Wednesday, April 30, 2014

Romania to boost defence spending this year

(Reuters) - Romania will raise the defence ministry's 2014 budget by 700 million lei ($217.41 million), or 0.2 percent of national output, Prime Minister Victor Ponta said on Monday.

The announcement comes as tensions continue to build in neighbouring Ukraine after Russia's annexation of Crimea.

Romania has agreed a fiscal budget deficit target of 2.2 percent of gross domestic product this year under the terms of a 4 billion euros aid deal led by the International Monetary Fund.

Higher defence spending would raise the ceiling, as would government plans to slash employer taxes to the social insurance budget. An IMF mission is expected in Bucharest later this year.

"We will supplement this year's defence ministry budget ... by roughly 700 million lei, or 0.2 percent of GDP," Ponta told reporters. He added troops will get better technical equipment, with upgrades done mostly in Romanian defence plants.

The European Union state's defence budget is currently at a little over 1 percent of GDP.

Romania's leftist government approved a plan last year to buy second-hand F-16 fighter jets from Portugal to bring its air force up to NATO standards.

Along with neighbouring Bulgaria, Romania joined NATO in 2004 and has been part of Washington's military operations in Iraq and Afghanistan. It is in the process of phasing out its outdated Soviet-made MiG-21s. ($1 = 3.2197 Romanian lei) (Reporting by Luiza Ilie Editing by Jeremy Gaunt.)

Romania's EU Membership: Costs vs. Benefits

Spring 2014 issue, World Policy Journal featured an article "Romania: Land for Sale" by Maurizio Bongioanni that discussed the growing phenomenon of land grabs in Romania.


By Maurizio Bongioanni

Bucharest, Romania—Mauro, 28, and Adrian, 27, are two broth­ers from the southern Italian region of Puglia, who were sent by their father to cultivate 750 acres of corn in southern Romania, not far from the Bulgarian border. Their plot is small by Romanian standards. The two brothers are considered tiny landowners. Country life is hard, they confess, and they live in an area where they often go without electricity for days. “Here the goal is quantity, not quality,” one of them says. “For months we have had a single young worker—young because the older ones have a concept of working that is light years away from farm­ing as we understand it. At the same time, we know many of our people who were cheated, who have had all their possessions stolen. Because here, Romanian workers see us as rich western entrepreneurs from whom they can steal as much as possible instead of seeing us as people who can employ them, and offer them a future. Even the [Roma­nian] state shares the same point of view. Sometimes we must give a gift to someone, paying for attention.”

Yet there are large profits to be made for those willing to seize the moment- a goal Mauro and Adrian are attempting to achieve. In a scene from Far and Away, the 1992 Ron How­ard film, Irish immigrants grab slices of American land, firmly planting their country’s flag on New World soil. Such a race for free and fertile land has moved elsewhere. Today, one key locus is Romania, where land grabbing by foreign investors is on the rise. Among the leaders of the pack are Italian farmers who, due to the high cost of land back home, lack of credit, and a paralyzing bureaucracy, are moving from Italy to Ro­mania where it is easier to start a business, especially a farm.

Italy is one of Europe’s biggest investors in foreign land, second only to Britain and followed by Germany, France, Scandinavian countries, the Netherlands, and Belgium. Generally perceived as a nation of large banks and insurance companies, auto and clothing giants, and mega utilities, there is another Italy—comprised of predomi­nantly smaller businesses. Re: Common, a Rome-based group engaged in resource management, observes, “Other smaller players, such as Italy’s small and medium enterprises, are ready to diversify their pro­duction if there is a chance to get incentives or tax relief, and Italy’s ubiquitous small power plants, seeking greater funding and convenient shortcuts to secure positive en­vironmental impact outcomes.” And then there are the farmers.

Marco Oletti is the Italian Honor­ary Consul stationed in Craiova, a city of 200,000 and capital of the southern Roma­nia state of Dolj. He knows many Italians who have settled in this remote agricultural region—people who would not be able to build the same kind of lives in their home country. But they are quite aware that their adopted nation of Romania is also danger­ously exposed to speculative investments by foreigners with deep pockets, who carry with them the approval of the governments of Romania and the European Union.


The Dolj region, bordering Bulgaria, is only the latest to be colonized by Italians in search of low cost agricultural land. The first was Timisoara in western Romania, a region of rich, black soil. In the early years of the millennium, large numbers of Italians moved to this region—the first to break free from communism. Indeed, Venetians now consider it the “eighth province of Venice,” as scores of Italians speaking with heavy Venetian accents wander the streets. The presence of so many Italians is not surprising. At the peak of the Roman Empire, its legions rolled through and annexed large swaths of what is today Romania, grafting their language and culture onto the region. Now, the Romanian language is closer to Italian than the languages of any of the surrounding Slavic regions of Serbia to the west, Moldova to the east, and Bulgaria to the south. Its residents often call themselves “a Latin island in a sea of Slavs,” and Italians have no problem reading daily newspapers in Bucharest or making themselves understood in most parts of the country.

In the Dolj region alone, 135 farms with Italian investment capital have been regis­tered at the Agency for the Internationaliza­tion of Italian Companies (ICE), accounting for nearly 75,000 acres of arable land—half of all the farmland managed by foreign com­panies in this region. Nationwide, there are 1,174 Italian farms, representing 25 percent of all Romanian agricultural land, or some 50,000 acres. Romania is a large country, with vast stretches of fertile agricultural land. Indeed, Romania has four times as much productive farmland as Italy. Still, for­eign companies here only grow corn, wheat, rape plants, and sunflowers—less expensive crops. Since the price of land is very low, this still allows for substantial profits.

A towering former basketball player who later studied medicine, Oletti took over several rice companies in Vercelli, in the heart of northern Italy’s Piedmont re­gion. But he spends half of each month in Craiova, where he performs the functions required of an honorary Italian consul, while serving as an agricultural manager, leading an agency providing expert advice to Italian farms on Romanian soil. “My job became buying land on behalf of third par­ties increasing their price. In one word: speculation,” he says.

But the activity that occupies most of Oletti’s time is the “unification” of slices of Romanian ground. As it happens, Roma­nia is still divided into millions of strips of property that nostalgic Italians call la­sagne—slices of land no wider than 20 to 25 feet. A product of Lupu’s Law, named for a former agricultural minister, they are a fragmented legacy of the transitional pe­riod between the fall of the Ceausescu-run Communist regime and the establishment of the new post-Communist government. By dividing farmland into many small plots allocated equally to the peasants of the former state-owned cooperatives, the goal was to make it possible for everyone to have a slice of the land they once worked as cooperative farmers, providing them some measure of self-reliance. But the real inten­tion was to keep agriculture as a rural sub­sistence activity.

The “unification” process of these slices of land is a necessary step to create a viable agriculture industry. The bureaucratic pro­cess of assembling the ownership certificates takes a long time. Until 2007, Romania never had a real bureaucracy capable of han­dling such a process. But the land market has not stood still. The number of owners with less than 2.5 acres has dropped by 14 percent in the past five years, while large companies that manage tens of thousands of acres have increased by 35 percent. Many of these larger companies are Italian-owned or controlled. Indeed, some activists for the rights of workers believe that Romania en­tered the European Union in 2007, at least in part, to facilitate land speculation and to gain access to cheap labor. Meanwhile the price of land has continued to surge. A de­cade ago, an acre cost barely $40. Today, the price of that same acre has soared to an aver­age of $1,000—still a fair price for foreign investors, faced with prices in Italy 10 times as high, but completely out of reach for the majority of Romanian farmers whose aver­age monthly salary is barely $135.


Totò, a Sicilian, arrives with another Italian contractor in the Romanian infrastructure and energy sectors. “Here, there is everything to do,” Totò says. Meaning what? “Roads, bridges, highways—in Romania there is nothing,” he replies. “In Italy, this manager cannot get credit from banks. In Romania, all is simpler, and moreover, there is land on which to build at reduced prices and maximum revenues if we consider that taxes here are 16 percent, compared with 44 percent in Italy, and a low cost of labor.” Clearly, both are added incentives for outside investment in land and farming. Totò adds that “my daughter made me think when she told me that Romania was as a tree full of fruits almost ripe, ready to be picked. Now that the tree has already been picked almost clean, but there are many other fields to be picked. The important thing is to know how to find them.”

