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Austrian Epa Acquires Romanian Euromedia and Beta Cons for 20 Mln

10:14 - 08 September 2005 - Austrian outdoor media company Epa Holding has bought the two Romanian outdoor media companies Euromedia and Beta Cons in a deal worth 20 mln euro, Epa Holdings' CEO, Heinrich Schuster, announced.


Euromedia and Beta Cons expect a combined turnover of 12.5 mln euro for 2005 and hold 60 percent of the market together.

As part of the Epa Holding, the two Romanian companies will work separately in line with Epa's quality strategy, Schuster said.

Euromedia reported a turnover of 10 mln euro in 2004.

Beta Cons reported a 1.6 mln euro turnover for 2004.

Euromedia is the largest outdoor media company in Romania with activities in over 60 cities across the country, national roads and tourist resorts.

Since 1999, Beta Cons manages backlit and citylight billboards in Bucharest.

Epa Holdings holds 40 per cent of the outdoor media market in Austria and it is present in Bulgaria, Croatia, Macedonia, Poland, Slovakia, Serbia and Montenegro, Slovenia, the Czech Republic and Hungary.

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Taxation Blues

Romania, Volume 100
08.09.2005

The debate on how to ease an overstretched budget and adapt tax policies has been dominating the Romanian parliament in recent days. In particular, arguments over what to do about social security contributions and value-added tax (VAT), along with the grander pros and cons of the government's radical flat tax policy, have been grabbing business headlines.

Eventually, the government decided to keep VAT at 19%, retain its 16% flat tax and reduce social security contributions by an amount yet to be determined.

"We decided not to increase VAT to let the economy breathe and grow stronger," Prime Minister Calin Popescu-Tariceanu told parliament on September 5, "but I want to make it clear that should the measures fail, we would increase the tax."

Meanwhile, newly installed Minister of Public Finance Sebastian Vladescu was discussing social security contributions. Businesses have been complaining that these are currently too high, encouraging the growth of micro-businesses which exploit legal loopholes to dodge payment.

Currently, social insurance contributions are 32.5% of gross wages for companies and 17% for employees.

Vladescu therefore announced that there would be a reduction in contributions for employers in 2006. President Traian Basescu then also expressed his support for such a move, which would support the primary goal of increasing government revenues. "I am convinced the secondary goal will be achieved - the decrease of social insurance contributions," he said.

Romania has never been so obsessed with taxes as it is today. This trend was set by the 16% flat tax which was adopted by the new government back in January 2005 - a policy that angered the International Monetary Fund (IMF), which feared budgetary revenues would decrease.

This fear was then borne out as lower taxes in the first half of 2005 brought in reduced revenues for the government. Now the need to increase these revenues in 2006 is a real concern, with two options being bandied about in Bucharest presently. First, there is a possible move towards increasing taxation, or second, an overall enlarging of the tax base by including more taxpayers in budgetary collection.

One view is that the way to go is to reduce social security contributions - thus encouraging businesses to register workers and enlarging the tax base.

The size of the unregistered economy and its draining effect on government resources was highlighted by Popesu-Tariceanu in early September, when he said that "A normal health system cannot be functional with 20m beneficiaries and only one-quarter of [them] contributors."

Yet it has not been a smooth road trying to get all parties to agree on what to do. One party in particular which was quick to judge these measures was coalition government member, the Democratic Party (PD). The PD announced that it would not back a move to enlarge the tax base, and then suddenly backed down by agreeing it was necessary to bring in a "fair collection system".

Health Minister Eugen Nicolaescu stated that as pensioners, farmers and socially assisted persons are the main categories to be affected by such measures, this would finally put an end to discrimination within health insurance. Nicolaescu also said that by taking such steps the health budget would increase by RON1.1bn-1.3bn (305m-361m euros).

Despite further opposition towards the proposed steps, National Liberal Party (PNL) Vice-President Dan Radu Rusanu said that it was "certain" that there would be a reduction in social contributions in 2006 - and highly likely too that there would be an increase in VAT to 22%.

However, PD Executive Chairman Adriean Videanu warned that with a larger number of taxes being collected, there could be an increase in the unregistered economy.

"Such a measure may lead to the taxed money becoming part of the unregistered economy and this may trigger adverse macro-economic and inflationary outcomes," he told reporters.

Higher VAT is also of great concern to those sectors operating in highly competitive markets, such as tourism. The fear in this sector was that a VAT hike up to 22% would inevitably push up consumer prices and therefore drive tourist revenues away, as holiday makers looked for a better deal elsewhere.

To try and allay these fears, Vice Prime-Minister George Copos responded early September that VAT in tourism would remain at 9% for accommodation and breakfast.

Meanwhile, behind the current tussle there is an ongoing debate too about the efficacy of the government's flat tax policy. Many have suggested that the flat tax has done little to inspire growth and stimulate the economy.

A recent report from the National Institute of Statistics stated that while the period January-June 2004 saw 6.6% GDP growth on the same period of 2003, the first quarter of 2005 saw only 4.9% growth. This has led to annual forecasts of 5.5-6% for the whole of 2005.

The report showed that services were the main growth area during the first quarter of this year, showing a 6.9% boost, whereas industry and construction came in below average at 3.6% and 3.9% growth respectively. Meanwhile, agricultural production was down, 7.1% lower than at the end of June 2004.

One reason for this was undoubtedly the bad weather conditions and flooding which affected the country's crops this summer.

While the debate ended with little changed, except a commitment to reduce social security, steps do need to be taken quickly to lighten the load of overstretched finances, as the IMF will not take kindly to further widening of the budget and current account deficits. Meanwhile, as a meeting of the Romanian Association of Business People (AOAR) concluded on September 7, perhaps more effective collection of taxes is really the key to stimulating better fiscal performance.

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Romania's Premier: Foreign Investment Up

Romania's Premier Says Foreign Investment Up 15 Percent in First Half of 2005

BUCHAREST, Romania (AP) -- Romania's direct foreign investment has increased by 15 percent in the first half of this year to euro1.48 billion (US$1.85 billion), Prime Minister Calin Popescu Tariceanu said Tuesday.

Tariceanu, who was launching Romania's new export strategy, urged authorities to do more to assist investors and local businesses to help the country be more competitive on foreign markets.

The premier praised the progress made by French car maker in Romania with the launching of its popular new model, the Logan.

"I'd like to see more investors like Renault in Romania, serious and ambitious investors who respect their commitments," he said, adding that Renault was now building a new euro215 (US$269) factory in Pitesti.

Outlining the new strategy for exports, Tariceanu said that Romanian companies should try to reorient their exports in the European Union toward more sophisticated products. He also urged Romanian businessmen to expand their operations in the southeast European region and former Soviet states.

He warned that tax evasion remained at high levels in Romania, distorting the business environment and urged authorities to improve tax collection, especially of the value-added tax.

"Unless Romania solves this fundamental problem, the economy will not grow strongly, we won't have real competition and we won't have an attractive business climate."

Also Tuesday, President Traian Basescu urged the government to raise taxes on alcohol and cigarettes, with the extra money going to help the country's struggling health system.

"The suppliers of disease should pay more for the health system," he said. Basescu, an avid smoker, said he would consider giving up the habit if the tobacco taxes are raised.

