Friday, November 30, 2012

Danube fare fight sends Romania, Bulgaria to court

A second bridge across the Danube between Romania and Bulgaria was to be officially opened on Thursday. But a revenue-sharing disagreement is keeping the Vidin-Calafat Bridge closedas the countries head to court.
This is Kamen Kalnidolski's lucky day: it is a Monday morning, and the long-haul truck driver will not have to wait more than two hours for the ferry runs from Calafat in Romania to Vidin in Bulgaria. The crossing lasts an hour, passport and customs checks are quick; the 52-year-old could be home with his wife in the Bulgarian capital, Sofia, by early afternoon.

"There is bumper-to-bumper traffic here on Wednesdays and Thursdays - we all have to wait for at least 20 hours," Kalnidolski said.

Kalnidolski is stuck in Calafat or Vidin two or three times a month, a bottleneck much-feared by truck drivers on their trips from central to southeast Europe. Romania and Bulgaria share a 450-kilometer (279-mile) border along the Danube River - but there is only one single bridge, far in the east near Romania's capital, Bucharest. In some cases, that would mean a detour of several hundred kilometers. So many truck drivers opt for the ferry - and a long wait. Drivers who arrive shortly before nightfall are in for an especially long wait as the ferries do not operate in the dark.

Showcase project

Two ferries go back and forth between the towns daily. They can carry between six and 15 semi-trailer trucks per trip. At times, trucks are backed up in to the center of Calafat, a small town with 15,000 residents.

Plans for a bridge across the Danube have been in the works for decades. In 1994, the EU agreed to develop the so-called Pan-European Transport Corridor IV. The route connects several major eastern European cities, from Dresden to Prague, Bratislava, Budapest and Sofia all the way to Istanbul. Even then, Romania, which opted for a more easterly location, and Bulgaria were locked in a bitter dispute about where exactly to build a new bridge. Construction was finally begun under EU pressure in 2004, between Calafat and Vidin, a town of 50,000 inhabitants.
The ferry between Vidin and Calafat is the only option for trucks

The EU had planned "Danube Bridge 2" as a showcase project highlighting bilateral cooperation in southeast Europe. But the scheme did not work out: in the end, Bulgaria organized the bulk of construction, signing on the Spanish FCC company to build the 270 million euro ($351 million) bridge. Spanish experts and mainly Bulgarian workers and firms were involved in the project with only few Romanian companies coming on as sub-contractors.

Opening postponed

The bridge was originally scheduled to be finished before 2010 - but there was a delay due to geological characteristics that made a new structural analysis necessary. The official opening was set for Thursday, (29.11.2012), but it's been postponed once more.

Construction of the bridge is essentially finished. A few weeks ago the last 18-meter-long segment on the Romanian side was fit in. Pedestrians could cross the imposing, two-kilometer structure - in theory.

Access roads are not quite done and border control posts have yet to be established. Julio Ruis, deputy construction manager, dampened expectations the bridge might open soon after all.

"We easily need another year for static load tests," he said.

At the same time, authorities in the economically underdeveloped region are looking forward to the economic stimulus they hope the bridge will generate.

"The bridge will facilitate economic relations between our countries," Vidin Mayor Gergo Gergov said. Across the river, in Romania's Calafat, the bridge also promises better times to come. "We fervently hope the bridge will help the economy and tourism in our town develop and that there will be more jobs," said Constanza Varzaru, the head architect at the mayor's office.

Political bickering continues

The way things are now, Kamen Kalnidolski and his fellow drivers will have to take the ferry for a while longer - just as they have these past two decades.

The truck driver said he still hopes the bridge will eventually open.

"When the bridge is completed, we'll be on the other side in 20 minutes rather than 20 hours," Kalnidolski said.

In the meantime, there is more political bickering on the horizon: Romania and Bulgaria want to take each other to court over how to share revenue and bridge tolls.

Romanian election heralds hard choices on shale gas

By Ioana Patran
BUCHAREST, Nov 29 (Reuters) - Romania is among the best placed of Europe's ex-communist countries dreaming of escape from reliance on Russian gas, as its newly accessible shale deposits place self-sufficiency within its grasp.
The obstacle, as elsewhere, stems from fears that extracting gas from shale will pollute water for drinking and farms.
U.S. energy major Chevron wants to start drilling for shale gas exploration near the town of Barlad and campaigners have organised protests ahead of elections on Dec. 9, demanding a nationwide ban.
The current moratorium on shale exploration could be lifted when voter pressure subsides after the vote.
But the Social Liberal Union (USL) of leftist Prime Minister Victor Ponta, which will probably form the next government, has yet to make its shale policy clear and the future is up in the air.
Other political groupings have also refrained from unveiling their plans on the issue for fear of alienating voters.
"A decision would need to be made eventually. We hope this decision will not be one to endorse this activity and technology," said Bogdan Grecescu from Greenpeace Romania.
Activists hope all Chevron's exploration rights will be annulled if they can secure an overwhelming majority against shale gas in a non-binding referendum in the Black Sea town of Mangalia, coinciding with next week's national elections.
Chevron has exploration rights for three blocks of 670,000 acres (270,000 hectares) near the Black Sea, and has also bought a 1.6 million acre concession close to Barlad for an undisclosed amount.
Hydraulic fracturing or fracking to extract shale gas involves injecting water and chemicals at high pressure into underground rock formations.
Experts say that if it is done according to best practice it is environmentally safe, but the technology still evokes much public concern.
The strength of feeling in Barlad is demonstrated by Neculai Rotaru, a retired army general and anti-shale activist, who said he did not care that the company proposing to carry out the exploration was from the United States or anywhere else, nobody should do it.
"It is a criminal method as it leaves the environment deeply affected, infected and contaminated," Rotaru said.
Romania's considerable conventional gas reserves mean it only imports only about a quarter of the gas it uses.
Exxon Mobil and Austrian OMV's Petrom have discovered what could be up to 84 billion cubic metres (bcm) of conventional gas in an offshore Black Sea well, but these big finds stand to be dwarfed by shale gas.
Analysts say that Romania's shale gas deposits, added to its conventional reserves, could make it self-reliant in gas use.
"Adding the shale gas reserves, Romania may actually cover all the internal demand from its own sources," said Otilia Simkova, an analyst at consultancy firm Eurasia Group.
The U.S. Energy Information Administration (EIA) estimates Romania and neighbouring Bulgaria and Hungary could have 538 bcm of shale gas between them, slightly more than Europe's annual consumption and enough to cover Romania's own for almost 40 years.
In the United States, fracking has revolutionised the energy sector, bringing a drop in domestic power and gas prices, but environmental risks and denser population have made Europeans more cautious.
The European Parliament rejected a ban on shale gas on Nov. 21 and asked for a robust regulatory regime to address environmental concerns. The European Commission, the EU executive, is expected to come up with a framework for managing risks next year.
In the meantime, European Union countries are finding their own way.
Poland is Europe's most ambitious advocate of shale and, although it slashed expected reserves this year by 90 percent, it is pushing to start production to limit dependence on Russia's Gazprom, which supplies 75 percent of the gas it consumes.
Among other formerly communist EU countries, Bulgaria has yielded to protests and halted shale exploration.
Exploration is on hold in the Czech Republic due to environmental concerns, while in Slovakia extraction could be limited due to considerations regarding water tables around the Danube, where some shale reserves are thought to exist.
Both countries are completely dependent on gas imports, largely from Russia.

Thursday, November 29, 2012

WSJ: Carrying the Torch for Romanian Cinema


Having endured Nazi occupation, Allied bombing and Communist dictatorships, violent revolutions and post-Soviet liberation, it's little wonder that Romania has produced some of the world's bleakest cinema. Recent milestones like Cristi Puiu's lacerating "The Death of Mr. Lazarescu" and Cristian Mungiu's "4 Months, 3 Weeks and 2 Days" have unapologetically depicted life in realistically downbeat dramatic hues, winning over festival juries and audiences along the way.

In fact, Romania cinema has gradually become a central component of international film culture. This year, Mr. Mungiu's "Beyond the Hills" earned screenwriting and acting recognition from the Cannes Film Festival jury, and it's an early favorite for the foreign-film Academy Award.

"When a country is emerging from some period of great political or social tumult, there's often a sudden explosion of new voices in the arts," said Scott Foundas, the associate program director at the Film Society of Lincoln Center.

On Thursday, FSLC will open Making Waves: New Romanian Cinema, the annual weeklong survey that has helped define and establish the southeastern European country as a stronghold of socially incisive, independently minded personal cinema. And true to form, this year's survey has itself emerged from tumult.