With the growth of this new agricul­tural market, there are biomass power sta­tions—another area of foreign investment using Romania’s fertile land. Domenico Pi­sano, 40, an agronomist from the southern Italian region of Calabria, lives in Bucharest and manages two farms in the Romanian countryside. He is replacing his cultiva­tion of corn with rape plants for energy. “Subtracting crops in the food sector to pro­duce energy is, I know, a contradiction,” he smiles. “But I am not the master of my com­pany. It is the market. And if the market goes in that direction, if I want to continue to work, I must follow.”

One hundred miles west of Bucharest is a big farm on the outskirts of the village of Scornicesti, the birthplace of the former dic­tator Nicolae Ceausescu. Antonio, a Neapol­itan from Milan, manages more than 12,000 acres of land there. Corn, rape plants, and sunflowers stretch on to the horizon, worked by hundreds of tractors. Much of this farm machinery is modern and requires qualified technicians—another sector of the market covered largely by Italians. In his office, An­tonio confesses that he wants to sell the en­tire farm to have time to dedicate to his real passion—dogs. When he arrived in Roma­nia, he wanted to create a major dog breed­ing operation. For a time, he succeeded, but was unable to give it the undivided atten­tion it required. He had simply bought too much land. “It cost too little to not take… advantage [of],” Antonio confesses sheep­ishly. Now, Antonio, 62-years-old, is in the process of selling off his property for $11 million, land which in Italy would be worth at least $55 million.


In 2007, the year Romania joined the European Union; Bucharest decreed that national farmland could only be bought through local companies. But the law contained a number of loopholes. If a foreign company wants to bring investment capital to Romania and is prepared to partner with a local company, if the domestic company is then bought out, the foreign company becomes the sole owner. However, even this restriction on foreign acquisition of farmland is expected to be removed in 2014. At that point, the real estate market must be brought into compliance with EU Common Agricultural Policy.

Currently, foreigners can purchase agri­cultural land only on behalf of a company incorporated in Romania, though they may maintain 100 percent foreign capital. Begin­ning in 2014, any international corporation would be able to buy Romanian farmland. They would neither need to be incorporat­ed in Romania, nor maintain funds within the country. This system has already led to sharp increases in agricultural prices, mak­ing both Romanian farms and their output more valuable.

As it happens, Romania has the high­est percentage of land controlled by foreign companies in the European Union. Hence, there is eager anticipation to see what hap­pens as government restrictions are lifted. Indeed, a host of multinational companies have been preparing for this moment. Ra­bobank, the Dutch bank, and Lukoil, a big Russian oil com­pany, are two giants who are working the land to produce grain, but not for Roma­nian, Dutch, or even Russian consump­tion. They are look­ing to meet growing demand from China. The State Secretary of the Romanian Ministry of Agriculture, Daniel Botanoiu, says that enormous busi­ness opportunities are becoming apparent with the opening of this new market since China needs cheap food, and Romania is the place to produce it. Such commercial ex­changes do not flow in just one direction. The Romanian government has begun to encourage immigration from China to stem the loss of Romanian laborers who have sought more opportunities at higher salaries in other parts of the EU, especially Italy and Spain, which EU accession has made pos­sible. Today, there are already some 10,000 Chinese workers in Romania, living in the Afumati district on the outskirts of Bucha­rest—which has become Eastern Europe’s largest Chinatown.

While Romania may become the new breadbasket of Europe, or at least the East­ern European market, the exodus of farmers to the cities continues to grow. In fact, 20 years ago, 80 percent of the national popula­tion was strictly rural. Today, that figure has plummeted to 45 percent. Meanwhile, some 8.5 percent (more than 1.8 million acres) of Romanian agricultural land is already in the hands of transnational owners or operators. Italy is the largest foreign investor in Ro­manian farmland, with 24 percent of these total foreign-owned territories, account­ing for 1,174 individual farms, followed by Germany with 15 percent and Middle East­ern countries with 10 percent, according to former Agriculture Minister Valeriu Tabara.

In her study, Scramble for Land in Ro­mania: An Iron Fist in a Velvet Glove,Judith Bouniol, of the Ecole Supérieure Européenne de l’Ingéniérie de l’Espace Rural in France, observes that this process will eventually lead to the control of Romania’s agricultural resources by a few large investors, mostly foreigners. Equally, it will give them the power to decide on the use of these lands, causing a progressive loss of Romanian food sovereignty. Nevertheless, Bouniol admits that it is difficult to speak of a real land grab because people are not forced to leave their land, and the rural population, mostly elderly and vulnerable, is generally excited when there are massive investments of this variety. “However,” writes Bouniol, “the ap­parent legality of this phenomenon is driven by a velvet glove that masks the aggression of an iron fist.”


The entire process has been facilitated by the Romanian government and financed by the European Union. From 2000 to 2006, Romania received more than $200 million for agricultural modernization from the Special Accession Program for Agriculture and Rural Development fund, designed to help new members prepare their rural countries for joining the EU. But this money flowed principally into large-scale projects, since the European framework mainly benefits massive agri-businesses. Of the 500 companies receiving EU subsidies, half the funds went to one percent of those enterprises; the other half went to the remaining 99 percent. Moreover, in 2012, the European subsidy amounted to $65 per acre, covering the entire cost of leasing the land for a year. This means that the companies that have benefited from these subsidies were allowed access to market-oriented agri-business using public funds, even though existing law might have prevented them from purchasing the property outright, at least until 2014.

Romania has also received $4 billion from the European Agricultural Fund for Rural Development—contributions that are paid only if the applicant can match the request dollar for dollar. Small farm­ers, who lack collateral or guarantees, of­ten are unable to access conventional bank loans and are therefore deprived of this type of development aid. Or as Re: Common observes, “land grabbing has become syn­onymous with agricultural investment, ex­propriations have been called acquisitions, and privatization has been named development.” Moreover, Bouniol also points out, “Banks are likewise supporting the agro-industrial sector and turning their backs on peasant farms.” As Bouniol explains, the influential Romanian Center for Economic Policies concluded that the low productiv­ity of Romanian agriculture was the result of the dominance of small-scale subsistence farms. The center’s director, Valentin Lazea, also the chief economist of the Romanian National Bank, further pledged to make every effort to get “small subsistence farming out of Romanian agriculture,” if necessary by levying “punitive’ taxes that would force small farmers to merge or sell their plots.”

The central question remains whether such a policy is in the best interest of any but large-scale foreign investors, or land grabbers. Indeed, as far back as 2003, the Assicurazioni Generali Spa, Italy’s largest insurer and one of the world’s leading in­surance groups, organized the purchase of 13,600 acres of land in northern Timiso­ara province—land that has risen in value from $440 an acre in 2002 to $660 an acre barely a year later, but still a fraction of the $7,200 to $8,300 an acre in Italy, France, or Germany.

In Romania, however, land grabbing has effectively been hidden behind the broader and widely anticipated process of joining the EU. Not only is greater par­ticipation by and consultation with local communities essential, but it is clear that one of the key weapons in the arsenal of those snapping up these lands is their con­nivance with a repressive and undemocrat­ic host government. Romania must un­derstand that only democratic institutions have the power to remove this risk by leg­islating accordingly. To curb speculation by foreign investors in fragile nations like Romania, it is essential to reverse the EU subsidies put in place to sustain rural ag­riculture and the peasants who farm these lands—subsidies that are now increasingly being perverted by many who they were never intended to help.

