Thursday, January 31, 2013

FT: Cameron’s special leave to Romania

By Robert Shrimsley
A little reverse psychology might dissuade immigrants from embarking

Perhaps the greatest news story of the week – one tarnished only by the probability of its not being entirely true – was the notion that the UK government may commission television advertisements to deter Bulgarians and Romanians from emigrating to Britain when EU restrictions on their right to work expire next year. These “Britain ain’t booming” ads would show the downside of life in the UK, presumably juxtaposed with shots of Venetian canals, Parisian cafés and German labour statistics.

Of course it would be vital to ensure the film is not mixed up with ones made for Chinese investors presumably boasting about Britain’s unrivalled financial expertise and infrastructure – “and a new high-speed train line by 2033!!”.
There may be scope for some basic factual information showing the UK is, in terms of benefits, a less attractive destination than some in Sofia or Bucharest might imagine. But for nations with an average gross domestic product per capita less than 40 per cent of the UK’s, a desire to come here is rational. So if we go down this route of dissuasion, a little reverse psychology might be better. Perhaps an open letter from David Cameron, UK prime minister:

It is an immense pleasure to address your great people. Actually, I was at school with several of your princes and they were first-class chaps. As I sit here on a dull, wet Wednesday in Westminster, my mind flies back to the happy evenings I spent watching Kenneth Branagh and Emma Thompson in The Balkan Trilogy, a story of a young English couple who find love and flee Britain for a better life in Romania. I’ve often thought of doing the same myself but, like most Brits, I’m hopeless with languages and Samantha says they don’t yet have a Smythson in Bucharest. Quite a business opportunity for an enterprising local, I’d have thought, and better-paid than cabbage-picking for the National Farmers Union.

I know some of you are thinking of emigrating to Britain and I want to extend a warm welcome and hope you will be able to make the long journey. Please do not be deterred by the third-world infrastructure you experience at Heathrow or wherever your easyJet flight lands. It’s true our border-control staff can be surly and our processes slow but no one has had to wait in the arrivals hall for more than three weeks and we will get a water dispenser by 2018.

Obviously, accommodation can be pricey. Even a room in a bedsit could cost £100 a week but you can get them for a lot less if you don’t care about smoke alarms. And don’t worry about food prices. Our supermarkets sell cheap burgers, some of which have been tested and found to have traces of beef.

Like you we have a rich and proud history. England cannot boast a Vlad the Impaler, but we do have Iain Duncan Smith, the notorious welfare slasher. Please don’t be scared of him; he is actually perfectly nice in the flesh and not at all the kind of man you would expect to be cutting housing entitlements. Still, things are tough: I no longer receive any benefits to help raise my children. But fear not; we may be rolling back the welfare state but we still have the rough sleepers initiative.

And don’t forget our National Health Service, the envy of the world and the centrepiece of our Olympics opening ceremony. Don’t be put off by news that some of our hospitals are closing because they have run out of money. We’ve made great strides in reducing deaths through infections picked up in our hospitals; many elderly people are now treated with care and compassion and there has been no repeat of theAlder Hey organ theft scandal.

I know you will be worried about the frosty welcome from the local community. It can often be violent but no worse than you experienced under Ceausescu or Zhivkov. I am sending you some copies of the Daily Mail to help you acclimatise.

But as our friends the Poles discovered, the British can tolerate anything except hard-working people who come over here to do the low-paid jobs we can’t be bothered to do ourselves. You can see how an indigenous population would resent having work being stolen from tradesmen by low tricks like turning up when you say you are going to, and working to a decent standard.

Finally, don’t fret that we may suddenly leave the EU or renegotiate our membership and deport the lot of you. We would love to do this but I’ve no reason to believe it will actually happen. So come on over and take a chance on Britain.

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Romania’s Leu Retreats on Bets Central Bank May Limit Advance

By Andra Timu & Irina Savu - Jan 30, 2013

Romania’s leu weakened on bets the central bank may limit the currency’s gain after an International Monetary Fund mission extended a review of the country’s backstop loan accord yesterday.

The leu depreciated 0.2 percent to 4.3843 per euro by 5:05 p.m. in Bucharest, after advancing 0.4 percent yesterday, the biggest jump in almost two weeks. Yields on euro-denominated bonds due 2019 rose seven basis points, or 0.07 percentage point, at 3.93 percent.

The mission extended the review of Romania’s precautionary loan pact by three months. JPMorgan Chase & Co. (JPM) andBarclays Plc (BARC) said the nation’s bonds are eligible for entry in their benchmark emerging-market debt indexes, increasing demand for the country’s fixed-income securities and currency. The leu has strengthened 1.5 percent in January, the largest advance among emerging-market currencies tracked by Bloomberg.

“As the central bank might try to keep local market volatility at low levels, it would also presumably curb any significant advance of the leu,” Mihai Tantaru, a Bucharest- based analyst at ING Bank Romania SA, wrote in a note today.

The IMF extended the review of Romania’s 5 billion-euro ($6.8 billion) accord until the end of June after Prime Minister Victor Ponta asked for more time to complete asset sales, Mission Chief Erik de Vrijer said in Bucharest yesterday. The IMF board will meet in June to reviewRomania’s implementation of pledges it made under the accord, a backstop for the country in the event of a worsening of the European sovereign debt crisis.

“With no local news flow, the leu might trade on low volumes today, with the natural net demand for hard currency possibly fueling a slight softening to 4.39 per euro,” Tantaru said.

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

Romania Needs to Increase Democratic Reforms Pace, EU Says

By Irina Savu & Andra Timu - Jan 30, 2013 

Romania, the European Union’s second-poorest member, has taken steps to address “serious concerns” about eroding democracy and needs to increase the pace of reforms to keep the judiciary independent, the EU said.

The coalition government, supported by a super majority in Parliament, has made progress in dealing with “challenges to the country’s constitutional order,” though it’s yet to appoint a new chief prosecutor and anti-corruption head, European Commission spokesman Mark Gray said today in Brussels.

Romania, which joined the EU in 2007, is being monitored by the commission since a power struggle between Prime Minister Victor Ponta and President Traian Basescu last year raised concerns that democracy is backsliding in the former communist country. The nation has since reversed Constitutional Court power-limiting laws and appointed a new Ombudsman to meet pledges to the EU.

“It has been a difficult year and I think the commission sees this report more as a signal of encouragement that we should no longer see this sort of” political turmoil, Gray said. “Progress has been made” and “we hope that 2013 will see a more stable political environment and the delivery of all those recommendations.”

The commission will release a new report on Romania’s progress under the mechanism by the end of this year, Gray said.

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

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

Wednesday, January 30, 2013 EU still unhappy with Romania's rule of law


BERLIN - Romanian ministers accused of corruption should resign and MPs should stop shielding themselves from anti-graft investigations, the European Commission is set to say on Wednesday (30 January) in a report on Romania's rule of law.

The 12-page report is a follow-up on a set of recommendations made last summer to the Romanian government, parliament and judiciary after a constitutional crisis linked to the Prime Minister's attempt to remove the President from office.

Some recommendations have been implemented, such as guaranteeing that the verdicts of the Constitutional Court are respected.

But others have not, particularly when it comes to the independence of the judiciary, an EU source familiar with the report told this website.

"For the credibility of both the government and the parliament, it is important that ministers with integrity issues step down and for the parliament to have clearer rules concerning the immunity of its MPs," the source said.

When the recommendations were made, three ministers had been deemed incompatible with their jobs by the so-called Integrity Agency - a body verifying conflicts of interests and unjustified revenues of public officials.

None of them resigned.

After general elections in December, they were not re-appointed, but two other serving ministers - transport minister Relu Fenechiu and administration minister Liviu Dragnea - are under investigation for corruption.

Members of parliament who are under similar investigations or who have been proven to be incompatible with their jobs have stayed on and are benefiting from a recent law expanding their immunity.

Twenty MPs elected in December to the new parliament have ongoing corruption cases. One of them, Marko Attila, was recently sentenced to three years in prison.

Money laundering is also an area of concern for the EU commission.

