the Swiss franc in which most Hungarian mortgages are denominated. The Narodowy Bank Polski left the seven-day interest rate at 4.5 percent last month after raising borrowing costs by 1 percentage point this year.

The leu, the fifth-best performer among more than 20 emerging-market currencies tracked by Bloomberg so far this year, rose 0.1 percent to 4.2330 per euro as of 1:20 p.m. in Bucharest trading. Romania’s benchmark BET Index fell 1.4 percent to 5224.21.
Rate History

Policy makers have kept the rate steady since June 2010 after a value-added tax to meet international bailout pledges boosted inflation to the fastest in two years. Before that, the bank cut the rate four times to combat the worst recession in two decades and contain price growth after a 5 percentage-point VAT increase to 24 percent boosted consumer prices.

Romania’s inflation rate, the European Union’s highest, unexpectedly fell to 7.9 percent in June from an almost three- year high of 8.4 percent in the previous month. The central bank targets an inflation rate of 3 percent, plus or minus one percentage point, for this year and next and expects the rate to end the year at 5.1 percent.

The rate may fall to between 3.8 percent and 5 percent in September, according to the most likely scenario, as a good farm harvest drives food prices lower and the effects of a government tax increase dissipate, central bank Governor Mugur Isarescu said on July 15.

“The inflation will slow substantially in July on base effects to as much as 5.5 percent, which is still far above the inflation target range and therefore no cut is justified,” Daniel Hewitt, a senior economist at Barclays Capital, said by phone. “The economy is spiraling downward, thus there is no pressure to raise rates and inflation will likely decline further. The only upside pressure will be from government adjustments of administrative price.”

The International Monetary Fund forecasts a 5.5 percent rate for the year, the lender’s Mission Chief to Romania Jeffrey Franks said on Aug. 1.

The central bank should keep a bias toward tightening monetary policy to counter possible energy-price increases even as inflation slows after the effect of last year’s tax increase wanes, Franks said in an interview.

To contact the reporter on this story: Irina Savu in Bucharest at isavu@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

Romanian minister nixes IMF hopes of wage hikes

BUCHAREST, Romania—Romania's labor minister says it would be foolish to increase public sector wages, days after an International Monetary Fund official said the country could afford to do so, as the economy rebounds.

In an interview Wednesday with Realitatea TV, Sebastian Lazaroiu said the government should not do "foolish things like raising salaries now." He said wages, which were slashed by one-fourth in July 2010, could be reviewed next year after the government sees what its budget is.

IMF envoy to Romania Jeffrey Franks said Monday the government could raise salaries soon. He predicted that exports and a good harvest would help the economy to grow by 1.5 percent in 2011, after two years of economic decline

Romania needs prudent policy to tackle CPI risks

Aug 3 (Reuters) - Romania needs to continue keeping a prudent monetary policy stance to counter significant upside risks to inflation stemming from future energy price hikes, volatile capital inflows and debt crisis concerns, the central bank said on Wednesday.

Earlier in the day the bank held its benchmark interest rate ROINTR=ECI unchanged at 6.25 percent as expected, a record low but the highest among its neighbours. 

Analysts widely expect interest rates to remain where they are unitl April-June 2012, when most of them see the central bank cutting borrowing costs.

The central bank said inflation will fall faster in coming months supported by a good harvest year and the fading out of the impact of a value added tax hike last year. (Reporting by Luiza Ilie; Editing by Radu Marinas)

Wednesday, August 3, 2011

About 1,000 post office employees protest in Romania

BUCHAREST, Romania (AP) — About 1,000 post office employees have gathered outside the Ministry of Communications in the Romanian capital to protest the running of the sector.
Protesters say the state-owned company which employs 34,000 people is losing money because the management is inefficient, and are calling for the resignation of Communications Minister Valerian Vreme.

The post office plans to close down hundreds of offices this year, with protesters in Bucharest saying Tuesday about 1,400 people are expected to lose their jobs. Management says many will be redistributed to other offices.

