Thursday, January 29, 2015

EU Says Romanian Fight Against Crime on Track, Bulgaria Stalls

(Bloomberg) -- Romania has achieved “impressive” progress in fighting high-level corruption and organized crime, while Bulgarian policy changes stalled on political turmoil, the European Union said in a report on the bloc’s poorest states.

“Romania is on the right course and needs to stick to it. Tackling corruption remains the biggest challenge and the biggest priority,” European Commission Vice-President Frans Timmermans said in a statement. Bulgaria’s judicial reform progress “has been slow” on political uncertainty and “further steps are needed,” he said.

The two countries that joined the 28-nation bloc in 2007 are judged to be among the EU’s most corrupt along with Greece and Italy, according to Berlin-based research organization Transparency International. The Black Sea nations have had repeated warnings to fight corruption harder to ensure a fair distribution of EU aid. Romania, the bigger of the two, stands to receive 35 billion euros ($40 billion) in EU aid through 2020. Bulgaria will get about 16 billion euros.


“Responses to the well-known problems in area of corruption and organized crime have remained piecemeal and lacking in overall strategic direction,” the commission said about Bulgaria. “There are very few examples where high-level cases of corruption or organized crime have been brought to conclusion in court.”

Bulgarian Prime Minister Boyko Borissov regained power on Nov. 7 after five government changes in two years. His first government was ousted by anti-austerity protests in 2013. The Socialist administration of former premier Plamen Oresharski resigned in July following the failure of the country’s fourth-largest lender and protests against a corrupt political system.
Efforts Intensified

Bulgaria’s parliament adopted a judicial reform strategy last week, which needs “to be implemented for change to be convincingly shown,” the commission said.

Romania’s new President Klaus Iohannis pledged to continue fighting corruption and urged Parliament to lift the immunity of all lawmakers under investigation. Romania’s efforts to curb graft intensified before presidential elections last year as prosecutors probed high-profile politicians from Prime Minister Victor Ponta’s party, businessmen and a constitution court judge. The cases involved Microsoft licenses, election fraud and tax evasion.

Former Romanian Economy Minister Codrut Seres and former Communication Minister Zsolt Nagy were sentenced to prison this week for undermining state economy.

“The action taken by the key judicial and integrity institutions to address high-level corruption has maintained an impressive momentum,” the commission said about Romania. “Many legislative issues remain outstanding” and “there continues to be inconsistency in some court decisions, which raises concern.”

The commission will continue monitoring the two countries and will issue the next two reports in one year, the commission said.

To contact the reporters on this story: Slav Okov in Sofia at sokov@bloomberg.net; Andra Timu in Bucharest at atimu@bloomberg.net

To contact the editors responsible for this story: James M. Gomez atjagomez@bloomberg.net Elizabeth Konstantinova, Andras Gergely

Romania jails ex-ministers, banker over privatisation plot

(Reuters) - Two former Romanian government ministers and a Credit Suisse banker were jailed on Tuesday for espionage and treason related to planned privatisations.

Former communications minister Zsolt Nagy was given a four-year sentence and formereconomy minister Codrut Seres was sentenced to four years and six months by the court in Romania, which has come under EU pressure to clean up its government and judiciary.

They were convicted of leaking confidential privatisation data and joining an organised crime group that prosecutors said targeted a string of planned privatisations in 2005 to 2007.

The European Commission, which has the judiciary under special monitoring, is expected to release a new assessment on Wednesday. Romania joined the European Union in 2007.

Credit Suisse investment banker Vadim Benyatov was sentenced to four years and six months for espionage, while Bulgarian Stamen Stanchev, who consulted for the bank, received five years and two months.

A spokesperson for Credit Suisse said: "We are disappointed with the verdict and will continue to support our current and former employees."

Six other people, including a Turk and a Czech citizen, received prison terms for joining an organised crime group targeting confidential data related to privatisations.

Seres and Nagy said the documents they were accused of passing on were not confidential, nor prejudicial.

Prosecutors said the organised crime group targeted, among other things, the planned privatisation of the Romanian postal service and the sale of a minority stake in oil and gas group Petrom, majority-controlled by Austria's OMV. None have yet happened and there is no current firm commitment to sell them.

Also targeted was the sale of power distributor Electrica Muntenia Sud, which has since then been bought by Italy's Enel.

The case has reached its last appeal and Tuesday's rulings are final.

AP: Romania's spy chief who backed security laws resigns

BUCHAREST, ROMANIA — The chief of Romania's Intelligence Service has resigned after criticizing the country's top court for rejecting security laws which allowed the government to collect data on people without court approval.

The Constitutional Court earlier this month rejected laws that would have allowed authorities to retain data and other personal details on people without persuading a court that the person represented a security risk. The court said the laws were unconstitutional and violated human rights.

George Maior, who directed the Intelligence Service since 2006, stepped down Tuesday, days after he criticized the court and said the laws were necessary for national security and protecting people.

Prime Minister Victor Ponta, an ally, praised Maior for reforming the service. He said his successor shouldn't be a political appointment.

Maior's resignation was accepted by President Klaus Iohannis, who will appoint a new chief.





