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2005-09-13T22:41:00.000+02:00

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U.S. Distillers Launch Whiskey in Romania

2005-09-09T18:46:00.000+02:00

U.S. distillers unveiled a wide selection of American whiskies on Friday, mixing cocktails and preparing spirit-spiked dishes targeting a growing consumer market in this former communist country.

"(Bourbons) taste awful good and it's different to what is already on the market such as cognac, vodka and gin. It has a unique style," said Chris Morris, master distiller of Louisville, Kentucky-based Brown-Forman, which produces Jack Daniel's Tennessee Whiskey and Southern Comfort Liqueur.

Morris took guests, hoteliers, restaurant owners and drinks distributors thought a one-hour tasting of various whiskies, explaining the history and process of the drink. Later, guests were shown how to mix bourbon-based cocktails, and cook dishes such as shrimp flambeed in bourbon.

Whiskey exports from the United States to Romania grew from about 500,000 containers under 4 liters (4.23 quarts) in 2000, to some 2.7 million last year. So far, there has been a 55 percent growth since last year. Romania's economy grew some 8.1 percent in 2004.

"You just have to look at all the cranes sprouting in Bucharest, to see that it is ripe for sophisticated tastes in beverage products," said Frank Coleman, senior vice president of the distilled sprits council of the United States.

Coleman said the U.S. distilled spirits industry, which is partly located in areas hit by Katrina, had been affected by the hurricane.

"Katrina has affected all U.S. companies who have operations in those areas ... It wasn't anything particular to the distilled spirits industry."

He said that distilled spirits companies including Jim Beam and Pernod Ricard had donated about US$1 million (euro805,000) to help relief efforts.

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Iran, Romania competent of expanding economic ties

2005-09-09T18:44:00.000+02:00

TEHRAN, Sept. 9 (MNA) – The grounds for expansion of economic ties are there between Iran and Romania, and the two parts should pay more attention to this issue, Mircea Boncu, advisor to Romanian Embassy in Tehran for trade affairs said on Friday.

Addressing the industrialists in a visit paid to Great Industrial Exhibition held in Arak, capital of Markazi (Central) Province, he said that the numerous capabilities of production in this province and Romania have created golden opportunity for enhancing the bilateral ties between the two countries.

He also referred to the great industrial exhibition to be held in Romania, and said, “The industrialists and businessmen of Markazi Province can introduce the potentialities of their province by participating in this exhibition.”

The industrialists of Markazi Province, on their part, called for enhancing relations with their Romanian counterparts.

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Deputy PM Discusses Economy's Problems With IMF Official

2005-09-09T18:43:00.000+02:00

Romanian Deputy PM, Gheorghe Pogea met with IMF representatives in Romania to discuss the main problems of the country's economy, namely the C/A deficit, inflation and the state's budget revenues, the Romanian official said.

Pogea said that this year, the C/A deficit will not exceed 8% of GDP, and might even stand at 7.75-7.8% of GDP.

Pogea also said that inflation cannot be controlled, unless the BNR's measures are supported by economic policies.

Moreover, the Romanian official claimed that the issue of the state's budget revenues is a real problem, given Romania's EU hopes.

"Romania must have additional revenues of at least 1.3% of GDP in order to be able to absorb EU funds", the Deputy PM said.

Feasible solutions must be found in order to rise the amount of revenues, he added.

Furthermore, he said that the VAT increase is not absolutely necessary.

As for the IMF official, he said that a solution could be to reconsider some of the budget expenditures.

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Second Reshuffle in Romanian Government Expected

2005-09-09T18:41:00.000+02:00

BUCHAREST, Romania -- Prime Minister Calin Popescu Tariceanu said on Thursday (8 September) that a second reshuffling of the government will take place next week -- this one involving some secretaries of state and county governors. Tariceanu noted that every party in the ruling coalition has evaluated the work of its representatives in the cabinet and has submitted the assessments to him. He will use them to decide on the reshuffle.

In other news, Bucharest will host the 52nd session of the WHO's Regional Committee for Europe next week. Health ministers from 52 European countries are expected to attend the event, which will focus on children and teenagers' health, the organisation of European health systems and the WHO policy regarding alcohol consumption. (Nine O'clock, Rompres - 09/09/05)

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Romanian Prime Minister Witness in Court

2005-09-09T17:58:00.000+02:00

Prosecutors in Romania will interrogate Romanian Prime Minister Calin Tariceanu in connection to the “Rompetrol case”, the newspaper Realitatea Romaneasca reads today. Katalin Danku, who is the defense lawyer of one of the accused, stated yesterday that Calin Tariceanu will be called as a witness and will explain the ways he acquired significant amounts of money after the sale-trade of Rompetrol shares. Danku stated yesterday that prosecutors plan on calling 40 witnesses whose names are in the trial’s documents. This case concerns businessman Dinu Patricu, who was accused of manipulation of exchange markets and violation of the Joint Stock Company law.

The most frequently used name is that of Tariceanu, who before heading the government stated that he owned a block of shares in Rompetrol worth ROL 6.25 billion. Danku stated that everyone who is connected with the case would attend the hearing, including Tariceanu. “If he fails to show up, we will summon him because he has also played with Rompetrol shares on the Exchange. Nobody stands above the law”, the lawyer emphasized.