The International Monetary Fund — with whom Romania has an agreement — has urged authorities to reform unprofitable state-owned companies.

Romania to Leave Rates Unchanged to Aid Currency, Survey Shows

Romania will leave the European Union’s highest interest rate unchanged as policy makers aim to keep the currency stable and boost an export-driven recovery after inflation slowed, a survey of economists showed.

The Banca Nationala a Romaniei will probably keep its monetary policy rate at 6.25 percent today, according to all 11 economists in a Bloomberg survey. A decision is expected after 11 a.m. in Bucharest.

Romanian policy makers have kept the rate unchanged at each policy board meeting since June 2010 to contain inflation sparked by a tax increase and rising commodity prices. Surging exports have pulled the economy out of the worst recession on record, helped by industrial output growth and a currency that has been trading around current levels in the last year.

The bank will keep the rate unchanged as “the country’s economy is still hurt by fiscal austerity, high inflation and high interest rates,” said Elisabeth Andreew, chief foreign- currency strategist at Nordea Bank AB in Copenhagen. “On the other hand, inflation risks are still lurking, for example increased administered prices, and it’s also important to keep rates high to keep the currency stable.”

The leu, the fifth-best performer among more than 20 emerging-market currencies tracked by Bloomberg so far this year, has been trading between 4.1 against the euro and 4.3 per euro in the past year. Central bank Governor Mugur Isarescu said on July 15 he expects the leu to remain trading in that range.
Regional Trends

Central and east European policy makers have kept rates steady over the past month, with Poland and Hungary halting monetary-policy moves to assess a slowdown in inflation.

The Magyar Nemzeti Bank kept the two-week deposit rate at 6 percent on July 26, after the sovereign debt crisis weakened the forint to a record low against the Swiss franc, in which most Hungarian mortgages are denominated. The Narodowy Bank Polski left the seven-day interest rate at 4.5 percent last month after raising borrowing costs by 1 percentage point this year.

Neighboring Serbia last month cut its benchmark rate, the second highest in Europe, by a quarter point to 11.75 percent, the second decrease in as many months.

Romania’s inflation rate, the EU’s highest, unexpectedly fell to 7.9 percent in June from an almost three-year high of 8.4 percent the previous month. The central bank targets a rate of 3 percent, plus or minus one percentage point, for this year and next and expects inflation to end the year at 5.1 percent.
IMF Forecasts

The International Monetary Fund, which granted Romania a two-year precautionary loan, forecasts an inflation rate of 5.5 percent for the year, according to Jeffrey Franks, the fund’s mission chief to Romania.

The central bank should keep a bias toward tightening monetary policy even as inflation is expected to slow after the effect of last year’s tax increase wanes, to counter possible energy-price increases, Franks said on Aug. 1 in an interview in Bucharest.

It also should refrain from reducing the amount of foreign currency banks are required to hold because it “would be unwise at the moment,” Franks said at the time.

The central bank lowered foreign-exchange reserve requirements by 5 percentage points to 20 percent on March 31, leaving commercial banks including Banca Comerciala Romana SA, owned by Erste Group Bank AG, BRD-Groupe Societe Generale (BRD) SA and Banca Transilvania (TLV) SA more money to lend to spur the economy, which the government expects to grow 1.5 percent this year compared with a contraction of 1.3 percent in 2010.

The central bank kept reserve requirements for leu deposits at 15 percent.

To contact the reporter on this story: Irina Savu in Bucharest at isavu@bloomberg.net.

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

Tuesday, August 2, 2011

Enel in Line for European Investment Bank Loan for Romanian Wind

Enel Green Power SpA (EGPW), a unit of Italy’s biggest power company, may receive as much as 200 million euros ($284 million) in funding from the European Investment Bank to build three wind farms offshore Romania.

“The European Investment Bank confirms that it is currently evaluating a possible loan of 200 million euros to Enel Green Power Romania,” Richard Willis, a spokesman for the EIB, said in an e-mail today. The loan represents 50 percent of the projects’ total cost, according to the bank.

