Saturday, November 16, 2013

The Economist: Anca Petrescu: Eastern Europe's most controversial architect

Anca Petrescu, the chief architect behind the Palace of the People in central Bucharest, had never been able to escape the legacy of the controversial building that came to define her: it is a building that still dominates the skyline of the Romanian capital—and a constant reminder of the dark days of Communism in one of the European Union’s newest member states.

The monolithic Palace of the People remains one of the lasting symbols of Nicolae Ceausescu's totalitarian regime. He never occupied the building; the first rooms were completed just months before he and his wife were executed live on television during the revolution of 1989.

Petrescu, who died following a car accident that had initially left her in a coma, was just 32 when she was made chief architect of a project that would gobble up an estimated 30% of Romania’s national budget while under construction (accurate accounting was not kept), and required around 20,000 people working in three shifts, around the clock, irrespective of the season, for seven years.

By some estimates 30,000 residents were forced to leave their homes to make way for the grandiose structure, which even today remains one of the world's largest administrative buildings (second only to the Pentagon). A million cubic metres of marble were used in its construction, as well as 3,500 tonnes of crystal, 3,500 square metres of leather and over 200,000 square metres of carpets. To make way for the building an entire district of historic Bucharest was razed to the ground, including some 9,000 houses as well as churches and synagogues.

Petrescu was vilified by some, and never publicly apologised for her role in the destruction of the historic heart of Bucharest. Monica Lotreanu, a Romanian architect and art historian, wrote in 2004 that: “In none of her statements did Anca Petrescu show the least remorse for having built her "creation" on the site of whole blocks of traditional buildings…places of worship and other historical or architectural monuments wiped off the face of the earth by the will of the "demolition angel" Ceausescu.”

Following the 1989 revolution the fate of the Palace was initially uncertain. Some were in favour of demolishing a symbol of the waste and brutal totalitarianism under Ceausescu. Ohers suggested looking beyond the negative associations. In the end, with few other options, the building was taken over by the Romanian parliament, senate and the constitutional court. In 2004, a modern art museum was added to the grounds.

In 1990 a group of architects tried to have Petrescu charged with the misuse of national assets. The charge went nowhere, but Petrescu was ostracised from her profession and received death threats. She moved to France to practise.

She eventually returned to Bucharest, to continue work on the building that had long defined her. Moving into an office inside the Palace of the People, she worked on redesigns and modifications to a structure not built for practicality, nor modern comfort (central air conditioning was not installed, for fear of a poison gas attack on the system). Later she ran unsuccessfully for mayor of Bucharest and became a member of parliament for the nationalist Greater Romania Party.

The building Petrescu designed still dwarfs much of its surroundings and continues to be a stark reminder of a brutal period in the country’s history. In August Pink Floyd performed The Wall in the plaza in front of the building. Roger Waters poignantly entoned “We don’t need no thought control” for a crowd of young Romanians born as the Communist era was coming to a close.

Friday, November 15, 2013

Romania's economy returns to pre-crisis levels: PM

The Romanian economy reached this year the pre-crisis levels of 2008 and next year, the country will have the highest gross domestic product (GDP) since 1989, said Prime Minister Victor Ponta on Thursday when presenting the draft budget for the coming year.

"In 2013 we reach the GDP of 2008, closing the period of decline in Romania," Ponta told a press conference at the government headquarters, stressing that "obviously, we will have in 2014 the highest GDP after the year of 1989."

Official statistics showed that in 2008, Romania had the highest GDP of 137 billion euros (about 200 billion US dollars) since 1989, when the eastern European country changed its political system.

Ponta's cabinet approved on Thursday the draft of the state budget and that of state social security budget for 2014.

According to him, the overall budget, including the state budget, the social security budget, the other budgets part of the consolidated budget, totals 230 billion lei (69.38 billion dollars).

"We obtain 216 billion lei (65.16 billion dollars) of it from taxes, duties and other revenues and 14 billion lei (4.22 billion dollars) will be the deficit - i.e. what we consume more than we produce to the budget," the prime minister explained.

The budget figures unveiled by the prime minister show that the Romanian budget revenues will account for 32.9 percent of the GDP, as compared to the EU average budget revenues of 46 percent of GDP.

Among the main objectives of his cabinet for the year to come, Ponta mentioned pension indexation by 3.76 percent, salary increase for resident doctors and the debutant employees in education, social security contributions decrease by 5 percent, reduced VAT (value added tax) for food, as well as minimum wage increase by 12.5 percent.

According to the prime minister, the economy of the country will have a growth of 2.2 percent next year, with an averaged inflation of 2.4 percent and an average exchange rate of 4.45 lei against the euro.

Thursday, November 14, 2013

Romania’s Economy Grows at Fastest Pace in Two Years on Harvest

By Andra Timu - Nov 14, 2013

Romania’s economy grew at the fastest pace in two years in the third quarter, probably spurred by a bumper harvest and export growth.

Gross domestic product increased 4.1 percent from a year earlier, compared with 1.5 percent in the second quarter, according to a preliminary estimate released by the National Statistics Institute in Bucharest today by e-mail. The median forecast of nine economists surveyed by Bloomberg was for a 3.5 percent expansion. GDP rose a seasonally adjusted 1.6 percent from the previous three months.