As FOCUS News Agency announced yesterday Tariceanu denied accusations that he had sold his Rompetrol shares for profit, and he also added that he only did it to avoid “conflict of interests”, because of his current position as Prime Minister.

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Flood Damages in Romania Amount to 2% of GDP

2005-09-09T15:28:00.000+02:00

The partial calculation made by the Romanian Ministry of Administration and Interior show that the damages caused by the floods in the country amount to more than Lei 52 billion (about EUR 1.5 billion), Romanian News Agency XPRIMM News reported.

For 2005 the losses of the floods in Romania amount to 2% of the prognosticated Gross Domestic Product (GDP) of the country.

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Bucharest Public Transport Employees Cut Down by 20%

2005-09-09T15:27:00.000+02:00

About 20% of public transport employees in the Romanian capital will be laid off and about 2,300 people will be relieved off duty by the end of next year, according to a reorganization project, voted by the General Council of the Bucharest Municipality on Thursday, Mediafax reported.

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Averea: Romania is Least Popular in EU

2005-09-09T15:23:00.000+02:00

Only 45% of EU members’ citizens support Romania’s accession, a Barometer study showed.

The European Commission in Romania presented the study yesterday, the newspaper Averea reads today. Bulgaria got a support of 50%; Croatia received 52% and Turkey only 35%, the issue reports. Out of all EU members Sweden, Greece and Denmark give their strongest support for Romania. The countries with the least support are Austria and Germany.

Head of the European Commission Delegation in Romania Jonathan Scheele said: “I am worried by the 45% support that Romania has received. You have to try hard to become more popular. Romania is the least known country in the EU”.

Romania, however, remains the country with the highest percentage of trust for the EU. The level of trust has dropped down in the last year from 74% to 68%, the study shows. “The level of trust for the EU in Romania has decreased a bit, may be because we tried to explain in detail the EU role in Romania. We are not here as arbitrators but to help Romania solve its problems. Decrease of popularity is the price we pay for being sincere, but I think it’s worth it” Scheele stated.

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JCR has upgraded the ratings for Romania

2005-09-09T13:32:00.000+02:00

JCR has upgraded the ratings on foreign currency long-term senior debts and local currency long-term senior debts of the issuer from BB+ and BBB- to BBB-/Stable and BBB/Stable, respectively.

The upgrading reflects the stronger probability that Romania will join the EU in January 2007 following the signature of the Accession Treaty on April 25, 2005, the expectation that the government will continue to push ahead with reforms, inspired by a strong political will with the backing of popular support, and the country's improving fiscal balance and public debts supported by positive developments in the economy.

On the other hand, the ratings are constrained by the country's external weakness as exemplified, in particular, by the high level of current account deficit, the low per-capita GDP (in terms of purchasing power parity) that stands at 31.7% of the average for the EU25, and the need for the country to make further improvement on qualitative factors, such as "justice reform" and "acceleration of competition," which are the requirements it must achieve before its EU accession.

The rating outlook is stable, as JCR sees that the direction of the country's integration with the EU is immutable, though there may be some delay in the process of justice reform as the Constitutional Court ruled the government's "justice reform package" as "unconstitutional."

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Mittal Steel Company has acquired a majority stake in Romportmet

2005-09-08T22:41:00.000+02:00

Mittal Steel Company N.V. (NYSE and Euronext Amsterdam: MT), today announces that it has acquired a majority stake in Romportmet, a port facility located in Galati, Romania.

Mittal Steel has increased its shareholding in Romportmet to 89% through the acquisition of approximately 20 million shares from the Broadhurst Fund, the current majority shareholders at a total cost of $ 47 million.

Mittal Steel Galati is already one of Romportmet's major customers and the company previously owned an 11% stake in the port.

Commenting, Mittal Steel Galati CEO, Mr. KAP Singh said:

'As part of our continuous efforts to manage cost effectiveness of all our Romanian production facilities, we have decided to integrate Romportmet into our asset portfolio. This will allow us to have better control on shipping and handling services for our products. In addition to the cost saving implications, the acquisition will increase reliability and ensure an improved delivery service for our customers.'

The transaction is subject to the approval of the Competition Council and other relevant Romanian bodies.

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Austrian Epa Acquires Romanian Euromedia and Beta Cons for 20 Mln

2005-09-08T20:39:00.000+02:00

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

2005-09-08T17:23:00.000+02:00

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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Rompetrol unveils business expansion programme worth $40 m

2005-09-08T15:58:00.000+02:00

Rompetrol Group, the second biggest player on the Romanian oil market, opened in Timisoara the first petrol station in a series of 36 such shops to be developed in 2005 nationwide. The project is part of an 18-month business expansion programme worth $40 million.

The new stations will bear the name of Rompetrol and will include shops, restaurants and Internet cafes.

Rompetrol Group, run by businessman Dinu Patriciu, has reported an H 1 2005 business turnover in excess of $1 billion, up 67 percent from H 1 2004.

The group also recorded a net profit of $81 million, compared with losses of $12 million in H 1 2004.

Rompetrol is one of the main players on the segment of petrol stations, where Petrom is currently the leader.

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Privatization of Romgaz will not be finalized this year, Seres says

2005-09-08T15:57:00.000+02:00

The privatization of the national natural gas producer Romgaz will not be finalized this year, the deadline being the end of 2006, Minister of Economy and Trade, Ioan Codrut Seres said during a seminar dedicated to the natural gas market in Romania.