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Through The Customer's Eye

It's all about perspective, according to adman Peter Georgescu. The consumer's perspective, that is.

Georgescu's first job after he got out of grad school was in the research department of advertising agency Young & Rubicam.

It was, he said, the best thing that could've happened to him. The surveys and research he conducted taught him "to respect the consumer point of view," he said in a recent interview with IBD. "I learned that all business problems could be solved from the customer's perspective, and that's how my mental wiring was created. That's the difference between people like (me) and people who approach problems from a marketing point of view."

That difference in outlook was in large measure responsible for his rise up the corporate hierarchy from research department trainee to Young & Rubicam's president and chairman. He took the company public in 1997. In the three years before he retired in 2000, revenue increased threefold, profit ninefold and price per share from $25 to $84. Georgescu, 66, is also the author of "The Source of Success: Five Enduring Principles at the Heart of Real Leadership."

He put all those principles to work when the agency was competing for the Sears account in 1994. At the time, Sears was reeling and its management was looking for ways to increase its apparel business. Sears was and remains one of the nation's largest advertisers. Georgescu understood that to make the money that the Sears account would generate, you had to spend money. All told, Young & Rubicam spent about $2 million preparing its presentation.

"You have to be willing to spend the money, have the confidence that you'll get all the right information and that you'll be able to solve the problem better than anyone else," Georgescu said.

Know Your Subject

One of the first things he did was underwrite research. "Creativity in business is not a random event. You have to study your subject," he said. "We became students of that business. Before going to the creative new solution, before you get to the new, you have to understand the now."

Some of the agency's researchers spent a week shadowing Sears' customers. The results were surprising: 84% of the retailer's customers were women. Women even bought power tools.

What to do with the information? Georgescu encouraged creative answers. "No idea was too ridiculous or stupid to voice," he said. "No one was allowed to pull rank."

Eventually a staffer came up with a tag line, "the softer side of Sears." Typically, an agency will go into a presentation armed with fall-back positions in case the client doesn't like the primary idea.

But Georgescu went with just this one big idea. "If you believe in something, if you believe that this is going to drive the business, increase purchases of Sears apparel, than go with it," he recalled saying. "We all said, 'Guys, this is it.'"

Georgescu had confidence in his idea -- and confidence that Sears executives would recognize its merits. "You have to have faith in the wisdom of your customers as well," he said.

That faith was rewarded. Sears hired Young & Rubicam, which is still the company's advertising agency of record.

To provide any service well, Georgescu said, you should "know your client's business as well as you know your own." To learn more about KFC, for example, he spent three days serving chicken before he pitched the account.

That may be unusual, but so is his life. Georgescu was born in Bucharest, Romania. His father, an oil company executive, was on a business trip when a shift in Romania's political winds left him and Peter's mother stranded in the U.S.

Just 9 years old at the time, Peter, a brother and their grandparents were sent to a Romanian labor camp. They were all finally permitted to emigrate in 1954, reuniting in the U.S. thanks to pressure from the U.S. government.

Act With Integrity

Since then, he said, he's become "an American culturally. (Americans) say 'I don't care what the problem is, I just want a solution.'

"One's ability to provide solutions also gives one permission to unmask problems, to eradicate the denial of reality. Many businesses are good at playing denial roles. They tell themselves things will get better; good times are just around the corner."

Giving clients news they don't want to hear is a matter of integrity with him. Warner-Lambert asked Young & Rubicam to handle the introduction of a new line of Arthur Ashe sunglasses -- a brand extension to some of the other toiletries and confections sold in drugstores. It was a great opportunity for the agency: do a good job and most likely pick up other Warner-Lambert business.

But after researching the market, Georgescu realized the program would be a costly failure -- and told that to Warner-Lambert.

Similarly, the agency resigned all business dealings with Walt Disney Co. The company's attitude was "Disney must win and you must lose," Georgescu said, and he wouldn't accept that.

"If your organization has limited resources, you can't do everything well. You have to choose who you want to work with," he said. "Some people say, 'I'll take any business that comes my way.' Others only do business with companies whose values they share. You do great work for them. They respect you; you respect them. Otherwise you have friction, and it's not worth it. You don't want to have a client denigrating employees; you don't want to put your people in harm's way."

Challenged To Grow

It isn't that Georgescu dislikes demanding clients -- on the contrary, they can pose challenges that force a business to grow. "Some of our most essential and rewarding innovations were driven by demanding clients," he said.

He cites his dealings with Colgate.

"They were a very tough client, but always fair," Georgescu said. "They said, 'You operate in close to 80 countries. We don't want 80 different solutions. We want global solutions where that's desirable. When we succeed in one market, let's take that idea and apply it elsewhere.'"

Until Colgate pushed the company, Georgescu said, "the level of cooperation geographically (between divisions) wasn't what it should be. Colgate, more than any other client, forced us to be a global agency."

Leadership isn't a popularity contest, he notes.

"You can't live your life trying to get everybody to love you," he said. "You have to do what you think is right. If you know that you're doing your best, that should be enough. Don't wait for people to pat you on your back and say what a good boy you are."

Georgescu acknowledges that over the course of his career, he made numerous mistakes. Each one was valuable, he says.

"Every leader has to make dozens and dozens of decisions every day, and in business you're lucky if you bat .500," he said. "You can't be afraid to make mistakes.

"You can't dwell on your mistakes, but you have to learn from them and not make them again. A colleague once said to me, 'There's not a lot to be learned from the second kick of the mule.'"

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Wolf Thiess Hires For New Romanian Office

ustrian leader Wolf Thiess has added a partner to its recentlylaunched Bucharest arm by taking a corporate and M&A lawyer from Squire Sanders & Dempsey. US-qualified Bryan Jardine was Squire Sanders’ representative in Romania, where it operates through an alliance with local firm Voicu & Filipescu.

Jardine joined the Ohio-based firm in 2001 from Washington DC practice Arent Fox Kinter Plotkin & Kahn.

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Pack and plan: destination Romania