Until 2012, the festival's existence was due almost entirely to the efforts of the Romanian Cultural Institute—a state-sponsored cultural exchange agency with branches in 18 international cities—and its local director, Corina Suteu, and deputy director, Oana Radu. "The Romanian Cultural Institute has been the single most important agent for bringing attention to these films internationally," Mr. Foundas said. "In terms of traveling with these films and filmmakers, it has done an enormous amount of work."

But this summer, the new coalition government of Prime Minister Victor Ponta sought to redirect the RCI's nonpolitical promotional efforts down more partisan avenues. A June "emergency decree" halted the institute's focus on international appreciation and exchange. Support for independent work that was seen by some as offering an unflattering national image was withdrawn in favor of what Mr. Foundas described as work "promoting traditional folkloric culture to the Romanian diaspora and not to a broader international audience."

The prime minister's decree also made the Romanian institute and its activities accountable to the country's increasingly divisive senate in the midst of an election year, rather than to the country's president. "The mandate of the institute changed," said Ms. Suteu, who, along with Ms. Radu, resigned from her post as director of the institute's New York bureau in September. "A president has the obligation of neutrality. By moving it to the senate, you politicize it."

Said Mr. Mungiu, the nation's most decorated contemporary filmmaker, "This decision was not taken following any kind of analysis regarding the activity and results of the institute. It was taken out of the blue and it was followed by an abrupt cut of funding, even for projects in development."

One line item that vanished overnight was the institute's considerable financial obligation to the Making Waves festival. "They cut all the funds for the autumn," Ms. Suteu said.

Representatives for the Romanian Cultural Institute in Bucharest could not be reached for comment.

While some, including the Museum of Modern Art and Film Forum, lodged protests, Ms. Suteu went back to work. "I believed that someone has to do something positive in this kind of disastrous situation," she said. "So I started to fund-raise for the festival."

In partnership with Ms. Radu and Mihai Chirilov, a critic, film programmer and the longtime artistic director of the annual Romanian film survey, Ms. Suteu established the Romanian Film Initiative. The organization is designed to retain what she described as "the playful, experimental spirit" of the festival, outside of the politics and purse strings of her own country.

The RFI swiftly courted individual financial support and grants from the Trust for Mutual Understanding and others. Visual artist Adrian Ghenie contributed a canvas to the RFI's war chest in advance of his anticipated Pace Gallery show in the spring. A crowd-sourcing campaign netted $22,341. "They really were able to put this together quite quickly and miraculously, when you consider that it all happened less than six months before the scheduled start of the festival," Mr. Foundas said.

The resulting, fully funded edition of Making Waves comprises 17 new fiction and nonfiction films, shorts, and a three-film revival of director Alexandru Tatos's seminal work, along with panel discussions and a high concentration of filmmaker attendance. The diversity of expression on hand resists critical and political naysayers who have dismissed Romanian film as minimalist, miserablist kitchen-sink cinema.

"I think someone in Variety said it was 'bathroom sink drama'," Mr. Chirilov deadpanned. "Whenever you have a trend, you always have people that will attack it."

Both he and Mr. Foundas pointed to the festival's opening-night film, "Of Snails and Men," a bittersweet comedy that set domestic box-office records at home in September, as an example of, in Mr. Foundas's words, "the breadth of what's getting made over there."

As to the future of the fledgling Romanian Film Initiative, Ms. Suteu said that whatever comes next will be handled in a spirit of freedom and conviction that isn't always readily available in public service. "When you are no longer a government official," she said, "you are not obliged to make compromises."

Wednesday, November 28, 2012

NYT: Festival Recast by Politics at Home

Published: November 27, 2012

Ordinarily, a change of government in a Balkan capital would be little cause for concern at the Film Society of Lincoln Center. But when you sponsor a Romanian film festival, and your Romanian partner comes under attack by the new authorities in Bucharest, thus jeopardizing your joint undertaking, you may find yourself thrust into a political imbroglio.
The festival, Making Waves: New Romanian Cinema, will begin as scheduled on Thursday night at Lincoln Center, running through next Wednesday. But the film society has severed its connection to the Romanian Cultural Institute, the festival’s original government-financed co-sponsor, in favor of collaboration with a new, private entity, called the Romanian Film Initiative, run by the former director of the institute’s New York office.

In the last decade, the emergence of a Romanian new wave has been one of the most startling developments in world cinema, with one film after another winning prizes at Cannes and elsewhere. In New York a festival of Romanian movies was first held in 2006 in TriBeCa under the auspices of the cultural institute, and last year was invited to move to Lincoln Center.

But the arrival of a new administration in Bucharest “sent us back to square one,” said Corina Suteu, who resigned in September, along with her deputy, Oana Radu, as director of the New York office of the Romanian Cultural Institute. “The present authorities have gone back to a discourse on culture that is very archaic, and they do not consider new wave cinema as being ‘representative’ of Romania.”

At Lincoln Center, film programmers said there was no hesitation about continuing their partnership with Ms. Suteu and her associates and they opted not to explore the possibility of an officially sanctioned event.

“Under this leadership, the cultural institute did incredible things to make the new Romanian cinema visible in the United States, so there was never any question in our minds,” said Scott Foundas, associate program director at the film society. “Our feeling always was that we think very highly of these people as curators, have very similar taste in cinema and are very pleased to have them as part of the extended Lincoln Center family.”

The government of Prime Minister Victor Ponta, which came to power this spring, is a seemingly unlikely coalition between former Communists and a conservative party. In June it issued an emergency ordinance modifying the 2003 statute setting up the Romanian Cultural Institute, which had previously reported directly to President Traian Basescu, Mr. Ponta’s political rival.

“It’s an Ionesco-like government,” said Mihai Chirilov, the artistic director of the film festival, referring to the Romanian playwright who is considered a father of the theater of the absurd. “It’s a very unexpected combination that shows their only aim is power.”

As a presence on the New York cultural scene since shortly after the fall of Communism in 1989, the Romanian Cultural Institute has not limited itself to promoting its national cinema. The institute has also helped bring Romanian writers to the annual PEN World Voices literary festival, supported visual artists in their efforts to get their work shown locally, and collaborated on shows featuring Romanian music, both classical composers like the pianist Dinu Lipatti and pop groups like Timpuri Noi.

In place of that longstanding emphasis on making Romanian culture better known in the West, under the new emergency ordinance the institute’s primary task is “to uphold the identity” of Romanians living abroad. The previous, outward-looking policy was condemned in the ordinance as “highly negative” because it “impairs on a permanent basis the feeling of belonging to the Romanian nation in the case of those temporarily living in other countries.”

The Romanian director Andrei Ujica has made several critically praised films, including “Videogram of a Revolution” and “The Autobiography of Nicolae Ceausescu,” shown at the New York festival in 2010, that examine the relationship between political power and media manipulation. In a telephone interview from Berlin, where he teaches cinema, he described the new government policy as an “abusive change” and “anticultural.”

“It’s a kind of attempt at a small cultural revolution, in a Maoist meaning, but in a new form, coupled with the new tabloid culture that has become so strong in East European countries,” he said. “That is a new and dangerous mixture, with a very rigid nationalist focus.”

On the Web site of Mr. Ponta, the government has denied any intention to seize control of the cultural apparatus or limit freedom of expression. “The decisions that have been adopted are meant only to build a more comprehensive democratic framework for the Romanian Cultural Institute’s functioning and to redress the problems pertaining to its spending of public money,” an official statement said.

With government financing ruled out, Ms. Suteu and her associates did what everyone does these days: they began a Kickstarter campaign that raised $22,000 from some 300 people. In other gestures of support, leading Romanian artists, writers and film figures, both in the diaspora and back home, signed protest petitions and also contributed money, and the Trust for Mutual Understanding, which promotes cultural and other exchanges between the United States and the former Soviet bloc, supplied a $50,000 grant.

The festival opens on Thursday with “Of Snails and Men,” an absurdist comedy by Tudor Giurgiu, and will conclude with Cristian Mungiu’s religious drama “Beyond the Hills,”which won two awards at the Cannes film festival this spring.

In between, the bill includes several works by promising new directors and a retrospective of the films of Alexandru Tatos, who died in 1990 and is considered a major influence on the new wave.

Unusually, the program also includes two panel discussions, titled “Creative Freedom Through Cinema: Romania and Hungary,” that will be linked with screenings on Saturday and Sunday. Hungary, Romania’s neighbor, is included in the discussion because the nationalist government there has been criticized as curbing freedom of expression.