"The privatization will begin in the second half of 2006 or even later," Seres said.

The Minister said that the company will be privatized with a strategic investor or using the capital market.

Seres said the privatization of Romgaz should not include the storage services, as they will be further administrated by the state at the same time as the establishment of a new company.

As for Distrigaz Nord and Distrigaz Sud gas operators, Seres explained that their new owners, Ruhr Gas and Gaz de France, pledged to cut some 15 percent of the distribution prices in the first regulation period (2005-2007).

"For this reason they will have to invest all their social capital, 182 million euros and 128 million euros respectively, in upgrading the distribution network," the Minister added.

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Lukoil to expand its network by 60-70 gas stations

2005-09-08T15:56:00.000+02:00

Lukoil's fuel distribution network will expand by about 60-70 gas stations by the end of 2006.

Lukoil's regional structure currently needs to increase and improve the supply of fuel from Romania towards other countries in the area, the company's manager stressed.

Lukoil started supplying fuel in Romania in 2001 via 19 gas stations and, at present, it posts sales worth about $90 million a month, he said.

Next year, depending on the market prices but also on Romania's capability to stand the price rise, the monthly average sales are expected to reach 130 million dollars, Lukoil's manager added.

The new gas stations will add to the 9 storage facilities and the 300 filling stations that Lukoil Romania currently owns.

Lukoil also announced investments in the revamp of the Petrotel Refinery bought in 1998, according to the Euro 3 and Euro 4 specifications, and for the Euro 5 production.

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Romania Will Have Problems if It Does Not Complete Judicial Reform

2005-09-08T15:55:00.000+02:00

Head of the European Commission Delegation in Romania Jonathan Scheele stated on Wednesday night at a round-table talk, organized by Conrad Adenauer Foundation that Romania will experience problems if it does not complete its judicial reforms by March or April of 2006, Mediafax reported today.

The European Commission’s report on Romania’s progress might cause activation of the safeguard clause in the EU Romania’s Accession Treaty. Scheele added that it is important that Romania is completely prepared for EU membership. “All government members state that accession is Romania’s number one priority. The problem is not whether Romania will join the EU in 2007 or 2008 but whether Romania will be prepared to meet with European reality right after accession”, Scheele stated. He emphasized that there are five more sectors on which Romania has to concentrate efforts - public market, free competition, agriculture sector, environment and judicial system reform.

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Romania's Premier: Foreign Investment Up

2005-09-08T15:44:00.000+02:00

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

2005-09-08T15:43:00.000+02:00

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

2005-09-08T15:42:00.000+02:00

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

2005-09-08T15:38:00.000+02:00

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

2005-09-08T15:35:00.000+02:00

"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

2005-09-08T15:32:00.000+02:00

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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Schroeder Backs Romanian’s EU Accession in 2007

2005-09-08T13:25:00.000+02:00

“The agreement for Romania’s EU accession envisages Romania to become an EU member stated on January 1, 2007. I absolutely back this aim”, German Chancellor Gerhard Schroeder stated in an interview for today’s edition of Jurnalul National .

Asked to comment on the words of the coordinator for the Stability Pact for Southeastern Europe Erhard Busek that there are other countries that are better prepared for EU membership than Bulgaria and Romania, Schroeder answered that he believes that by 2007 both the countries will have “done their homework and will be ready for accession”.

Schroeder has added that during his election campaign he is trying to show that the reforms in the spheres of labor, social policy, healthcare and pension insurance, which he has inaugurated, have already brought results and that Germany needs a reliable policy in a foreign and European aspect, which includes the application of pre-accession agreements.

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Military Service Becomes Voluntary in Rumania in 2007

2005-09-08T13:22:00.000+02:00

Defense Commission members of Parliament approved of a Military Service bill, Romanian newspaper Libertatea reads today.

The new bill makes provisions for the nature of military service. It reads that military service will become voluntary from January 1st 2007. The last regular recruitment will enter the Army in 2006.

Men with shorter military service term, who have graduates from university, enter in October and the rest enter in June. This draft bill will be announced for discussion next week in the Chamber of Deputies.

National Defense Minister Teodor Atanasiu declared that depending on the need, between 5,000 and 10,000 volunteers will be hired in the beginning. Volunteers can be both male and female. Draft bill also reads that in case of war, military service will become mandatory for men only, newspaper adds.

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Austrian Epa Acquires Romanian Euromedia and Beta Cons for 20 Mln

2005-09-08T11:44:00.000+02:00

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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IAR Ghimbav: Profit doubles y/y in H1

2005-09-07T17:05:00.001+02:00

IAR Ghimbav, a company that specializes in the construction and maintenance of helicopters, announced H1'05 results, according to which earnings reached 1.9m euro, twice higher than in the same period last year.

Sales reached 13.1m euro, up 45 percent compared to the same period of 2004.

IAR's CEO, Ion Dumitrescu said the total value of the company's ongoing contracts stands at 240m USD, with deliveries set for the 2005-2009 period.

The most important contract is the one concluded with the United Arab Emirates' army for the upgrade of dozens of Puma helicopters from Romania. The contract is worth 90m USD.

IAR Ghimbav holds a 49 percent stake in Eurocopter Romania, a joint company running on Romanian-French capital, set up in 2002, together with Eurocopter SAS, which controls a 51 percent stake.