Suitcases of all sizes inundated the front hall of a Leawood home on Aug. 24. Dozens of volunteers crowded the spacious kitchen and spilled into adjacent rooms. A stack of delivery pizzas arrived as Doug Hagen, RN, MD, anesthesiologist, and director of missions for Medical Missions Foundation (MMF), took the floor.
He reminded everyone that stickers and small pieces of candy were acceptable "gifts" for the children they would meet; they should not drink the tap water; and only unmarked, unripped American bills would be acceptable for money exchange. Hagen also told them to bring locks for their bags and accept any opportunity to visit homes of the local people.
"And we are ambassadors for MMF and Kansas City so keep your professional decorum about you," he said.
The volunteers had gathered to pack and plan for an upcoming trip to Botosani, Romania. Since 1993, the Leawood-based Medical Missions Foundation, a nondenominational, nonprofit organization, has aided indigent people who live in developing and economically depressed countries throughout the world.
Volunteers provide reconstructive surgery and rehabilitation for children with birth defects. They foster ongoing medical care by teaching local health care providers, and providing donations of supplies and equipment to the areas they serve. During 2004 alone, MMF volunteers assisted 1,027 patients and performed 149 surgeries. Cerner Corporation's First Hand Foundation is a co-sponsor of this trip.
Dallas Rowan, RN, and an OR nurse at St. Joseph Medical Center, has traveled to China, the Philippines, Guatemala, Mexico, Cuba and Bolivia with the organization, and this will be her fourth visit to Romania. She is also vice president of clinical engineering and materials management for the Medical Missions Foundation.
"A friend told me about MMF, and I went to China the first time," Rowan said. "The biggest difference in nursing care is that, here, we have so much more equipment and 'activities.' American nurses are very assertive, and that's more of an asset than a liability. In Cuba they didn't know what to make of us."
Vonnie Kane, RN, works in labor and delivery at Shawnee Mission Medical Center. She has made six previous trips with the Medical Missions Foundation, including two to Romania.
"I'm widowed and I'd always wanted to do a medical mission," Kane said. "My first mission was to Mexico. I usually do pre-op or recovery or I circulate.
"(These mission trips have taken) my blinders off, and I've brought back an increased objectivity in dealing with people. I get more out of this than I give."
MMF volunteers hail from almost every city in the metropolitan area. They pay their own way, and many take uncompensated leaves of absence or use vacation time for the privilege of participating. Because of their generosity, all money raised by the foundation can be used to purchase items that have not been donated or cannot be transported.
Each volunteer for this trip will travel with two suitcases - one for personal items and the other packed with up to 70 pounds of medical equipment and supplies. Their packing lists include two pairs of jeans, comfortable walking shoes, rain jackets, flashlights, 50 tubes of antibacterial ointment, 50 bottles of children's vitamins and 30 bottles of ibuprofen.
Most mission participants will begin their arduous journey on Sept. 9, with flights to Chicago, Amsterdam and Bucharest, followed by an 11-hour train trip and a brief bus ride to rural Botosani. They will spend the next four to five days providing medical assistance and training, before they begin their return trip.
"This is my seventh trip to Romania," Hagen said. "I went, for the first time, five years ago. It has been the most rewarding experience of my professional career."

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Romanian students come to Stanford to learn to make their country's first citizen-built satellites

"Made in Romania." That's a claim that can't be made about any satellite--but that may soon change. Five Romanian scholars came to Stanford Aug. 26 to Sept. 4 to meet with Bob Twiggs, a consulting professor in the Aeronautics and Astronautics Department, and learn to build sophisticated satellites barely bigger than Rubik's cubes.

"When they go back, they'll build the first satellites built by anyone in Romania," said Twiggs, who also is teaching university students in Bogota the skills that would allow Colombia to produce its first satellites.

The satellites, cube-shaped with 4-inch sides, are nicknamed "CubeSats." They weigh less than a kilogram (2.2 pounds) and cost $25,000 to build and $40,000 to launch--a bargain compared to large satellites, which can cost $150 million to $400 million to build and $12,000 to $25,000 per kilogram to launch (a large satellite can weigh several tons).

The Romanian Space Agency (ROSA), the University of Bucharest and Politehnica University of Bucharest sponsored the students' trip. Stanford does not charge for the training, which is offered as a courtesy between universities. Twiggs said the CubeSat community is to small satellites what the Linux community is to computer operating systems--an international group devoted to open sharing of information to optimize the technology. Currently more than 60 universities worldwide are building CubeSats.

The CubeSats will be used to launch experiments and cameras into low-Earth orbit (400 to 600 kilometers, or 249 to 373 miles from the Earth's surface), said Mugurel Balan, a graduate student in physics at the University of Bucharest. He met Twiggs this spring at a "Hands On for Space" conference in Aalborg, Denmark, and was intrigued to hear about satellite experiments Twiggs' students had launched to detect micro-materials in space.

The Romanian students are designing three experiments for their CubeSats. The first will house sensors to detect dust from meteors; this will help the scientists better understand the damage to satellites that these particles can cause. The second experiment will contain an ionic chamber that will let scientists measure the total dose of radiation to which people or equipment could be exposed during space flight. Radiation affects chip performance, especially memory, said physics undergraduate Marius Trusculescu of the University of Bucharest. It can cause data to be lost, underscored his classmate, Claudiu Stirbei.

The third experiment tethers two satellites together to study their dynamics and test math models, said Irina Stefanescu, a doctoral candidate in aerospace engineering at Politehnica University of Bucharest. Applications of tethered satellites include launching spacecraft in formation, deploying a conducting tether to measure electricity from the ionosphere and generating the spinning motion necessary to toss satellites into lower or higher orbits, said Stanford Consulting Professor Belgacem Jaroux of the Aeronautics and Astronautics Department.

The students are at Stanford to learn as much as they can about CubeSat standards, power supplies and solar panels, said their faculty adviser, Mirel Vasiliu, a research scientist in electronics at Politehnica University of Bucharest. They hope to launch their satellites in 2007.

"To build, launch and manage a complete satellite mission is an excellent challenge for young people and an impetus to continue to build needed careers based on science and technology," Marius-Ioan Piso, president and chief executive officer of ROSA, wrote in an e-mail interview. Building professional-level micro-satellites prepares students to contribute to an important emerging market. "Partnership and cooperation are also a relevant effect--the resulting diversity produces progress. Any data on the universe and the Earth environment might become useful. The capacity of the space systems is still far from the needs. We need them not only for development but also to monitor the planet Earth and humankind's stability and security."

Satellite cameras could help Romanians monitor environmental conditions like the floods that ravaged their country this summer, the students said. And nurturing technology abroad may help here at home too. An international charter recently commandeered satellites worldwide to mitigate the effects of Hurricane Katrina. Said Piso: "The radar and optical satellites of the European Space Agency, together with other national agencies, are bringing useful information to help the disaster recovery."

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Cram course in satellite technology at Stanford/NASA for Romanian students

Aero-Astro Professor Bob Twiggs goes through the nuts and bolts of building a tiny satellite for visiting Romanian engineering and physics students. From Bucharest, they will take what they have learned and will build the first satellite ever to be made in Romania, scheduled for launch in 2007. It was a cram course: Elements of Twigg's normal 10-week program corkscrewed into just five days. Almost too much information, said the students, who asked their country's space agency for permission to come to the United States to meet with Twiggs.

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Alexandru Paleologu was a Romanian diplomat

BUCHAREST, Romania -- Alexandru Paleologu, a leading Romanian intellectual, senator and diplomat, died Thursday after a long illness. He was 86.

Paleologu died at home, friends and state news agency Rompres said Friday. He was awarded a top prize for diplomatic excellency by President Traian Basescu the previous day.

Paleologu served briefly as Romania's ambassador to France after the fall of communism in 1989, but resigned after falling out with then-President Ion Iliescu over his belief that Iliescu had not distanced himself sufficiently from the communist system. He served as a senator in the Liberal Party from 1992 to 2004.

Paleologu was a founding member of the Civic Alliance, one of the first groups to press for democracy after 1989.

Early in his political career Paleologu spent five years in a communist prison for plotting against the state, and was released in the 1964 general amnesty for political prisoners.