To do this, the Romanian government could follow the advice of Eco Ruralis, a group of small Romanian farmers who prac­tice organic and traditional farming based on environmentally conscious principles. In 2013, it launched a campaign against farm­land profiteering. Its program, potentially a blueprint for a national policy, seeks an extension of the deadline for opening ag­ricultural and forest markets to the rest of the EU to 2024; the end of current local, national and regional policies supporting land consolidation; and the establishment of policies promoting local agriculture and agro-ecological practices. But “prolonging the period during which Romania can re­strict farmland acquisition by foreigners af­ter 2014 can only have been achieved if the accession treaty is changed, an almost im­possible endeavor,” Eco Ruralis concedes. “Instead, the authori­ties said they would find solutions to limit transactions made by foreigners, such as al­lowing land purchas­es only up to a speci­fied maximum or allowing acquisition only by individuals who can prove they have a background in agriculture.”

Apparently em­bracing such a goal, the nation’s agriculture minister, Daniel Constantin, says Romania must reach a balance between limiting farmland acquisitions by foreigners and en­couraging foreign investments in local ag­riculture. A solution could lie in persuad­ing local owners, especially those who own small tracts, to lease their land to foreigners rather than sell it. The measure is included in the proposed reform of the Common Ag­ricultural Policy (2014-2020) that is still under review in Brussels. Yet, despite these initiatives, much damage has already been done. Foreign landowners are deeply en­trenched in Romania. The goal must now be to put curbs on future expansion.


Maurizio Bongioanni is an Italian journalist who contributes to Altreconomia and other publications. He writes about environmental and social issues and has produced three documentaries about excessive land use in Italy

Anti-Roma views rampant across all Romanian political parties


BUCHAREST - Snow, wind and sub-zero temperatures descended on Romania in February, gridlocking the roads, isolating villages, killing pensioners and causing panic across the country.

Social Democratic Party (PSD) MP for Bucharest Dan Tudorache, a member of the Parliament's foreign relations commission, chose this moment to post a public message on Facebook.

"It is minus 14 in Bucharest! Very cold!!!" he wrote. "So cold that I actually saw a gypsy with his hands in his pockets."

For those unfamiliar with racist humour against Romania's Roma minority, Tudorache was referring to the myth that 'gypsies' always have their hands exposed in the street so they can steal wallets and phones from passers-by.

However, he implied, even the 'gypsies' were unable to stand the cold snap, so had to sacrifice their urge to pickpocket.

Ciprian Necula, a 38-year-old Roma activist, took a stand against the MP, making public his prejudice in the newspaper Adevarul.

As a result of public outrage, Tudorache erased the Facebook post.

But the MP was greeted with waves of support from readers. Many attacked Necula in the comments section of the newspaper.

"Smile at a good joke," said 'Radu', while 'Valentin' told Necula: "I understand you are upset, but let's look at some statistics and see the percentage of gypsies in prison for stealing, compared to Romanians."

Damian Draghici, a candidate for the European Parliament in the Union of Social Democrats (USD) – and a Roma himself – also does not believe Tudorache's comments were racist.

He told EUobserver that these public representatives do not understand discrimination because they have never had such opinions put under scrutiny.

"When you are five years old and you put your hand on the oven, you know it burns," he says, making a comparison, "but if you have never put your hand on the oven until you're 30 years old – you will get burned at 30."

Draghici argues that his colleague in the ruling coalition did not have "bad intentions".

What is necessary, he argues, is to educate such people about what discrimination means.
Cultural acceptance

This is at the heart of the political debate about Roma today – whether prejudice voiced at the highest level is due to naiveté or a calculated attempt by politicians to woo anti-Roma sentiment rife in the population.

Among minorities, Roma are the biggest target of political jibes and suffer the most prejudice in the country. The National Council for Combating Discrimination (CNCD) says that when Romanians are asked to describe Roma in their own words, 20 percent choose two words – 'thieves' and 'criminals'.

Prejudice is recycled from generation to generation and ingrained in Romanian children at an early age. In Romanian playgrounds it is common to hear elders tell their children they should behave or "the gypsies will come and kidnap you" and, if they have paint or mud on their face or hands, that the infant is "dirty like a gypsy".

De facto segregation of the Roma is common in schooling, housing and work.

This sentiment cascades from the top. Anti-Roma rhetoric emerges from politicians across all three major political parties – the left, the right and the Liberals.

Last year a Liberal leader from Alba County in central Romania promoted the idea of sterilising Roma women.

Rares Buglea, the leader of National Liberal Party (PNL) Youth Organization in Alba County and a local council member, posted on Facebook a comment on the difficulties of changing Roma mentality.

He said it would be better for a Roma woman to be sterilised after her first child if social workers found that the mother does not have "the intention to raise the child in humane conditions".

Accused of embracing Nazi-style eugenics, Buglea resigned from the Youth Organisation, but not from the Liberal party or from his position as a local council member. The CNCD slapped him with a paltry €2,000 fine.

Meanwhile left-of-centre Prime Minister Victor Ponta has made an outright distinction between Romanians and Roma. In a BBC TV interview in 2013, he stated that the issue of Romanians who travel to the UK and Germany to take advantage of social benefits was a "specific situation of the Roma community".

Right-of-centre President Traian Basescu, who has led Romania since 2004, has received two convictions from the CNCD for racist statements.

In 2007, he was accosted in a cash-and-carry store by a female TV reporter who was attempting to interview him. He was then caught on dictaphone calling her a "stinky gypsy".

In 2010, on a trip to the Slovenian capital Ljubljana, he said that nomadic gypsies traditionally "live only on what they steal".

But when politicians such as Basescu make such statements, all they face is a fine. Their popularity is not affected, nor do they come under party or public pressure to quit politics.

Outrage tends to come only from non-governmental organisations and foreign politicians. Nevertheless, this is progress since anti-Roma hate speech reached a peak in the 1990s.

"The fact that we have a civil society, which represents the Roma and puts pressure on politicians, means a change," says Cristian Ghinea, director at Bucharest-based think tank the Romanian Centre for European Policies (CRPE).

"Politicians who make such discriminatory statements are admonished in public and they apologise," he adds.

Half of the population admits to prejudice towards Roma. Fifty-eight percent of Romanians would not accept a Roma person to be a member of their family while 48 percent would oppose having them as a work colleague, according to the CNCD.

"Racism is caused by ignorance as 70 percent of the population is rural in mentality and has little or no access to information or education," says activist Necula.

"Civic education is not the responsibility of educational institutions, but of families, which often choose to use 'gypsies' as a monster to make their children behave 'correctly'. Romanians are growing up with the idea of a gypsy being dangerous and inferior," he says.

During election time, the public unashamedly condone such racist opinions. Three quarters of Romanians would not vote for an MEP who is a Roma, according to a CNCD survey in December 2013.

But the situation may be more complex.
Not so black and white

Damian Draghici, as Romania's only openly Roma candidate running for a European Parliament seat in next month's EU vote, is dismissive of such studies.

"Life is not only studies," he says. "I don't think voters will not vote for a candidate because they are Roma."

He argues that the public may be prejudiced, but who they vote for depends on the individual standing and what that person has achieved in his life – and proudly cites himself as an example.

Draghici left Romania in 1989, crossing the border illegally into Yugoslavia, settling in Greece and then moving to the US, where he studied music and launched an international touring and recording career.

"This guy has done it," he says of himself. "He left Romania, went to the States, was successful, helped his community and he did it [and the people will say] 'I believe in him and he is going to do it again'."

Nevertheless many politicians and public figures are less vocal about their Roma background than Draghici.

"They have a problem with themselves," says the would-be MEP. "They haven't solved personal issues. I think it is better to have all the cards on the table and say: 'I am Roma – you can like me or not'."

As an elected senator, he says he has never faced prejudice in the corridors of power.

Unlike many countries in the region, Romania does not have a powerful far-right party campaigning for the European elections against the rights of ethnic or sexual minorities.

The only mainstream group which historically made anti-minority statements is the Greater Romania Party (PRM), which won three seats (out of 34 seats in total) in the 2009 European elections. But polls predict the PRM is set to fail in the May vote.

The Roma is also a growing minority. They represent a large block of voters, potentially in the millions, including more and more young people.