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Hungary to Ratify Bulgaria, Romania EU Treaty by End-Sept

2005-09-07T17:05:00.000+02:00

The Hungarian Parliament will ratify the EU Accession Treaty of Bulgaria and Romania by the end of September.

The statement was made by Lucian Leustean, Romania's State Secretary with the Ministry of Foreign Affairs, at the end of a session held by the expert committee for cooperation in foreign politics and European and euro-atlantic integration, as quoted by Rompres news agency.

So far, Slovakia has been the only EU Member state to ratify the accession treaty signed by Bulgaria and Romania on April 25.

The two Balkan countries are expected to join the EU on 1 January 2007 after all of its 25 members ratify them.

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Tyre maker Danubiana returns to profit

2005-09-07T13:36:00.000+02:00

Romanian tyre maker Danubiana (located near Bucharest) has succeeded in surpassing the loss recorded in mid-2004 by posting a modest profit of 64,000 RON (one euro is traded for some 3.5 RON) in H1 2005, ACT media news agency reports.

The company's expenditures and revenues are by 38% smaller than on June 30, 2004.

In H1 2005 investments worth 924,000 RON were commissioned.

The investments consisted in new types of tyre moulds.

The company's main shareholder is Tofan Group International, which owns 83.47% of Danubiana's capital of 45.9 million RON. The rest of the shares is owned by the State Assets Realization.

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Republic of Romania LT FC Rating Raised To 'BBB-' On Declining Debt Burden; Outlook Stable

2005-09-06T17:17:00.000+02:00

LONDON (Standard & Poor's) Sept. 6, 2005

Standard & Poor's Ratings Services said today it raised its long- and short-term foreign currency sovereign credit ratings on the Republic of Romania to 'BBB-' and 'A-3', from 'BB+' and 'B', respectively, on improving government indebtedness indicators. At the same time, the long-term local currency rating on Romania was raised to 'BBB' from 'BBB-', and the 'A-3' short-term local currency rating was affirmed. The outlook is stable.

Romania is the twelfth sovereign currently rated by Standard & Poor's that has made the transition to investment grade from speculative grade. The full analysis on the Republic of Romania will be published later today on RatingsDirect, Standard & Poor's Web-based credit analysis system. The report will also be posted on Standard & Poor's public website, www.standardandpoors.com (select Credit Ratings, then select Sovereigns from the left-hand menu, then find under Credit Reports).

"The upgrade stems from the improvement in general government fiscal indicators that has occurred on the back of buoyant domestic demand," said Standard & Poor's credit analyst Moritz Kraemer. "GDP looks set to grow at almost 6% in 2005, with domestic demand expanding almost twice as rapidly."

As a result, the general government deficit will reach 1.3% of GDP, despite a comprehensive tax cut associated with the introduction of the 16% flat tax in 2005, and additional spending pressures related to the floods affecting part of the country this summer. General government debt will drop to less than 20% of GDP in 2005, well below the 'BBB' median. Sustained fiscal
consolidation and parastatal budget control will lead to a stabilizing general government debt ratio. By the end of the current decade, this ratio will inch up to a moderate 22% of GDP, as GDP growth will ease toward a more sustainable 5.0% and EU-accession related spending pressures will make themselves felt.

The ratings on Romania remain constrained by institutional weaknesses, significant external imbalances, low levels of economic prosperity, and a large, albeit declining, loss-making parastatal sector.

"Romania's external imbalances are offset by its EU membership prospects, which would make the growth- and investment-enhancing economic modernization process irreversible," said Mr. Kraemer. "Furthermore, we expect that the government will take the necessary action to reduce the large current account deficit, which could reach 9% of GDP in 2005."

In this context, a prudent approach to public finances and the careful management of capital inflows and the ongoing domestic credit boom will be vital. Failure over the medium-term to effectively mitigate the vulnerabilities caused by the persistent external imbalances could bring the ratings under renewed downward pressure. A delay to EU membership to 2008 is
now more likely than entry in 2007, but would not in itself put any downward pressure on the ratings on Romania.

Further improvements of the rating would hinge on policy predictability, sustainable continued real convergence with higher-rated peers, and tangible success in reducing Romania's governance problems.

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BCR granted The Banker Bank of the Year Award 2005

2005-09-06T15:48:00.000+02:00

UK financial magazine The Banker, member of Financial Times press group, has granted the Bank of The Year Award 2005 to Romanian commercial bank Banca Comerciala Romana (BCR).

Some 510 banks from more than 138 countries registered for The Banker 2005 Awards competiton.

BCR received the award for its continuous growth trend over the past years.

Indeed, BCR's net profit rose from 43.26 mln euro in 1999 to 128.98 mln euro in 2004. BCR holds 25 percent of the market for corporate loans and 30 percent of the market for loans for individual clients in the country.

In terms of bank deposits from individual clients, BCR holds 32 percent of the market.

In addition, the award reflects the high performance of BCR group members BCR Asigurari, BCR Leasing, BCR Asset Management and BCR Securities.

Note that this is the fourth time that BCR receives The Banker Bank of the Year award.

BCR ranked 332nd in The Banker's top 1,000 commercial banks in the world last year, up 40 positions from 2003.