“Corina and Oana have been very quick on their feet to make this happen, which I’m not sure everyone could do,” Mr. Foundas said. “It was a very bold move on their part, and without skipping a beat, they have created an entity to protect the independence of this festival and to continue going forward in the way we want to see.”

Village Voice: Celebrating the Romanian New Wave at Lincoln Center

By Michael Nordine
Wednesday, Nov 28 2012

What's now referred to as the Romanian New Wave announced itself loudest with Cristian Mungiu's 4 Months, 3 Weeks and 2 Days, which in 2007 won the Palme d'Or at the Cannes Film Festival. The laurel wasn't exactly unprecedented—at least one Romanian film had received a major award at the festival each of the two years prior—but it nevertheless felt definitive. Deeply rooted in the nearly quarter-century (1965 to 1989) reign of Nicolae Ceausescu as its authoritarian dictator and characterized by minimalist staging and deadpan black humor, the central European nation's recent contributions to the world of film have been good or great with almost alarming frequency. "Making Waves: New Romanian Cinema," the Film Society of Lincoln Center's annual series co-sponsored by the Romanian Film Initiative, begins this Thursday with Tudor Giurgiu's Of Snails and Men and runs for exactly a week. In addition to a dozen or so other recent works, it also features a shorts program and a retrospective devoted to Alexandru Tatos.
Giurgiu's film is a good deal less somber than most Romanian exports to make it stateside. But its comic tone shouldn't be mistaken for a lack of seriousness: Set against the backdrop of Michael Jackson's first and only visit toRomania in the early 1990s, it concerns a group of factory workers at a shuttered car plant who scheme to take over the factory by donating sperm en masse. Entwined in its comic narrative is a genuinely felt sense of loss and fear; Giurgiu does take the dark humor so often embedded into his countrymen's films and, as Corneliu Porumboiu did with 2007's 12:08 East ofBucharest, quietly moves it to the fore.

Radu Gabrea's Three Days till Christmas acts as a sort of companion piece to last year's stunning The Autobiography of Nicolae Ceausescu. Gabrea presents an at times farcical take on the dead-and-deposed dictator that highlights the man's absurdity via a re-enactment of his last days interspersed with archival footage and talking-head interviews. It offers few rewards to anyone who has seen Ujica's film, but works well enough as a genre mash-up holding all parties responsible.

The biggest draw is still likely to be Mungiu's Beyond the Hills, which tells of a young nun and her wayward, overly dependent friend and closes the series next Wednesday night. (It isn't the only monastic offering on display; Anca Hirte's Teodora Sinner, a decidedly more modest and lo-fi take on the lives of nuns, screens Sunday and Wednesday.) Mungiu, whose follow-up this is to 4 Months, is, along with Cristi Puiu, one of the Romanian New Wave's primary standard-bearers; his latest won two more awards—for its screenplay and two lead actresses—at Cannes just this May. Long, deliberately paced, and set on a remote monastery, it's something like the archetypal Romanian film: so quietly tense on so many levels that its seemingly placid surface seems poised to shatter at a moment's notice. Waiting for that to happen (or not happen) proves far more exhilarating than exhausting.

Romania, Bulgaria, Greece work to increase growth

Three Balkan countries aim to jointly tackle regional and European challenges.

By Paul Ciocoiu for Southeast European Times in Bucharest

Romanian, Bulgarian, and Greek ministers of foreign affairs pledged to co-ordinate their countries' EU enlargement policy on the Western Balkans, regional and cross-border co-operation, and EU external border security in an effort to bolster common growth and regional stability, with an emphasis on fighting illegal immigration and trans-border criminality.

The ministers met in Sofia this month at the eighth trilateral meeting of foreign ministers in Sofia. The meeting, which aims to foster lasting co-operation and co-ordination among the three countries on their European and regional issues, is also part of the mission to dispel a widely-perceived disunity prejudice in the Balkans, officials told SETimes.

"The trilateral format evolved and is currently focusing on both co-ordinating the three states' positions on the main themes on the European agenda, promoting in EU and NATO where the three countries have a significant expertise and share common interests: the Western Balkans and Black Sea region," Romanian ministry of foreign affairs told SETimes.

First launched in 1995, the trilateral meetings focused on the three main issues -- politics, regional developments dialogues and economic co-operation.

During the meeting, Bulgaria's Nikolay Mladenov, Romania's Titus Corlatan, and Greece's Dimitris Avramapoulos agreed to strengthen economic co-operation, focusing on energy and infrastructure projects, opportunities within the EU strategy for the Danube region and other EU initiatives.

In a final joint declaration, the three countries voiced support for an accelerated EU accession of the Western Balkans states, provided that the accession criteria are fully met. They also renewed their support to maintain the liberalised visa regime for the region.

"The aim is to remove all the black holes in the Western Balkans so there'll be no dysfunctions in the region," Niculae Mircovici, a lawmaker representing the Bulgarian minority in the Romanian parliament, told SETimes.

Diplomats hailed the Sofia meeting achievements as historic.

"The trilateral meeting demonstrates the determination and willingness of the three countries to represent a pillar of stability in this historically entrapped region of Europe," Georgios Poukamissas, Greek ambassador to Romania, told SETimes.

"This historical chance is really important, that the three countries have a common goal on the Western Balkans, Black Sea region, with other timely developments in the EU, for instance, the discussion envisaging the 2014-2020 financial frameworks. I hope such meetings with a spirit of resolve and solidarity bring the three countries even closer one to one another," he added.

Mircovici emphasised that "a common voice in Sofia on various important themes, and this is even more important since it paves the way for the three countries' rotating EU presidency."

Greece, Bulgaria, and Romania are scheduled to take over the presidency of the EU council in 2014, 2018 and 2019 respectively.

"The level and intensity of discussions suggest that a regional approach could expand in the future, which will only benefit Southeast European countries and the EU," Mircovici said.

The trilateral meeting joins the other regional co-operation structures, such as the Southeast Europe Co-operation Process and the Regional Co-operation Council, which aim to realise the EU perspective of all the states in these organisations.

"This is why Romania will promote, during the [Southeast Europe Co-operation Process] presidency in June 2013-June 2014, a future-oriented approach, and bend on achieving visible results to benefit both, the region, and each member state," the Romanian ministry of foreign affairs said in a statement.

Populist Romanian tilts at PM with promise of better times

By Luiza Ilie

TARGU JIU, Romania | Tue Nov 27, 2012

(Reuters) - The lanky man rode into town in a white Rolls Royce, his promise of better economic times attracting a fervent audience and spelling trouble for Romania's prime minister at next month's election.
Dan Diaconescu is standing in the seat of leftist PM Victor Ponta and his campaign depicts the media entrepreneur as the last hope of a people betrayed by the political class.
Few voters in this depressed southwestern region will be ignorant of his populist agenda by election day on December 9.

The 44-year-old has attended weddings and funerals, gone canvassing door to door and even promised to build indoor bathrooms for local families who lack plumbing.

In warm sunshine, Diaconescu shook hands and autographed posters and wrists at a rally in Targu Jiu, a town with little industry at the heart of a struggling coal-mining area.

"The battle is very tight. If we win here, we will push Victor Ponta out and automatically shake up the system he represents," Diaconescu told Reuters as the crowd strained to touch him.

Diaconescu is campaigning on the promise of more jobs and deep tax cuts, and doubts over an International Monetary Fund bailout.

It is unlikely he will win, analysts say, but he could push Ponta's share of the vote below 50 percent, which would undermine Ponta's claim to be the Social Liberal Union's (USL) prime minister in a new government.

Ponta is popular but his credibility was hit when the EU criticised USL for undermining the rule of law in an effort to oust President Traian Basescu, his bitter rival, who appoints prime ministers.

In more than 20 years since the fall of communism, Romania has made progress but remains the second-poorest European Union member and struggles to provide citizens with basic services like road links and reliable electricity and water supplies.

Roughly 3,500 Romanians gathered at Diaconescu's rally on Sunday in a field within walking distance of works by modernist sculptor Constantin Brancusi.

"He gives us hope," said Ion Dumitrescu, a 59-year-old lawyer, at the rally. "The other parties have been lying to us for 22 years. If he fails us, then we can stop voting because there is nobody else."

Diaconescu is under investigation in two separate cases, for allegedly trying to blackmail a mayor to stop him airing damaging information, and for fraud in a failed privatisation. He said charges were the system's attack on an outsider.