Many Roma are poor – and those at the lowest income level in Romania are often targets for vote-buying. At election time, they are wooed by those of all political shades and parties often pay them – from €8 upwards – to vote for a specific candidate.

The PSD’s move to employ Draghici is viewed by some analysts as a potentially smart move, as it could tap into a swelling constituency.

But the fear is that parties will adopt a Roma as a poster-boy to show their multicultural credentials, without seriously dealing with the Roma problems of poverty, poor education and lack of social mobility.

Draghici claims to have been approached by many political parties in the past.

"Before as a musician, it would have been an easy way for a politician to have me next to him, he says, "just because I was very popular."

He says he settled on the current coalition and on Victor Ponta's leadership because he felt they were honest about implementing targeted pro-Roma programmes.

But Roma activist Necula argues that Draghici is a lone voice and that the coalition he represents has achieved little so far in this area.

Part of the problem, says Necula, is that Draghici is trapped in the status of being a Roma showpiece for parties with an archaic attitude towards certain ethnicities.

"He is a VIP token candidate for a coalition with a lot of anti-Roma discourse and a government who did mostly nothing for solving Roma problems," he says.

Many analysts argue that it is within the interests of politicians to keep the Roma as a poor, divided and uneducated community, who are easy to manipulate at local and national elections.

"The distinction between social class and ethnicity is not clear for Romanian politicians," adds Necula. "The Roma are seen, by a huge number of Romanian politicians, as lumpen-proletariat, the bottom of the social hierarchy."

Moldova to get gas supplies from Romania

April 29, 2014

CHISINAU, Moldova (AP) — Moldova's prime minister says neighboring Romania will export gas to his country this year, reducing the former Soviet republic's dependence on Russia for gas.

Iurie Leanca said: "We will have better tariffs. This means we will see diversity and energetic security." He attended an event Tuesday on the Romanian border with Romanian Prime Minister Victor Ponta.

Initially, the gas will be pumped to an area in southern Moldova by the end of August. There are plans to build a European Union-financed pipeline within three years to the Moldovan capital, where most consumers are located. Russia currently supplies all Moldova's gas.

Moldova is pursuing an agreement with the EU and would like to become a member in 2019. Moldovan citizens began traveling to most EU countries without a visa on Monday.

Friday, April 25, 2014

Romania not to exploit shale gas in next five years: PM


Romania will not exploit shale gas at least in the next five years, yet efforts must be made to secure its energy independence by using the domestic production, Prime Minister Victor Ponta Thursday told the state radio station.

"For the time being and in the next five years, not a single cubic metre of shale gas will be exploited in Romania," said the prime minister to Radio Romania Actualitati, explaining that "in the next five years, Romania has to set in place the best performing and most up-to-date environmental protection legislation, so that we may have all the guarantees in place if shale gas will really be exploited in five years' time."

According to him, shale gas exploitation has to be put in the context of Romania securing its natural gas demand from its own resources.

"If we do not have gas from domestic production, we will buy it from Gazprom, because there is no other gas producer in the region selling gas," Ponta said, stressing that "Romania securing energy independence for itself and Moldova is such important an objective that by all means, yet in compliance with the highest environmental standards, but by all means to have such resources from the Black Sea or elsewhere in Romania, we have to use them."

"We should not ignore them so as to come to depend on Russia for natural gas," underlined the head of government.

Romania is thought to have 1.44 trillion cubic meters of unproved technically recoverable shale gas resources, enough to fuel its energy needs for about 100 years, according to the US Energy Information Administration.

The Bucharest authorities lifted its moratorium on shale gas exploration one year ago, and the country has high hopes of becoming one of the biggest gas producers in the EU.

Yet, locals from villages with exploration potential have been protesting against the exploration ever since. The protesters claimed there is a high risk of polluting air and underground waters, with a devastating impact on the flora and fauna across large areas.

US oil and gas company Chevron which won exploration approval, has attempted to drill exploratory wells in the town of Pungesti twice last year - once in October and once in December - but has had to suspend its activities each time due to protests.

Monday, April 21, 2014

Romania aims to exempt heavy industry from green energy costs

BUCHAREST, April 17 (Reuters) - Romania plans to exempt large industrial energy users from paying up to 85 percent of their renewable energy costs for 10 years, the economy ministry said on Thursday, hoping to avoid the threat of job cuts in an election year.

The draft decree, now up for public debate, would be the latest in a wider set of measures the leftist government has enforced this year to help industrial consumers cope with high power and gas bills.

Industry's energy bills have been driven higher largely by the ongoing deregulation of electricity and gas markets and by a generous support scheme for renewable energy producers.

The scheme gives developers green certificates for each megawatt generated and forces power suppliers and large industrial users to buy them based on a gradually increasing annual quota set by the country's energy regulator.

Green energy investors gain once by selling certificates and again when they sell their electricity. The government has already cut back the scheme.

"It is important to create the conditions necessary to maintain local industry output," Economy Minister Constantin Nita said in a statement.

The government decree would grant the exemptions, ranging between 40 and 85 percent of renewable costs, but impose conditions on energy-intensive firms such as not cutting jobs and promoting energy efficient measures.

The green energy support scheme, once deemed too generous by the European Commission, has brought foreign investors to Romania, particularly to wind energy, including Czech energy company CEZ and Italy's Enel.

But large industrial consumers have repeatedly warned high energy bills could lead to production cuts and layoffs.

The economy ministry said energy-intensive firms accounted for about 20 percent of the country's gross energy consumption and generated around 760,000 jobs in 2012. (Reporting by Luiza Ilie, editing by David Evans)

Romania: claims over abuse of mentally ill people puts spotlight on EC’s funding millions

By Chris Harris

A probe has been launched amid allegations that abuse of vulnerable people in Romanian institutions is at ‘crisis levels’.

Mentally ill people are being force fed, deprived of light and subjected to physical and mental violence, according to a disability charity.

The Mental Disability Advocacy Center (MDAC) has slammed the European Commission for allegedly providing millions of euros of funding to such institutions.

The European Commission (EC) said it had begun an investigation into the allegations, but said it had not been approached about any human rights breaches.

Euronews contacted the Romanian government for comment, but it has not responded. A minister told Al Jazeera, who detailed the alleged abuses in its People and Power series, he was outraged and that inspectors would be sent to investigate.

Al Jazeera’s report comes after the Centre for Legal Resources published a report on its monitoring visits to Romanian institutions. It said it had observed situations which amount to ‘torture’ and ‘inhuman and degrading treatments’.

MDAC says EC funding of at least 24 million euros was propping up 50 residential institutions in Romania. It said thousands of people with disabilities were being ‘warehoused’ in such institutions, segregated from society and subjected to inhumane conditions.

Oliver Lewis, executive director of MDAC, said: “Dumping people with disabilities in institutions is a gross human rights violation.

“Conditions inside these institutions are often deplorable. Force feeding, light deprivation, physical and mental violence and deaths have all been uncovered in numerous institutions across Romania. Many have been funded by the European Commission.”

MDAC has also called on the EC to close all institutions that segregate disabled people from society.

Shirin Wheeler, an EC spokeswoman for regional policy, said it would shift its funding focus towards initiatives which encourage independent living.

She added: “It’s important to stress also that in the next funding period, 2014-2020, de-institutionalisation will be the main focus and even a condition for funding . No big, traditional institutions will receive money in the future .

“Regarding individual projects we have been approached by no NGO so far alleging specific projects supported by EU funds are involved in breaches of human rights.

“But following this media report we have reacted immediately by asking various departments of the Commission to investigate the project in question.” EU elections in Romania: a test before a bigger battle

For political forces in Romania, the European elections are first and foremost a test before the presidential election, to be held later this year. EurActiv Romania reports.

Romania is preparing for its third electoral campaign for the European parliament. On 25 April, a full month before Election Day, all the parties and all the independent candidates who have met the necessary legal requirements will begin competing for the 32 seats that Romania will have in the new legislature of the European Union.

Although the European agenda is filled with pressing problems spanning economic issues, debates on freedom of movement, and Euroscepticism, to issues related to Russia, Ukraine and, more recently, Moldova and Transnistria, the Romanian electoral campaign will more likely be focused on internal politics.