“Favorable weather conditions this year resulted in a good agricultural output, very likely above multi-annual averages for most crops,” analysts at Raiffeisen Bank Romania SA, including Ionut Dumitru, wrote in an e-mail before the GDP release. “We foresee the gross value added in agriculture to increase 23 percent in 2013 and to have a positive contribution of 1.4 percentage points to the GDP growth rate this year.”

Last month the government, in agreement with the International Monetary Fund and the European Union, increased Romania’s 2013 economic-growth forecast to 2.2 percent from a previous estimate of 1.9 percent, citing a good harvest and a pickup in exports.

The leu rose 0.2 percent to 4.4560 against the euro at 10:02 a.m. in Bucharest, according to data compiled by Bloomberg.

Industrial production increased a seasonally adjusted 7.1 percent from a year earlier in September, the institute said on Nov. 8. The country’s trade deficit shrank to 413 million euros ($556 million) in September, as exports grew faster than imports, the institute said on Nov. 11. Retail sales decreased 0.8 percent in September, it said on Nov 4.

The statistics institute will release a breakdown of third-quarter GDP on Dec. 4, according to a calendar on its website.

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

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

Wednesday, November 13, 2013

NYT: A Medieval Romanian City With Major Art Talent

Lacking a famous art school, government support or even a location most people can point to on a map, the small medieval city of Cluj, Romania, has become an unlikely breeding ground for the next generation of art stars.

Two years ago, the painter Adrian Ghenie was in his friend’s studio, having a coffee with some former classmates — all Romanian artists and gallerists in their mid-to-late 30s — when it sunk in: they had made it.

“I realized that Mircea was having a show in Salzburg, and Cipri, right next to him, was going to show at Tate,” Ghenie recalls of his friends Mircea Cantor and Ciprian Muresan. “We’re having shows at MOMA San Francisco. And Plan B” — the gallery Ghenie started with the artist-turned-dealer Mihai Pop in Cluj in 2005 — “was going to Basel. I realized I don’t have to go out to Paris or London to find out what’s going on in art, because we are it right now. And we were still in Cluj having coffee like normal people!”

In the last decade, Cluj-Napoca, better known as Cluj, an Eastern European university town of about 325,000 permanent residents, has become an unexpected art world hothouse, its homegrown talent pool earning rapturous praise on the international stage. Ghenie is represented in New York by the powerful Pace gallery, and his work has caught the eye of major collectors, including the Christie’s owner François Pinault. At two separate Sotheby’s auctions in the last year, his sales tripled and then doubled their respective estimates.

While Ghenie and Victor Man are the best known of the group, success has come to each in his own right, as if lightning struck multiple limbs of the same tree. It was the Italian critic and Flash Art founder Giancarlo Politi who in 2007 first called them the Cluj School, in the manner of Dresden and Leipzig. Already known abroad for his 2005 video “Deeparture,” depicting a wolf and a deer left alone in a Parisian white-cube gallery, Cantor won the Marcel Duchamp Prize in 2011, which came with a solo exhibition at the Centre Pompidou last fall. Muresan, too, first gained wide notice for a video: “Choose,” showing his young son mixing Coca-Cola and Pepsi in the same glass. The work landed him a place in the 2009 New Museum show “The Generational: Younger Than Jesus,” as one of the world’s 50 top artists under 33. Last year, he had a show with the Polish artist Anna Molska at the Tate Modern in London.

“I found it somehow miraculous,” Ghenie, 36, adds of the group’s success, coming from a state with paltry, temperamental support for the arts and a university with no reputation abroad. “This thing happened in such a short time from that place, which had little tradition. There was a month when if you opened Artforum, every three pages was an ad with a Romanian — and from really big places like MOMA or Tate to smaller, private galleries.”

“Nobody bet on such a successful artist from this small scene — maybe one, but not five,” Muresan, 36, agrees. “This is weird.”

Why this flowering? Well, the best explanation is the artists’ work and, perhaps, their work ethic, a trait they often attribute to cultural cross-pollination from the Germans and Hungarians who settled in the area years ago. Romania is still recovering from decades of isolationist and brutal rule under Nicolae Ceausescu, and this fall the country’s justice system began the first trial in decades of one of its own for abuses during the Communist era.

Twenty five years after Ceausescu’s lightning-quick trial and execution on Christmas Day, when most of the artists were in grade school, they retain a special brand of pragmatism, cynicism and dark wit. Their output — somber, intellectual, haunted by history and laced with gallows humor — reveals the psyche of a country sentenced to grapple with its past for decades to come. Ghenie’s thickly worked canvases depicting what look like melting faces have drawn comparisons to the work of Francis Bacon, but his titles making reference to pie fights lend the works a layer of slapstick. Muresan’s video of dog puppets evokes the human potential for brutality. The Romanian critic and curator Mihnea Mircan, 37, summed up their generation as “allergic to utopia.”

In this spirit, they navigate success in a post-Communist environment, where for decades most any achievement required working with the regime. “I trust myself better than I trust others,” Serban Savu, 35, says, explaining the self-reliance he and his colleagues have developed. “Nobody helped us to construct the art scene.”