New laws on confiscating assets were only put in place in 2012. "We still need concrete results. Also, there were no comprehensive statistics on what they have recovered," the EU source said.

The report is likely to delay even further any decision on letting Romania and Bulgaria join the border-free Schengen area.

Before the summer crisis in Romania, opposition to Schengen enlargement was limited to the the Netherlands. Now Germany is also against the move and is likely to stay so until at least after the September elections.

But for his part, Romanian Prime Minister Victor Ponta said in a press release on Tuesday that "all points agreed with the EU commission have been fully fulfilled."

"The government has and will remain deeply committed to ensure the independence of the judiciary and strengthening the rule of law," he added.

IMF Mission to Propose Romania Accord Extension on Reform Delays

By Irina Savu & Andra Timu - Jan 29, 2013

The International Monetary Fund extended a review of Romania’s loan accord until the end of June, after Prime Minister Victor Ponta asked the lender to prolong the agreement to complete more reforms.

The IMF’s board will meet in June to decide on Romania’s progress under the accord, which will bring the current review to completion, Mission Chief Erik de Vrijer said in Bucharest today. The Balkan nation must sell minority stakes in some energy companies, such as Transgaz SA (TGN) and Complexul Energetic Oltenia SA, before the Washington-based board meeting, he said.

“Because there were some misses on targets and there were delays in structural reforms, the government has asked to extend the accord by three months and we have agreed to ask our board to grant this request,” de Vrijer said.

Romania, which is counting on the 5 billion-euro ($6.7 billion) precautionary loan from the IMF and the European Union to act as a safety net against the European sovereign-debt crisis, still needs to sell 15 percent stakes in Transgaz and natural-gas company Romgaz SA, a 10 percent stake in Nuclearelectrica SA and select a manager for the sale of a 15 percent stake in Oltenia. It must also pay some overdue debt to the private sector as part of its pledges.

The IMF cut its economic growth forecast for Romania to almost zero in 2012 from a previous estimate of 0.9 percent and to 1.5 percent for this year.
Deficit Overshoot

Romania’s 2012 budget deficit totaled 14.8 billion lei ($4.5 billion), or 2.5 percent of gross domestic product, exceeding the cash target set under the accord with the IMF, while meeting a target under European accounting standards. De Vrijer said the mission will ask the board to grant Romania a waiver for the budget gap overshoot, which was due to technical payment delays related to EU funds.

The eastern European country plans to negotiate a new precautionary accord with lender, “immediately” after completing the current one, Ponta said on Jan 25. Romania relied on a 20 billion-euro loan from the lender between 2009 and 2011 to help it emerge from a two-year recession and withstand external shocks from the global financial crisis.

The country hasn’t drawn any money from the current precautionary accord, which isn’t off track because of the extension, Ponta said yesterday.

Romania must also sell a majority in rail freight company CFR Marfa SA to a strategic investor before the end of June.

During the mission ending today, the IMF and the EU helped the country outline the 2013 budget, which still needs Parliament’s approval. It targets a budget deficit of 2.1 percent of GDP.

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

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

Tuesday, January 29, 2013

BBC News: Immigration from Romania and Bulgaria: Government accused of 'farcical' strategy

Government efforts to deal with a possible increase in immigration from Romania and Bulgaria next year "border on the farcical," says an MP.

No 10 says it is looking at options amid MPs' concerns about the impact of temporary controls lapsing this year.

Labour MP Keith Vaz said trying to discourage people from coming to the UK would be "counterproductive".

He was responding to reports negative adverts about the UK were among suggestions being considered.

The idea potential migrants could be deterred by references to the downsides of British life, such as the amount of rain, emerged over the weekend.

Communities Secretary Eric Pickles told ITV News that the UK did not wish to portray itself as "anything other than a very pleasant place to be" but migrant workers had to have "sensible expectations" when they arrived.

The last Labour government agreed transitional controls on immigration from Bulgaria and Romania when the two countries joined the European Union in 2007, but these expire at the start of next year.

The government has said it is impossible, under EU law, to keep the limits in place any longer.

But ministers are coming under increasing pressure to act, from MPs concerned about the repercussions of any increase in arrivals for public services and commitments to cut net migration.'Legal framework'

According to newspaper reports, Downing Street is considering restricting access to public services for future migrants, as one of a number of potential responses.

Ministers would be better off working with their Romanian and Bulgarian counterparts and the EU to address the reasons migrants want to come here in the first place”Keith VazLabour MP

According to The Financial Times, options being considered included asking immigrants who had not found a job within three months or did not have necessary funds to support themselves for six months to leave.

No 10 said it was is considering all options open to it, but a spokesman stressed there was a "clear legal framework" underpinning guarantees on the free movement of people within the European Union and "we have to operate within that".

The spokesman played down suggestions Britain might try to deter Bulgarian and Romanian arrivals by launching an advertising campaign in those countries stressing the negative aspects of life in the UK, including the weather.'Singling out'

But Mr Vaz, who is chairman of the Commons Home Affairs Select Committee, said any suggestion of spending money on "advertisements and propaganda trying to stop Romanian and Bulgarians coming to Britain borders on the farcical".

"On the one hand, the Home Office doesn't want them in but on the other hand, the minister for Europe is saying there is freedom of movement," he said.

"The government is in danger of actually encouraging more people to come."

"These kinds of tactics have been used in the past and been found to be counterproductive."

He also suggested there were divisions in government about how to deal with the issue.

Mr Vaz said the question of whether foreign workers should have guaranteed access to public services, including the NHS, should be looked at, but warned against "singling out" workers from individual countries.

"Ministers would be better off working with their Romanian and Bulgarian counterparts and the EU to address the reasons migrants want to come here in the first place."

Migration figures

Ministers have warned against "scare stories" about a potential surge in numbers. But Mr Vaz said officials had failed to come up with an estimate of the number of arrivals expected, despite repeated requests.

The think tank Migration Watch, which supports tighter immigration controls, has said about 50,000 people from Romania and Bulgaria will come to the UK each year until 2019 and that this will have "significant consequences" for housing and jobs.

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

Since 2007, Bulgarians and Romanians have been able to come to the UK as self-employed businessmen or women, or as students, provided they do not seek benefits or any other employment.

But the end of existing controls will give Bulgarian and Romanians who want to work in the UK the same rights as foreign nationals from the other 24 EU nations.

Speaking in the Commons on Monday, Work and Pensions Secretary Iain Duncan Smith said ministers were "utterly opposed" to European Commission proposals which he claimed would allow future migrants - including those from Bulgaria and Romania - to claim benefits on "day one" after arriving.

But a spokesman for the European Commission described the minister's claims as "total tosh" and said EU nations were not obliged to do so unless certain residency tests are met.

Immigration: Romanian or Bulgarian? You won't like it here

Ministers consider launching negative ad campaign in two countries to persuade potential immigrants to stay away from UK

The Guardian, Sunday 27 January 2013

Please don't come to Britain – it rains and the jobs are scarce and low-paid. Ministers are considering launching a negative advertising campaign in Bulgaria and Romania to persuade potential immigrants to stay away from the UK.

The plan, which would focus on the downsides of British life, is one of a range of potential measures to stem immigration to Britain next year when curbs imposed on both country's citizens living and working in the UK will expire.

A report over the weekend quoted one minister saying that such a negative advert would "correct the impression that the streets here are paved with gold".

There was no word on how any advert might look or whether it would use the strategy of making Britain look as horrible as possible or try to encourage would-be migrants to wake up to the joys of their own countries whether Romania's Carpathian mountains or Bulgaria's Black Sea resorts. With governments around the world spending millions on hiring London-based consultants to undertake "reputation laundering" there would be a peculiar irony if Britain chose to trash its own image perhaps by highlighting winter flooding of homes or the carnage of a Saturday night A&E ward.

There are precedents. In 2007, Eurostar ran adverts in Belgium for its trains to London depicting a tattooed skinhead urinating into a china teacup. It remains unknown if any discussions have taken place over personalities who could carry off a similar exercise in anti-nation branding.

On Sunday a Downing Street source said: "It is true that options are being looked at but we are not commenting on the specific things mentioned ... as obviously it is an ongoing process and we will bring forward any proposals in due course."