Last month the European Commission cleared Romania’s program to support renewable energy developments including a wind energy and solar plants. So-called green certificates, worth 27.70 euros to 56.10 euros, are granted to producers of electricity from clean sources for each megawatt-hour generated.

The three Romanian on-shore wind farms will be located in the regions of Dobrogea and Banat with a total installed capacity of 258 megawatts. The farms will be equipped with 126 turbines and have a capacity ranging from 2 megawatts to 2.3 megawatts.

Enel, based in Rome, also is developing wind farms in Latin America and North America. Romania has 462 megawatts of installed onshore wind projects, according to the European Wind Energy Association. The country trails six other European nations, led by Spain, in the capacity it installed last year.

EIB declined to comment on the loan’s maturity or interest because the agreement hasn’t yet been finalized.

To contact the reporter on this story: Katie Linsell in London at klinsell@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

Romania May Need to Raise Interest Rates Later in Year, IMF’s Frank Says

Romania’s central bank may have to raise interest rates this year to counter possible energy-price increases, said Jeffrey Franks, the International Monetary Fund’s mission chief for the country.

The central bank should keep a bias toward tightening monetary policy even as inflation is expected to slow after the effect of last year’s tax increase wanes, Franks said today in an interview in Bucharest. It also should refrain from reducing the amount of foreign currency banks are required to hold because it “would be unwise at the moment,” he said.

“The early indications that we get from inflation for July seem to be quite good, so pressure has eased a bit,” Franks said. “We would still advise the central bank to keep a tightening bias, to be prepared to go up rather than down, but the key is to see what happens in July and August.”

The Banca Nationala a Romaniei left its benchmark interest rate unchanged at 6.25 percent for a 13th month June 29 to tame inflation sparked by a 5 percentage-point increase in the value- added tax and rising global commodity prices. The central bank expects inflation to slow to less than 5 percent in September as a good harvest drives food prices lower.

Romania’s inflation rate unexpectedly fell to 7.9 percent in June from an almost three-year high of 8.4 percent in the previous month. The central bank targets an inflation rate of 3 percent, plus or minus one percentage point, for this year and next and expects the rate to end the year at 5.1 percent. The IMF forecasts a 5.5 percent rate for the year, Franks said.
‘Still Advisable’

“We know the inflation rate is going to drop in July and here food prices from the agricultural harvest should be helpful,” Franks said. “In the rest of the year there will perhaps be some increases in administered prices that are necessary for public enterprises, so we have to weigh this all in and I think caution is still advisable.”

Investor interest in Romania will probably increase after Fitch ratings raised the Balkan nation’s sovereign-debt rating to investment grade last month, Franks said.

Still, Romania must “calibrate” its plans to sell state assets and set attractive prices to avoid discouraging investors after it postponed an offering of shares in OMV Petrom SA (SNP), Romania’s largest oil company, Franks said.

Romania last month failed to sell a 9.8 percent Petrom stake valued at about 2.07 billion lei ($704 million) as the euro-region debt crisis made investors wary of bidding for the shares. The government said July 26 that it will try to revive the sale in the first half of next year.
Stake Sales

The government must choose the right timing and price for the stakes it plans to sell in utilitiesTranselectrica SA (TEL) and Transgaz SA this year because of the market turmoil triggered by a worsening of the euro-debt crisis, he said.

The government should also strive to meet the timetable for a planned sale of a majority stake in chemical company Oltchim SA this year, Franks said. The sale of a majority stake in CEC Bank, Romania’s last-remaining state-run bank, would be “an attractive target,” he said.

To contact the reporters on this story: Irina Savu in Bucharest at isavu@bloomberg.net; Andra Timu in Bucharest at atimu@bloomberg.net.