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Alexandru Paleologu was a Romanian diplomat

2005-09-06T07:27:00.000+02:00

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

2005-09-06T07:26:00.000+02:00

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

2005-09-06T07:23:00.000+02:00

(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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4.1-Magnitude Earthquake Registered in Romania

2005-09-05T21:19:00.000+02:00

An earthquake measuring 4.1 on the Richter scale was registered in eastern Romania at 5:24 pm local time, AP reported. The quake was centered in the region of Vrancha, 175 km north of Bucharest.

There are no reports of casualties or material damages.

Earlier, RIA Novosti reported that an earthquake measuring 3 on the Richter scale was registered in Moldovan capital Kishinev at 5:24 pm local time.

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Romanian revolution monument revolts art critics

2005-09-05T21:18:00.000+02:00

By Marius Zaharia

BUCHAREST (Reuters) - Described as a skewered potato and brain on a stick, Romania's monument to the heroes of its 1989 anti-communist revolution was unveiled on Monday amid widespread doubt over its artistic merit.

The $2 million (1.1 million pound), 25-metre (82-foot) high marble and copper sculpture was attracting controversy long before President Traian Basescu opened it, praising the 1,058 people killed in the uprising that overthrew Stalinist dictator Nicolae Ceausescu.

"Allow me to express my deep respect for those who gave us freedom," Basescu said. "As someone who respects them, I can only bow to them and welcome a monument that honours them."

In front of the building where Ceausescu made his last speech before being whisked away by helicopter to his execution, the marble spike pokes through an egg-shaped metal mesh.

The Romanian media has labelled it the "spiked potato", "brain on a stick", "olive on a toothpick", even "the penetration monument".

Art critics have slammed the work as a mistake, both in its own right and as part of its surrounding area -- the historic Revolution Square where many buildings are still pockmarked by the 1989 street battles that ended four decades of communism.

"The monument is badly placed and was only chosen because the sculptor was a friend of the authorities," architecture professor Florin Machedon told the weekly Saptamana Financiara.

The creator was picked during the rule of the ex-communist PSD party, which was ousted in November elections. Even the former culture minister said he had opposed it at the time.

"It's revolting," art critic Neagu Djuvara told the newspaper. "It should have been something simple, with only the names of the dead written on it."

The sculptor of the monument, officially named "Resurrection Memorial - Eternal Glory to the Heroes of Romania's 1989 Revolution", defended it as an important addition to the Bucharest landscape.

"If you look on the streets of Bucharest, people are looking down. I wanted to raise their eyes a bit," he told Reuters. "The pyramid is a symbol of victory and the crown represents the souls of the heroes in heaven."

Most ordinary Romanians passing by the monument said they failed to see the symbolism.

"This contraption is worthless for Romanian people because nobody can see what it really represents. One thing is clear: it's too big and too ugly," said locksmith Victor Iacobescu, 54.

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Austrians Give Thumbs Down to Bulgaria, Romania EU Entry

2005-09-05T21:17:00.000+02:00

Most of the Austrians oppose Bulgaria and Romania's entry into the European Union (EU), APA news agency reports.

There is only a small percent of the Austrians backing the entry of the Balkan countries into the Union on January 1, 2007.

A study of Eurobarometer shows that some 21% of the Austrians back the entry of Bulgaria, whereas its neighbour Romania enjoys the support of some 17%.

Romania and Bulgaria are both hoping to join the Block in 2007, although the two Balkan countries lost precious time in political squabbles over the last month.

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Romania Leader Says No Tax Hikes in 2006

2005-09-05T17:22:00.000+02:00

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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Comvex: Profit triples y/y in H1

2005-09-05T17:03:00.000+02:00

Comvex, a Romanian Black Sea port operator, announced that its first-half net profit tripled year-on-year to 98.55 billion old lei, as turnover rose by 62%.

Comvex's turnover reached 300.5 billion old lei, due to improved management and a rise in the quantity of bulk cargo handled in the first half of the year, the company said.

Comvex can handle over 18 million tonnes of bulk cargo, used by metallurgical and power industries in central Europe.

It did not provide data about the cargo volume in the first half of 2005.

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Romania Fin Min:To Focus On Tax Collection Not Higher Tax

2005-09-05T17:02:00.000+02:00

BUCHAREST -(Dow Jones)- Romania will focus on better collection rather than higher taxes to boost revenues of its cash-strapped budget next year, the country's new finance minister said Monday.

For 2006, "the value-added tax will stay at 19%, the flat tax at 16%, and social security tax will be reduced by a percentage that will be decided within weeks," Sebastian Vladescu told reporters in Bucharest.

Vladescu's statements end more than two months of rows within the ruling coalition about raising VAT by three percentage points to boost budget revenues in 2006.

The measure had been agreed with the International Monetary Fund in June, but government backtracked on it following widespread protests from population and business people.

Higher VAT would have helped the government make up for lost revenues after the introduction of a flat 16% individual and corporate tax Jan. 1, but would have increased inflation by 1.5 percentage point to 6.5% in 2006.

At present, Romania's $400 million standby loan agreement with the IMF has been put on hold due to political uncertainty and the economic effects of recent heavy floods.

However, Vladescu, who took his job at the end of August following a government reshuffle, said he is optimistic about Romania's relations with international lenders.

"I'm sure that our partnership with international organizations will continue based on the balanced budget we are building (for 2006)," he said.

IMF approval of Romania's economic program is important, because Romania hopes to join the European Union in 2007, together with neighboring Bulgaria. The European Commission has said admittance could be delayed until 2008 if the countries don't meet entry criteria.