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Romania's Main Opposition PSD to Propose Joint Political Platform

BUCHAREST, Romania -- The main opposition Social Democratic Party (PSD) said on Sunday (4 September) it plans to initiate formation of a joint political platform among all leftist and centre-left parties in the country to provide an alternative to the current ruling coalition. PSD president Mircea Geoana says consultations would begin shortly. (Nine o'clock - 05/09/05)

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ROMANIAN GROUP CLONED CREDIT CARDS AND CASH CARDS IN SUPERMARKET

(AGI) - Reggio Emilia, Italy, Sept 5 - They entered supermarkets at night and via an alteration of the EPOS systems on the cash tills managed to copy thousands of credit cards and cash cards details, which were then cloned and used abroad.

The multi-million euro fraud was carried out by a Romanian group, which has been identified and uncovered by carabinieri in Reggio Emilia, who acted on the orders of Captain Passafiume in coordination with Reggio's deputy prosecutor, Maria Rita Pantani. Details of the operation and arrests will be given in the morning. (AGI).


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Romania Leader Says No Tax Hikes in 2006

BUCHAREST, Romania (AP) -- Prime Minister Calin Popescu Tariceanu said Monday that his government won't raise the value-added tax next year and will reduce payroll taxes.

The government has been considering raising the VAT tax from the current level of 19 percent to 22 percent to reduce rapidly rising demand which threatens to increase inflation.

Tariceanu said that after discussing the matter with his Liberal Party, "we concluded that there is no need to raise the VAT tax." He added that the flat income tax for individuals and corporations would also remain unchanged at 16 percent.

"We want to respect our promises on reducing the payroll taxes," Tariceanu said in a news conference with his Finance Minister Sebastian Vladescu.

Vladescu said the size of the payroll tax cuts would be decided later, and vowed to work toward a balance budget for 2006.

"We will try to keep the macroeconomic balance, and avoid international criticism for unsustainable expenses," he said.

Romania's economy is expected to grow by over 5 percent this year. The country wants to cut inflation from 9.3 percent last year to about 7.5 percent.

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Royal Palm Beach names Romanian town as sister city

ROYAL PALM BEACH — Point to Calarasi, Romania, on a map.

Anyone? Anyone?

Well, then, introductions are in order. Because once everything is official, residents of Royal Palm Beach, Calarasi will be your sister city!

The idea was initiated by a Calarasi resident here visiting his son Cristian David, who has lived in Bella Terra for three years. Cristian fled to the United States in 1991.

"Romania was hopeless, at least in my opinion,"

David said.

But his father, Aurel David, 69, still lives there.

"He thought of having an exchange of people and ideas between the two places," Cristian David said of his dad.

Calarasi is still trying to bounce back after decades of communist rule, David said. Apparently, that takes a while.

"If you live 50 years under someone who tells you what to do all the time, it's kind of hard," David said. "They've just started to move things more visibly toward another way of life."

Cristian David said he watched as his father marveled at the new, sprawling developments — with houses of warm, contrasting colors and equally tidy lawns.

"There's good and bad in development in my opinion," Cristian David said. "But to him, it's all good. He saw the developed land and said 'Wow.' "

So, a few months back, Aurel and Cristian David went to the village council and asked that Royal Palm Beach become a sister city with Calarasi. The village council said sure, why not?

Councilwoman Carmela Starace, who sits on the international board for both the Florida League of Cities and the National League of Cities, agreed Calarasi was an unusual choice. Romania is, after all, also the home of the mythical vampire Dracula and his Transylvanian castle.

Starace recalled that Aurel David said, with his son interpreting, that Calarasi was looking for "a cultural exchange."

Plus, Starace said, "they could use some of our expertise in engineering and infrastructure."

"We have to look at the global economics of things to come, especially with all this outsourcing," Starace said. "Even in my little city, if the businesses thrive, its good for residents. We have to start thinking globally."

And the relationship isn't always one-sided, said Ami Nieberger-Miller, a spokeswoman with Sister Cities International.

Nieberger-Miller said when Amesbury, Mass., — a town of about 14,000 — became sister cities with Esabalu, Kenya, most folks thought 'that's interesting.' But the relationship between the two villages really thrived.

Health care workers from both countries have taken turns visiting one another. Amesbury officials held public lectures and slide shows about Kenya. And people in both countries became somewhat knowledgeable about a land they previously knew nothing about.

"There are lots of ways these relations benefit," Nieberger-Miller said. "It's not fair to say it's lopsided. How do you put a dollar figure on people better understanding the world?"

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Mutu revives Romania hopes after 2-0 win over Czechs

By Radu Timofte

CONSTANTA, Romania, Sept 3 (Reuters) - Juventus striker Adrian Mutu fired Romania to a 2-0 win over the Czech Republic on Saturday to revive their hopes of reaching next year's World Cup finals.

Defeat was a major blow to the Czech Republic's chances of automatic qualification from Group One.

"We played a great match," Romania coach Victor Piturca told reporters. "It was one of our best performances for years but also a painful reminder of the points we have lost in earlier qualifiers."

The Netherlands have 25 points from nine matches, three ahead of second-placed Romania who have played two games more and face Finland away in their final game next month. The Czechs have 21 from nine matches.

Mutu, who scored twice against Andorra last month, netted his first in the 26th minute from Razvan Rat's cross. The former Chelsea striker added a second 20 minutes into the second half.

Romania's 37-year-old midfielder Dorinel Munteanu won his 126th cap to overtake Gheorghe Hagi's national record while Piturca opted for an experimental frontline of Razvan Cocis of Sheriff Tiraspol and Sportul Studentesc's Ionut Mazilu supporting Mutu.

Jan Koller hit the post for the away side in the second half and the lacklustre Czechs, who had scored 14 goals in their last two qualifiers, spurned other good chances.

"Our chances of automatic qualification are seriously compromised now," said Czech coach Karel Bruckner.

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Mittal wants to be the Ford of steel

.LONDON FGN32

London, Sep 4 (PTI) India-born steel magnate Lakshmi Mittal plans to turn his company, rated the world's largest, into a family dynasty to become the Ford of steel.
Mittal, the richest man in Britain, said Ford was a good model for the company, which produces 51 million tonnes of steel annually and was listed last year.

"The Ford brand still exists after 100 years and it is a professionally run company. And if any family member has an interest in running the company, he has an opportunity to do it," he told The Sunday Times newspaper.

But Mittal's tight grip over the company could put off some investors, the report said. He and his family control 88 per cent of the shares of Mittal Steel.

Global investment banking and security firm Goldman Sachs had last week summed up his problem in one of the first research notes published on the combined group.

It said any valuation of Mittal Steel should include a 15 per cent discount because of the strength of family control, the number of insiders on the board (four out of nine) and the position of Aditya, Mittal's son, who is both president and chief financial officer.

In the wide-ranging interview, Mittal also rejected any impropriety in his donations to the ruling Labour party, saying there was no connection between his donations to Labour and his business activities.

In July he gave the party 2 million pounds, having given 125,000 pounds four years ago. It transpired then that Tony Blair had written a letter in support of Mittal's purchase of Sidex, the Romanian steel group. PTI

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European motorists bemoan soaring gas prices after Hurricane Katrina

STOCKHOLM, Sweden -- Grumbling European motorists watched gas-pump dials spin to extraordinary levels Friday as prices soared this week after Hurricane Katrina crippled fuel supplies in the United States.