His party, which he founded in 2010, wants to raise wages and pensions, cut sales tax to 10 percent from 24 and pay budding entrepreneurs 20,000 euros ($26,000) for starting a new business.

Opinion polls put Diaconescu's party third, benefiting from widespread discontent with austerity and mainstream politicians, and it may hold the balance of power after the election.

Ponta's USL has support levels of around 50 percent and is favourite to win the election. The prime minister has said he is confident he will prevail in Targu Jiu and the townspeople were "not fans of the circus".

Constituencies won with less than 50 percent by individual candidates are redistributed based on party results, meaning Ponta could even lose his seat if Diaconescu wins enough votes.

"Targu Jiu is the only constituency in the country where we have two powerful figures fighting it out in this election," said political commentator Mircea Marian.

"Diaconescu cannot win, but if he pushes Ponta below 50 percent this may give the president arguments in favour of appointing a different prime minister."

Bloomberg News: Romania’s Leu Heads for Two-Month High on Funding Cap, Greek Aid

The leu headed for its strongest level in two months after the Romanian central bank extended a cap on repo funding to an eighth consecutive week and as easing of terms on emergency aid for Greece boosted risk appetite.

The leu appreciated 0.3 percent to 4.5053 by 5:10 p.m. in Bucharest to the strongest on a closing basis since Sept. 19, gaining for a third day. Yields on 2019 Eurobonds fell two basis points, or 0.02 percentage point to 4.78 percent, according to data compiled by Bloomberg.

The Banca Nationala a Romania capped lending at 4 billion lei ($1.1 billion) in a repurchase agreements auction yesterday, extending its limit on weekly funding for lenders introduced on Oct. 8. European finance ministers cut the rates on Greece’s bailout loans, suspended interest payments for a decade, giving the nation more time to repay, and engineered a Greek bond buyback. The country was also cleared to receive a 34.4 billion- euro ($44.7 billion) loan installment in December.

“As international markets saw some relief due to the news related to the Greek bailout, the leu strengthened against the euro,” analysts including Mihaela Neagu at OTP Bank Romania SA wrote in a note today. “The appreciation continues to be supported by the tightening of liquidity.”

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

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

Monday, November 26, 2012

FT: Romanian leaders signal truce

By James Fontanella-Khan in Brussels

Romania’s prime minister has vowed not to reignite a power struggle with the president that had sparked international concerns over threats to democracy in one of the EU’s newest members

Victor Ponta ruled out any new attempt to impeach President Traian Basescu if his centre-left coalition wins next month’s general elections in a move aimed at restoring confidence after months of political instability.

“I think that the fight with Basescu is a closed chapter,” Mr Ponta said in an interview with the Financial Times. “I think that both of us will do our best to avoid any more conflict . . . because right now . . . the one who breaks the peace is going to be held responsible.”

Mr Ponta tried to impeach Mr Basescu in July after accusing the centre-right president of exceeding his powers and interfering in the government’s effort to push through key economic reforms. Mr Basescu rejected the prime minister’s accusations.

The dispute came to an end after Romania’s constitutional court said that despite an overwhelming majority voting to impeach Mr Basescu in a referendum, the poll would be annulled as fewer than 50 per cent of registered voters had participated.

However, the fight between the two leaders exposed broader problems about the solidity of Romania’s democracy and respect for the rule of law in the country.

The EU urged Mr Ponta to take swift action to safeguard the independence of the judiciary and respect the constitution after several judges complained of rising pressure – including death threats– as they were caught in the middle of an increasingly bitter political feud between the premier and president.

Since Mr Basescu was reinstated , the two political leaders have sought to co-operate more, said Mr Ponta. “We have been working together after the summer crisis and I think that in the interest of the country both of us drew the necessary lessons from what happened,” he said.

The prime minister said that the two reached four key agreements this month, including a new deal with the International Monetary Fund over financial guarantees that will allow them to borrow money from the private sector and the country’s 2013 budget.

The IMF has praised Romania for undertaking tough austerity measures to restore the country’s finances – the budget deficit is expected to halve to 2.2 per cent of gross domestic product in 2012. But there are fears that such achievements may be reversed by populist political promises ahead of elections scheduled for December 9.

“Strong commitment to achieving fiscal sustainability and judicious implementation of the structural reform agenda remain crucial to anchor policy credibility, ensure macroeconomic stability and boost inclusive growth,” the IMF said in its most recent assessment of Romania’s economic performance.

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PM Says Romania Can't Afford New Political Crisis


BRUSSELS—Romania's Prime Minister Victor Ponta pledged to bury his political feud with President Traian Basescu after next month's parliamentary elections, predicting he will return as premier and turn his full attention to the country's economic and social challenges.

The 40-year-old Mr. Ponta, one of Europe's youngest leaders, acknowledged mistakes in his handling of a political crisis this year, during which investors sold off Romanian assets, the economy declined and the European Union and U.S. scolded Mr. Ponta over what they saw as threats to the rule of law.

He said neither he nor Mr. Basescu, 61, want a new political crisis after what he called the recent "hot summer."

"After the elections, nobody can afford…a new crisis. I think that the president will stay in his place, the government will have the support of a new parliament and we will have a lot of work to do next year," he said in an interview with The Wall Street Journal.

The crisis erupted after Mr. Ponta took office in May, when his coalition used its parliamentary majority to try and impeach Mr. Basescu over charges he had exceeded his powers as president.

A July 29 referendum to remove Mr. Basescu from office failed after fewer than 50% of the country's eligible voters cast ballots. The Constitutional Court ordered Mr. Basescu restored to office the following month.

The impeachment attempt, alongside the replacement by the government of the country's ombudsman, the use of emergency decrees and allegations of pressure on the judiciary and constitutional court, brought a sharp retort from Brussels. European Commission chief José Manuel Barroso talked of a threat to two decades of Romanian democracy-building, and after a visit by Mr. Ponta, set out 11 demands—dubbed the "11 commandments" in Bucharest—of Mr. Ponta's government.

German Chancellor Angela Merkel and the U.S. State Department also pushed the new government to reverse course.

Three months on, the two political arch rivals are at least speaking. Thursday's interview was delayed 35 minutes as Mr. Basescu and Mr. Ponta compared notes by phone on the latest twists at an EU summit aimed at agreeing on a multiyear budget plan.

Mr. Ponta's coalition of Social Democrats and Liberals is the current favorite to win the Dec. 9 vote, and Mr. Ponta says he is confident the government will command an absolute majority in Parliament. In theory, Mr. Basescu could ask someone from his party to try and form a government—or even ask one of Mr. Ponta's coalition colleagues to take the premiership.

"It's not going to happen," said the prime minister. "I am sure that even the president will do everything for the stability of the country."

Bogdan Oprea, a spokesman for Mr. Basescu, said the president has made it clear he will pick as prime minister "the person who represents the national interest." He declined to say whether that could be Mr. Ponta.

However, Mr. Oprea said: "I can assure you he will find the right decision to have social and political stability in Romania after the elections."

Mr. Ponta, who measures his words carefully, admits the first six months in power have been a steep learning curve. Asked if he would change anything he did over the summer, the prime minister shoots back, "plenty of things."

He is more positive about the EU executive's role in the summer crisis than are many of his supporters, who have accused Mr. Barroso and his team of political bias toward Mr. Basescu.

"I have never wanted to export" the political crisis "or to blame the European Commission for something that was our fault at the end-the president and myself," said Mr. Ponta. "Even during this hot summer…I fought against all the ideas of euro-skepticism. I said no, this is our problem."

As part of his efforts to rebuild ties with Brussels, Mr. Ponta agreed that the president should represent Romania at EU summits-the subject of an early dispute with Mr. Basescu that was a catalyst for the political crisis. Mr. Ponta says his government is determined to stick to budget discipline and win a new precautionary loan from the International Monetary Fund in April, when the current $5 billion package expires.

He brandishes other pro-EU credentials. He wants his country, which isn't in the euro zone, to join the region's single bank supervisor that is set to be launched next year. Most non-euro-zone countries have been noncommittal about joining. And he said he wants Romania to join the euro zone eventually, although he won't say when.

Those efforts have borne some fruit. EU officials say privately that they were impressed by Mr. Ponta's response to its summer demands. One official said Mr. Ponta is seen as "someone we can work with" is one of the moderates within the governing coalition.

Still, real concerns remain among Romania's European partners, especially over alleged intimidation of the judiciary by the government's supporters and attacks by senior political figures on an anti-graft agency, which has successfully taken on dozens of politicians.