It’s mid-August, and Savu is piloting his black Volvo sedan through Manastur, the area where he grew up. Originally intended as a Le Corbusier-inspired modernist project, the green space between the blocks was filled in with additional units as Ceausescu shunted Romania onto an industrialist track and crowded peasants into towns and cities. Savu’s social realist-style paintings, which have drawn comparisons to Jean-François Millet, Edward Hopper and Pieter Bruegel, offer gentle, complex depictions of Romanians generations on — agrarian families uncoupled from their homes and still uncomfortable with the transition decades later.

“It’s our generation’s task to start building,” says Mara Ratiu, 35, a senior lecturer and vice rector at the University of Art and Design of Cluj-Napoca, where many of the Cluj set studied. “I’m doing this at my university with my colleagues. Mihai is doing that in his gallery program.” She’s just returned from the Venice Biennale and is sitting in Cluj’s Museum Square, a cobblestone plaza in the old city.

“I hate sometimes living in Romania,” she admits. “It’s crazy to live here because you have to deal with so many difficult things. On the other hand, what’s very fascinating is this pioneering work, the idea of building something.” With its centuries of history and culture, Cluj is fertile ground.

But in 2005, when Ghenie and Pop decided to start Plan B, Romania’s second largest city seemed more like a place they couldn’t escape. Ghenie had just returned penniless from living in Vienna and Catania, Sicily, where he had begun doubting his ambition to be an artist. Ghenie’s brother introduced him to a friend, a stockbroker who had recently purchased a big house in Cluj with empty walls and offered him a tidy sum to help start an art collection.

Meanwhile Pop, who was running an exhibition space at the university as a graduate student, was frustrated with interference from the administration. The two found a space in the city center with damaged parquet floors and called it Plan B. Then they used the money to mount a Victor Man show.

It may have started as a fallback plan, but Plan B quickly became the catalyst for a new scene. Juerg Judin from the gallery Haunch of Venison in Zürich flew in to see Ghenie’s first solo show on the advice of the British curator Jane Neal. When Judin arrived at the airport in Cluj, Savu and Ghenie showed up late to pick him up in a red Soviet-made 1982 Lada. The work, however, impressed him, and on returning to Zürich, he mounted a show in 2006 called “Cluj Connection,” curated by Neal, presenting works by Cantor, Ghenie, Man, Muresan and Savu, among others, as a group for the first time. Ghenie’s paintings sold out, and Judin added him to the gallery’s roster.

In 2007, Plan B was the only Eastern European gallery with a booth at the Armory Show in New York, and Pop took the reins of Romania’s national pavilion at the Venice Biennale. Plan B opened a second exhibition space in Berlin shortly thereafter.

After it lost the white-cube space in Cluj, Plan B joined with the nonprofit gallery Sabot in 2009 to renovate an old paintbrush factory in the light industrial district close to the city’s center. They envisioned a complex of performance spaces and studios. “It’s a factory, and I really feel that I am coming here as a worker,” says Daria Dumitrescu, 36, the gallerist running Sabot. When the Paintbrush Factory opened in October 2009, more than 1,000 locals from Cluj turned out to see what the artists and gallerists there were up to.

Cluj’s artists tend to share a pessimistic streak, and as a result, they seem primed for their moment in the spotlight to elapse, but seven years after the original Cluj coming-out in Zürich, the city continues to draw interest. At the end of 2012, Cluj was included in the San Francisco Museum of Modern Art show “Six Lines of Flight: Shifting Geographies in Contemporary Art.” Until January, Espace Culturel Louis Vuitton in Paris is showing artists from Cluj as part of the show “Romanian Scenes,” and the Arken Museum of Modern Art outside Copenhagen just concluded a show called “Hotspot Cluj — New Romanian Art.” Phaidon included Cluj in a new book published in September, “Art Cities of the Future,” alongside the likes of São Paulo and Istanbul, metropolises 30 and 40 times its size.

It’s a frantic pace, and the gallerist Pop, 39, can’t help wondering how long Cluj will hold onto its stars. Cantor has long worked out of Paris, for instance, and Ghenie is spending more time at his studio in Berlin. Pop is also preparing for the moment when the art world’s eyes shift to the next big thing. “The shows about Cluj, I find them O.K., but I know quite soon they will be gone,” he says, sitting on a bench at the botanical garden on one of the hills overlooking the city. “The people who are organizing these shows, they like to map territories,” he adds. “And when they already know who’s good, who’s not, they go further to map another territory and another territory.”

“In our case in the East, it’s important to constitute something,” Pop continues. “From the very beginning the idea was that if we open Plan B, it will be a long-term project. In the West, everyone is always asking you ‘What’s your next project? And what comes next? Next, next!’ There’s no next. Next is to sustain yesterday’s project.”

Tuesday, November 12, 2013

Romania failing traumatised soldiers

Globalpost

The Romanian army is ignoring the existence of debilitating combat stress disorders among its military, according to a year-long investigation published Monday.

A documentary broadcast on the website of Romania's Gandul newspaper tells the story of a soldier, Florin Jalaboi, who was diagnosed with post-traumatic stress disorder (PTSD) after he served in Afghanisatan.

Jalaboi, who tried to commit suicide on three occasions, was forced to retire after finding himself unable to cope. "The army did not admit that his sickness was a consequence of his profession so he was left with a 571 lei (128 euro, $171) monthly pension", the report said.