The price of a liter of gas climbed above 1.40 euros ($1.73 per liter or $6.70 per gallon) in Germany and hit a record high in Switzerland. Spaniards were paying 1.07 euros per liter ($5.08 per gallon) on Friday, up nearly 7 percent since last week.

"Look at that! Eight liters -- 106 kronor ($14.20)," said freelance journalist Inger Ortenblad at a Stockholm gas station shaking her head in disbelief as the numbers swirled. "This is amazing."

Returning the nozzle, she affectionately patted the black sedan she had borrowed from a friend. "Good car," she said. "Fuel efficient."

The Geneva-based International Road Transport Union, which represents the industry, is pressing the EU to set limits on national fuel taxes, which it says exacerbate the price spikes.

In Sweden, where taxes account for 60 percent of the gas price, some motorists called for a price cap.

"This is a disaster," said Claes Brulenius as he filled up his black Volvo station wagon. "In this situation, you really have to introduce a maximum price for fuel."

He recalled driving through part of the United States -- including New Orleans -- earlier this year, and was surprised to hear Americans complain about having to pay more than $2 per gallon.

"People would say, 'I guess you Europeans aren't used to such high gas prices,'" he said. "I thought they were kidding."

Even before Hurricane Katrina plowed through the Gulf Coast, oil producers and refiners had been struggling to meet rising demand around the globe, particularly in the U.S. and China.

In the U.S., stations in some states ran out of gas Thursday as they were overrun by panicked motorists looking to top off their tanks as prices soared past $3 per gallon and reports of shortages spread.

In Germany, gas-station operators Total, Aral and Shell raised prices 12 euro cents (15 US cents) per liter in the span of 24 hours from Wednesday to Thursday.

"I don't remember it ever being so high," said Jan Meyer, a 33-year-old architect filling up his Volkswagen sedan in Berlin.

In Switzerland, the liter price rose 10 centimes (8 U.S. cents) Friday to a record 1.76 Swiss francs ($1.42). "The gasoline price is exploding," the Zurich-based tabloid Blick said.

Still, the Swiss pay considerably less for gas than their neighbors in France, said 24-year-old Keat Charles, a Frenchman who sells panini sandwiches in Geneva.

"In France, gasoline is becoming just too expensive and you also earn less, so I come here to Switzerland to buy cheaper gasoline and profit from the higher Swiss wages," he said.

Michael Brighten, of Dunmow, 40 miles northeast of London, said most people in Britain "now accept that petrol prices will rise above 1 pound ($1.83) per liter. But it's just something you have to live with. I'm not going to let it change my lifestyle in any way."

Previous surges in oil and fuel prices have led to widespread protests and blockades by truckers in countries, including Britain and France.

There was no panic in Europe, but plenty of moaning at the pumps, with some drivers considering alternative modes of transportation.

"With these prices I will start biking to work instead of driving," said Rikke Michelsen, 39, in Copenhagen, Denmark.

"It's really getting pricey, I may have to cut down on my driving," said 25-year-old Racheed Ali, reflecting on the price tag of 11.14 kroner ($1.85) per liter in Denmark.

Taxi drivers complained that soaring fuel prices threatened their business.

"We can't raise our prices because we would lose our customers," said Virgil Aldea, a 56-year-old taxi driver in the northwest Romanian city of Cluj. "Our prices have stayed the same, but the gas has doubled in price. If we starve to death, who will care?"

A liter of unleaded fuel costs about 1 euro ($1.20) in Romania -- significantly lower than in western Europe.

"We the taxi drivers are the ones who lose out," said 60-year-old Giuseppe Maiolo, outside St. Peter's Basilica in Rome. "Our prices have remained the same despite Katrina."

Italy's productivity minister, Claudio Scajola, said the government was looking into lowering taxes on gas so that consumers aren't hit so hard by rising prices, although he cautioned that the savings would be small and not felt immediately.

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British diplomat extends helping hand to Europe's last leper colony

Cristache Tatulea, the mayor of the Romanian village of Tichilesti, has a simple test to show visitors how times have changed in his fiefdom: he offers them his hand. "Ah good, you are one of the ones who will shake it," he says, a smile lighting his tanned face. "In the old days, nobody would do that at all."

Tichilesti is Europe's last leper colony. Throughout its 80-year history, no locals would go within miles of the cluster of whitewashed buildings, hidden in a densely forested valley, for fear of catching the flesh-wasting disease.

Now, however, decades of near-total isolation and extreme poverty are drawing to an end, largely thanks to a British diplomat who aims to bring the lepers back into society.

Jonathan Scheele, the European Union's ambassador to Bucharest, read about the lepers on the internet and immediately did what no Romanian official had ever done - went to see the colony for himself.

"When my Romanian driver found out we were going there, he refused to drive any further and I had to walk through the forest without him," Mr Scheele recalled.

"The colony was not what you would expect - it was very calm and peaceful. It was remarkable to talk to people who had spent their entire lives in this compound. They came as teenagers and now they are old. Some married here, have had healthy children - who have grown up and gone to live outside the colony - and have entered old age without ever leaving.

"Yet they have made the best of their lives, building houses and making gardens on the hillside.

"I spoke to one who had been there since 1949 and never left. That really brought it home to me, because they had been there since I was born." The colony, 140 miles north-east of Bucharest, was founded in 1928 when 200 lepers were relocated from another colony run by monks.

At that time the condition, caused by a bacillus which attacks the skin and nerves leaving limbs and eyes severely disfigured, was still seen by Europeans as a "divine punishment".

Romanian lepers suffered even more under the Communist dictator Nicolae Ceausescu, who regarded the illness as an affliction of the decadent West.

Victims were evicted from their homes, had their possessions burnt and were forbidden to use notes or coins in case they passed on the infection.

Tichilesti was removed from official maps and many locals still claim to be unaware of its existence.

Today only 23 mostly elderly residents are left, of whom the oldest is 92. Some live in long pavilions, resembling monastic cells, while others, including Mr Tatulea, have built their own houses.

There are two churches, one Orthodox, one Baptist, and a farm on which the colony grows corn. Mr Tatulea, 73, also has his own vineyard.

His sister-in-law, Ioana Miscov, lost her fingers and feet, and has to tend her neat house and garden by crawling on her hands and knees.

"I've been here since 1941, but I couldn't live just in a room and sit on a bench all day," she said. "I keep myself busy with the flowers and the vegetables."

After the fall of the Iron Curtain quarantine continued until 1993, when residents were finally allowed to leave. With no money or homes, however, and fearful of the reaction of outsiders, most stayed where they were.

Now more than £70,000 has been allocated to refurbish the crumbling leper colony and supply satellite television and radios to link residents to the outside world.

The EU has also funded an information campaign about leprosy. Contrary to popular opinion, it is not highly contagious: infection occurs only after prolonged exposure to droplets from the nose or mouth.

Since the 1980s leprosy has been curable, although it remains a problem in parts of the developing world.

The EU also wants local Romanians to become accustomed to living alongside the lepers. An old people's home has just opened next to the colony and the pensioners - who were not informed in advance about their new neighbours - say they have got used to it.