Saturday, January 24, 2015

Romanian judge took BMW and dresses as bribes, prosecutors say

(Reuters) - A judge at Romania's highest court has been placed under investigation for abuse of power, taking bribes including a BMW car and two dresses for his wife, and setting up an organised crime group, prosecutors said on Thursday.

Judge Toni Grebla, who denies wrongdoing, is the latest in a series of top officials to be investigated for alleged corruption in Romania. They include the father-in-law of Prime Minister Victor Ponta, the brother of former President Traian Basescu and the chief prosecutor at the agency in charge of fighting organised crime.

The former communist state, which joined the European Union in 2007, has come under heavy pressure from Brussels to clean up its government and judiciary. The EU has praised anti-corruption prosecutors for their efforts to tackle high-level graft.

Grebla, 61 was appointed to the Constitutional Court in 2013 after serving as a senator since 2008. Prosecutors said in a statement he co-founded an organised crime group to forge customs documents and smuggle food to Russia after Moscow banned food imports from the European Union last year.

Grebla has also demanded and received a BMW worth 56,070 euros (42,992 pounds), 20,000 flyers for his senate election race, and two dresses worth 1,200 lei ($310) from a local businessman to intercede in his favour with public clerks, prosecutors said.

They added the judge, whose position prohibits him from having any commercial dealings, had managed an ostrich farm through intermediaries in southeastern Romania.

"What is being alleged has no connection to activity at the Constitutional Court," Grebla told reporters. "It is damaging my image, that is why it bothers me."

He said the BMW had been given to him by a businessman who was also his godson, and therefore was "in the family". He also denied running an ostrich farm.

The Constitutional Court has the final say in all legislative and state matters. Its nine judges serve nine-year terms and are appointed by the president, the senate and the lower house of parliament.

"It was a huge surprise for us, this is the first time that a Constitutional Court judge is in such a situation," chief judge Augustin Zegrean told reporters.

"We regret this situation. Anti-corruption prosecutors must see this investigation through and get to the bottom of things because I want no shadow of a doubt hanging over the Constitutional Court."

Grebla will be allowed to remain in his position for now but would be suspended if his case went to trial.

Romania Planned New Power Capacities Idle Due to Subdued Demand

By Andra Timu Jan 22, 2015

Romania doesn’t need to invest in new power capacities in the next 10 years as demand will be capped by shrinking industrial production, officials from Fondul Proprietatea SA and consulting firm AT Kearney Inc said.

The government, which plans to add two more new nuclear reactors at its Cernavoda plant and build new power plants with the help of foreign investors, should refrain from spending money on projects that boost production and focus more on increasing the efficiency of existing plants, Michael Weiss, a partner at AT Kearney, said in Bucharest today.

“Without major industry investments there is no need for extra capacities because existing ones can accommodate demand by 2025,” Weiss said during the presentation of a study on Romania’s energy system. “Investments are warranted if they aim to replace outdated existing capacities. Romania still uses lignite to stabilize the power market, which is not the best practice.”

Romania, the European Union’s second-poorest member, is trying to lure foreign investors to help upgrade its outdated energy system as it seeks to diversify and lower costs for people and companies. It benefited from a boost in renewable energy in the past years as companies such as CEZ AS and Enel SpA (ENEL) invested millions of euros in wind, solar and biomass plants with a total installed capacity of more than 4,700 megawatts.
Investment Needs

Still, the country needs at least 100 billion euros ($116 billion) in investments in oil, gas and power by 2035, according to the Energy Ministry’s latest estimates. The government turned to Chinese investors after ArcelorMittal, Enel and other companies withdrew from the 6 billion-euro project to build the reactors.

The reactors, together with a 1 billion-euro hydropower plant, expanding power and gas interconnection grids and Black Sea gas production are among Romania’s strategic objectives for reaching energy independence, according to a 2035 energy strategy that is currently up for public debate.

“An integrated nation-wide energy strategy, matching the economic strategy, is essential for the growth of the energy sector and should address issues such as the current low investor confidence and uncompetitive taxes,” said Greg Konieczny, a manager at Fondul Proprietatea.

Romania’s electricity demand will post “limited growth” in the next 10 years of between 0.2 percent to 0.7 percent as existing capacities can support the demand, AT Kearney estimated. That makes the reactor project “less commercially attractive without a major support scheme,” the study showed.

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

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

Romanian watchdog protests honoring fascist sympathizer

A Romanian anti-Semitism watchdog group condemned Romanian President Klaus Iohannis’ honoring of a man who praised fascists who murdered Jews during the Holocaust.

The Center for Monitoring and Combating Antisemitism, or MCA Romania, was responding to the admission last month of the anti-Communist political activist Octav Bjoza into the Order of the Star of Romania for his efforts within the Association of Former Political Prisoners in Romania.

Bjoza, 76, was the first of 25 people Iohannis decorated with the Star of Romania medal. The Dec. 22 ceremony was the newly elected president’s first official function after assuming office the previous day.