The soldier is described as "the man who does not exist" in the documentary after a military official denied soldiers suffered from the illness.

PTSD covers a broad range of symptoms found in soldiers returning from battle including anxiety, depression and nightmares, as well as physical symptoms such as an increased heart rate and excessive sweating.

Adrian Prisacaru, the Romanian army's chief psychologist, told reporters: "There are no soldiers diagnosed with post-traumatic stress disorder."

However Paul Fink, the former president of the American Association of Psychiatry, told Gandul it was "impossible" that Romania had no PTSD cases when around 20 percent of American soldiers returning from Iraq and Afghanistan were found to be sufferers.

Romania, a NATO member, has sent 30,000 soldiers to war in Iraq and Afghanistan since 2001, with 1,000 still serving in Afghanistan according to official figures.

Canada and Britain have acknowledged that a percentage of their soldiers who served in Afghanistan and Iraq suffer from PTSD, with French troops in Afghanistan also affected according to their defence ministry.

The investigation took more than a year to put together and was supported by the Carter Centre, an American human rights organisation founded by former US president Jimmy Carter.

Army documents obtained by Gandul appeared to show the existence of PTSD symptoms among soldiers but no cases were officially acknowledged.

The army's refusal to acknowledge cases of PTSD created a "fear among soldiers of being stigmatised by a mental illness," the report said.

PTSD first gained attention in the United States in the 1980s when doctors noticed severe mental health problems among soldiers returning from the Vietnam War.

Monday, November 11, 2013

Romanian commission set to reject gold mine project

(Reuters) - A special Romanian parliament commission is set to reject a draft bill that would allow Canada's Gabriel Resources Ltd to set up Europe's biggest open-cast gold mine in the Carpathians, the senate speaker said on Monday.

Gabriel has been waiting 14 years for approval to use cyanide to mine 314 tonnes of gold and 1,500 tonnes of silver in the town of Rosia Montana. The state also holds a minority stake in the mine.

Earlier this year, the government of Prime Minister Victor Ponta proposed a bill to speed up the project by setting strict deadlines for the approval process.

The bill, which triggered countrywide protests against the mine, prompted parliament to set up a commission to assess the bill. It is expected to file its report on Monday.

"The current government bill will be rejected," said Crin Antonescu, senate speaker and the head of the liberal party, a member of the ruling coalition.

(Reporting by Luiza Ilie; editing by Radu Marinas)

Romania accused of shady moves to please Canadian mining firm

By Mihaela Rodina (AFP)

Bucharest — Romanian authorities have covered up crucial documents and sacked whistleblowing academics to please a Canadian company planning to open a huge gold mine in the heart of Transylvania, rights groups say.

The company, Gabriel Resources, hopes to extract 300 tonnes of gold from four mountains surrounding the picturesque village of Rosia Montana, in what is expected to become Europe's biggest open-cast mine.

With lawmakers expected to vote soon on a bill clearing the way for the mine, experts said the company and the government were striving to hide key data.

The Canadian company, which holds an 80-percent stake in the Rosia Montana Gold Corporation (RMGC), plans to use large amounts of cyanide to separate gold from hundreds of millions of tonnes of rock.

The waste, containing heavy metals and cyanide, is to be stored in an artificial lake in the Corna Valley covering 360 hectares (900 acres) and contained by a 180-metre-high (590-foot) dam.

But geologists have warned that the site is underlain by fault-lines which will allow toxic substances to leak into the ground, and accused the company of using maps from which the faults had mysteriously vanished.

Displaying maps dating back to 1979 which clearly show faults in the Corna Valley, the sacked director of the Romanian Geological Institute (IGR), Stefan Marincea, told AFP: "The area is extremely permeable and the risk of groundwater contamination very high."

Marincea was dismissed by the government a few days after making the same argument before a parliamentary committee tasked with analysing the company's plans.

"I see no reason for my dismissal other than my insistence on telling the truth, which may anger some people today but will still be valid 20 years from now," he said.

Asked to comment on Marincea's allegations, the company said it had "never falsified any documents".

"The RMGC has used in good faith a map bought from the IGR which shows no major fault likely to affect the stability of the tailings lake and the dam," it said in a press release.

But geologist Costin Andrei told AFP that 19 open faults had been detected in the Corna area, with at least one of them undercrossing the dam.

Marincea also accused his predecessor at the IGR of altering the conclusions submitted by a team of experts after a 2011 visit to Rosia Montana.

The former director ignored their opinions and assured the environment ministry the site was safe for storing toxic substances, Marincea said.

"When I heard about this last summer, I nearly fainted... and I thought that one day I could be arrested" for not going public over the "falsified" report, he said.

'Return to the Inquisition'

Another key document, a study emphasising the value of Rosia Montana's cultural heritage and unique Roman-era mining galleries, was never released by the authorities.

AFP recently obtained a copy, whose authenticity was confirmed by the authors -- archaeology experts Andrew Wilson of Oxford University, David Mattingly of Leicester University and Michael Dawson of British consulting firm CgMs.

Stressing the "unique contribution of the area to world culture," the authors described the seven kilometres (four miles) of ancient galleries as "the most extensive and most important underground Roman gold mine known anywhere."