The source also said that the government did not think the rule changes would necessarily bring a big influx of people, since Romanians have closer links to Germany and Italy rather than Britain.

Other reported options include making it tougher for EU migrants to access public services. Another is to deport those who move to Britain but do not find work within three months.

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.

Campaign groups such as MigrationWatch have predicted that 250,000 will come from both countries over the next five years, although these figures are disputed. One Tory MP, Philip Hollobone, has claimed that Romanian and Bulgarian communities will treble to 425,000 within two years.

These figures have been questioned by experts, because they are based upon the numbers of Poles and Czechs who moved to Britain in in 2004. Then, only three countries opened their borders. This time, all of the 25 EU states will lift Labour market restrictions.

Buoyed by Cameron's offer of an in-out referendum, a growing number of Tory MPs now believe the UK should block the lifting of restrictions even if it were to prompt a row with the European commission.

The idea, however tentative, appears to clash with the billions of pounds Britain spent on the Olympics, partly to drive up the country's reputation. It also emerged as the Home Office launched a guide to Britishness for foreigners who would be citizens which opens with the words: "Britain is a fantastic place to live: a modern thriving society".

Wednesday, January 23, 2013

Romania parliament boosts criminal immunity, may irk EU

By Luiza Ilie

BUCHAREST | Tue Jan 22, 2013

(Reuters) - Romanian members of parliament voted overwhelmingly on Tuesday to boost their immunity from prosecution, a move set to annoy a EuropeanCommission already exasperated by Romania's hesitant efforts to tackle high-level corruption.

The deputies approved changes to a law that regulates their activity, lowering their housing and transport allowances but also making it harder for prosecutors to investigate them for graft or conflict of interest.

Romania's European Union partners have its justice system under close scrutiny and last year expressed concerns over the rule of law when the ruling leftist alliance tried to impeach the country's president. The EU has also kept Romania out of its passport-free Schengen area.

Romanian prosecutors need parliament's approval to launch a criminal probe against MPs.

Under the previous rules, parliament's legal committees would assess the requests and issue a non-binding approval or rejection before a mandatory vote in the chamber.

With the changes approved on Tuesday, parliament would not need to vote if the committees reject the requests from prosecutors.

"This means those prosecutors' requests that are rejected will never see the light of day," said Laura Stefan, a legal specialist at the Expert Forum think tank. "The process is likely to be blocked in the committees."

Lower house speaker Valeriu Zgonea said some of the changes, such as a ban on deputies hiring relatives, mirrored regulations for European MPs and were taken after consultation with state institutions, according to comments carried by local media.


Another change approved by the deputies softens the powers of the National Integrity Agency (ANI), an anti-graft watchdog set up after Romania joined the EU in 2007 to investigate the wealth and potential conflicts of interest among politicians.

The work of the agency has won praise in Brussels.

ANI discovered that 42 lawmakers had conflicts of interest or amassed dubious wealth in the four years up to 2012.

Deputies who amassed conspicuous wealth or faced conflicts of interest would automatically lose their seat if they did not provide evidence to ANI. Now, MPs can hold on to their post until a final court ruling on their case, which in Romania's cumbersome legal system could take years.

"I expect these changes will feature prominently in the European Commission's (justice monitoring) report and ... that our Schengen entry will be postponed for a long time," said Sergiu Miscoiu, an analyst with the CESPRI political think tank.

"Then there are risks to Romania's trust and credibility within the EU, which are already very low, and ... perhaps that will also hurt investment," said Miscoiu.

Six years after joining the EU, Romania has made little progress in reforming its state-dominatedeconomy and fighting widespread corruption.

Previous justice monitoring reports have criticized parliament for trying to thwart criminal inquiries. Between 2006 and 2012, anti-corruption prosecutors put 23 lawmakers and 15 ministers and deputy ministers on trial.

Tuesday, January 22, 2013

Romania Yields Seen at Record-Low at 1st Euro Bond Sale in 2013

Yields at Romania’s first euro- denominated bond sale this year are expected to fall to a record after the nation’s inclusion in benchmark emerging-market indexes increased the appeal of its debt.

The Finance Ministry will sell 150 million euros ($199 million) of three-year bonds in the local market, according to a calendar published on Bloomberg. The average yield may fall to between 3.15 percent and 3.25 percent, the lowest for this maturity, according to analysts at Erste Group Bank AG in Vienna and Piraeus Bank Romania SA in Bucharest. That compares with a rate of 3.4 percent in a sale on Nov. 16, according to the central bank’s data.

“We are expecting the government to borrow significantly above the notional amount, paying yields at around 3.25 percent,” Bucharest-based analysts at Piraeus, including Camil Apostol, wrote in a note today.

Romania’s local currency debt is eligible for inclusion in the JPMorgan Chase & Co. (JPM)’s GBI-EM Index Series in a rebalance on March 1, the U.S. bank said on Jan. 15. Barclays Plc also said on Nov. 6 it will add Nigeria and Romania to its emerging-market local-currency government bond index from March.

The country plans to issue euro-denominated bonds on a quarterly basis this year as it is scheduled to repay 1.76 billion euros of state debt maturing this year, the Finance Ministry said on its website. It has raised 10.3 billion lei ($3 billion) of leu-denominated debt this month, the most since the central bank started recording the data in 2005.

“We expect solid demand and the ministry to accept bids around a yield of 3.15 percent,” traders at Vienna-based Erste wrote in a note today.

The leu weakened 0.3 percent to 4.3643 per euro at 11:34 a.m. in Bucharest, depreciating for a third day.

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

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

Romania plans tax on gas producers to subsidise price hikes

Mon Jan 21, 2013

BUCHAREST, Jan 21 (Reuters) - Romania's government plans an additional tax in 2013 on gas producers, which are enjoying higher profits as a result of the country's energy market deregulation, a draft law showed on Monday.

The tax revenue will subsidise households that are expected to be hurt by rising charges as the European Union's second-poorest state liberalises energy prices, an ongoing process lasting until 2017 for the electricity sector and 2018 for gas.

Romania put off deregulation for years to protect voters in a country where the average individual income is less than 350 euros a month. For millions of Romanians and some industrial consumers tariffs are capped below market prices.

But controlled prices have deterred private investment. The government approved deregulation timetables last year, under an international aid deal led by the International Monetary Fund. The European Commission also requires member states to align prices to EU levels over a number of years.

Under a draft law released on Monday state-owned gas producer Romgaz and top oil and gas producer Petrom, owned by Austria's OMV, would pay a tax of up to 60 percent on income resulting from price hikes that they have been able to introduce as part of the deregulation process.


The government also published draft plans for two other taxes on the energy sector, envisaged for February, saying it would use additional budget revenues for investment projects.

Romania plans to introduce taxes of 0.45 lei ($0.14) and 1.25 lei per megawatthour for electricity and gas transporters and distributors, including local units of Czech CEZ, Italy's Enel and Germany's E.ON.

The tax will run until end-2014, and power and gas distributors with less than 100,000 clients will be exempt. The government has estimated the tax will bring an additional 554 million lei ($169.49 million) to state coffers overall.

The leftist government of Prime Minister Victor Ponta will also introduce an additional temporary monthly tax of 0.5 percent of turnover on firms exploiting natural resources, including oil, coal, uranium, ferrous and non-ferrous metal ore.

The tax will be in place only until the government renegotiates its royalty taxes on natural resources in 2014-2015. ($1 = 3.2686 Romanian lei) (Reporting by Luiza Ilie; Editing by Sophie Walker)

Monday, January 21, 2013

The Telegraph: 'Romania's young should go to England'

By Peter Stanford

18 Jan 2013

'I’d go to England,” says Octavian Gheorghe as he stands at his stall where he sells traditional cured meats and cheese at a big open-air market in central Bucharest. “But at my age [late forties], it’s too late for me. For the young, though, this is the solution: go to the rich countries like England because Romania has no economic future to offer them.”