-By Cristi Cretzan; Dow Jones Newswires;

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Bulgaria, Romania "Join EU after Meeting All Requirements"

2005-09-05T17:00:00.000+02:00

Politics: 5 September 2005, Monday.

Bulgaria and Romania will join the European Union (EU) once they fulfil all the requirements, German opposition leader Angela Merkel was cited as saying said during the TV debate with Chancellor Gerhard Schroeder.

Radio France International reported that Merkel has clearly stated that the two member candidates must meet all EU requirements before joining the Block.

Merkel and Schroeder also clashed over Turkey's bid to join the EU.

Merkel repeated her position that Turkey should be offered a "privileged partnership" with the EU, rather than full membership and that talks due to begin next month should focus on that. "It would be irresponsible to make the suggestion now that the country will become a full member only to say one day that we can't implement that after national referendums in some European countries," she said.

Schroeder argues that Merkel "doesn't understand the geo- strategic importance of Turkey" in the region. "If we succeed to binding Turkey lastingly into western society, to combine non- fundamentalist Islam with western values, than we gain security in Germany and Europe."

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Chicken thief on Interpol list

2005-09-05T15:27:00.000+02:00

Ananova:
Chicken thief on Interpol list

A Romanian man who stole seven chickens from a neighbour was surprised to find he was on Interpol's most wanted list.

The 51-year-old chicken thief, from Iasi in eastern Romania, who is unnamed for legal reasons, had left the country four years ago.

But when he returned to visit family he was told by border guards he had been identified from an Interpol list of dangerous fugitives - for stealing chickens from his neighbour's farm before he left.

Police spokesman Serban Pittner said: "He was a wanted man for four years. Officers identified him by his international arrest warrant for stealing seven chickens."

The international chicken thief has been sentenced to three and a half years in jail.

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Rabobank H1 profit rises, no interest in Romania

2005-09-05T15:24:00.000+02:00

AMSTERDAM, Sept 5 (Reuters) - Dutch financial cooperative Rabobank reported a 12 percent rise in interim profit on Monday and ruled itself out of buying Romanian bank Casa de Economii si Consemnatiuni (CEC), saying it was eyeing other markets.

"Our focus is on Poland and Turkey and possibly another country in Eastern Europe at this time but not in Romania," Rabobank [RABN.UL] Chairman Bert Heemskerk told a news conference.

Last week, Rabobank was listed by the Romanian government as one of nine banks that had expressed an interest in the country's fourth-largest bank, which analysts say could fetch as much as $650 million.

Rabobank, one of the Netherlands' leading retail banks with a focus on food and agricultural banking, has a strategy of obtaining banking stakes in emerging markets and Heemskerk said he expected to announce the purchase of another 25 percent stake in a Chinese cooperative bank within two months.

The Dutch bank and the World Bank's private investment arm, the International Finance Corporation, is already close to buying a 25 percent stake in the Chinese Hangzhou Rural Credit Cooperative Union in the east of the country.

Heemskerk said Rabobank would pay between 15 million and 20 million euros for each stake. Over time, he said Rabobank would spend over 100 million euros in China, whose sprawling network of rural credit cooperatives is seen as one of the weakest links in a financial system awash with at least $200 billion in bad debt.

Rabobank's net profit rose to 941 million euros ($1.18 billion) over the first half of the year as strong fee income and solid investment revenue from its insurance operation made up for a lacklustre 2 percent increase in lending income.

Heemskerk said he expected a limited increase in revenue over the rest of the year as tough competition in the domestic mortgage market, a flat yield curve and low interest rates meant that profit margins on loans were shrinking.

Nonetheless, he expected to maintain at least 12 percent net profit growth for the full year because Rabobank intended to keep total costs at the same level as 2004.

"Even if the revenues do not increase as fast because of tight interest margins, we have stabilised costs and we hope to achieve at least 12 percent profit growth for the year as a whole."

Heemskerk said despite stiff competition in the mortgage market, Rabobank, with assets of about 510 billion euros, would cut prices to remain market leader.

Its overall group revenues rose 5 percent to 5.1 billion euros and costs fell 1 percent to 3.41 billion euros.

Unlike Rabobank's listed rivals ABN AMRO and ING , which benefited from a sharp drop in loan loss provisions, the cooperative group saw its provisions for bad and doubtful loans rise 45 percent to 249 million euros.

Rabobank said its loan loss provisions in the first half of 2004 were very low and its rate in 2005 was still below the long-term average.

Heemskerk said he expected to announce an acquisition, possibly in the retail financial market, later this year.

He declined to give any further details but did not rule out that the purchase could be made in the lucrative U.S. market, where Rabobank aims to be a top agricultural bank.

Last year, Farm Credit Services of America called off a deal for Rabobank to buy it for $750 million.

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Nine contenders for CEC’s takeover

2005-09-05T10:40:00.000+02:00

Nine important banks, out of which six are already present on the local market, have filed their letters of intent for the privatization of the Savings Bank – CEC by the deadline fixed on Wednesday, August 31, "ACT Media News Agency" reports.