Mr. Ponta, a former prosecutor, said corruption has grown "worse and worse" under Mr. Basescu and said he would ensure judicial independence. He pledged to fire government officials found to be involved in corruption or other wrongdoing.

Meanwhile, Mr. Ponta said he is eyeing tax reform at home. He has pledged to keep the 16% flat income-tax rate but wants a special rate of 8% and 12% for lower-income Romanians, at least for a time. When that will be done isn't clear. Everything depends on "the development of the budget and the economy."

Thursday, November 22, 2012

Populism takes spotlight in Romania power struggle

(Reuters) - On a sunny October day, Dan Diaconescu arrived at Romania's economy ministry with seven bags stuffed with 3 million euros in cash to pay workers' overdue wages at a chemical plant.

The government turned down the money but the stunt served its purpose for the media tycoon, raising his electoral profile along with nightly self-promoting appearances on his own television channel, calling himself "Romania's next president".

Promising steep tax cuts, his populist party may hold the balance of power after a December parliamentary election. That would set up weeks of horse trading which could raise questions over an International Monetary Fund deal and undermine Romanian markets.

"Once in power we will make things right. We will have bread, glass and brick factories like in the old days," Diaconescu told voters in the impoverished mining town of Targu Jiu, where he is standing for parliament.

Romania joined the EU in 2007 but its chaotic politics have brought into question whether it is fit to be part of the block. It remains a second-tier member - excluded from the passport-free Schengen zone and its justice subject to monitoring.

Its leftist government, led by Victor Ponta, is favorite to win the election and may well secure an outright majority. But its credibility is damaged abroad after a failed attempt to unseat President Traian Basescu, who is deeply unpopular due to his links to austerity and perceptions of cronyism.

If parliament is split then Diaconescu, whose party has poll ratings of about 14 percent and turns 45 on the December 9 election day, becomes the likely kingmaker.

Both main parties - Ponta's Social Liberal Union (USL) and the Basescu-allied Romania Right Alliance (ARD) - have committed to work with international lenders, but Diaconescu's policies will alarm the IMF, which leads a 5 billion euro deal that shores up investor trust.

Diaconescu is proposing to raise salaries and pensions, cut sales tax to 10 percent and pay budding entrepreneurs 20,000 euros for starting a new business, though demands would be tempered in a coalition.

Wealthy and with designs on power, the tall, slim and sharply dressed Diaconescu is standing in Ponta's constituency. He will almost certainly lose but gain a seat under proportional party lists - and taking on the prime minister brings publicity.

"Diaconescu is luring people with a vigilante image," said Sergiu Miscoiu, an analyst with the CESPRI political think tank.


Whoever ends up in charge has a long to-do list. Romania is the second-poorest and one of the most corrupt EU states, with an average wage of less than 350 euros - about half of candidate Croatia's and barely a quarter of France's minimum.

While the country of 19 million has made great strides since the violent revolution of 1989 and execution of communist dictator Nicolae Ceausescu, it still trails far behind other new EU members Poland, the Czech Republic and Hungary.

Agriculture is the backbone of the economy but produces nothing like its potential and swathes of the economy remain in inefficient state hands. Business and investors complain of outdated infrastructure and energy production, mind-numbing bureaucracy and corruption.

The economy is barely growing after a credit bubble burst in 2009 and forced the country to the IMF.

"I don't think, when we look back for 20 years, that there was any big difference from one government to another," said Steven van Groningen, head of Raiffeisen Bank's local unit and the foreign investors' council.

Society is split with a small number of very rich people but many millions living from subsistence farming or minimal wages. About 40 percent of residences have no running water and some areas do not have mains electricity.

"It doesn't matter who will end up in parliament after the December election, nothing will improve," said Laura Jipa, 42, who sells newspapers near the government headquarters. "They are all trying to make things better for them and their families."


While commuters in Bucharest struggle to work in clogged streets and packed trams, politicians - many of them in politics since the 1989 fall of communism - have generous expense accounts and are swept through the city in police motorcades.

In the last seven years, 23 lawmakers have been sent to trial for corruption.

"Politicians would like to keep their privileges and influence at the expense of a credible judiciary that would generate benefits for citizens through the level of foreign investment to Romania," Horia Georgescu, head of the National Integrity Agency corruption watchdog, told Reuters.

Should the USL secure a majority, it will take Diaconescu out of the equation but investors will remain on edge because it will have to work with Basescu, a blunt former sea captain who makes enemies easily. The USL could try to impeach him again.

The previous attempt at impeachment last summer drew criticism from the European Union and the United States, sent the leu currency to record lows and raised borrowing costs.

"I have to explain to lots of foreign investors what is happening in Romania - that's not easy," van Groningen said.

(Additional reporting by Ioana Patran; Editing by Rosalind Russell)

Romanian Leu Gains First Time in Three Days; Bond Yields Steady

By Andra Timu - Nov 21, 2012

Romania’s leu gained for the first time in three days as an extension of a cap on repo funding to a seventh week offset paring of risk appetite after European officials failed to agree on a debt-reduction package for Greece.

The leu strengthened 0.1 percent to 4.5306 by 6 p.m. in Bucharest, heading for its highest level in more than a week. Yields on 2019 Eurobonds were unchanged at 4.901 percent, according to data compiled by Bloomberg.

The Banca Nationala a Romania extended its 6 billion lei ($1.7 billion) limit on funding via repurchase agreements even as demand rose to 30 billion lei at an auction on Nov. 19, according to data compiled by Bloomberg. The central bank introduced the cap on Oct. 8. European finance ministers failed to agree on a debt-reduction package for Greece after battling with the International Monetary Fund over how to bring the recession-wrecked country back to fiscal health.

“European finance ministers failed to overcome division over how fast to cut Athens’ debt and called a further meeting next week,” Mihai Patrulescu, a Bucharest-based economist at UniCredit Tiriac Bank SA wrote in a note today.

A campaign for general elections in Romania started on Nov. 9 as the ruling coalition of Prime Minister Victor Ponta goes head-to-head with the opposition party supporting president Traian Basescu. Parliamentary elections will be held on Dec. 9.

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

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

Tuesday, November 20, 2012

Solar power to eclipse nuclear in Romania by 2016


BUCHAREST — Solar power will eclipse nuclear energy in 2016 in Romania if investment in photovoltaic plants continues at the current pace, official figures released on Monday showed.

"We expect the installed capacity of solar plants to reach 50 to 100 MW at the end of 2012, 500 to 1,000 MW at the end of 2013 and to top 1,500 MW in 2016," an official of the national energy regulator (ANRE), Zoltan Nagy, told a solar power conference.

The two reactors of Romania's sole nuclear power plant in Cernavoda produce together around 1,400 MW, accounting for 18 percent of the country's energy needs.

Romania plans to build two more reactors at Cernavoda but has so far failed to find investors willing to come up with the requisite 4.0 billion euros ($5.0 billion).

After a strong increase in wind-power projects over the past two years, Romania is now witnessing a surge in investments in solar energy.

The South Korean group Samsung is currently looking at two potential locations in southwestern Romania to set up plants with a forecast capacity of 45 megawatts.

"The share of renewable energy in Romania accounts for 8.0 to 9.0 percent," ANRE president Nicolae Havrilet noted, before stressing that the target was to top 20 percent in 2020.

"With wind farms having reached the top limit, solar power now offers the best investment opportunities," he added.

A May 2012 survey by Ernst&Young cited by PV Romania, a website specializing in solar power, says Romania is the sixth most attractive European country for investment in solar power.

Monday, November 19, 2012

Romania Energy Regulator to Decide Next Year on Solar Cuts

Nov. 19 (Bloomberg) --Romania’s energy regulator will decide early next year whether to recommend a cut in solar incentives as project costs fall.

The regulator, known as ANRE, has so far proposed a reduction in the number of green certificates granted for solar- power production to five from six per megawatt, said Nicolae Havrilet, who heads the organization.

“We need to analyze the 2012 report on investment costs and we will see whether the number of green certificates needs to be reduced or not,” Havrilet said at a conference in Bucharest today. “Based on the current legislation, no change in the incentives will be applied before January 2014.”

Romania may join Spain, France, Italy and the U.K. in curbing incentives for the industry. The eastern European nation currently offers green certificates for each megawatt-hour of energy produced from wind, solar, hydro or biomass, as it seeks to attract about 5 billion euros ($6.4 billion) in energy investments through 2020 to reduce carbon emissions.