"We were scared of getting the illness, but we now know that you can't catch it and are not worried," said Aurelia Dan, 67.

Local residents insist that had Mr Scheele not defied the taboos by visiting the colony nothing would have changed.

"No Romanian politicians ever visited us in the decades we were here. They probably do not even know we exist, and certainly don't care," said Mr Tatulea. "But Mr Scheele, he cares. He drank wine with me in my home, and we talked about life and all sorts of things. I will never forget it."

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Romanian Foreign Minister: EU Member States See 2007 as the Year of Bulgaria and Romania's EU Entry

Bucharest. The most remarkable aspect of the informal meeting was the way, in which all the participants emphasized that the date of accession of Bulgaria and Romania is January 1st, 2007, Romanian Foreign Minister Mihai-Razvan Ungureanu said after he returned from the informal meeting of EU Foreign Ministers in Newport, Wales, Mediafax reported.

Ungureanu added that the European politics and the British government back up the EU entry of the two countries on January 1st, 2007.

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Outsiders progress slowly in Romania

By Katalin Tóth

The wild wild East

Our neighbor to the east, Ro­ma­nia, has been overlooked for decades by Hungarian companies as a serious destination for investment, owing mainly to the destructive legacy of the one-time Ceausescu regime, and – despite much obvious potential – hitherto weak economic growth.

But things are changing, and changing rapidly. The region’s third largest country is growing at a remarkable rate, and the previously unthinkable idea of Romania becoming an EU member is now an imminent reality.

Romania’s GDP rocketed by 8.3% in 2004, and is expected to grow by 5.5% this year. Inflation has finally come down to single digits, and is predicted to fall to 7% in 2005. With few exceptions, every sector of the economy is booming – especially construction, retail and services.

Tapping into this vast and largely unexploited market is, however, no cakewalk. The sheer scale of possible returns means that small Hungarian firms will often go up against multinationals when seeking a foothold on the Romanian market. Nonetheless, SMEs are making headway in niche markets such as IT, while Hungarian powerhouses like OTP Bank are gaining a presence in what most analysts agree will be the most dynamically growing market in the CEE over the next five years.

Romania is a rapidly growing market promising higher returns than most developed markets, with quickly growing demand and a still relatively inexpensive workforce and services. However, as entrepreneurs and consultants speaking to the BBJ stressed last week, investors should also take into consideration factors such as cultural differences, lack of skilled management and lax fiscal discipline, which necessitate a special approach to this market of some 22 million people.

GDP in Romania grew by 8.3% in 2004, and is expected to increase by 5.5% this year. As the economy is growing much faster than in most European countries, while inflation is expected to decline to 7% in 2005, almost every sector of the economy is booming, especially the construction industry, and the retail and services sectors.

Speaking at a conference hosted this year in Budapest by economic news portal portfolio.hu, Marc Cannizzo, partner at Romanian corporate finance consultancy Osprey Partners, noted that average wages in Romania have grown in real terms to the equivalent of about €180 per month, household purchasing power is on the rise, and consumer finance products – including mortgages – are increasingly available.

“There is a vast, mostly untapped market in Romania,” observed Attila Fazakas, CEO and owner of PS Index s.r.l., which operates Romanian household appliances store chain Profi Center. “Besides strong demand, investors in Romania can expect a quick return on their investment of two to five years, while – in my experience – it is between four and seven years in Hungary, for example.”

The high profit margin in Romania is due to lower costs, especially wages, Fazakas noted. From this, he added, it follows that almost all services are much cheaper than those in Hungary or elsewhere in Europe.

“For example, the cost of maintaining a fleet of cars is 60%–70% of the equivalent cost in Hungary, and half of that in Western Europe,” he said.

Low wages, however, often also translate into lower productivity, especially in counties of Romania outside the heavily ethnic Hungarian-populated region of Transylvania, Fazakas warned.

“At my company, I introduced a performance-related remuneration system, but sometimes it seems impossible to motivate employees above a certain level,” he said. “When I asked one of my dealers in [the region of] Moldavia why his performance was lower than that of dealers in another county, and [pointed out] that if he worked more he could make more money, he answered that he was satisfied and didn’t need more money.”

Another factor hindering Romanian investments is the shortage of skilled and experienced management, Cannizzo said. Fazakas agreed, saying that traditional state-owned universities don’t produce enough professionals, while students of numerous private universities are poorly prepared for their future jobs.

Making it pay

All do not share this dim view of doing business with Hungary’s neighbor, however. The managers of one Hungarian training firm that recently opened a Romanian affiliate related entirely different experiences.

“We had several worries and preconceptions about working with people from a different cultural environment, but the people we interviewed, and later employed, were very educated, experienced, and familiar with the European management style,” said Attila Kriaszter, communications director of Develor Rt. “Romanian workers are eager to learn anything that comes from the EU. It came as a very pleasant surprise for us.”

Some major Hungarian firms with investments in Romania have already contacted Develor, and the training firm plans to organize training programs for SMEs too, Kriaszter added.

Besides cultural differences, the most serious problem for Romanian firms, and for potential investors from abroad, is under-capitalization and a lack of fiscal discipline at these firms, explained Ferenc Gábor, a consultant at Osprey Partners.

Fazakas pointed to problems with payment discipline.

“It’s a common thing that customers don’t pay or are very late with payments, partly because many don’t have operating capital, or have financial problems, while others are just not in a hurry to pay because being late with payments is cheap financing for them,” Fazakas said. He added that some big companies abuse their strong positions by paying late to smaller suppliers, and foreign investors in Romania must thus be tough negotiators.

Gábor cited an example of a mid-sized Transylvanian manufacturer, whose biggest customer did not pay for a long period, as it did not believe its smaller business partner would dare suspend their contract and stop shipping goods until regular payment resumed. When the supplier did move to suspend the contract, payments from the customer became more regular, the Osprey consultant said.

Gábor added that there is a blacklist available to commercial banks and companies, so that investors can avoid lending to insolvent clients. The Romanian Finance Ministry also publishes the latest balance sheets of companies on the internet.

While late payments can already be enough to destabilize a company, tax and other legislation also present potential risk factors.

The pace of development is very fast in Romania, and the legal system often fails to keep up, according to Fazakas. Tax laws are especially sensitive, he said, because many provisions of Romanian tax law are open to several interpretations, while the taxpayer cannot ask for a legal interpretation from the tax authority, as in Hungary or other EU countries.

“One time we sent a letter about a tax issue to the Romanian tax authority, explaining our interpretation of a provision and asking for theirs,” Fazakas recalled. “In the answer, the clerk just repeated the text of the law, and avoided taking a stance on the issue.”

Tax incentives

In Romania, investment incentives are equal for both domestic and foreign investors, and are available for significant investments or for investors in special economic zones, according to Róbert Heinczinger, tax partner at Ernst & Young Advisory Kft.

Investments that exceed $1 million are exempt from customs duties on new equipment. Local authorities may also grant an exemption or reduction of land tax for land related to the investment for the period of execution, up to a maximum of three years from the beginning of the works. Investors may also benefit from national grants for research and development, regional aid, and subsidies for SMEs, training, restructuring, large investment projects and environmental protection.