According to a press officer of the Ministry of Finance, the nine contenders are as follows:

Italy’s Banca Monte dei Paschi di Siena SpA (assets worth over 132 bn euros; controls 3.5% of Alpha Bank Romania; assisted by attorneys-at-law Tuca & partners); the French-Belgian Dexia Bank (assets worth about 431 bn euros, specialized in retail and financing of municipalities; assisted by attorneys-at-law Popovici & Partners); the Hellenic EFG Eurobank (assets worth 31.3 bn euros; controls almost 63% of Bancpost);

Austria’s Erste Bank (assets worth about 148 bn euros; assisted by attorneys-at-law Cameron McKenna); the National Bank of Greece (the largest Greek bank with assets worth over 55 bn euros; it also controls the Romanian Bank); Hungary’s OTP Bank (the largest Hungarian bank with assets worth 18.9 bn euros; acquired RoBank a year ago), the Dutch Rabobank (assets worth 475 bn euros); the consortium made up of Raiffeisen Zentralbank Oesterreich Aktiengesellschaft and Raiffeisen International Bank Holding AG (already present in Romania through Raiffeisen Bank Romania); the French Société Générale (assets worth over 600 bn euros; owner of BRD Romania).

The FinMin’s consultant in the privatization process, the American bank JP Morgan, will send the Confidentiality Agreement to the investors that meet the pre-selection criteria. According to the schedule announced by the Commission in charge of CEC’s privatization, the shortlisted investors will be announced by September 9.

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Royal Palm Beach names Romanian town as sister city

2005-09-05T09:25:00.000+02:00

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

2005-09-05T09:24:00.000+02:00

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

2005-09-05T09:21:00.000+02:00

.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

2005-09-05T09:20:00.000+02:00

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

2005-09-05T09:17:00.000+02:00

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

2005-09-05T09:15:00.000+02:00

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

2005-09-05T09:07:00.000+02:00

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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M&M plans financial bid for Romanian company on Friday

2005-09-05T08:33:00.000+02:00

India’s largest tractor manufacturer Mahindra & Mahindra (M&M) is submitting a financial bid on September 9 for Romanian-based Universal Tractors. The technical bid was submitted a month ago and the due diligence exercise has been completed, company officials said.

Confirming the development, Anjanikumar Choudhari, head, farm equipment sector of M&M, said that the acquisition, if it went through, would give M&M a foothold in the Eastern European and West Asian tractor markets.

Universal Tractors’ flagship brand ‘Universal’ enjoys market share in countries of the former Eastern Bloc, Iran, Egypt and Pakistan. The Romanian tractor major has a 15,000-unit per year facility in Brasov with an additional capacity of 18,000 engines annually. Last year, it produced 5,000 tractors and posted a turnover of Rs 250 crore.

M&M bid for the tractor company which the Rumanian government put up for sale again after Italy’s Landini decided against buying the company.

Mahindra is competing with MYO-O, a closely-held Romanian maker of agricultural machinery. The agency carrying out the sale, AVAS, has not announced a date for awarding the sale. The government will select the buyer of its 80% stake following direct negotiations with the bidders, AVAS said.
Italy-based Landini, which is controlled by the Morra family and has plants in Europe, North America and South Africa, didn’t follow through on its September ’03 agreement to buy Tractorul, Universal Tractors’ main supplier, AVAS said.

Sources indicate that since M&M does not have a facility in Europe Universal Tractors could also be used as a low cost supply base to the CIS and Western Europe too, with Romania set to become a member of the European Union in ’07. The Romanian asset would therefore tie in neatly with M&M’s global plans. The company has already added fresh capacity for 60 hp at an additional assembly plant in Georgia, USA, to act as a buffer to its Houston assembly line and ramp up sales in Canada

This will not be M&M’s first attempt to acquire a tractor company in Europe. The company had, in ’03, submitted a bid for Finland-based Valtra but had lost out to tractor major AGCO. M&M has been on a quest to emerge as a leader in the global tractor market. Recently, the company formed a joint venture —Mahindra (China) Tractor Co — in China in which it has an 80% stake, the balance being held by Jiangling Motor Co Group. The joint venture has a production capacity of 12,000 tractors per annum.

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OTP Bank sees Romania as pillar of future growth

2005-09-05T08:26:00.000+02:00

In the past few years, OTP Bank Rt, Hungary’s largest retail bank by far, has seen its path to further expansion increasingly lie within the surrounding region.

Owing mainly to increased competition at home, the bank has acquired retail operations in Slovakia, Croatia and Bulgaria – and, with the 2004 acquisition of RoBank SA, Romania. Stated future targets include Serbia and Ukraine, but in spite of recent comments on the rising cost of Romanian banks, OTP clearly sees Hungary’s eastern neighbor as a growth center.

The bank’s growth into Romania was given further impetus last week, when OTP confirmed that it is one of the bidders for the purchase of Casa de Economii si Consemnatiuni (CEC), the country’s fourth largest bank.

The Romanian state called a tender on Aug. 10 for the sale of not less than 50% plus one share, but no more than a 75% holding in CEC. The established deadline for submitting bids was Aug. 31.

As of Dec. 31, 2004, CEC had IFRS-based total assets of €1.31 billion and shareholders’ equity of €149 million. With its 5.6% market share based on total assets, CEC is Romania’s fourth largest bank, having posted a net profit of €17 million in 2004. CEC serves approximately two million clients via a network of 1,407 branches, the largest in Romania.