His enthusiasm chimes with warnings issued this week that Britain is facing a flood of Romanian and Bulgarian economic migrants when work permit restrictions on them end in December and the European Union labour market is thrown open. British ministers are refusing to reveal their projections of how many may come – conscious of how wrong the last government got it over Polish immigration in 2004 – but one Conservative MP has put it as high as 425,000.
As he offers me a nip of his homemade wild cherry liqueur, Gheorghe reels off a list of reasons why the next generation of his countrymen will be leaving. “There are no jobs here,” he begins. Unemployment in Romania officially stands at 7 per cent, but many say the real figure is much higher because there are no benefits worth registering for. “And then,” he goes on, his face darkening, “Romania is so corrupt. The situation is not going to get any better.”
As if to emphasise his point, a market inspector in his official jacket, walkie-talkie in hand, approaches and tells us that taking photographs in this public place is forbidden. We must have a permit, he insists. In other words, he wants a bribe.
Elsewhere in the market – once we have given the grasping official the slip in the mid-morning fog – Ion Viorel on the pots-and-pans stall tells how he has already been an economic migrant, spending six years in Germany and one in Italy. (The latter is Romania’s biggest trading partner and the two have a natural link in their Latin-based and – to this untrained ear – remarkably similar mother tongues.) He worked as a labourer on construction sites.
Did he have the right “work papers”? He just smiles and shrugs. “I have a house that I am building in the countryside, 30 kilometres from here,” he explains, “and I couldn’t afford to finish it with what I earn in Romania. In Italy and Germany I could get 1,000 euros a month. Here, the most I get is 500.”

These cash-in-hand sums sound simple but the lure of Italy, just a day’s drive from western Romania, has faded as its economy has plunged into crisis. The same is true with Spain, another traditional magnet for migrants, especially among the Roma people (most Romanians call them gypsies) who make up five per cent of the population here. Spain has even introduced restrictions on Romanian workers. And likewise, in neighbouring Bulgaria – with the lowest average wages in the EU – the time-honoured migration route to indebted Greece has also been choked off.

So will they now turn their gaze towards Britain? “I have a cousin who works in London,” says Viorel. “He washes cars there, but he tells me that your Queen doesn’t want foreigners anymore.” The political furore in London over Romanian migrants has already filtered back to this Bucharest market. But, as Viorel and (possibly) his cousin demonstrate, the work permit system is already being bypassed. Those Romanians willing to do unskilled, off-the-boat jobs are already here.

By another stall I meet Dana Mizileanu, a member of the Roma community. “I went to France,” she tells me, “but it was a sad experience. I couldn’t find a job. My family had to send money to bring me home. Now I believe things are better in Romania.”

So she won’t be tempted to migrate again? “I was thinking about Britain,” she answers. “I have a little girl of 13. Perhaps we will try together. Maybe it would be better.” And does the forthcoming scrapping of the work permit regime make that more likely? She looks blank.

What lies behind some of the fears expressed in Britain about an influx of Romanians after December is the often unspoken assumption that for Romanians read Roma. And the Roma travellers, who camped out around Marble Arch in central London during the Olympics last summer, gave such migrants a very bad name indeed. Police reported a marked upturn in street crime as a result of their presence. But Dana’s casual attitude to coming to Britain makes clear that relaxing work permit restrictions will make no difference to many in this community because they operate outside any law.

At the other end of the labour market, though, there is already an estimated 125,000 well-qualified Romanians working in Britain with the required documents. One lament I hear in Bucharest is that you can no longer find a doctor working in Romania because they are all in Britain. To find out if the opening up of the labour market will encourage more of Romania’s educated and ambitious young professionals to follow suit, I make my way over to the university quarter.

“I’m more likely to go to Germany,” says Stefan (he doesn’t give his surname), a 20-year-old studying for a degree in information technology. Romania has a high number of graduates in this in-demand subject – which may explain why the country has the second fastest WiFi speeds in the world after South Korea. “Germany has a strong economy and I prefer its culture.”

But his classmate, Georgiana Stefan, is reluctant to think about leaving. “I’ve had friends from high school who have gone to Britain and come back. They found it too hard to assimilate. They missed their family and their culture.”

In the Fire Club, a student bar in the Old City area, Aura Theodora Topa, an economics undergraduate at Bucharest’s prestigious Economic Science Academy, is more emphatic. “In many ways this country sucks right now. Wages are low and we have laws but no politician sticks to them. Still I couldn’t leave. My generation has to stay to give leadership for change.”

Next to her, Diana Duitescu, 19, is shaking her head. “There are just more possibilities in London,” she interjects. Like every other student I meet here, her English is perfect, the product of good schooling and a youth culture that laps up English-speaking music, films, TV and video games. “I have a friend who worked in Britain in the summer,” she says, “living with a family and doing babysitting. She earned £300 a month. That is what a manager here earns.”

“But everything costs so much more,” Aura counters.

Diana refuses to be put off. With Romania and Bulgaria going through painful austerity measures that have halted the rapid economic growth that followed the collapse of communism 23 years ago, such debates are not unusual. The young look northwards and see high wages and stable politics. Migration inevitably tempts them. But does their interest go beyond talk?

Those Romanians who study the subject are sceptical. “I haven’t seen anything to justify talk of hundreds of thousands,” says Bianca Toma, a journalist specialising in EU affairs at the highbrow Bucharest daily paper Adevarul (“The Truth”). “The changes may help those who are working abroad illegally to regularise their situations, but those who really want to leave have already done it. I’d put the figure at thousands.”

Her colleague Iulia Rosu, who spent two years studying and working in Britain, is equally unconvinced. “I went to England because I loved English culture, but if I was thinking about money, England wouldn’t be anywhere near the top of my list. I’d go to Sweden or Denmark or Germany. They have the strong economies.”

Mystical tales from Transylvania

By Oliver Berry, Lonely Planet Traveller
It’s a freezing midwinter evening just outside the Transylvanian village of Miklósvár, and the forest is eerily quiet. Icicles dangle from the branches and silver blades of sunlight filter through the conifers, casting the forest floor in an iridescent glow. Apart from the crackle of the campfire and the stamp of horses’ hooves, there’s not a sound to break the wintry silence. It’s then that Count Tibor Kálnoky begins to tell the tale of the first time he visited the village witch.

‘One of my sons was suffering from sleepwalking,’ he explains, staring into the campfire as he pours out a round of pálinka, a fiery Romanian fruit brandy. ‘Every night he would wake up and wander in his sleep. We tried many treatments, but nothing worked. So we asked some local people and they told us to visit an old lady by the name of Marika Neni, who everyone just called Auntie.’ He sips his brandy, stirring the embers of the campfire with his leather boot.

‘She used an old remedy which involved melting some lead in an iron pot and then looking at the shape the lead made as it cooled, rather like reading tea leaves. Then she said some spells, gave us the lead to put under his pillow as he slept, and sent us home.’

He looks up from the fire, downs his pálinka and breaks into a roguish grin. ‘And believe it or not, he’s never sleepwalked since.’

With his dapper hair, jodhpurs and knee-high boots, Count Kálnoky doesn’t strike you as the kind of man who would believe in witches’ cures. But superstitions such as these are still a fundamental part of everyday life in Transylvania, even after decades under Communist rule. Having spent most of his childhood in government-enforced exile, Kálnoky finally returned to reclaim his family’s estates in 1999, following the fall of Ceaușescu’s regime and after an eight-year legal battle. Since then the count has learned to embrace Transylvania’s old ways.

‘It’s good luck if a stork nests on your rooftop,’ he explains, ducking through the timber gateway of a courtyard cottage, one of several he’s renovated around Miklósvár over the last decade. ‘And bad luck if you knock them down. We’ve got a nest that hasn’t been used for years, but I’m not brave enough to remove it!’

Entering the cottage feels like stepping into a Brothers Grimm fairytale. Stout oak beams underpin the roof and rough plaster lines the walls, while an antique ceramic stove pumps out warmth and shuttered windows peep onto the moonlit courtyard.

‘You should be cosy in here,’ says Count Kálnoky. ‘Don’t be alarmed if you hear noises in the night. It’s probably just the watchman stoking the fire. And, if not – well, that should help keep out the vampires.’ He gestures to the doorway, where a bunch of dried garlic has been nailed into the plaster.