A complicated relationship

Romanians will vote to elect a new President in November 2014. The country’s institutional framework splits executive power between a government confirmed by the parliament, and a president elected through the popular vote. As a consequence, both institutions play an immense role in shaping Romanian politics, creating complex tensions between major players. This is why the results of this year’s presidential elections will be of particular importance.

Therefore, political parties view the EU elections as an early opportunity to strengthen their position, and to gain public support for the bigger battle. The ruling center-left coalition will search for ways to promote its political agenda, and counteract all opposition criticism, while the right-wing parties will look for ways to get public attention, and improve the chances of their candidates in the presidential election.

Both the centre-right president, Traian Băsescu, and the Socialist prime minister, Victor Ponta, have publicly addressed the security risks surrounding Ukraine, and more recently in Transnistria, the breakaway region in another Romania’s neighbor, Moldova, where Romanian is widely spoken. But, no matter how big these challenges may appear, the public agenda is primarily saturated with accusations of corruption.

The Romanian political landscape

The 2012 parliamentary elections were won by a coalition named Social Liberal Union (USL) an alliance between Ponta’s Social democratic Party (PSD), the National Liberal party (PNL) of Crin Antonescu, and two smaller forces, the National Union for Progress of Romania (UNPR) and the Conservative Party (PC).

Last February, the coalition was dissolved due to tensions between PSD and PNL, but Ponta retained his parliamentary majority through an alliance with PC and UNPR. Their former partner, the PNL, shifted towards the opposition, while, at the same time, a newly formed right-wing political party, Popular Movement, managed to attract several former members of the Democratic Liberal Party (PDL), including the support of Băsescu.

Parties and candidates line up for MEP seats

The list of the largest political force today, PSD, is led by current MEPs Corina Creţu and Cătălin Ivan. Daciana Sârbu, also a current MEP and wife of Prime Minister Ponta, is on the eligible 7th rank. The PDL has kept its prominent MEPs for the eligible positions - Theodor Stolojan, Monica Macovei, formerly Minister of Justice, Marian-Jean Marinescu, vice-chairman of the EPP.

Similarly, in the case of the liberal party (PNL) and of UDMR, current MEPs top the list: Norica Nicolai (PNL), Renate Weber (PNL), Adina Ioana Valean (PNL), Iuliu Winkler, and Csaba Sobor.

Surprisingly, Elena Băsescu, the daughter of president, a PDL MEP who switched to PMP, will not run for a new term. From this party, the first three candidates will be MEP Cristian Preda, Siegfried Muresan, European People's Party Political Advisor in charge of Economics and Social Policy, and Teodor Baconschi, formerly Minister of Foreign Affairs.

The electoral race will also feature lesser-known parties, that have yet to make themselves noticed in the Romanian political landscape, such as the Socialist Alternative Party, the Social Justice Party, and the National Alliance of Farmers. The Green Party, and the Ecologist Party of Romania, will also run for seats in the European Parliament.

The final political party contending in this year’s elections will be the Greater Romania Party (PRM), a nationalist party that won 2 seats in the European Parliament, in 2009.

Additionally, 8 independent candidates have enlisted in the electoral race. [More details in this document]

The finalization of the list of candidates has been a complicated process, as the Central Electoral Bureau has rejected several political parties and independent candidates. Most of them have contested the decisions of the Bureau at the Tribunal of Bucharest. Ultimately, Bucharest’s Court of Appeal overturned the decisions, and the parties and independent candidates were allowed to run in the elections.

The most notorious case was that of former PNL senator Mircea Diaconu. The National Agency of Integrity prohibited him from participating in the election. In the end, though, the court recognized his right to run for a seat in the European Parliament, and the Electoral Bureau was forced to overturn its initial ruling, and confirm his candidacy.

Thursday, April 17, 2014

Romanian Orthodox MEP candidate campaigns on anti-gay ticket

Iulian Capsali, a Romanian Orthodox priest, has gathered the necessary signatures to be registered as independent candidate for the European elections, the Romanian press reports. He presents himself as “the candidate of the Romanian family”, campaigning against abortion and against “homosexual culture”.

Capsali admits that the Orthodox Church has helped gathering 120, 000 signatures for his registration as an independent candidate. Romania is one of the seven EU countries where independent candidates are allowed to compete in European elections. These include also Bulgaria, Cyprus, Estonia, Ireland, Malta and the United Kingdom.

In Romania, independent candidates for the European elections must provide at least 100, 000 signatures. Since 1979, there have been twelve European Parliament elections in which independent candidates have obtained over 2% of the vote. So far independent candidates have obtained an EP seat on 12 occasions. In Romania, the daughter of President Traian Băsescu was elected as an independent MEP in the last 2009 European elections, in what was seen by observers as a transfer of votes from her father’s party PDL to her list [read more].

Capsali, who lives in a three-bedroom apartment with his wife and his nine children, say he decided to be a candidate when a Protestant priest of Romanian origin from the USA, Peter Costea, announced his intention to run for MEP.

“When I saw that he is a candidate, I said to myself that an Orthodox country should have an Orthodox representative”, Capsali says, as quoted by the daily România liberă. Costea, too, is running on an independent ticket, and has claimed to be the richest Romanian candidate, with a personal fortune of €1.6 million which he earned as a lawyer in the USA.

Capsali says he has normal relations with Catholics, but not with Greek Catholics, which he says are “aggressive” against the Orthodox. He also says that he is not bothered by the fact that the Romanian Orthodox Church prohibits its priests from party policies, or electoral campaigning, adding that he relies on the Church to bring him votes.

Asked about his motivation, Capsali says that he wants to be an opponent in the European Parliament of those who contest the family, and named the socialists, the neo-Marxists and the Greens as detractors of the traditional family values. “Even Mr. Barroso has been a Maoist in his youth”, he said, referring to a well-known detail of the biography of the current Commission President.

The “homosexual ideology” leads to the destruction of the family at global level, Capsali says.

“They want to be given some rights at the expense of our rights, of the Christian families’ rights. The famous Lunacek report [Ulrike Lunacek is an Austrian Green MEP, author of the LGBT Roadmap report] says that a child at birth doesn’t have a clear identity. That it is something fluid. And that family, culture, the environment give the child its sexuality, which is a fallacy. They says boys should be wearing skirts”, Capsali says.

The Romanian Orthodox Church is by far the biggest religion in the 21 million person country, but it has so far stayed out of politics. Anti-gay feelings are also strongly rooted in Romanian society. Political pundits say that the attempt to send an Orthodox Church MEP to Strasbourg is in fact a test for the possibility to set up an Orthodox political party for the national elections in 2016.

In the European Parliament, there have been attempts to create some sort of “Orthodox unity” involving MEPs from Greece, Cyprus, Bulgaria and Romania, but not much has been achieved.

Romanian poet, dissident Nina Cassian dies

BUCHAREST, Romania - (AP) -- Romanian poet and translator Nina Cassian, who obtained political asylum in the United States after the Communist-era secret police found her critical poems scribbled in a friend's diary, has died in New York City. She was 89.

Her husband, Maurice Edwards, told The Associated Press she died at home Monday from a heart attack.

The Securitate found her poems in 1985 in the diary of Gheorghe Ursu, who was questioned and later died after being beaten by a fellow prisoner. Cassian, then visiting the United States, was granted asylum.

In 2003, the Securitate officers who ordered Ursu's beating were sentenced to 11 years in prison.

Romanian authorities confiscated Cassian's apartment in Bucharest and her assets after she was granted asylum and her books were removed from bookshops.

She married Edwards, an author who was then the Brooklyn Philharmonic orchestra's artistic director, in New York when they were both in their 70s, he said.

Born into a Jewish family in the Danube port of Galati in 1924, Cassian joined the Communist Youth Wing when it was outlawed by the pro-Nazi government. She said she was attracted by the ideas of equality and lack of racial prejudice.