They also emphasised the value of Mount Carnic, which the RMGC plans to blow up if it gets the necessary permits.

"The Romanian government and the RMGC will be vulnerable to accusations of cultural vandalism if the mining project goes ahead," they said.

Kelemen Hunor, the culture minister who commissioned the study in 2009, said the document was meant to help him make a decision on the mine project but that he had "no duty" to release it.

He said that after reading it he decided against taking Mount Carnic off the list of protected historical monuments. But the national archeology commission ruled otherwise and gave its green light to the mine.

The current culture minister, Daniel Barbu, has said he does not see the area's heritage as an impediment to the RMGC's plans, prompting dozens of archeologists, historians and architects to call for his resignation.

Four of them, members of national committees that report to the culture ministry, were immediately sacked.

Several rights groups have accused Barbu of ignoring the British study to please the Canadian company.

"The stand taken by several Romanian officials is the same as the company's," Mircea Toma, president of Active Watch rights group, told AFP.

"The president, the prime minister, the culture and environment ministers have never made remarks that could displease the RMGC."

Active Watch battled for two years to get a copy of an agreement between the RMGC and the National Heritage Institute.

It received a copy only after a local court ruling and a bailiff's intervention.

Under the deal, the RMGC pledged to spend 70 million euros ($95 million) for restoration projects -- provided it obtained permits to start digging.

The Soros Foundation Romania, part of US billionaire George Soros's philanthropy network, also condemned the sacking of experts "simply because their opinions run counter to the authorities' interests".

It said it was unacceptable to "ask public servants to choose between their professional integrity and the security of their job."

"Telling academics what they can say and what they cannot looks to me like a return to the Inquisition," said Marincea.

"Will the next step be to burn us at the stake?"

Thursday, November 7, 2013

Romania Trims 2013 Inflation Forecast for Third Time This Year

Bloomberg News

Romania’s central bank cut its 2013 inflation forecast for the third time this year as slower price growth paves the way for interest-rate cuts.

The Banca Nationala a Romaniei predicts year-end inflation at 1.8 percent, compared with August’s 3.1 percent estimate, Governor Mugur Isarescu said today in Bucharest. It also lowered next year’s projection to 3 percent from 3.1 percent, he said.

Policy makers, who have resumed a rate cutting cycle in July after more than a year of pause, cut the benchmark rate to a record-low 4 percent on Nov. 5 and said there’s still “some room” for further reductions. The central bank is lowering borrowing costs to fuel economic growth that slowed between April and June after reaching its fastest in 1 1/2 years in the previous three months.
“We have an obvious improvement in inflationary expectations and the public perception encourages us to believe that this is a long-term trend,” Isarescu said.

Inflation slowed to 1.9 percent in September, the lowest level since May 2012, from 3.7 percent in August. Prices declined 0.6 percent from the previous month after the government cut the value-added tax for bread to 9 percent from 24 percent. October inflation data will be released Nov. 11, according to the Statistics Institute’s website.

The inflation rate to temporarily fall below 1.5 percent in the first half of 2014, according to Isarescu. Next year’s forecast is 3 percent “because the effect of the decline in the value-added tax for bread will fade from September and the favorable impact of the decline” in volatile product prices will also disappear, he said today.
The government last week increased this year’s economic-growth estimate to 2.2 percent from 1.9 percent amid a bumper harvest. The International Monetary Fund and the European Union also estimate 2.2 percent growth this year. The IMF sees year-end inflation at about 2 percent, Andrea Schaechter, the fund’s mission chief to Romania, said Nov. 5.

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

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net; James M. Gomez at jagomez@bloomberg.net

EBRD to Extend 600 Million Euros in Funding to Romania This Year

By Irina Savu & Andra Timu - Nov 7, 2013

The European Bank for Reconstruction and Development plans to invest as much as 600 million euros ($810 million) in Romania in 2014, possibly matching this year’s level, to support its energy and banking industries.

The London-based lender invested 612 million euros in Romania last year, part of 6.4 billion euros it has spent there since the 1990s, James Hyslop, the EBRD’s country manager for Romania, said in an interview in Bucharest yesterday.

“We had a very strong year in Romania and we still have a few significant projects to close,” Hyslop said. “I would certainly envisage that if we did 600 million euros last year, we’re doing about the same amount this year, and we should be doing 400 to 500 to 600 million euros next year.”

Romania, the European Union’s second-poorest member in output per capita, is the EBRD’s fourth-largest recipient of funds after Russia, Poland, and Ukraine, according to the bank’swebsite. The development bank has lent 3 billion euros in the country of 21 million people over the last five years to support its transformation from a former-communist state to a market-driven democracy, Hyslop said.

The EBRD, which bought a 1.9 percent stake in natural-gas producer Romgaz SA through Romania’s biggest initial public offering ever last week, may participate in other asset sales planned by the government, Hyslop said. Romania plans to sell a 15 percent stake in hydropower generator Hidroelectrica SA and a majority stake in energy distributor Electrica SA by June.
Future Listings

“Romgaz was a test case for future listings in 2014,” Hyslop said. “There’s domination by the state in the energy sector, so it’s extremely important to increase private sector participation in these core energy assets.”