Romania is counting mostly on its wind energy potential in regions close to the Black Sea, which has already attracted investments from companies such as CEZ AS. (CEZ)

At the moment, Romania hands out two green certificates for each megawatt of wind energy produced and six certificates for a megawatt of solar power. The value of a green certificate varies from 27 euros to 55 euros, according to ANRE data.

Romania may have as much as 100 megawatts of power produced from solar plants at the end of this year, said Zoltan Nagy- Bege, a director at ANRE. The country’s solar capacity may increase to 1,500 megawatts in 2016, he said.

Nagy-Bege said the investment cost of one megawatt of solar power has dropped in half in the past two years to about 1.5 million euros.

EDP-Energias de Portugal SA acquired a portfolio of solar projects in Romania with total capacity of 60 megawatts, Ziarul Financiar reported Sept. 26. EDP, Portugal’s biggest utility, may spend about 120 million euros on the projects, the newspaper said, citing its own calculation.

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

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

Friday, November 16, 2012

Romania: Lifting the Lid

By Glenn Ellis

It has been quite a year in Romania with the resignation of two prime ministers and near-impeachment of a president. This coupled with nationwide riots and a growing sense of injustice means that next month's parliamentary elections will be the most bitterly contested for decades.

The power struggle between Traian Basescu, the right-wing president, and Victor Ponta, the left-wing prime minister, has grabbed all the headlines, but the story behind this struggle stretches back to Romania's communist past – and to the very moment when a firing squad put an end to Nicolai Ceausescu, Europe's last Stalinist dictator.

On Christmas day 1989, in a barracks outside Bucharest, Captain Dan Vionea, a young military prosecutor, was told by his superiors to prepare a case. When he asked the name of the accused, he was told 'Nicolai Ceausescu'.

The Berlin Wall had just fallen and communist regimes were toppling like dominoes across Eastern Europe, but not Romania. Here Ceausescu's fearsome secret police, the Securitate, maintained a ruthless grip on power. Ordinary Romanians took to the streets. Thousands were killed or injured.

Ceausescu fled by helicopter while the capital erupted in bloodshed. But the Ceausescus were captured and the young captain found himself face to face with the dictator.

Vionea was ordered to write an indictment by hand and read the charges. He was shocked to find that no evidence was submitted and there were no witnesses.

Within an hour, Ceausescu and his wife Elena were sentenced to death and shot. The outside world hailed it as a triumph over the regime and its feared secret police, but Voinea begs to differ.

I met Voinea, now a retired general, at the barracks where the dictator and his wife were gunned down. He took me to a wall riddled with bullet holes.

"They did not think it would be a good idea to give Ceausescu a proper trial," he says. "Because other crimes of the communist regime would come out. So they killed him to save themselves and then spread the idea that the people killed Ceausecu. In this way the communists remained in power, even after the revolution."

The general's sense of injustice is palpable as we walk through the grounds of the now defunct barracks.

"In the revolution there were 8,000 victims, dead, wounded and arrested," he says. "And from these 8,000 not a single party activist."

One man who shares the general's view is historian and poet, Marius Oprea, Romania's leading expert on the Securitate.

I encountered Oprea in the magnificent baroque city of Cluj in central Transylvania at the county morgue. His team of volunteers were bent over a skeleton on a slab, piecing together the last moments of a young life tragically cut short during the communist terror.

Even now no one knows how many people were killed by the Securitate. Five years ago Oprea created the Institute for the Investigation of Communist Crimes winning the support of President Basescu. But when he began exhuming the bodies of Securitate victims from unmarked graves and demanding justice, Basescu, fearful of what he was finding, sacked him from the organisation he had founded.

"I trusted him to clean up the country from the communists and Securitate," says Oprea. "But he put them back in power and he even threw me out of my job."

Oprea's search for Romania's missing has taken him the length and breadth of the country. But telling the truth here is risky. Oprea now has many enemies and like General Voinea, he receives death threats.

There is a sense that the old guard are simply untouchable.

"I've never seen anyone from the Securitate condemned in a court for their crimes," Oprea says, "even if it is proved. In Romania this does not happen."

From Cluj I headed west, through rolling hills and scattered farmsteads - and landscape scarcely touched by the 20th century - to meet the man credited with starting the revolution that brought an end to communism in Romania.

Laszlo Tokes went on to become a significant political figure and was until recently, vice president of the European parliament.

But back in communist times, he was a humble priest risking everything by preaching democracy and liberty from his pulpit in the city of Timisoara – tantamount to signing your own death warrant in what was easily Europe's most brutal dictatorship.

The Securitate tried everything to silence him including a botched assassination attempt. When this failed, they decided to evict him from his church. But Tokes's parishioners formed a human chain around the building.

"They stopped the whole process of eviction ..." Tokes tells me, almost overcome with emotion, "and a spontaneous revolt changed into an anti-communist demonstration and in some hours started a general uprising against the whole regime."

It was a pivotal moment. Tokes's defiance lit the touch paper that spread the revolution from Timisoara to the rest of Romania.

Nevertheless, many wonder how much things have really changed in the intervening years.

"The final victory over communism has not yet arrived." Tokes insists, pointing to the fact that many of the regimes most notorious criminals are still at liberty.

The Securitate officer responsible for the ruthless treatment of Tokes and his family is Major Radu Tinu, who agreed to meet me at his dacha in the mountains outside Timisoara.

Tinu has done well for himself in the years since and exudes an air of confidence and swagger as he pours me a plum brandy on his terrace.

"No one I knew ever objected to what I did," he says abour Tokes. "Many said: Why didn't you smash his head when you had the chance?"

Amongst Tinu's other victims was Nobel Laureate Herta Muller. Muller's chilling novels graphically depict the terror of life in Ceausescu's Romania. But Tinu is not a fan of her work.

"If she'd won the Nobel Peace Prize I would understand, but for literature ... please!"

A communist flag still flies on Tinu's garden. As I leave, his mobile phone rings with the theme from The Godfather. Though it is almost comical, I have to remind myself that Tinu was a senior figure in a brutal regime that imprisoned, tortured and killed its opponents.

Back in Bucharest, I visited the National Council for Studying Securitate Archives where Germina Nagat, the chief investigator showed me around.

She has spent 10 years sifting through the archive looking for evidence of human rights abuses. It is a massive task.

Files were kept on virtually everyone with the sole purpose of blackmail - an immense dossier to control the population. If laid end to end the documents would stretch for 24km.

As we wander through the shelves, Nagat picks a file at random and opens the cover. It is packed with secret photographs, stolen letters and personal mementos -the guiltless details of an innocent life, pored over endlessly by the Securitate.

It is one of five volumes kept on a young man from the 1950s until his death in the 1980s. Putting it back Nagat turns to me, "All this ... ," she says, gesturing to the endless rows of documents, "and for what?"

"It's not easy to understand from a human point of view," she goes on. "It's tragic ... it's monstrous. The details are more often than not monstrosities.

It's very hard to accept that it's a real story - that's what everybody from outside keeps telling us: 'well I can't believe this, it's not possible'. It was possible and it happened."

After the fall of Ceausescu, the files remained in the hands of the new secret police, the SRI, who were made up almost entirely of former Securitate officers.

Many files had been destroyed, including that of Basescu, the current president.

It took eighteen years before they were finally opened to the public and even then under pressure from the EU. Nagat has sent over a thousand cases to the prosecutor general, but to date no one has been convicted, not least, she says, because the judicial system remains riddled with former Securitate officers.

"If you see the list of persons we sent to the court," she tells me, "you will see some of the names on the list are Securitate officers in the judicial system. They were assimilated immediately after the revolution, some of them, so they are still active of course - it's very simple."

A stone's throw from Nagat's office lies the People's Parliament, the second largest building in the world after the Pentagon.

It is Ceausescu's absurd folly at the heart of Bucharest. Hundreds of historic buildings were torn down to create this ugly colossus, the construction of which virtually bankrupted Romania. Bucharest was once considered the Paris of the East, but not anymore.

In a park opposite, I had arranged to meet Constantin Bucour, a Securitate captain who was assimilated into the SRI, but was thrown out a few years ago after revealing the scale of state surveillance in post- communist Romania. According to Bucour it has actually increased.

"The phone calls of politicians and journalists are intercepted," he says.

"Actually it could be that all of us are intercepted. The president gives an order, then we will be intercepted, it doesn't matter. The people already accept this - they say it doesn't matter as well. Nobody thinks that this is repression of human rights. To intercept your phone means getting into your house, into the intimacy of your family, of your relationships. It's something very ugly."

When I press him further about President Basescu, he makes a startling accusation.