Sprawling along the edge of the snowy Carpathians, Europe’s last truly wild mountain range, Transylvania is a land that is rich in myths and legends. A region of Romania since 1918 but historically an independent province, Transylvania’s history has been shaped by the many transient populations that have passed through over the centuries: Saxons, Ottomans, Hungarians, Jews, Serbs and Roma Gypsies. With them came stories collected on their travels: tales of goblins and giants, fairy queens and woodland nymphs, unearthly phantoms, man-eating ogres and predatory ghouls. Venture out on a moonlit night and you might encounter the pricolici, the devilish werewolves said to be the restless spirits of violent men. Even more terrifying are the samca, wizened hags with dagger-like fingernails that sometimes appear to children and women during childbirth; their appearance signifies certain death. And then there are the legends of the strigoi, or vampires – undead creatures risen from the grave to feast on the blood of the living – which fired the imagination of an Irish writer by the name of Bram Stoker, and inspired him to write his Gothic bestseller, Dracula, in 1897.

Like many rural corners of Europe, Transylvania has a tradition of oral storytelling that stretches back centuries. In a pre-scientific world, these allegorical tales served a dual purpose. They helped explain otherwise inxplicable events – disease, death, natural disasters – but also offered a source of entertainment to pass the long winter nights. Often, legends also provided moral guidance: one tale tells of the bau-bau (also known as the omul negru, or ‘black man’), a spindly figure dressed in a cloak who steals naughty children and hides them in his cave for a year.

Many of Transylvania’s superstitions have proved remarkably resilient, although perhaps this is unsurprising in a land where some villages have hardly changed since the Middle Ages. Driving through the sleepy hamlets around Miklósvár feels like journeying through Europe’s pre-industrial past: pastel-coloured cottages and tumbledown barns line the streets, horse-drawn carts rattle through the snow, and wood smoke drifts up from rickety chimneys. Many houses are still protected by ornate kapu, the distinctive carved wooden gateways which were imported to Transylvania by Saxon settlers over eight centuries ago.

Similarly, most villages have a witch or folk-healer who dispenses spells, removes curses and provides spiritual guidance. Since 2011, witches, palmists and fortune tellers have even been made liable for income tax – a controversial decision that proved so unpopular that local MPs felt the need to start wearing the lucky colour of purple in the hope of warding off the witches’ hex.

Nany Etelka has spent her entire life in the little village of Băţanii Mici, 20 miles from Miklósvár, and now runs the village mill with the help of her two adult sons, Domi and Laecsi. ‘I can still remember the stories I told to my boys when they were small,’ she recalls. ‘Many of them I learned from my mother, who learned them from her mother, and so on. I wouldn’t be surprised if many of them are hundreds of years old!’ she laughs, raising her voice to be heard above the creak and clatter of the mill’s iron machinery.

She bustles into the kitchen, where a forest of pots and pans dangles from the rafters, and a battered coffee pot bubbles away on the stove. ‘During Communism, we were not encouraged to celebrate our culture,’ she explains. ‘But telling stories was one of the best ways we had of keeping our past alive.’

As she hands out mugs of treacly coffee and slabs of homemade kolach, a type of sweet corn bread, she explains that Băţanii Mici also happens to be the birthplace of Transylvania’s most famous storyteller: Benedek Elek, a journalist and folklorist who devoted much of his life to setting down the region’s fairytales. His stories of cruel kings, enchanted animals and paupers-turned-princes are still a staple bedtime read for most Romanian and Hungarian children, and a bronze statue of the author now stands in the village’s main square – a sign of the fondness with which the author is remembered, not just in Transylvania, but across much of Eastern Europe.

It’s not hard to see why Transylvania’s landscape has sparked the imagination of so many storytellers. Hemmed in by mountains, pockmarked by valleys and swathed in old-growth forests, it’s a land of strange and often supernatural beauty. Beyond the towns and villages, much of the country still feels fantastically wild. Lynx, deer and wild boars populate its woodlands, and golden eagles can often be spotted wheeling amongst the mountain peaks. In the more isolated corners, brown bears and packs of wolves still roam free.

'For me, this is such a special place,’ says Gabor Tomas, as he treks through the snowy woods around Zalanpatak, another tiny hamlet on the Kálnoky estate, about 15 miles southeast of Miklósvár. He’s been exploring Transylvania’s backcountry since he was a child and now works as a conservationist and nature guide. ‘There are very few places in Europe where you feel so far from civilisation. If you want to, you can still really taste the wild here.’

As if to illustrate his point, a winged shadow swoops low across the valley, fluttering to rest on a branch of a skeletal oak tree. ‘Look,’ he whispers. ‘A Ural owl. People believed they were an evil omen and signified death.’

We watch the owl loop and hover above the land, as the sun silhouettes spindly trees along the horizon and snowflakes tumble from the winter sky. ‘I wish people took the time to discover this side of my country,’ Gabor says. ‘Nature is our greatest asset. But as soon as you mention Transylvania, it means just one thing to people: Dracula. No matter what we do, that won’t change.’

It’s more than a century since Bram Stoker dreamt up his vampiric count, but Dracula is still big business in Transylvania. He’s everywhere: on T-shirts and keyrings, on leaflets and billboards, on coffee jars and toothpaste tubes. Every town claims a tenuous link with the count, or more accurately with his real-life counterpart Vlad Țepeș, known as Dracula, the bloodthirsty warlord who ruled the kingdom of Wallachia intermittently between 1448 and 1476, and who had a predilection for impaling his enemies on stakes, allegedly thousands at a time.

Few places sell their Dracula connections harder than Bran Castle in the Carpathian foothills, about 20 miles south of the well-preserved medieval town of Brașov. This sturdy fortress was originally built during the 13th century to guard the Rucăr-Bran Pass, a key strategic route into Wallachia. It’s now better known as the legendary location of Dracula’s castle.

It certainly looks the part: ringed by ramparts and riddled with echoing halls and secret passageways, it seems the ideal place for a thousand-year old strigoi to have made his mountain lair. Unfortunately, as so often with the Dracula legend, there’s no evidence that Vlad ever visited Bran, let alone lived there; his actual castle, now a ruin, was at Poienari, 150 miles north of Brașov.

‘When it comes to Dracula, untangling fact from fiction is the biggest problem,’ says local history professor Dr Nicolae Teșculă, as he surveys the red-tiled rooftops of Sighișoara, the hilltop town that’s now famous as Vlad Dracula’s birthplace. The winter sun is casting long shadows as we walk through Sighișoara’s alleyways, past merchants’ mansions, cobbled courtyards and fortified gateways. Ravens strut and croak on the medieval ramparts, and a faint peal of bells echoes from the church.

‘There’s no doubt that Dracula was a brutal warrior,’ Teșculă continues. ‘But many of the myths surrounding him are propaganda disseminated by his enemies. In fact, he’s regarded by most as a hero. He protected Transylvania against the threat of Ottoman invasion and ensured the survival of our own indigenous culture.’

He crunches on through the town’s icy streets and sets about debunking the Dracula myth with an academic eye. The name Dracula actually derives from a chivalric order called the Order of the Dragon, he explains. Vlad Țepeș’ father was a member of this order, and took the epithet Dracul – the dragon. Dracula simply means ‘son of Dracul’. Vlad’s reputation as an impaler was exaggerated by his enemies, to portray him as a bloodthirsty tyrant. The fact that Vlad’s body was found buried with no head is no surprise: his killers would simply have wanted proof of his death in order to collect a bounty.

‘But it doesn’t matter what I say,’ he laughs, watching tourists shopping for plastic crucifixes and vampire mugs at a souvenir stall. ‘I think that Count Dracula’s legend will outlast us all. Perhaps he really is immortal!’

He leads the way to Sighișoara’s clocktower, and we watch as darkness slowly falls across the snow-covered hills, and clouds of birds swirl home to roost over the town’s jumbled rooftops.

‘That’s the thing about all the best stories,’ the doctor muses. ‘They have a way of taking on a life of their own.’