The EBRD bought 2 percent of Romanian oil and gas company OMV Petrom SA in 2004, according to its website. It sold 20 percent of that stake a year ago.

Under the EBRD’s plan to support the development of local capital markets, it’s “actively looking” to help companies fund themselves through bond sales, he said. Raiffeisen Bank Romania SA and UniCredit Tiriac Bank SA have already attracted 775 million lei ($236 million) in funds, including from the EBRD, via 2 bond sales this year.

The EBRD provided 56.3 million lei to Raiffeisen through the bond sale and 110 million lei to UniCredit, according to data published on the bank’s website. It also arranged a 225 million-euro syndicated loan to the local unit of Cosmote Mobile Telecommunications SA to develop fourth-generation mobile phone services.

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

To contact the editors responsible for this story: James M. Gomez at jagomez@bloomberg.net; Balazs Penz at bpenz@bloomberg.net

Tuesday, November 5, 2013

Romania government agrees 2014 budget with IMF, EU

BUCHAREST (Reuters) - Romania's leftist government has agreed a budget plan for 2014 with the International Monetary Fund and the European Commission under an aid deal, introducing new taxes but raising the minimum wage, Prime Minister Victor Ponta said on Monday.

IMF and EU representatives were in Bucharest to review Romania's third aid deal since 2009. The government does not intend to draw on the 4 billion euros made available.

Ponta said his government will target a fiscal shortfall of 2.2 percent of gross domestic product in 2014 - in both cash terms and European accounting standards - down from this year's target of 2.5 percent of GDP.

The economy of the EU's second-poorest state is also expected to grow 2.2 percent next year.

Ponta came to power after a previous centrist coalition became deeply unpopular for taking painful austerity measures under the country's first IMF-led aid deal, including cutting state wages by a quarter and raising the value added tax.

While his government has reversed the wage cuts and brought the budget deficit under the EU's 3 percent Maastricht ceiling, revenues have underperformed so far this year and the country's economic recovery is struggling to pick up speed.

Ponta said the minimum wage will rise in two stages to 900 lei ($270), from the current 800 lei, while some state employees, like teachers and doctors will receive modest salary hikes and state pensions will be indexed by 3.76 percent.

But the government will also hike royalty taxes on all mineral resources except oil and gas by 25 percent and introduce a new excise tax on fuels. Starting next year, Romania will also index excise taxes to inflation - it currently uses an October exchange rate.

The cabinet will also introduce a special tax on "special" buildings owned by corporate clients, such as electricity polls and warehouses, without elaborating.

Ponta said the government is also committed to cutting a tax on social contributions for employers, which analysts have said would be a boost for investors and the economy.

"It is a political commitment that ... certainly from July 1 a significant cut of 5 percent will be enforced," Ponta said, adding the cabinet must find additional resources to compensate the tax losses.

Deputy Prime Minister Daniel Chitoiu estimated those losses for 5 months at 2 billion lei. He also said Romania has agreed to list a 15 percent stake in hydro power producer Hidroelectrica and a minority stake in lignite power holding Oltenia next year.

The IMF will present its review of the aid deal on Tuesday.

(Reporting by Luiza Ilie; editing by Ron Askew)

Monday, November 4, 2013

Romanian film enters a new era

By Alison Frank
BBC News

Child's Pose - The Golden Bear-winning Romanian drama is released in UK cinemas this weekend. While it was the winner at the Berlin film festival Alison Frank found a wealth of Romanian films were riding high at the recent Warsaw film festival. Is this the start of a new era for Romanian film?

The Romanian New Wave was declared several years ago, as The Death of Mr Lazarescu (2005) and 4 Months, 3 Weeks and 2 Days (2007) triumphed at international film festivals, opening doors to subsequent Romanian films such as California Dreamin' and Tales from the Golden Age.

All waves eventually break, but those who sounded the end of Romania's may have spoken too soon.

At the recent Warsaw Film Festival Romania tied with Poland for the largest number of films in competition with four, coming just behind the Czech Republic.

While none of the five Czech films won any awards, Romania secured one prize and a statement of appreciation.

Romania's dominance in Warsaw was more than a matter of quantity. Romanian debuts such as Love Building and Little Spartan demonstrated originality where other first-time directors offered a pale imitation of cinema's masters.

Against a background of films filled with cruel individuals and empty violence, the Romanian directors' better-developed characters, playful sense of humour and thought-through conclusions were refreshing.

The Romanian films had their share of death, illness, loneliness and betrayal, but offered closure as they typically found a witty, sometimes absurd way to deal with life's imperfections, compromises and disappointments.

Broad appeal

Romanian comedy Love Building got a standing ovation at its first Warsaw festival screening but also received special praise from the critics' jury.

First-time feature director Iulia Rugina has been surprised at the broad appeal of her low-budget comedy, which had a successful Romanian box office run before making its international premiere in Warsaw.

"Love Building was very well received in Romania by the audience. That was important because it is rare. There is a very big group of population who refuses to go watch Romanian films and makes a statement about this," Rugina explains.

As to critical favour, Rugina says: "I know it is not often that audience-friendly films are critically acclaimed. And the other way round. That is why to have both is unexpected."