"From my point of view, I'm convinced that Traian Basescu was an undercover officer of the Securitate. A lot of archives have disappeared - but the people they didn't disappear and he had several different contact officers - so it means a lot of people know about his activity. Some of them were bribed and they are silent now. But others speak."

Not surprisingly, President Basescu denies any links to the Securitate, but it is a sobering thought.

My next appointment is with Stelian Tanase, one of Romania's leading writers.

During communism, Tanases' books were banned and he suffered badly at the hands of the Securitate. But even now Tanase, like many of the regime's current political opponents, says he is shadowed and his phone calls are monitored.

"They want to control and to know everything about us ..." he says, "my private life, my manuscripts, my friends, my relatives. They're details of our lives, but if they want to be in control then that means to have details about me - information to blackmail me, to threaten me."

I ask Tanase to describe the pervasive nature of the Securitate in Romania today.

"Eighty per cent of rich Romanian people come from the Securitate structures. If you read Forbes or Capitol, they publish every year the list with the richest people in Romania. You can take it name by name and you could discover very easily their connection with the Securitate."

And what about the president? I ask him.

"I think he was very connected with the Securitate. If you ask Romanian journalists they say the same thing. He is an officer - he is like Putin. You know this structure of a communist state? He came from there. He started his career very supported by the secret structures.

"We have an appearance of democracy, we have a constitution, we have unions, a free press, parties, election, we have everything - but it's only a façade. You know this concept: 'facade democracy' like in South America? Romania is a South American democracy - it's a half democracy half dictatorship."

Al Jazeera

Wednesday, November 14, 2012

Romania anti-graft agency says faces political intimidation

(Reuters) - A Romanian anti-corruption watchdog has said the ruling leftist alliance is trying to pressure it to drop its investigations of senior figures ahead of a December election.

The head of the National Integrity Agency (ANI) said politicians were trying to intimidate his organization after it notified three ministers and a state official last week that it was investigating them for possible conflicts of interest.

"The political pressures we have recently seen are the most aggressive since ANI was founded," Horia Georgescu told Reuters. "They are meant to discourage and intimidate the agency's ongoing investigations."

The ANI, set up after Romania joined the European Union five years ago, has been praised by Brussels but is resented by politicians at home. During the 2008-2012 parliamentary term, it discovered 42 lawmakers had conflicts of interest or had amassed dubious wealth.

Since Friday, when it notified the three ministers and the government's deputy secretary general that they were under investigation, politicians have accused the ANI of trying to interfere with elections and making politicized decisions.

The agency says the politicians either had wealth they could not account for or had worked for institutions that dealt with their ministries, creating conflicts of interest. All four have denied wrongdoing and said they would sue the ANI.

Prime Minister Victor Ponta, whose Social Liberal Union (USL) leads in opinion polls and is likely to win a December 9 parliamentary election, dismissed his deputy secretary general on Tuesday and asked the three ministers to explain themselves. He has previously sacked two ministers over similar issues.

ANI's investigations also prompted resignations from the two previous centre-right governments, which were viewed by many Romanians as corrupt.


Complaints by ANI of political intimidation are likely to be viewed badly by Brussels, which expressed concern over the rule of law earlier this year when Ponta's USL tried to unseat rival President Traian Basescu.

The EU still has Romania's justice system under special monitoring and criticizes it for failing to root out widespread corruption.

In the last seven years, anti-corruption prosecutors have put 23 lawmakers and 15 ministers and deputy ministers on trial.

Georgescu said graft often crossed party lines. ANI studies showed local administrations shared public contracts and funds among parties, while officials handling EU funds routinely had their relatives bid for contracts.

Parliament has declined prosecutor requests this year to investigate several politicians and this month voted that one USL deputy, a former culture minister, can keep his seat despite a Supreme Court ruling he should not hold public office.

"This sets a precedent that it is possible they will not be sanctioned in any way, regardless of court decisions," Georgescu said. "I have serious fears that, after the December election, the progress that has been registered could be reversed, judging by recent public political statements."

Transparency International ranks Romania as one of the EU's most corrupt states. It is excluded from the passport-free Schengen zone and has had EU funds potentially worth billions of euros blocked due to graft concerns.

Analyst Sergiu Miscoiu of the CESPRI political think tank said there was a risk that, after the election, politicians would seek to limits the power of ANI, prosecutors and the courts.

"ANI is the most detested institution by Romanian politicians, yet so very necessary," he said.

(Reporting by Luiza Ilie; Editing by Robin Pomeroy)

Tuesday, November 13, 2012

Romania misses billions through sell-off delays

By Mihaela Rodina (AFP)

BUCHAREST — Romania last year embarked on an ambitious plan to sell stakes in energy and transport companies but has since seemed to get cold feet and delayed most of the deals, losing billions of euros in potential revenue.

The transactions, sanctioned by the EU and IMF, were expected to bring in some 3.5 billion euros ($4.45 billion), but have been bogged down by a lack of resolve, cronyism, and a newly emerging suspicion of foreign investment, observers said.

On Tuesday IMF auditors arrived in Romania to review progress on reforms and prospects for the economy and the stalled privatisations are sure carry weight in a final report to be published after a general election on December 9.

The cash-strapped Balkan country had pledged to float 10 to 15 percent stakes in nuclear energy company Nuclearelectrica, hydro-electric power company Hidroelectrica, electricity transporter Transelectrica, gas transporter Transgaz and gas producer Romgaz.

Majority privatisations of the national air carrier Tarom, railway freight company CFR Marfa and chemical giant Oltchim were also part of a deal concluded in March 2011 with the International Monetary Fund and the European Union in return for a 5.0 billion euro credit line that followed an even bigger 2009 rescue package.

But apart from the sale of a 15-percent stake in Transelectrica for $50 million in March the sell-off plans have come to nothing.

A bid to sell Oltchim failed in September after populist party leader and TV mogul Dan Diaconescu could not prove he had the 45 million euros promised for a 55-percent stake.

Analysts say the privatisation office (OPSPI) should have barred individuals without experience in the field from bidding for Oltchim, the second-biggest producer of chemicals and plastics in eastern Europe.

A public offering for a Transgaz stake due in June has been delayed repeatedly. The deal is now threatened by the government's wish to impose a high price analysts say will drive investors away.

With the any remaining sell-offs postponed until 2013, Victor Ponta's centre-left government has little to show when it meets the joint mission of the IMF and the EU.

"I know that the government only took over in May and that elections are due in December but there has not been great progress compared to what we would like to see or to what was agreed with the IMF," Grzegorz Konieczny, Romania CEO of Franklin Templeton Investment Management, told AFP.

Franklin Templeton manages a multi-billion-dollar fund, Proprietatea, set up by the state in 2005 to compensate Romanian owners whose properties were seized by the Communist regime.

While he said that some of the delays were due to "relatively objective" causes, Konieczny believed officials in the economy ministry and the OPSPI "are afraid to take decisions" while managers of state-owned enterprises "do not understand the benefits of listing a company".

"People say 'now it's not a good time to sell', but I say this is a much better time than it will be in six months," he said.

"The longer a company stays under state control the lower its value will be."

Economic analyst Cristian Grosu said Romania missed the opportunity to sell before the onset of the crisis, when prices were high, and is now pressured to take steps that could prove detrimental to its interests.

"What Romania needs is determination, courage and a plan. But it is obvious that it has no plan, it only acts under constraint," he told AFP.

With general elections due on December 9, the anti-privatisation rhetoric that was raging in the 1990s, when Romania emerged from the communist regime, is gaining ground again, analysts stress.

After dozens of botched sales, with major companies closed down shortly after they were bought by questionable private investors, many Romanians assimilate privatisation with fraud.

"Most plans to sell a company in a transparent way, on the stock exchange, have been abandoned under the propagandistic pretext that 'foreigners are going to steal our country'," Mihai Chisu, a broker for IFB Finwest, told Ziarul Financiar daily.

"Politicians often say 'we have to control this company because it's a question of national security', but this does not make sense, the government has tools to control the company through regulations," Konieczny said.

Sources close to the negotiations with international lenders said the IMF was not convinced by the government's excuses for not selling state-owned assets: "The IMF wants to see more progress."

The US ambassador in Bucharest Mark Gitenstein, a staunch supporter of privatisation, in a recent speech said that "Romania could once again be the energy hub of Europe ...if it could attract the $10 billion necessary to modernise energy infrastructure and build new power plants."

"But these assets are under the control of state-owned enterprises and (often) managed by individuals chosen more for their political connections than for their professional competence," he said.