Employment subsidies up to 70% of the minimum monthly gross salary are available for hiring unemployed persons, recent graduates, individuals over 45 years old, and members of other special or disadvantaged categories.

Grants from the Environment Fund, which are managed by the Romanian Environment Ministry, are available for projects promoting clean technologies, eco-labeling and other environment-friendly technologies.

Industrial, scientific and technological parks are exempt from building tax and land tax, while investments in construction or internal infrastructure development in industrial parks are given a one-off allowance of 20% of the investment value, granted as a reduction of the taxable base for profit tax, until Dec. 31, 2006.

Tax advisors also pointed out that investors in free-trade zones can benefit from a tax exemption until June 30, 2007, if, by July 1, 2002, they carried out investments amounting to a minimum of $1 million in depreciable tangible assets. This exemption does not apply, however, if more than 25% of the investment was sold within one year. Operations within the free-trade zone are VAT-exempt.

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Romania: FID reaches 1.5 billion euros in H1

12:45 - 01 September 2005 - The total value of foreign direct investment into the Romanian economy closed in on the 1.5-billion-euro figure, growing 15 percent as compared with the same period last year, a release of the Central Bank (BNR) informs.


According to BNR in the first six months of 2004 foreign direct investments amounted to 1.29 billion euros. Taking into account June alone, the value of FDI rose by almost 30 percent, totalling 531 million euros. BNR data reveal that the ending balance for the analysed period is a positive figure of 536 million euros. For the same period in 2004 portfolio investments showed a negative ending balance of 117 million euros. Subscribed capital in the first half of this year grew 35 percent, to 890 million euros.

According to data provided by the National Office of the Trade Registry (ONRC) the value of social capital foreign companies had, was of 658.3 million euros. The ONRC calculates FDI considering the subscribed social capital at foreign companies and joint ventures. In June this year the value of subscribed capital was of 194.3 million euros, 7.6 times greater than last year when a value of 25.4 million euros was registered.

The top five of investors sees the Netherlands in pole position, followed by Austria, France and Germany. US ranks only fifth while Italy comes in sixth though in June alone 235 of the 1,035 newly set-up firms were Italian. The Romanian Agency for Foreign Investment (ARIS) announced that this year's target is a FDI level of 3.2 - 3.8 billion euros. How high the FDI level will go depends however on the pace of privatisation in the second half of the year and on the activity of the Authority for state Assets Valuation. In 2004 FDI amounted to 4.1 billion euros.

Source: ACT Media News Agency

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Romanian spying accusation

THE former head of the Democratic Alliance of Hungarians in Romania's Budapest office and his wife, formerly an official in the Office for Hungarians Abroad (HTMH), worked for the Romanian secret services, according to reports in the Hungarian and Romanian press.

It has also been alleged that the marriage between Tibor and Ildikó Szatmári was one of convenience. Ildikó Szatmári, it has been suggested, had affairs with two ministers, the former head of the HTMH and a spokesman for one of the two large parliamentary parties.

None of the allegations has been confirmed by security services in either country. The press department at the Education Ministry, which is headed by the Free Democrat Bálint Magyar, has also denied that Ildikó Szatmári and he ever had anything more than a professional relationship.

Tibor Szatmári told Hungarian Television that he would sue those who repeated allegations about his activities without first consulting him.

According to the weekly HVG, security services identified the pair as agents more than six months ago. An agreement was reached at the time according to which they would be allowed to remain in the country in exchange for silence over the affair. The information was first leaked to the Magyar Nemzet by sources inside the Hungarian community of Romania, HVG claims.

Spies working in the posts in question would have had access to a wealth of information about many aspects of Hungarian-Romanian relations, and would have had considerable influence over the way in which the Hungarian government's financial subsidies paid to ethnic Hungarian organizations abroad were spent.

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Romania Postpones Deadline for Bids

Romania Postpones Deadline for Bids in Sale of State-Owned Romanian Commercial Bank BUCHAREST, Romania (AP) -- The Romanian government has agreed to postpone a deadline for bids in the sale of the country's largest bank until Oct. 17, officials said Thursday.

The government privatization agency said that shortlisted potential buyers had asked for more time to complete their assessment of the Romanian Commercial Bank, known locally as BCR. The initial deadline was Sept. 19.

"We have accepted investors' request because it's clearly justified, reflecting on one hand BCR's market value, and on the other, their firm interest to take over the bank," said Gabriel Zbircea, who heads the privatization agency.

There are nine foreign banks bidding: Germany's Deutsche Bank AG, BNP Paribas SA, National Bank of Greece SA, Banco Comercial Portugues SA, Belgian-Dutch financial services company Fortis NV, Belgian bank KBC Group NV, Erste Bank AG, Dexia SA and Banca Intesa SpA.

BCR is Romania's largest bank, managing assets worth some euro7 billion (US$8.54 billion), or 26 percent of the assets held by the country's banking system. Last year, the bank reported a net profit of euro161 million (US$196 million) under International Financial Reporting Standards.

The government will select two bidders for final negotiations.

BCR is the last commercial bank to be privatized in Romania, which wants to have a completely private banking system before joining the European Union in 2007 or 2008.

The government is also selling the country's savings bank, CEC.

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OTP indicates interest in majority stake in Romania's CEC with 8 others

OTP Bank has submitted its Letter of Intent to acquire a majority stake in Romania's Casa de Economii si Consemnatiuni (CEC), the bank said in a statement on Wedneday. Romania has recieved Letters of Intent from nine potential bidders, but none of them were named.

The Romanian state called on 10 August a tender for the sale of not less than a 50%-plus-one-share stake but no more than a 75% holding in CEC. The deadline for submitting Letters of Intent was set to 31 August.

The Finance Ministry will set a list of pre-qualified investors based on the Letters of Intent submitted.

OTP declared earlier that it was also considering the possibilities of development via acquisition in Romania beside organic growth.


“The submission of the above Letter of Intent does not create any financial or other kind of obligation on the largest Hungarian bank. OTP Bank is convinced that CEC's privatisation will be a correct and transparent process, in line with international standards applied in the European Union," OTP said in a statement.

As of 31 December, 2004, CEC had IFRS-based total assets of EUR 1.31 billion and shareholders' equity of EUR 149 million. With its market share of 5.6% based on total assets, CEC is Romania's fourth largest bank, which posted a net profit of EUR 17 million in 2004. CEC serves around 2 million clients via 1,407 units.

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Dexia submits letter of intent to Romania govt on acquisition of CEC Bank

BRUSSELS (AFX) - Financial services group Dexia said it has sent a letter of intent to the Romanian government, confirming its interest in acquiring Romania's largest savings bank Casa de Economii si Consemnatiuni CEC.

Company spokeswoman Ulrike Pommee said: 'Yesterday, we deposited a letter of intent. We are still interested in the bank.'

Other European banks, including Rabo, Erste and Hungarian bank OTP, are also expected to submit letters of intent.

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EU Warns Sofia and Bucharest

The European Union’s warning to Bulgaria and Romania that they must speed up reforms or see their entry to the bloc set back a year represents a toughening of its attitude to EU aspirants, EU diplomats said yesterday.