Love Building is the story of three relationship therapists who set up a week-long couples' retreat in the countryside. Yet most of the comedy comes from the therapists' own, much bigger, relationship issues.

If there's one problem with Love Building, it's that there are too many characters: it's hard for audiences to keep track of some 14 couples, and even harder for an 85-minute film to give all of them sufficient screen time.

But the film's very existence depends on its crowded cast list. Every year, professional actors Dragos Bucur, Alexandru Papdopol and Dorian Boguta (who play the film's therapists) run a summer acting school, which normally ends with the making of a short film.

Last year, Iulia Rugina suggested that they try to make a full-length film instead. Where filmmakers normally decide on the script first and select their cast second, here the process was reversed.

Faced with a large group of mainly non-professional actors, Rugina had to come up with a story set in countryside with enough roles for all the students.

One of the most common questions from audiences is why there are two lesbian couples in the film, but no gay couples: it's because more women than men took part in the acting school that year, Rugina explains.

The most successful Romanian film in Warsaw was The Japanese Dog, directed by Tudor Cristian Jurgiu. It won the 1-2 Competition for directors making their first or second feature.

The film revolves around an elderly man who lost his wife, home, and most of his belongings in a flood, and is estranged from his only son who moved abroad years ago.

Unexpectedly, his son comes to visit with his Japanese wife and seven-year-old son. Grandfather and grandson immediately bond over photo albums and a toy - the robotic Japanese dog of the film's title.

There is little dramatic tension, and the dog feels like a bit of a gimmick, but the film nonetheless offers a beautiful and sensitive portrait of the Romanian countryside, of cross-cultural and cross-generational bonding, and directs attention towards the increasingly common and devastating problem of flooding.

Bizarre hybrid

While The Japanese Dog was to some degree typical festival fare, Little Spartan was a film that many critics were at a loss to describe. Sure enough, it is a bizarre hybrid of a film in every respect.

Billed as a mockumentary, Little Spartan is the result of a collaboration between first-time feature director Dragos Iuga and Gabriel Dita, an engineer who suffers from a lack of growth hormone receptor in the pituitary gland.

Making use of interviews, mobile phone footage, surveillance cameras, home videos and even fantasy, Iuga shot the film over the course of 17 years, exploring various aspects of the life of Dita, nicknamed Little Spartan.

Endlessly surprising and full of eclectic elements, the film might be dismissed as just another pseudo-documentary, albeit an odd one, if it weren't for the vein of the fantastic snaking through the film.

This is a daring addition and sure enough, the fantasy element in Little Spartan knocks it off balance, yet such is its whimsy and magic, it is hard not to be charmed.

In his uncle's workshop, Dita and his brother as children look on while the carpenter makes whimsical wooden lamps that mysteriously power themselves. While it did not win any awards, Little Spartan was aptly placed in the festival's Free Spirit category for its uninhibited and experimental approach.

The Romanian New Wave in its early days was marked by social realism and a clear-eyed approach to both its Communist past and its neo-liberal future. According to this definition, The Japanese Dog fits most clearly into the New Wave lineage, while Love Building corresponds partially as a satire of the new aspirational middle classes.

But could the more eclectic approach of Little Spartan and the popularity of Love Building's comedy mark a new stage in the evolution of Romanian cinema? Iulia Rugina thinks so.

"The Romanian New Wave is still high up, but I am not able to predict what will happen next...there might be an alternative type of films coming out - a lighter type of cinema, more glossy, more audience-friendly, a little distant from the Romanian realism that international festivals have got used to."

International audiences came to know Romania's cinema through stark realism; the coming years may be marked by a more popular, but no less fresh and innovative Romanian New Wave, embraced both at home and abroad.

UK audiences will get a chance to experience a selection of these films at the 10th Romanian Film Festival in London that starts 28 November. The festival is entitled Turning the Page, indicating how the films on show look forward beyond the New Wave in terms of content, social analysis and storytelling.

"The windows have been thrown open! We're turning the page!" is the festival's tagline.

Sunday, November 3, 2013

FT: Romania’s biggest IPO: a privatisation breakthrough?

Nov 1, 2013
by Andrew MacDowall

It was the biggest initial public offering in Romania’s history, and the latest of several big IPOs in eastern Europe. But will Friday’s part-privatisation of natural-gas utility Romgaz reinvigorate Romania’s stalled liberalisation programme?

The sale of 15 per cent of Romgaz was five times oversubscribed and raised 1.7bn lei ($517m), above the 1.38bn lei minimum, Bloomberg reported on November 1. The government sold 57.8m shares at 30 lei each through the Bucharest Stock Exchange (BVB), as well as global depository notes on the London Stock Exchange. Both will start trading on November 12. Some 60 per cent of shares went to foreign investors.

“The IPO shows the energy sector in Romania is seen by investors as an interesting market, with good potential to develop,” Romanian economic journalist Cristian Pantazi told beyondbrics. “For the BVB, it shows that there is money in the local market, but investors are afraid of risk and willing to go only to safe places. The success is moderate, given the fact that a few months ago some government officials said they were expecting to raise €600m ($800m).”

The sale was part of a package of measures put together to meet conditions set by the IMF, which agreed a much-needed $2.7bn standby loan to Romania in September to buttress the country from external shocks as it recovers from a savage recession in 2009 and a fiscal crunch that followed. Also in September Romania offered 10 per cent of nuclear power company Nuclearelectica in an IPO.