She debuted with "Scale 1:1" in 1947 which was badly received by the critics because it ran against the Socialist grain of the time. She then wrote a series of books that were flattering to the regime, as did many Romanian writers, arguing it was the only way they could survive artistically.

Romanian President Traian Basescu sent his condolences to her family, hailing her as a poet, writer, translator and songwriter appreciated in Romania and the US.

"Nina Cassian, who lived, loved, wrote, smoked, drank, and played more than any of us has gone - simply, swiftly, at home, the way she had hoped to go," said documentary maker Mona Nicoara, a friend.

"She had always been fragile, one way or another - yet it was hard to think of her as anything short of immortal."

Cassian also wrote children's books and translated Shakespeare, Moliere and Bertolt Brecht, and her work was published in The New Yorker, The Atlantic Monthly and other publications.

She wrote 50 books, including a volume of poems in English in 1998 called "Take my word for it," and "Continuum" in 2008. Her last book was the 2013 "C'è modo e modo di sparire" -- a compilation of her poetry between 1945 and 2007 translated into Italian.

She is survived by her husband. A memorial service will be held Tuesday at the Riverside Memorial Chapel in New York before the ashes are returned to Romania.

Tuesday, April 15, 2014

Romanian villagers take on Chevron over plans to drill for shale gas

Monday, April 14, 2014
By Isabelle Wesselingh, AFP

PUNGESTI, Romania--U.S. energy major Chevron, shielded by barbed wire, under police protection and under fire from egg throwers, is in trouble in Romania with villagers angry at its drive to drill for shale gas.

Opposition is fierce in the tiny remote village of Pungesti near the border with Moldova which has become a symbol of hostility to the environmentally controversial techniques of extracting shale gas.

“In other countries, I have not experienced this type of protest,” said grim-faced drill site-manager for Chevron, Greg Murphy.

His words were almost drowned out by cries of “stop Chevron,” “thieves,” and “please leave” from dozens of demonstrators at the wire barriers as he showed journalists the site in the northeast of the country.

Various new techniques for extracting oil and gas, notably “fracking” involving the injection of water and chemicals deep into rock to release reserves, has lead to booming production in North America.

The flows of this cheap energy are causing upheaval on world markets in what the International Energy Agency describes as an energy revolution.

Demonstrators Disrupt Project

Chevron has broadened its attention to potential reserves in eastern Europe, especially in Poland and Romania.

But the company's attempts to establish its first exploration well in Romania were suspended twice at the end of 2013 owing to demonstrations by villagers.

Now the site is a “special security zone,” and people in the area have to show identity papers.

Chevron has gone on a charm offensive with an “open day” bussing the media pack directly into the site in coaches to avoid contact with the local people.

But villagers outmaneuvered the minders, made their way across fields and turned up uninvited to vent their anger as the Chevron executives showed journalists around.

One of the coaches came under fire from eggs. “We thought Chevron executives were inside,” a demonstrator told AFP later.

Chevron's country manager in Romania, Tom Holst, held that the objectors did not represent feeling in Pungesti, which includes several hamlets nestling in hills.

“I would say that people of Pungesti are very anxious for this project. There are benefits to be had and those benefits are jobs. There are approximately 60 locals who are working here on the project. About 30 from Pungesti,” he said.

“Given the recent events in the Ukraine, countries are very, very concerned that they have energy security and that they are not dependent on imports,” he said referring to Russian intervention in Crimea and a big increase in the price of Russian gas for Ukraine.

Romania, unlike many countries in eastern and western Europe, is not heavily dependent on Russian gas since it produces gas itself, and last year imported from Russia only about 10 percent of its supplies, according to financial newspaper Ziarul Financiar.

But the main concern which drives opposition to the drilling is that fracking technology could seriously damage the environment below and above ground.

On this, too, Holst was reassuring.

“This is an exploration well,” he said. “Hydraulic fracturing will not be used.”

But many local people object that if the drilling finds gas, it will be only a matter of time until fracking techniques are used.

Their homes bear banners saying “I don't want fracking” or “Stop Chevron.”

Cows, Goats and Water

Mariana Morosanu, a 33-year-old local farmer who has cows, goats and chickens, referring to a common concern that underground water reserves could be contaminated, asks: “If it's not dangerous why did France ban fracking?”

She said: “My child passes through the garden and asks me: will I still be able to pick fruits, will the grass still grow? He looks at the hills and he asks me if they will remain this beautiful if Chevron starts drilling. I don't know what to answer ... People protest but Chevron goes on with its plans.”

Catalin Scantei, a carpenter had the same concerns, and pointed to cracks in his house which he alleged had been caused by heavy traffic of lorries carrying drilling gear.

“Before people were calm, they lived their lives,” he said. “Here in the village we work the fields and grow animals. But now if they poison our water and everything, what will we do?”

But the objecting villagers target the root of their wrath at Romanian officials, accusing them of “betrayal.”

The Social Democrat Party of Prime Minister Victor Ponta, when in opposition, opposed exploration for shale gas but is now fervently in favor.

“Unfortunately, our politicians do not care about the population,” Mariana asserted.

For Chevron, Holst was confident: “We expect that within the next two to three weeks, the drilling operation will commence here in Pungesti,” he said.

Romania's forestation level well bellow EU average

April 14, 2014
Source: IHB/AGP

Romania has a low forestation level, of only 29 percent, compared with the 40 percent average of the European Union members, shows a study presented on Thursday by Academician Victor Giurgiu, in the international symposium 'Woodland strategies in European countries,' organized by Romsilva, Consilva and the European Council of Foresters, the Romanian media agency 'Agerpress' reports.

According to the study, the forestation level of Romania's territory is also very low compared with other European countries with similar natural conditions, such as Slovenia, with 62 percent forest areas, Austria, with 47 percent, Slovakia, with 41 percent. Academician Giurgiu explains this situation through the low level of forest administration and with the excessive dissolution of the stock of wood.

'We are confronted with an excessive dissolution of the forest property. At present, there are about 900 thousand owners, following the unreasonable reconstruction of the ownership right, and this process is still going on, Romania having become one of the EU countries with the most small forest estates per thousand inhabitants, without having managed to merge these owners' associations. There are areas of approximately 500,000 hectares of woods not benefitting from forestry administration or services, to which other fraudulent forest retrocessions are added, mainly in Transylvania, Valea Trotusului, Banat,' Academician Giurgiu showed.

He underscored that 'there is a very reduced concern for the afforestation of the spoiled lands, three million hectares at present, for the creation of the national system of windbreaks, the harnessing of the torrential hydrographic basins and the promotion of ecologic technologies for wood exploitation.'

The study also reveals that Romania is one of the EU countries with the highest share, 50 percent, of forests devoted to the protection of the environment factors, water, soil, climate and biodiversity. In terms of the wood volume existing in the forests, over two billion cubic metres, Romania ranges among the first four countries in the European Union.

Friday, April 11, 2014

Romania keeps ancient tradition of bee medicine alive

Agence France-Presse 
April 10, 2014

Bee venom to combat multiple sclerosis, pollen for indigestion, honey to heal wounds -- the humble bee has been a key source of alternative medicines since ancient times, and Romania is working to keep the tradition of "apitherapy" alive.

The tradition goes back to ancient Greece when Hippocrates applied honey to treat wounds, and the Romans saw pollen as "life-giving".

In the past of India, China and Egypt, a resinous substance collected by bees from the buds of certain trees, known as "propolis", was popular as an antiseptic.

"The hive is the oldest and healthiest natural pharmacy," said Cristina Mateescu, director general of the Institute for Apicultural Research and Development in Bucharest.

Today in the wilderness of Romania's Carpathian mountains, honey bee products are still a familiar part of traditional medicine.

"In my village, my great-grandmother was a healer and used products from beehives. She inspired me," Dr Mariana Stan told AFP.

Having spent years as a conventional doctor, Stan now practises in Bucharest as a "apitherapist" -- using bee products "which give slower but longer lasting and more profound results".

In a country still infused with folk culture, several families continue to use propolis against sore throats, as well as honey and pollen to boost the immune system.