Thursday, January 17, 2013

The Economist: Trivia and sleaze

Romanian mediaJan 16th 2013 by L.C, | BUCHAREST

IN an editorial-page article last year for the The Wall Street Journal, Tom Gallagher, an author and Romania expert, wrote

“Romania’s media—for a time one of the most independent-minded press corps to be found in ex-Soviet Europe—is once again in the grip of the old guard, who are given to laying off journalists en masse when they write something unpleasant. Television stations attract viewers to their nightly tirades against reformists or independent politicians by wrapping political content in trivia and sleaze.”

The recent coverage of the death of a Romanian celebrity was more illustration of how the standards of Romania’s media are deteriorating. Images of his coffin, a grieving crowd, dramatic funeral bells, close-ups of old ladies crying their hearts out intermingled with sound bites of politicians expressing their regret for the nation’s great loss and melodramatic live reports of correspondents struggling to glorify the recently departed. Back in the studios, journalists were in hot debate: “Should he be cremated, as he wished to, or should he be buried, as the Romanian Orthodox Church wants to?” “Did he really have an illegitimate son?” “Why was his wife wearing white at the incineration?” “If he really is the one inside that coffin, then they should keep the lid open so we could see his face. We want to see his dead face!”

The celebrity in question was Sergiu Nicolaescu (pictured above), a famous filmmaker, who died on January 3rd at the age of 82. He directed more than 60 films glorifying the country’s history, which earned him recognition especially during the communist regime.

Although his family publicly asked the media to respect their privacy, journalists didn’t stay away. Instead of limiting their coverage to Mr Nicolaescu’s professional life in Romanian cinema and politics, they speculated about the director’s personal life. In some cases, they didn’t even make the smallest efforts to verify the facts such as the (false) story of Mr Nicolaescu’s illegitimate son, which appeared in the press after his death and was spread all over the media in a few hours.

It is not the first time the Romanian media is losing its decency. Over the last couple of years, the death of almost any celebrity was treated in such a manner. Why is this happening?

Ioana Avadani, boss of the Centre for Independent Journalism in Romania, says it's a combination of factors that has led to the downward spiral of editorial content in Romania. One is the quality of the reporters, which reflects the quality of the education. Reporters not only lack knowledge of journalistic ethics, she believes, but they have not learned to think critically. A second problem is the editors in the newsrooms, who push reporters to go for lowbrow and gossipy topics. A third problem, Ms Avadani thinks, is a lack of dissuasive measures. The National Audiovisual Council of Romania, the regulator for the audio-visual sector in the country, has not been consistent in sanctioning sensationalist coverage and the fines it imposed were not effective deterrents. This time, the Council only issued a short statement expressing their disapproval for the way the media covered Mr Nicolaescu’s death.

This is just another chapter in the decay of the Romanian media landscape, believes Ionut Codreanu who has been monitoring previous sensational coverage for ActiveWatch, a media-monitoring agency in Romania. “Over the last years we gathered irrefutable evidence that proved that, in order to survive through the economic storm, Romanian media and journalists took the easy way. Our yearly research on ethical standards in media discourse clearly state the lack of manner and rules in dealing with sensitive issues. Journalists pay no respect to privacy or human dignity and take every opportunity to exploit vulnerable individuals or tragic events.”

After being forced to consume only censored media during the communist regime, Romanians now live in a society where they can choose their media freely. To help them make the right choices Romania should implement media education programmes that could enable future generations to develop a critical capacity for interpreting information in the media. But “unfortunately, Romania never considered launching a media literacy programme and every delay is wasted time,” says Ms Avadani. “What we have now is the confluence of an uneducated public, uneducated journalists and poor quality editors.” It’s a recipe for disaster.

JP Morgan gives fresh impetus to Romania debt

By Radu Marinas

BUCHAREST, Jan 16 (Reuters) - Romania's borrowing costs dropped to record lows on Wednesday after JP Morgan said it would include the country's debt in an emerging market index.

Bond yields have now fallen by around one percentage point since a December parliamentary election gave leftist Prime Minister Victor Ponta a mandate to conclude a new deal with the International Monetary Fund.

The JP Morgan announcement overnight drove a further rally in Romania leu-denominated bonds on Wednesday that took 10-year yields below 6 percent for the first time, the latest in a series of successive lows.

JP Morgan said Romania's potential weight in its flagship GBI-EM Global Diversified index could be 0.54 percent, given a market capitalisation of $3.5 billion. The bonds will be included from March 1.

Werner Gey van Pittius, who co-manages Investec's emerging debt funds, took an overweight position in Romania last year anticipating its inclusion and estimated the JP Morgan move could bring almost $1 billion of inflows.

"From benchmark-relative investors like us, there is a lot of money that will come in for sure but the question is how many people will have anticipated this already," van Pittius said.

Romania had already been included in a Barclays index in November and its inclusion in both should increase the pool of investors and boost the small secondary market.

Nigeria's 10-year yields have fallen more than 4 percentage points since JP Morgan said last August it would include Nigerian naira bonds in its GBI-EM index.

Romania is paying about 5.5-5.6 percent on five-year debt, already the lowest since the 1989 fall of communism, even though its benchmark official interest rate is 5.25 percent, far higher than those of emerging EU peers Poland and Czech Republic.

Despite recent falls, yields in Hungary - where Prime Minister Viktor Orban's unconventional policy mix has alarmed investors - remain a little higher.

The Romanian rally has also helped the leu currency strengthen to a one-year high of 4.32 against the euro .

A Bucharest dealer said there was already high interest in new Romanian debt issues "and because of Romania's inclusion in JPM's index, the secondary market will see a boost together with foreign investors' interest."

Borrowing costs rose and the currency fell through 2012, largely because of concerns about policymaking and Ponta's failed attempt to impeach President Traian Basescu.

Ponta's election win should bring more predictability to policymaking and he is expected to replace a 5 billion euro ($6.7 billion) deal with the IMF with a new agreement after March, which would act as an important vote of confidence in his economic policies.

Analysts and dealers expect Bucharest to take advantage of the market rally to front-load sales and say bonds could rally to 5.25 percent for paper longer than one year, with the leu strengthening as far as 4.25 per euro.

With a budget gap set to fall below 3 percent of gross domestic product for 2012 and gross debt at one of the lowest levels in the European Union, Romania has already sold 6.9 billion lei ($2.1 billion) in local currency debt in January, more than a third of its target for the first quarter.

It also wants to raise 2.5 billion euros ($3.3 billion) on international markets for the whole year. ($1 = 3.2577 Romanian lei) ($1 = 0.7492 euros) (Additional reporting by Carolyn Cohn and Sujata Rao in London; Editing by Ruth Pitchford)

Wednesday, January 16, 2013

globalpost: Romanian orphans face challenges decades after adoption

Americans rushed to rescue children from terrible conditions after the fall of communism. Twenty years on, adopted orphans are finding their damage has been permanent.

Meghan Collins Sullivan
January 16, 2013 06:00

Editor's note: Following the Christmas Day execution of Romania’s long-time communist dictator Nicolae Ceausescu in 1989, the outside world first saw images of tens of thousands of abandoned children living in cramped, filthy institutions across the country.
Ceausescu’s policies — including outlawing abortion and birth control and dictating that every woman bear a minimum of five children — had created a generation of children that were cared for by the state.
Many didn’t survive. But nearly a quarter of a century later, those who did are now young adults.
This is the first of a two-part series that takes a look at two young men who lead very different lives as they navigate society on the outside today.