There have been a number of major offerings from both state-owned enterprises (SOEs) and private companies in eastern Europe in recent weeks. Last month, Poland raised 1.42n zloty from the sale of 50 per cent minus one share of its rail cargo operator in the biggest IPO for over a year, while Russian credit card companyTCS raised $1.1bn through an IPO on the LSE, and the Russian government earned $1.3bn for 16 per cent of Alrosa, one of the world’s largest diamond firms, on the Moscow Stock Exchange.

The Romgaz sale has been hailed as a success by the Romanian government. The country’s history of privatisation has not been an entirely happy one, with a number of poorly-planned and botched sell-offs since the fall of Communism. In the past two years, the sales of the country’s largest copper mine, a major chemical plant, its rail freight company, and its national airline have all hit snags at various stages, and there have been questions about successive governments’ commitment to privatisation. The process is regarded with some suspicion by many Romanians, perhaps after a number of dubious deals in the past. Pantazi argues that the Romgaz IPO is a step in the right direction – but plenty remains to be done, particularly where majority shares are due to be sold.

“The IPO is encouraging for the future,” Pantazi says. “Romgaz is gaining strength through this, as its future moves are going to be more transparent, and transparency will be good for Romanian SOEs. The process of privatisation is still too slow for the needs of the Romanian economy. The Romgaz IPO is a sign that the government must have confidence in the market, and must accelerate the process in order to make the economy more transparent. These IPOs are very important, but we have to see the commitment on big companies such as [chemicals company] Oltchim or [rail freight operator] CFR Marfa.”




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Romania Raises 1.7 Billion Lei in Biggest IPO on Record

Romania raised 1.7 billion lei ($518 million) from the sale of a minority stake in natural-gas producer Romgaz SA, in the eastern European country’s biggest initial public offering ever.

The government sold 57.8 million shares in the biggest gas producer at a price of 30 lei per share, raising more than the minimum 1.38 billion lei it had planned to secure, Energy Minister Constantin Nita told reporters in Bucharest today. It sold the shares directly through the Bucharest Stock Exchange and through global depositary receipts in London. The sale was 5 times oversubcribed.

“The interest for Romgaz was higher than we expected, and even the sale managers had expected,” Energy Minister Constantin Nita said at a press conference today in Bucharest.

The government needs to raise cash and ease the state’s influence on the economy as it seeks to meet a pledge to the International Monetary Fund and the European Union to sell the shares by the end of November under its third consecutive accord with the lenders.

Romania is joining Poland in selling state assets, after the Polish state-owned railway Polskie Koleje Panstwowe SA raised 1.42 billion zloty ($461 million) in the sale of its cargo unit, that country’s largest IPO in almost a year.

Romania sold a minority stake in nuclear power generator Nuclearelectrica SA in September as part of the 4 billion-euro agreement with the international lenders.

Goldman Sachs Group Inc., Erste Group Bank AG, Banca Comerciala Romana SA and Raiffeisen Capital & Investment SA managed the sale.

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

To contact the editors responsible for this story: James M. Gomez at jagomez@bloomberg.net; Balazs Penz at bpenz@bloomberg.net

Romanian architect Petrescu, who built giant ‘Palace of the People’ in Bucharest, dies at 64

By Associated Press, Published: October 30

BUCHAREST, Romania — Anca Petrescu, the chief architect of Bucharest’s “Palace of the People,” a massive government structure that has been described as a huge Stalinist wedding cake, died Wednesday. She was 64.

Petrescu, who had been in a coma after a September car accident, died in Floreasca Hospital in the Romanian capital, hospital spokesman Dr. Bogdan Oprita said.

Her landmark Bucharest palace is the world’s second-largest administrative building after the Pentagon. It spans 350,000 square meters (3.77 million square feet) and is perhaps the most visible legacy of Romania’s late dictator, Nicolae Ceausescu.

Appointed the building’s chief architect in 1978, Petrescu worked at the still-unfinished palace until her accident. She told The Associated Press in an interview last year that Buckingham Palace in London and the Palace of Versailles outside Paris were her artistic inspirations for the building, not North Korean architecture as was widely reported.

Petrescu recalled Ceausescu, who was tried and executed Dec. 25, 1989, and never got to use the palace, as being obsessed with detail and constantly inspecting the site. She said that were he alive to see what had become of the palace, which even hosts weddings and balls today, he “would make the sign of the cross” — as in he’d be horrified.

After communism ended, Petrescu was criticized for her role in creating the grandiose building, on which 1 million Romanians worked round the clock. Some 9,000 homes were demolished, churches and synagogues were razed or moved, and two mountains of marble were hacked down for the 84-meter (275-foot)-high palace to be built.

But Romanians have come to appreciate the palace; its tenants include the Parliament, the Constitutional Court and the Southeast European Law Enforcement Center, which fights crime, smuggling and fraud. Ceausescu had intended for it to house the presidency along with other government units.

The late pop star Michael Jackson moonwalked in front of the palace, and former U.S. President George W. Bush, Russian President Vladimir Putin, and German Chancellor Angela Merkel have made speeches there.