“It is deeply regrettable that in post-communist Romania, Mr. Bjoza chose to celebrate the ideas and beliefs of a criminal group like the Legionnaires,” MCA Romania Director Maximillian Marco Katz told JTA Thursday, referring to Romania’s pro-Nazi Iron Guard. Iohannis’ embrace of Bjoza was “a disappointing note of populism,” he added. “It sends the wrong message.”

Iron Guard members killed 125 Jews during the Bucharest pogrom of 1941 and many thousands more throughout World War II.

In 2009, Bjoza was filmed attending an event titled “Commemorating Legionnaires, Assassinated Martyrs,” where he said: “I am not a Legionnaire, it was too late to become one, but fortunately, at the age of 19 I was educated by some of them.”

He said they taught him that “the Romanian nation is hunted by traitors.” For this, he added, “I will forever carry them in my mind and in my soul.”

Following criticism over the award he received, Bjoza told the Adevarul daily that he was “not anti-Semitic” and that he “rejects extremism of any sort.”

Iohannis told Romanian media that the criticism of Bjoza was unfounded because Bjoza was never a member of the Iron Guard.

Romanian PM pessimistic about relations with Russia

BUCHAREST, Jan. 22 (Xinhua) -- Romanian Prime Minister Victor Ponta on Thursday believed that the bilateral relations with Russia are getting worse, both because of the conflict in Ukraine and the irreconcilable interests of the two countries with respect to the Republic of Moldova.

Ponta told local media that he saw no sign of improvement of the relations of Romania with Russia.

"I see them worsening," he stressed, specifying that "Romania will keep its position that same as Poland and the Baltic countries, a firm position as to what the Russian Federation is doing."

The prime minister also underscored that the interests of Romania and that of Russia in Moldova are "totally opposite" and "irreconcilable," as Romania remains committed to the territorial integrity of Moldova, while Russia supports the "separatists" in Transdniester, a mainly Russian-speaking region which split away from Moldova in 1990.

"We want Moldova to go on the pro-European route and Russia is against it," continued Ponta in an interview with Jurnalul National daily online, adding that "from the viewpoint of the relations with Russia, it will only be worse on the short- and medium-term, I do not know what will be on the long-term."

Ponta insisted, after his installation as Prime Minister in May 2012, that his country should deepen relations with Russia, however Romania had decided to freezes business relations with the latter soon after the crisis erupted in Ukraine.

Friday, January 16, 2015

Romania's new President Iohannis in court

The facts of the case are clear. Klaus Iohannis, mayor of the Transylvanian town of Sibiu from 2000 to 2014, represented the city's government at the shareholders' meetings of two firms of which the city itself is a co-owner. Romania's National Integrity Agency (ANI) saw this as an illegal conflict of interest. Iohannis sued over the ANI report and scored a victory in the trial in September 2013. The agency's assessment that the Sibiu mayor's activities were incompatible was declared null and void.

ANI then lodged an appeal with the High Court, and that trial began on Wednesday (14.01.2015). Iohannis has repeatedly stated that nothing about the case has changed in the interim, and he is therefore certain that the High Court will also decide in his favor.

However, it is ANI and not Klaus Iohannis that is the focus of public debate about real or spurious incompatibilities and conflicts of interest among Romanian politicians. The National Integrity Agency was established under pressure from the European Commission to check asset declarations by holders of public office, and possible conflicts of interest. In 2007 Romania was the first country in the European Union whose politicians came under scrutiny from an institution founded expressly for that purpose.

Fight against corruption

ANI became an important instrument in the so-called Cooperation and Verification Mechanism, introduced by the European Commission for Romania (and Bulgaria) following their accession to the EU in 2007 to tackle deficiencies in judicial reform and in the fight against corruption. Brussels formulated clear objectives in four key areas: reform of the judiciary, integrity, combating high-level corruption, and the prevention of corruption in the public sector.

And although the Commission has acknowledged that Romania has had some success in this area, the country is still being monitored by the Cooperation and Verification Mechanism seven years after joining the EU. Several ministers and a former prime minister have been found guilty of corruption, and investigations are ongoing against numerous members of parliament across the political spectrum. New President Klaus Iohannis has repeatedly emphasized that he respects the independence of the judiciary, that it is one of his highest priorities, and that he will protect it from political influence.

Protected by presidential immunity

However, ANI seems to have overstepped the mark with its accusations against Iohannis. According to a literal interpretation of Romanian law, a mayor may not sit on the board of a company involved in municipal development projects. In other words, a directly elected mayor may not participate in discussions or in the decision-making process around important projects in his city. Iohannis' case concerns his participation in the shareholders' meetings of the municipal enterprises dealing with water and sewage management, and with local markets. The question not just the mayor but also voters and experts are asking themselves is valid: Who, if not the mayor, should be the main person dealing with issues pertaining to infrastructure, water supply, sewage and waste management?

This was the view taken by the court of appeal in September 2013, when Iohannis was acquitted of incompatibility and ANI's assessment was annulled. The agency lodged an appeal, and now the High Court will make the final decision. Under Romanian law, those found guilty of incompatibility are banned from holding public office for three years. However, if Iohannis were unexpectedly found guilty, he is protected by presidential immunity and would not in fact have to step down.