BUCHAREST, Romania — After the fall of Nicolae Ceausescu’s communist dictatorship in 1989 lifted the curtain on an orphanage system whose grossly unsanitary, overcrowded conditions shocked the world, Mary traveled here from her home in Connecticut to adopt a 1-year-old boy.
Daniel had spent the first, largely unattended year of his life lying in a crib in a cramped, bare-walled maternity hospital in the mountainous Transylvania region.
Mary, who asked that her last name not be used to protect Daniel, believed proper care would make up for the stimulation he’d lacked.
“We thought food and family would solve everything,” she said. “We thought it would just be a process of catch up.”
“We were very naïve.”
Despite growing up in a loving family that provided him with top-notch medical care, Daniel has faced major unanticipated challenges.
Now 23, he’s been diagnosed with a host of mental health issues including anxiety, schizoaffective disorder and Tourette's syndrome, and has come close to being labeled autistic.
He’s hardly alone. Twenty years after thousands of families from the United States, Canada and Europerushed to save some of them from callousness and neglect, many orphaned and abandoned Romanian children struggle with mental, emotional and physical health issues, as well as the stigma associated with them.
Although Daniel’s challenges may partly stem from inadequate prenatal care and genetics, they’re probably largely attributable to sensory deprivation and lack of attachment in the first key months of his life.
Malnourished, he was fed only liquids from a Coke bottle topped with a nipple until his adoptive parents arrived. His senses weren’t stimulated, his fingers a poor substitute for toys, and he banged his head.
Mary says none of that appeared to matter to Romanian officials when she made her first trips here in 1990. “They looked at me like I had rocks in my head when I tried to ask about Daniel’s birth family and whether there were any medical issues.”
A pediatrician first identified Daniel’s delays soon after he arrived in America.
“He wasn’t paying attention to people,” Mary said. “He was far more attentive to physical issues in the room, what’s now seen as a symptom of autism. He would watch a mobile going around. Inanimate objects rather than people and their faces.”
Problems like Daniel's are common among children who spend the first years of their lives in institutions.
“There’s a huge over-representation of children in mental health services with histories of adoption and foster care,” says Dr. Lisa Albers Prock, director of the adoption clinic at Boston Children’s Hospital.
Various studies, including a project following Romanians adopted to Britain and another to Canada, show the younger a child is adopted, the greater chance some of the damage can be reversed.
The Bucharest Early Intervention Project (BEIP) has studied the effects of institutionalization on orphans in Romania for the past 13 years. Working from a small lab in a former Bucharest orphanage, researchers from the US and Romania have compared children growing up in institutions with those living with families.
“We found that institutions are a particularly toxic environment in which to raise young children,” says BEIP’s lead researcher Charles Nelson, a professor of pediatrics and neuroscience at Harvard Medical School.
Institutionalized children exhibit everything from reduced IQs to reductions in brain size and activity, he says.
The researchers say that although any time spent in non-family situations is harmful, their work suggests institutionalization past the age of 2, and in some cases earlier, causes irreversible effects.
That’s grim news for the 8 million children UNICEF says are living in institutions worldwide today.
Although Daniel’s early intervention therapy began shortly after his arrival in the United States, he didn’t speak until age 3. Enrolled in special education classes in public school, he’s attended occupational, play and speech therapy, and has had a mental health counselor since elementary school.
To help cope with his fears, Daniel created a parallel world of different planets and galaxies.
“He could say that on his planet, Osama bin Laden had turned to the good side,” Mary says. “Anything he was fearful of he found a way to turn for the good in his fantasy world.”
As he starts to face life as an adult, however, Daniel is running into new obstacles.
“People with mental health challenges — it’s off-putting to the general public and in employment situations it’s an area where employers need to work on becoming comfortable and having the right expectations,” Mary says.
However, she says there have been signs of progress: He’s brought his fantasy world back to the Milky Way. It’s now located in South Beach in Miami, Fla.
“He’s handling his anxiety by taking control of his future,” Mary says. “He’s going to live there and meet up with some rappers and work in horticulture.”
Meghan Collins Sullivan is a freelance journalist living in Bucharest, Romania. Her work is supported in part by a Rosalynn Carter Fellowship for Mental Health Journalism. 

Financial Times: Erste write-off shows Romania pain

Romania’s economy may be recovering from a deep crisis, but it is not recovering quickly enough for the country’s main lender, BCR.

Austria’s Erste Group this week announced that it would take a €300m goodwill charge largely due to the problems besetting BCR. So even if the International Monetary Fund is reasonably content with Romania’s economic progress, a key foreign investor is far from happy.

Erste said in a statement on Tuesday that it would post net profit of around €450m for 2012. The bank said it would “fully service participation capital as well as pay a dividend on ordinary shares for the 2012 business year,” adding that “as goodwill is excluded from the regulatory capital calculation, Erste Group will report significantly improved capital ratios as at year-end 2012.”

Erste said that it still expected full-year operating profit for 2012 to be “slightly behind” the €3.363bn achieved in 2011.

The Austrian bank’s performance has also been held back by losses on its sale of its Ukrainian subsidiary. It sold Erste Bank Ukraine for $83m in December, recording a €151m loss.

Erste has been experiencing difficulties with BCR, which has been hit by Romania’s economic troubles, which have seen a deep recession followed by swinging austerity measures.

In December, BCR announced that it was cutting 1600 staff – around 18 per cent of the total – due to market conditions; Erste said that it would pump more money into its Romanian subsidiary through a capital increase worth nearly €111m.

This followed a downgrade by Moody’s in June, with the agency citing “the bank’s rapidly weakening financial performance”.In a statement to beyondbrics, Erste said that “we started an intense restructuring program at BCR in December 2012, which should enable us to post a slight profit for the full year 2013.”

Romania’s banking system is beset by bad debt, with the non-performing loan ratio reaching around 26 per cent, according to research by Italian bank Unicredit. Many lenders have been hit by defaults on foreign currency loans made in the boom years of the last decade, which have since turned rotten due to Romania’s economic crash and the fall in its currency, the leu.

Erste says that it expects provisions for bad debt in Romania to fall significantly in 2013, but with its GDP growth forecast at just 1.1 per cent, the good years are an increasingly distant memory.

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Tuesday, January 8, 2013

The Economist: What will happen to Romania’s judiciary?

AFTER a year of political crisis that ended with a clear victory of the ruling alliance of social democrats and liberals at the parliamentary elections last December, the country’s most powerful men decided to make peace, at least on the paper. Traian Basescu (pictured on the right), the president, and Victor Ponta (pictured on the left), the prime minister, signed an agreement that guarantees institutional cooperation between the presidency and the government and a commitment to respect the Constitution on both sides.

Apart from the promises to respect common values related to NATO or EU, the agreement also contains a code of good manners and public behaviour for the two men. In the near future, Romanians will be spared the political slinging match of the political campaign last month. Back then, Mr Basescu compared Mr Ponta with a pig and called him “a compulsive liar” while the prime minister said “Basescu will swallow pigs, cats, dogs, all the animals if his alliance wins the elections”.

Even so, appointments to key positions in the judiciary will continue to cause controversy in 2013. The most recent episode involved the superior council of magistracy, the institution that guarantees the independence of the judiciary. The election for the vice-president ‘s position was postponed because some of the council’s members didn’t agree with the nomination.

Appointments for other key judicial institutions such as the anti-corruption agency, the public prosecutor or the directorate for investigating organised crime and terrorism will me made throughout 2013. Mr Basescu stated that “nobody will negotiate the independence of the justice system just for the sake of political peace.” The president added that he “would rather have a war than a justice system that is not independent”. His statement comes just a few weeks before the European Commission is expected to publish a supplementary report on the progress on justice and corruption made by Romania.

The justice system has been closely monitored by the European Union, which severely criticised Romania over the last couple of years for failing to enact judicial reform. Romania has been recently made progress, but some major issues remain unsolved. The parliament continues to block the prosecution for corruption charges of high-profile politicians. For some MPs, getting a seat in the parliament last month (and therefore acquiring parliamentary immunity) was their only escape from being investigated.

Romania’s chances to get the Schengen membership depend on the upcoming EU Commission report. If the report is negative, countries like the Netherlands and Germany that are opposed to the admission of Romania into the Schengen area could use the results as an argument against the country’s entry. The issue is expected to be debated at the next EU Justice and Home Affairs Council in March. In case Romania’s gets green light, it might join the Schengen bloc in a two-step admission procedure suggested by France and Germany: sea and air borders in the first phase and land borders afterwards.

Schengen is not the only big issue Romania is facing this year. The IMF is coming to Bucharest this month to review the country’s economic performance and hold talks with the Romanian government on the draft budget and monetary policies. The government also hopes to discuss with the Fund the possibility of a third precautionary loan. Romania has already received a €20 billion ($26 billion) loan from the IMF in 2009 and another €5 billion in 2011.