Konieczny too said cronyism was a big problem: "We started here two years ago, during the first two or three months every day we had another shock seeing what was happening inside those companies, we did not expect things to be that bad."

As some analysts call into question Romania's expertise in privatisation, Konieczny said: "It's actually a question of will, not of expertise."

Romanian Central Bank May Ask Lenders to Increase Provisions

Romania’s central bank will probably ask some local lenders to increase their provisions at the beginning of next year, Deputy Governor Bogdan Olteanu said.

The new provisions will be triggered by a reevaluation of assets pledged as collateral for loans granted by the banks in the country, Olteanu said at a conference in Bucharest today.

The Banca Nationala a Romaniei has asked commercial banks to adjust the value of collateral to current market conditions after a two-year recession pushed asset prices down.

“We are in the procedure of revising the collaterals and where it is necessary, probably at the beginning of next year, we will ask for new provisions,” Olteanu said.

He also said non-performing loans in the banking system currently exceed 17 percent of total lending.

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

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

Romania Parties Entice Voters With Lavish Pledges

By: Balkan Insight
November 12, 2012
By Marian Chiriac

All the main Romania parties competing in the December election are issuing impressive-sounding promises about jobs and taxes – which experts say will be hard to deliver.

New jobs, an increase in the minimum monthly wage and cutting corporate and personal income taxes are among the electoral promises that the main parties in Romania are making ahead of general elections scheduled for next December 9.

The centre-left ruling coalition of Social Democrats and Liberals, USL, is promising to create around 1.4 million new jobs, mainly in rural areas, as well as to raise pensions and lure more foreign investment.

For its part, the new alliance of centre-right parties, the Alliance for the Romanian Right, ARD, is promising to cut the single rate tax to 12 per cent from 16 per cent, and lower employers’ social contributions.

The ARD is also planning to raise the minimum wage from 700 lei (155 euro) a month to 850 lei in 2013 and 1,000 lei in 2015 and cut companies’ social security contributions by 5 per cent, from the current level of about 30 per cent.

Analysts say all political parties are trying to win the hearts of the people, but they have to be more realistic.

“The problem is that most of the promises are hard to deliver. It is normal to try to better the lives of Romanians, but this should be done accordingly to a clear and realistic strategy. And the parties have no such strategy,” a political analyst, Emil Hirezeanu, said.

Latest polls suggest that the USL coalition led by Prime Minister Victor Ponta remains on course to win the election.

Ponta’s aliance is tipped to win around 55 per cent of the vote, only slightly down from the 60 per cent it was polling over the summer.

The ARD, a grouping dominated by the opposition Democratic Liberals – deeply unpopular for enforcing past austerity measures – has the support of some 16-18 per cent.

The populist People’s Party, PP, which advocates tax cuts and higher wages and pensions, came third in the polls with 14 per cent.

The PP is run by a journalist-turned businessman, Dan Diaconescu, who is under investigation for allegedly breaking the law in a bid to buy the chemical company, Oltchim, which was subsequently thrown out by privatisation officials.

In an effort to curb the tradition of vote-buying, the government this week ruled that while candidates may distribute promotional materials, such as caps, pens or lighters, their value should not exceed 10 Lei (2.5 euro).

It is for the first time in 20 years of democracy that Romania has attempted to regulate the sensitive issue of vote-buying.

Vote-buying, by offering petty gifts such as sugar, cooking oil and clothes, has become an accepted practice in Romania, mainly used in poor areas.

Monday, November 12, 2012

Romania Inflation Unexpectedly Slows on Food, Fuel Costs

Romanian inflation unexpectedly slowed in October for the first time in five months as falling food and fuel costs offset rising prices for services boosted by a weaker leu.

The inflation rate fell to 5 percent, compared with 5.3 percent September, the Bucharest-based National Statistics Institute said today. The median estimate of 13 economists surveyed by Bloomberg was 5.3 percent. Prices grew 0.3 percent from the previous month.

Romania’s central bank lifted its inflation forecast for this year to 5.1 percent, above its target range of 2 percent to 4 percent, due to a jump in food prices. It also raised its 2013 inflation outlook to 3.5 percent from a previously predicted 3 percent, Governor Mugur Isarescu said on Nov. 7.

Policy makers kept the key rate unchanged at a record-low 5.25 percent on Nov. 2 amid a faltering recovery and turned to other means to tighten policy, such as limiting weekly lending to commercial banks, as inflation accelerates.

“We expect year-on-year inflation to display an upward trend during the remainder of 2012, ending the year at around 5.7 percent, well above the target and the bank’s recent projection,” Citigroup Inc. economists Ilker Domac and Gultekin Isiklar said in an e-mailed note before the release.

Food-cost growth slowed to 6.1 percent in October from a year earlier, compared with 6.9 percent in September. Inflation for non-food items decelerated to 4 percent, compared with 4.3 percent in September, as fuel prices dropped, the report showed.

Service-price growth quickened to 4.9 percent, compared with 4.8 percent in September, as a weaker leu boosted rent and telephone prices gauged in euros, the institute said.

-- With assistance from Barbara Sladkowska in Warsaw. Editors: Jeffrey Donovan, Andrea Dudik

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

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

BBC News: UK will not extend Romania and Bulgaria migration curbs

Bulgarians and Romanians will gain the unrestricted right to live and work in the UK from December 2013, Home Secretary Theresa May has confirmed.

Temporary curbs imposed in 2005 to protect the British labour market are set to expire on that date.

The Labour Party have said they would support any moves to extend the ban.

But Mrs May told the BBC's Andrew Marr show that was not possible under EU law, although she was hoping to limit the impact on the UK economy.

The Home Office has not produced an official estimate of how many of the 29 million Romanian and Bulgarian citizens will take advantage of their new freedoms when controls are lifted.'Pull factors'

But some experts predict a large number of immigrants from Eastern Europe, which Labour has warned could put pressure on British jobs and wages.

The government's migration advisory committee says there is evidence Bulgarians would move to Britain because of its stronger economy, and it was "plausible" Romanians would come for the same reasons.

But extending restrictions could involve tearing up the provisions of the treaty signed when Romania and Bulgaria joined the EU.

Shadow Home Secretary Yvette Cooper last week told Andrew Marr that Labour would back an extension on the restrictions on migrants from the two countries working in the UK.

But Mrs May told the programme: "There are no further transitional controls we can put on. The transitional controls end in December 2013."'Sham marriages'

The government was looking instead at limiting access to benefits and the NHS to reduce the "pull factors" that encouraged migrants to come to the UK, she added.

She said she was working on possible limits to free movement with other EU nations - a "growing number" of whom were concerned about "sham marriages" and other abuses of the system.

The issue of freedom of movement will also be part of a review of the UK's relationship with the EU being carried out by Foreign Secretary William Hague.

The UK is also embroiled in a long-running legal dispute with the EU over the UK's habitual residence test, which limits benefit claims by new arrivals.

Mrs May insisted the government was still on target to cut annual net migration to the UK, from outside the EU, to below 100,000 by 2015.

The number of visas being issued had fallen following a clampdown on abuse of the system, she added, but said there was still a "huge amount of more work to do be done".

Friday, November 9, 2012

Romania government support slips before vote: poll

(Reuters) - The popularity of Romania's leftist government has slipped to just below 50 percent, but it should still win a December 9 parliamentary election, an opinion poll showed on Thursday.

The survey, by pollster CSOP, showed 48 percent of Romanians would vote for Prime Minister Victor Ponta's Social Liberal Union (USL) party.

Other recent surveys have put USL's support at above 50 percent.

If the USL fails to win an outright majority, analysts say centre-right President Traian Basescu, who appoints the prime minister, may try to nominate one of his allies to form a coalition, prolonging uncertainty after the vote.

The USL failed to impeach Basescu earlier this year in a bitter political battle that raised concerns over the rule of law in the European Union's second-poorest member state.

The upcoming election has stoked uncertainty over policymaking and about how closely Romania will stick to the terms of its 5-billion-euro International Monetary Fund-backed aid deal.

The Alliance for the Romanian Right (ARD), a new grouping of centre-right parties dominated by the opposition Democrat Liberals - allies of Basescu who are unpopular for past austerity measures - had 24 percent support, the poll showed.

The populist party of media tycoon Dan Diaconescu, who advocates steep tax cuts, came third with 14 percent.

The poll, commissioned by newspaper Evenimentul Zilei, surveyed 1,006 people between November 2-5 and had a margin of error of 3.1 percent.