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

Wall highlights divide between Romanians, Roma

By Anca Teodorescu (AFP)
BAIA MARE, Romania — "Why did they build this wall? What are they trying to hide, our poverty?" grumbled Alexandru Banta, a Roma father living in a dilapidated neighbourhood of this northern Romanian city.

"Children cannot see beyond this wall, it's as if they were convicts behind bars," he told AFP, holding his little daughter Cristina in his lap.

The "wall" is a concrete barrier city hall erected in July that separates two apartment blocs housing 180 mainly Roma families from a busy street next door.

But not all accept the official explanation that the structure -- about two metres high and 100 metres long (6x330 feet) -- is a "safety" measure to save Roma children's lives. Some see it as a wall of shame to hide a rat-infested eyesore housing a shunned minority.

The barrier has even divided the Roma residents themselves; a few are grateful, others disgusted by what they see as one more "humiliation".

For Banta, it's like a prison. "OK, they could have built a small fence, but not a concrete wall," he protested.

Non-governmental organisations working for Roma rights have joined the outcry. Some note that the structure went up three weeks before a parliamentary by-election to fill the MP's seat vacated by Catalin Chereches, who was elected mayor of this former mining city of 146,000 in May.

"The wall carries important political capital, since many non-Roma have wanted such a thing for a long time," said one NGO representative who asked not to be named.

Officials also plan to "inaugurate" the wall this week in a move the NGO representative found baffling.

"How can you inaugurate a wall dividing Roma from non-Roma?" he asked.

Mayor Chereches insists it aims to end a worrisome series of road accidents. He said more than 20 were recorded in the last 12 months, most of them involving children.

"We thought this buffer between the neighbourhood and the road would help reduce the number of accidents," he told AFP.

But opponents are not convinced.

"If the justification was to protect the Roma, this solution is disproportionate," said Marian Mandache of Romani CRISS, a leading Roma rights group, who felt other options like speed bumps or a small iron fence could have been taken.

"Money would have been better used if a playground had been built," he said.


-- 'Turn neighborhood into civilised area' --



Seen from a distance, the decaying, five-storey building -- the other has undergone renovation -- looks deserted, with walls blackened by smoke from makeshift stoves. Indoor plumbing was cut off since bills went unpaid and running water comes from a single outside faucet.

The dismal scene turns lively when the children come out, with dozens romping about the muddy, garbage-scattered yard, some making mudpies.

"There are rats everywhere and authorities do nothing about it. Instead they built this wall," a woman carrying a newborn shouted from a window.

"I have five children and I cannot afford to send them to school. What shall I feed them, concrete?" said another named Rodica, standing in a dark staircase.

Residents complain about the dire conditions but refuse to give their names for fear they may be evicted from the city-owned buildings.

As Europe's biggest ethnic minority, Roma number 10 to 12 million and live in all of Romania's 26 EU partner states but it's long been an uneasy relationship. Both the EU and the Council of Europe have pressed for change to fight persistent discrimination and suspicion that has led to expulsions, social exclusion and poverty.

Romania's Roma community is the biggest in Europe, officially put at 530,000 though local NGOs put it closer to two million, saying many hide their origins to try to escape this prejudice.

For Mandache, money should be spent on improving the Romanian Roma's access to education and employment in a country where less that a third of this community have steady jobs and half have no qualifications.

Not everyone is unhappy, including Roma father Alin Ghiulai.

"We approve of this construction. I myself look after my kids, but others just let them play in the street," he said. "We thank the mayor. No one before him ever thought of doing something for us -- except during election campaigns."

Mayor Chereches, meanwhile, plans to "decorate this wall, renovate the derelict building and turn this neighbourhood into a civilised area," he said.

And a couple living on the other side of the wall in a house with a garden rushed to shake his hand during a recent visit.

"Thank you. Nobody had thought of doing something for us before," said the woman, smiling.

"The mayor has done a good thing, I feel more secure now when I drive by. Before there were too many children playing in the street," said a local taxi driver who gave his name only as Gabriel.

"Plus ...we don't see the filth over there anymore," he added.