- Apitherapy pioneer -

Every town in Romania has its "plafar" -- natural pharmacies selling products made from plants, honey, beeswax and propolis.

"Romania is a pioneer of apitherapy, which it recognised very early as a component of scientific medicine," said US professor Theodor Charbuliez, head of the Apimondia Commission of Apitherapy, a group that brings together thousands of practitioners from around the world.

Modules on apitherapy have started to work their way into more conventional medical classes and extracts from propolis developed by the Apicultural institute into recognised medicines.

Founded in 1974, the institute employs 105 people who look after local bee colonies and sell around 30 approved products.

A new range even seeks to treat cats and dogs with bee-related products.

Bucharest also boasts an Apitherapy medical centre, the world's first, which opened in 1984.

Scepticism remains among the regular medical community in the absence of scientific studies about the effects of bee venom, but many users are full of praise and welcome the cheap costs and environmentally friendly approach.

Doina Postolachi comes twice a week to the medical centre to receive injections of bee venom, or "apitoxin".

The 34-year-old poet says the injections have allowed her to "rediscover hope" in her fight against multiple sclerosis.

"For a year, I could no longer walk or get into my bath. My feet were stuck to the ground. But today, the venom treatment has given me back strength in my legs. I walk, I can take baths," she said.

She said she has never wanted any regular pharmaceutical treatments "which come with numerous side effects".

- Bees do wonders -

There has been mounting interest across the world in apitherapy.

In 2013, Washington University in the US city of St Louis published a study on the efficacy of milittine, a toxin contained in bee venom, in countering the AIDS virus.

In France, thousands of patients have benefited from bandages treated with honey at the abdominal surgery department of Limoges hospital.

Bee products are also infiltrating the cosmetics industry, used in skin-toning and anti-wrinkle creams.

Part of the appeal rests with the natural and organic image of bee products.

"In Romania, we have the chance to maintain an unspoiled nature," said Cornelia Dostetan, a member of the National Apitherapy Society.

Under Communism, poverty meant that pesticides were rarely used and the country has never shifted to large-scale monoculture forms of agriculture. The result is that Romania retains a great diversity of flora, said Dostetan.

Certified organic, the Romanian brand Apiland, a specialist in raw pollen, has launched its products in France and Italy.

According to the last agricultural census in 2010, Romania counted 42,000 beekeepers and more than 1.3 million colonies of bees.

Postolachi says she looks on the bees with "immense gratitude".

"These miniscule beings do wonders."

Romania presses for NATO redeployment over Ukraine crisis

Agence France-Presse

NATO should redeploy its forces in eastern Europe and take a firm stand to prevent a contagion of the Ukraine crisis, Romania's foreign minister urged in an interview Thursday with AFP.

"Romania has concrete expectations of a redeployment and an eastward repositioning of NATO's naval, air and ground forces," Titus Corlatean said.

"The Black Sea region must be a top priority for NATO and the EU," he stressed.

Bucharest "is extremely concerned over developments in Ukraine which have a serious impact on international security," Corlatean said, stressing his country is "on the frontline".

Romania, a member of both the European Union and the North Atlantic Treaty Organisation, shares a border with Ukraine in the east and in the north.

In recent days pro-Kremlin activists have seized government buildings in several cities in Ukraine's east, declaring independence and vowing to vote on splitting from Ukraine.

The US has accused Moscow of trying to "create chaos" to justify a military intervention like in Crimea.

"Our expectations towards Russia are clear and firm: it should engage in a political dialogue and avoid escalation," Corlatean stressed.

EU and NATO should "stand firm in order to stop potential risks of contagion of the crisis from Odessa in Southern Ukraine to Transdniestr", a pro-Russian breakaway region in Moldova.

Trasndniestr, a strip of land on Moldova's eastern border, broke away from the rest of the country in the wake of the 1991 fall of the Soviet Union but is not recognised by any other state.

On Monday, its leader, Yevgeny Shevchuk, said his dream would be to see the region "together with Russia".

Moscow maintains thousands of troops there for years against the will of the pro-Western Moldovan government.

"We hope that a political dialogue will prevail", Corlatean insisted saying Russia could show its good will by participating in a new round of negotiations planned next week to solve the Transdniestr situation.

"It is important that these talks take place even if they are delayed because this will show if Moscow is more open on the matter or not.

"We have no interest in a clash between the European Union and Russia", but Corlatean warned that if Moscow choses escalation, "further sanctions are still an option".

And the gas issue should not be a reason to "forget about the fundamental values of international law".

"There is a lot of talk about Europe's dependence on Russian gas but Russia is also depending on European markets" to sell its production, Corlatean said.

"Russia could have an interest in listening to what Europe wants on Ukraine", he says.

President Vladimir Putin on Thursday sent a letter to leaders of 18 European countries, warning them Russia could cut gas supplies to Ukraine.

But in what might be an overture to de-escalate the crisis, Putin also said that "Russia is prepared to participate in the effort to stabilise and restore Ukraine's economy", but only on "equal terms" with the EU.

Romania caps green energy quota to help large industrial firms

BUCHAREST (Reuters) - Romania's government capped the amount of renewable energy that large industrial consumers must buy this year in a move to help offset their high energy costs and stave off the threat of job cuts ahead of elections later this year.

The cap is part of a wider set of measures the leftist government plans to enforce this year to help industrial consumers, who have repeatedly warned that high power and gas prices could lead to production cuts, layoffs and even plant relocations.

However, the measure also boosts uncertainty for private investors in the electricity and gas sectors, which could scare off badly needed investment. The government has already lowered its support scheme for renewable energy projects.

The support scheme gives developers green certificates for each megawatt generated and forces power suppliers and large industrial users to buy them based on a gradually increasing annual quota set by the country's energy regulator.

Green energy investors gain once by selling certificates and again when they sell their electricity.

On Wednesday, the government said it capped the annual quota at the 2013 level of 11.1 percent of gross power consumption.

The incentives, which have been in place since 2012, were once deemed too generous by the European Commission. But they have also brought droves of foreign investors to Romania, particularly to wind energy, including Czech energy company CEZ, Italy's Enel or Energias de Portugal.

The renewable support scheme is not the only factor pushing energy prices higher. The government is also in the process of deregulating its gas and power markets in stages, as agreed under an aid deal from the International Monetary Fund and the European Commission.

Romania has put off deregulation for years to protect voters in a country where the average individual income is roughly $500 a month. For millions of Romanians and some industrial consumers tariffs are capped below market prices.

(Reporting by Luiza Ilie; Editing by Susan Fenton)

Tuesday, April 8, 2014

Romania could earn billions by integrating its Roma, World Bank says

(Reuters) - Romania could enjoy a more productive economy and gain hundreds of millions of euros a year in tax receipts if it integrated its young and impoverished Roma minority, a World Bank study showed on Monday.

Human rights groups have criticized Romania - home to up to 2.5 million Roma, or roughly a sixth of the population - for not doing enough to improve their living standards or job prospects.

The government in Bucharest commissioned the study to help it reach poverty reduction targets agreed with the European Commission, which has earmarked funds in the next EU budget for integrating the Roma better across the entire region.

The Roma are Europe's largest ethnic minority. Out of an estimated 10-12 million, some six million live in the EU. Despite the fact that EU countries have banned discrimination, many are victims of prejudice and social exclusion.

In Romania, nine out of 10 live in severe material deprivation, the study said. Children under 14 years make up almost half of their number and only a third of Roma boys will still be in school at 16, and even fewer girls. A third of Roma who seek work will experience discrimination.

If Roma unemployment rates fell and wages rose, Romania could reap productivity gains between 887 million euros and 2.9 billion euros per year - up to 2 percent of GDP - and up to 675 million of extra taxes, the study found.

A better educated Roma workforce would also fill an employment gap in the EU's second poorest state, where the population has shrunk and aged rapidly since the fall of Communism in 1989, as younger Romanians left in search of a better life elsewhere.

"Inadequate education and skills and poor health hamper one's access to earning opportunities," said Kosuke Anan, a World Bank expert and co-author of the report. "At the same time, the lack of earning opportunities results in insufficient resources."