The two Balkan neighbors were cautioned by European Commission President Jose Manuel Barroso and Enlargement Commissioner Olli Rehn on Monday that failure to complete a long list of key reforms on time would push the date back to 2008.
Both countries have struggled with endemic corruption, crime and other problems since communism collapsed in 1989. Brussels has agreed to let them in on January 1, 2007 but with a safeguard clause of a one-year delay if they are not ready.

EU diplomats and analysts said the latest warnings made clear that enlargement fatigue in Europe had made the EU less forgiving to shortcomings than a year ago and that both states faced a tough task in convincing Brussels they deserved to join.
“Nobody’s moving the goalposts, but time is marching on and there is perhaps a less forgiving political climate,” said a senior EU diplomat. “The political background in the EU means that it’s that much more important that there is nothing to reproach Romania or Bulgaria for.”

EU doubts over future expansion emerged after French and Dutch voters rejected the EU constitution. With gross domestic product per capita at a third of the EU average, Romania and Bulgaria form the EU’s second eastward enlargement. Turkey is waiting in the wings.

Alarm

“The risk of delay is rising,” said Ognyan Shentov, head of Sofia’s Center for the Study of Democracy. “Judging the situation in the EU and reading between the lines (of the two warnings), unfortunately this is very alarming news.”

Other analysts said the statements may have been meant as last-minute pressure on the two countries to pass a wave of laws and other measures ahead of a crucial October 25 report.
The report is seen as the milestone by which both countries will be judged as potential member states next spring.

The EU will evaluate progress on areas such as justice, agriculture, competition and the environment.

The body had already sent the two countries letters about these issues in June.

Romania, riddled with chronic corruption, inefficient courts, primitive agriculture and a polluted environment, has been slow to reform but an eight-month old centrist government appears more determined to effect real change.

Bulgaria has been praised for tackling similar problems faster but a seven-week political stalemate after inconclusive elections last June has held back legislation and organized crime remains a top concern.

“We are still working on the draft reports but the nearer you get, the less time you have to achieve what hasn’t been achieved,” an EU official said.
By Dina Kyriakidou
Source: Reuters

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Agassi beats Romanian in just 69 minutes

NEW YORK (AP) -- Andre Agassi was poised on the baseline waiting for Razvan Sabau's serve when the voice rang out from high above center court, cutting through the heavy, humid night. "Andre, 20 more years!" the man called, drawing laughter and approving applause from the U.S. Open crowd.

At 35, Agassi has no idea how much longer his creaky back will allow him to play, if even another year. On nights like Monday, though, he can still find that combination of artistry, finesse and power that made him one of the game's greatest players.

Showing no signs of the back pain that's troubled him most of the season, he cruised through the first round, needing a mere 69 minutes to beat the Romanian Sabau in his Open debut, 6-3, 6-3, 6-1.

That was only three minutes longer than top-seeded Maria Sharapova's 6-1, 6-1 victory over Eleni Daniilidou.

"Everybody here is taking the day out of their lives to come watch me, and I thank you for that," Agassi told the crowd after taking his traditional bows and kisses to all directions. "I've been through a lot of things in my life. A lot of things have taken me away from the lines of a tennis court.

"But it's never taken me away from here. Twenty years here feels better than 19, so thank you."

There were few surprises for the top seeds on Day 1 of the Open, with everyone advancing unscathed except defending champion Svetlana Kuznetsova and 2004 French Open winner Gaston Gaudio. Kuznetsova was the first defending women's champ to lose in the first round at the Open, and only the fourth at a major since the Open era began in 1968.

Top-seeded Roger Federer, 2003 champ Andy Roddick and No. 1 Lindsay Davenport all play Tuesday.

Agassi has won two of his eight Grand Slam titles here (1994 and 1999) and been runner-up three times. He has a bond with the Open crowd like few others. When he walked onto the court Monday night, the standing ovation was so loud it drowned out his introduction. His every winner was cheered, and fans shouted encouragement after a loss of only a point or two.

And unlike other matches, fans don't jump to the underdog's side when Agassi is playing.

"It took me a while to enjoy playing here," Agassi admitted. "If you don't understand the mentality of the people, you don't appreciate the city, you don't appreciate playing here. It took me a while to understand the mentality of a New Yorker. They don't have a lot of time to waste. If they're going to do something, they're going to bring it and they expect the same from you.

"That's something I've grown to appreciate. And embrace."

And he gives as good as he gets.

Agassi lost in the first round of the French Open when sciatic pain shot down his right leg from a herniated disk in his lower back. The same injury kept him out of Wimbledon, and he's only played twice since - winning one tournament in Los Angeles and reaching the final of another in Montreal. Though he's had a cortisone shot and is diligent about strengthening his core, he knows the injury could reappear at any time.

"It's not like you're nurturing a muscle or a tendon where you sort of understand the state of it along the way," he said of his vulnerable sciatic nerve. "It can literally be potentially anything that sets it off."

But it didn't stop him from playing with Sabau like a cat with a mouse. He raced through the first set, winning four straight games and not dropping a point in two of them. He had eight aces in the second set, including three straight to win the first game.

Agassi had 11 aces total, hitting as high as 127 mph on the radar.

He ran Sabau from one end of the baseline to another all night before finally putting him out of his misery with a variety of crosscourt winners, drop shots and lobs.

And what Agassi didn't do to Sabau, the Romanian did to himself, double-faulting eight times.

"I feel great," Agassi said when asked how his back held up. "But I also haven't played five sets. Haven't been out there for four hours. That's potentially a different battle altogether. I'm only going to know that when I cross that bridge.

"As of right now, I have every reason to be hopeful that health is not going to be an issue."

(c) 2005 The Associated Press.

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Greek Telecoms Operator Posts Profit Surge

Greek Telecoms Operator Reports Second-Quarter Profit More Than Doubles on Lower Tax Rate ATHENS, Greece (AP) -- Greece's largest telecoms operator, OTE, said Wednesday its second-quarter net profit more than doubled because of a lower tax rate and a sharp increase in earnings at its Romanian unit.

However, OTE's domestic fixed-line business revenues fell, extending a three-year trend. Sales have been hit by subscribers switching to mobile phones.

"Greek fixed-line operations showed some resilience in the quarter, and we seem to have put a halt to the continuing growth in operating expenses, but the overall performance remains weak," OTE Chief Executive Panagis Vourloumis said in a statement.

OTE is restructuring and cutting jobs as part of efforts to lower the fixed-line division's costs.

The company's net profit rose to euro119.1 million (US$145.1 million) in the second quarter from euro45 million (US$54.8 million) in the same period a year earlier. Revenues climbed to euro1.36 billion (US$1.6 billion) from euro1.3 billion (US$1.6 billion) on year.

In the second quarter, earnings were buoyed by euro20 million (US$24.4 million) income from investments as well no longer having to bear costs the company incurred last year when sponsored the Olympic Games. The tax rate also fell to 30 percent from 48 percent in 2004.

At an operational level, OTE's Romanian business, RomTelecom, posted a surge in net profit to euro57.6 million (US$70.2 million) from euro9.3 million (US$11.3 million) a year earlier.

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