This year Romania needs to continue its structural reforms, to fight against corruption and improve the independence of the justice system. Another series of painful austerity measures is just around the corner. Mr Ponta said he is willing to take full responsibility for several measures that will upset the electorate. Ironically, Mr Ponta’s alliance gained popularity in 2012 precisely because of opposing such anti-austerity measures.

FT: Romania holds rates as inflation overshadows sluggish growth

The National Bank of Romania (BNR) kept its benchmark interest rate unchanged at 5.25 per cent on Monday, as policy makers juggled with the conflicting demands of meeting inflation targets and stimulating a flailing economy.
The Romanian leu strenthened slightly against the euro, to 4.40 lei to the euro after opening at about 4.42.
The bank said in a statement:
The NBR Board decided to keep the monetary policy rate unchanged at 5.25 per cent per annum, to ensure an adequate liquidity management in the banking system and to maintain the existing levels of minimum reserve requirement ratios on both leu- and foreign currency-denominated liabilities of credit institutions.
These decisions are aimed at resuming and consolidating disinflation, whose outlook is further marked by risks and uncertainties related to domestic developments, including the persistence of structural rigidities across the Romanian economy as well as the euro area and global economic recovery.
Dan Bucsa, economist with Unicredit Bank in London, told beyondbrics:”The decision was exactly my expectation. Despite falling in the last quarter, annual inflation in 2012 has probably fallen outside the plus or minus 1 point band around the 3 per cent target.”
Bucsa stressed that the inflation target for 2013 has been set lower, at 2.5 per cent, making the BNR even more cautious when it comes to easing rates. Indeed, he expects the bank to keep rates unchanged throughout 2013, after inflation ended 2012 at 3.6 per cent. That was a fairly good result, but just outside the 1 per cent band the bank sets around its target.
Bucsa argues that with economy spluttering, and a trend in neighbouring countries – notably Hungary – to cut rates, the central bank is unlikely to hike.
Bucsa wrote in a note: “The [Monetary Policy Council] doves have become more vocal lately, and we believe their stance reinforces a general bias against hikes,”
In Vienna, Erste Group analysts are of a similar mind. They noted that Romania’s fundamentals “remain robust” – pointing to “the conclusive progress in consolidating public finances even in the election year 2012” which is likely to lead to a budget deficit of just 2.7 per cent of GDP this year.
But Erste noted that the economy would continue to be “trailing behind its potential in 2013, with economic growth due to pick up slightly to 1.1 per cent.”
As a result, there will be little room for cuts, the bank says.
The outlook of depreciation pressures with a direct negative impact on the purchasing power of households and NPLs in the banking sector (17.34% as of the end of September), together with higher inflation prospects (4.3% in December 2013) leave little, if any, room for further monetary policy easing and helping the real economy. We expect the Central Bank to keep the key rate at 5.25%, but do not completely rule out a prospective hike. This would be consistent with the Central Bank’s thesis that financial stability has to be a priority, while economic growth can wait, especially for as long as predictability remains low and the confidence crisis persists.
Romania has some other positives: it is not so dependent on exports to the European Union as most of its peers (exports account for just 30 per cent of GDP) and, crucially, it should enjoy political stability in the immediate future, despite the rift between the president and government.
“The ruling coalition of Social-Democrats and Liberals (USL) will enjoy an unprecedented, more than 60 per cent support in parliament,” and as a consequence, the government should be free to implement a reliable governing program, Erste reasons.
However, Romania appears wedded to assistance from (and therefore meeting the requirements of) the International Monetary Fund and other lenders for some time to come, given the size of forthcoming debt repayments.
Erste Bank writes:
A new program with IFIs [international financial institutions] is seen as a necessary approach in order to maintain foreign investor confidence in the country’s macroeconomic dynamic balance, as well as to secure a financing buffer for the government in case of worsening conditions on international markets – [this] taking into account the FX repayment calendar of the MinFin and NBR to the IMF in the coming two years (EUR 5.2bn only in 2013). Maturing debt (mainly to the IMF for the funds drawn under the first stand-by agreement signed in 2009) and anticipations of a drop in FX reserves will put pressure on Romania’s currency, with the amplitude of the depreciation highly sensitive to the effective improvement of EU funds absorption and foreign direct investments inflows. Against this backdrop, we see the RON traded at between 4.4 and 4.7 against the EUR in 2013, with the ability of the MinFin to tap international markets in order to finance maturing external debt affecting local currency development.
Romania – or rather the Romanian population – has swallowed some hard medicine in the recent past. While the economy has moved in the right direction, the country is far from being out of the woods just yet.

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Sunday, January 6, 2013

Romania statistics chief sacked for 'severe error'


BUCHAREST — Romanian Prime Minister Victor Ponta has sacked the country's chief statistician, accusing him of "severe error" in his projection of GDP for 2011, the government said Saturday.

Virgil Voineagu was laid off Friday, the government said in a statement, announcing that his deputy, Beatrix Gered, would serve as acting president of the National Statistics Institute (INS).

Ponta slammed the institute for a shortfall of 21 billion lei (4.9 billion euros) in its projection of the 2011 GDP.

"This year, in order to respect the deficit aim we have to cut one billion lei (in spending) because of a calculation error. Where from? From health, education, the army, the police?" Ponta asked at a government meeting on Friday.

He said the INS had made erroneous projections for every year from 2003 to 2010, adding that for 2011: "I have no proof that this was intentional but it is a severe error."

The INS said in a statement that the differences between provisional, semi-final and final calculations are "inherent and are not generated by errors".

The institute also insisted that it complies with "EU reglementation and calculation methodologies".

The growth forecast is 0.7 percent for 2012 in Romania, the EU's second poorest country, and the public deficit is expected to amount to around 2.0 percent of gross domestic product.

An IMF and EU mission is to arrive to Romania on January 15 to discuss the 2013 draft budget and progress on reforms.

In May 2009, the Balkan country obtained a 20 billion euro ($24.7 billion at current exchange rates) rescue package from the IMF, the European Union and the World Bank in exchange for drastic spending cuts.

In March 2011, the IMF and the EU agreed to provide a fresh credit line of 5.0 billion euros to be drawn down only in case of emergency.

Romania prime minister says cuts needed after GDP overestimated

(Reuters) - Romania's government will have to cut 1 billion lei (nearly $300 million) from its budget spending this year because the country's 2011 economic output was overestimated, Prime Minister Victor Ponta said on Friday.

Romania's 2011 gross domestic product was overestimated by 20 billion lei ($5.9 billion), said Ponta, who won an overwhelming election victory in December.

The European Union's second-poorest state, which has a 5 billion euros aid deal led by the International Monetary Fund, targets a budget deficit of 1.8 percent of GDP in cash terms in 2013, down from a target of 2.2 percent in 2012.

"In reality, in 2011 we have had 20 billion lei less gross domestic product and this means ... this year we have to cut another 1 billion lei to meet the deficit target," Ponta told his cabinet.

He said he plans to replace the management of the National Statistics Board, which is in charge of GDP data, although he did not believe the error was intentional.

The overestimation amounts to 0.3 percent of 2011 GDP and there is a slight risk Romania will miss its 2012 deficit target. The revision will reflect on this year's GDP figures and on 2012 budget data, which will be released later this month.

"If the 2011 GDP was revised visibly, this means the 2012 one will likely be lower than thought, and this year's as well," said Vlad Muscalu, senior economist at ING in Bucharest.

"Assuming there are no other differences, the 2012 deficit would be 0.1 percent of GDP higher. Not a big deal."

A previous rightist administration enforced deep spending cuts and tax rises in 2010 to stop the budget gap ballooning and its resulting unpopularity swept Ponta to power.

Austerity has helped to steady Romania's finances but analysts expect the economy to have grown only 0.4 percent in 2012.

"One billion lei because of a mistake in calculation - where do we cut a billion?" Ponta said. "From health, education, police, the army?"

Romania is seeking a new IMF deal to replace its current agreement expiring in March and has yet to agree this year's budget. ($1 = 3.3703 Romanian lei)

(Reporting by Luiza Ilie; Editing by Sam Cage/Ruth Pitchford)