In neighboring Hungary, Roma number some 600,000-700,000, or around 7 percent of the population. As in Romania, most are unemployed, poor and relatively uneducated.

Mistrust among Hungarians towards the Roma has been fuelled by the far-right Jobbik party, which won an unprecedented 21 percent in Sunday's national election.


Many Romanian Roma have flocked to western European cities since the country joined the EU in 2007. According to police, some are involved in petty crime or begging on the streets, and outbursts of anti-Roma sentiment are now common.

France has deported thousands of Romanian and Bulgarian Roma from illegal camps, prompting criticism from the EU.

Even so, some prefer begging abroad to being at home.

"At least here people give me food and medicine," said Ana Ferariu, a 65-year-old Roma woman begging outside a convenience store on London's crowded Oxford Street.

Ferariu, who doesn't speak English, said she left the impoverished town of Botosani in eastern Romania after her husband died and her house was destroyed in a flood. She sleeps in parks and has been picked up by police at least ten times.

"I am harmless, if people want to give me something that's ok, but if they don't that is also fine. If I die over here, the queen will bury me, but who will bury me at home?" she said.

In common with other countries, Romania has Roma inclusion programs in place but the results have been not be monitored properly to gauge their effectiveness, the World Bank said.

The study recommended building up local capacities to manage pro-Roma projects and better tap EU development funds, making more realistic budget estimates and strengthening anti-discrimination laws.

Romania readies tax cuts to spur economy

By Radu Marinas and Matthias Williams

BUCHAREST (Reuters) – Romania will scrap the tax on profits that companies reinvest in the country and cut some other levies to help create jobs and secure economic growth of around 3 percent this year, the finance minister said on Monday.

The government will also reduce firms’ social security payments by 5 percentage points, slash value-added tax on certain foods and, once it can afford to, introduce a lower income tax rate for low earners, Ioana Petrescu told Reuters in an interview.

Romania is the European Union’s second poorest state but its economy has outpaced most peers of late, thanks to a revival in exports and a stellar 2013 harvest that pushed growth to 5.4 percent in the fourth quarter.

While the tax cuts should help keep growth relatively high, Petrescu said they would be matched by deficit-reduction measures to ensure Romania met this year’s fiscal targets.

“Either (there) needs to be more tax collection or a reduction in expenditures or freezing the expenditures for that particular period, so we certainly are committed to fiscal prudence,” the minister said in her first interview with the foreign media since taking office in March.

She declined to go into specifics but said the government was in discussions with the International Monetary Fund about reviewing the royalties it charges firms to mine its natural resources.

Romania has an ongoing 4 billion euro (3.30 billion pounds) standby aid deal with the IMF, its third since a real estate bubble burst in 2009 and tipped the country into recession.


Tax cuts could help shore up the popularity of Prime Minister Victor Ponta’s leftist government, which faces European elections in late May ahead of a presidential ballot in November in which Ponta might run.

“I am optimistic that this year we’ll also have an economic growth maybe around 3 percent, and I think this can be sustained by pro-growth fiscal policies,” said Petrescu, a 33-year-old Harvard-educated economist who was previously an economic adviser to Ponta.

“... We intend to eliminate the provision to tax reinvested profit so hopefully that would spur more investment and more capital creation.”

That measure was likely to be introduced in July, meaning it would have has a low impact on the budget of about 20-30 million lei ($6-9 million), she said.

As part of its agreement with the IMF, which is key to Romania’s credibility with investors, the government has pursued deficit-cutting measures and economic reforms such as cleaning up inefficient state companies in order to spur growth.

It is targeting a fiscal deficit under IMF norms of 2.2 percent of economic output this year, compared with a goal of 2.5 percent in 2013.

There have been calls within the ruling alliance for Romania to exit such IMF agreements, but Petrescu said such a decision would depend on the economic climate in 2015, the year the current deal expires.

Petrescu’s forecast for growth in 2014 is higher than the IMF’s projection of 2.2 percent. She also forecast that inflation will quicken this year. It is currently at a record low of 1.1 percent, which prompted the central bank to end its run of rate cuts in March.

Romania, which is rich in natural resources including oil, gas, coal, salt and gold, is rethinking the level of royalties it charges for extraction – currently among the lowest such taxes in Europe and a boon for companies such as Austria’s OMV, Chevron and Romgaz.

Petrescu said the government was looking at “redesigning” the royalty system while taking care to not make investment prohibitively expensive.

“We had extensive talks with the IMF officials (and)... we’ll have more talks on this topic,” she said. “We need to be careful because a lot of investments in this area are very risky at the very beginning so if we tax them too much they might just simply not do it.”

Wednesday, April 2, 2014

U.S. seeks to boost troops in Romania amid Crimea crisis

BUCHAREST (Reuters) - The United States has asked to boost the number of troops and aircraft it has stationed at an airbase in NATO ally Romania, President Traian Basescu said on Tuesday, as tensions between the West and Russia simmer over neighboring Ukraine.

U.S. forces have used the Mihail Kogalniceanu air base on the Black Sea in eastern Romania since 1999. It is a major hub for U.S. troops leaving Afghanistan and is located not far from Ukraine's Crimea peninsula, annexed last month by Russia.

"The U.S. embassy in Bucharest has asked for support from Romanian authorities to expand current operations at the Mihail Kogalniceanu base," Basescu said in a letter of notification to the speaker of Romania's lower house of parliament.

The U.S. request would add up to 600 U.S. troops to the roughly 1,000 currently stationed in Romania and would also increase the number of military aircraft there, the letter said.

Foreign ministers from the 28-nation NATO alliance were meeting in Brussels on Tuesday to discuss ways to boost the security of member states in ex-communist eastern Europe after Russia's occupation and annexation of Crimea.

Tuesday, April 1, 2014

Political risks to Romanian reforms on the rise ahead of elections-IMF

BUCHAREST, April 1 Tue Apr 1, 2014

(Reuters) - Romania has buffers to help it withstand potential external shocks, but domestic political pressure ahead of two elections later this year was on the rise, posing risks to the leftist government's reform drive, the IMF said on Tuesday.

The International Monetary Fund approved the first and second reviews of Romania's 4 billion euros aid deal in late March, after weeks of bickering over taxes between the government and the president threatened to derail years of deficit-cutting reforms.

"The program continues to be a policy priority for the government's leadership but risks emanating from the political arena are growing," the IMF said in a staff report for the two deal reviews, published on Tuesday.

"These factors could complicate program execution and undermine the government's resolve to implement the structural reform agenda."

The report also said the finance ministry's financing buffer, a flexible exchange rate and adequate levels of foreign exchange reserves provided cushions against potential external shocks.

Romania, the EU's second-poorest state, does not plan to draw on the funds from the deal, its third since 2009. But their availability provides reassurance for foreign investors concerned about fiscal slippage before a presidential election and a European Parliament election later this year. (Reporting by Luiza Ilie)

Romania ex-economy minister jailed in energy scandal

Agence France-Presse 
March 31, 2014

Romania's former minister of the economy Codrut Seres was sentenced to four years in prison on Monday for his part in a corruption scandal in which the country's largest power producer undersold electricity at a huge loss to the exchequer.

Seres turned a blind eye to the signing of contracts that were highly unfavourable to state-run electricity company Hidroelectrica while he headed the ministry between 2004 and 2006.

Four former directors of Hidroelectrica were also given sentences of four to five years by the High Court in Bucharest on Monday.

They were accused of selling electricity well below market prices in a series of corrupt deals with businesses between 2002 and 2004 at a loss estimated at $165 million (120 million euros).

The poor management of Hidroelectrica forced the company to declare insolvency in 2012, and it has struggled to stay afloat since.

Seres, who denied all the allegations against him, was already sentenced to six years in prison in December in a case of economic espionage related to the privatisation of state-run companies, in which he was accused of "treason through the transmission of secrets".

He is currently free while he appeals December's ruling, and is expected to also appeal Monday's decision.