OTP declared earlier that, besides organic growth, it is considering the possibility of development via acquisition in Romania. If successful, the acquisition of CEC would dwarf OTP’s current exposure in the country.

OTP completed the $47.5 million purchase of RoBank last July. The move, hailed by regional banking analysts, was its first venture into Romania.

RoBank, renamed OTP Bank Romania SA in 2005, was a small bank with just 16 branches nationwide. OTP announced it would invest up to $100 million in the next three to five years to expand the branch network. As a first step in the process, OTP raised RoBank’s capital by €10 million, while OTP President-CEO Sándor Csányi stated that the bank would step up branch openings, with 50 branches to be opened by year’s end and an eventual target of 200.

Csányi said OTP will expand RoBank regardless of further acquisition targets in either Romania or any other neighboring country.

“[RoBank] is a small bank with total assets of €95 million, but it’s a foot in the door in a market that has very strong growth ahead of it,” said Zoltán Pártl, an analyst at K&H Equities Rt at the time of the acquisition. Pártl said the move represented the first step in OTP’s stated aim of winning control of 5%–10% of the Romanian banking sector, adding that the sector’s underdeveloped state justified RoBank as a good investment.

Grzegorz Zawada, CEE banking analyst at Erste Bank AG, described OTP’s strategy as unique in the region.

“Cross-border initiatives are usually driven by strategic investors. OTP has none,” he noted. “It’s management-led, and is aimed at continuing to deliver high-profit growth to shareholders.”

Indeed, according to OTP’s vision for the next four years, delivered in a July presentation by Deputy CEO Zoltán Spéder, the group is “building a regional franchise through acquisition.” Spéder stated that, compared to Hungary, banking penetration is lower in Bulgaria and Romania; in Slovakia and Croatia, on the other hand, total assets of the banking system compared to GDP are significantly higher than in Hungary.

Although OTP expects its most dynamic growth in Romania, the bank nevertheless does not expect bank penetration in that country to reach the current level in Hungary before 2009.

The decision to attempt further expansion through the acquisition of CEC is in line with the bank’s four-year strategy. At the same time, Spéder echoed Csányi only a month ago in saying that Romanian banks have become too expensive, stating that the sale of savings bank CEC is the only major opportunity for OTP to expand further in Romania.

Spéder declared that OTP would not bid for the biggest Romanian bank, Banca Comerciala Romana (BCR), in this year’s upcoming tender, explaining that to acquire BCR would require OTP to “put too much capital into one asset.”

“The prices of small and medium-sized banks in Romania have got so high that they don’t reflect any fair growth potential. Even future growth is overpriced,” Spéder told Reuters in a recent interview. “Csányi has already warned that banks in Romania have appreciated markedly in the past 12 months in terms of price to earnings and price to book value.”

Central Europe’s biggest bank by market capitalization, OTP is one of nine bidders the Romanian Finance Ministry named as having submitted a formal bid for CEC. The others include Austria’s Erste Bank AG and Raiffeisen Zentralbank Österreich AG; Banca Monte dei Paschi di Siena SpA, Italy’s fifth largest bank; Belgium’s Dexia SA; Rabobank Nederland NV; and Greece’s EFG Eurobank.

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National Bank of Romania's international reserves advance 1.5 billion euros in August

2005-09-05T08:25:00.000+02:00

The international reserves of Romania (foreign currencies plus gold) stood at the end of August at 17.62 billion euros, up 1.5 billion euros as against the previous month, the National Bank of Romania (BNR) informs.

At the end of August, reserves in foreign currency stood at 16.432 billion euros. The increase of 1.579 billion euros registered in August represents inflows worth of 2.090 billion euros, as purchases from the currency market, inflows from privatisations, revenues derived from the administration of the international reserve, modification of the minimal reserves in foreign currencies at commercial banks, foreign currency transfers to the state reserve and others.

Outflows totalised 510.6 million euros and represented payment of instalments and interests for the direct public external debt, guaranteed by the Ministry of Public Finance, modification of minimal reserves in foreign currencies at commercial banks, payment of shares, bank commissions and others.

The gold reserve stood at 105 tonnes, its value advancing to 1.196 billion euros on the background of higher international prices. By the end of 2005, the failing due payments for the public external debt, guaranteed by the Ministry of Public Finance, sums 676 million euros.

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Central bank governor: forecasts of foreign analysts on leu’s evolution are “irrationally exuberant”

2005-09-05T08:22:00.000+02:00

Central bank governor Mugur Isarescu declared this week that the exchange rate of the domestic ‘leu’ depends not only on the financial inflows which press indeed for the currency’s appreciation, but also on economic developments.

“Of course that the central bank wants a strong convertible leu, but at the same time we want the domestic currency to stay in the proper place. The leu has now rather a financial than a commercial character but despite that, the exchange rate cannot be uncoupled from gains in productivity, the commercial deficit or the current account deficit,” said Isarescu.

The analysts expect the ‘leu’ to further appreciate because it would be impossible for BNR to completely purchase the amounts in foreign currency that enter the market and also sterilize the excess of lei.

Last week the Londoner organization IDEA Global said it was expecting the exchange rate to attain 28,000 lei per euro in 2006, but governor Isarescu rejects such a prediction: “How realistic can such an forecast made by a Londoner analyst be? To a central bank expert, the opinion that the ‘leu’ will steadily follow just one trend is a sign of irrational exuberance and a sign of a market anomaly. What would the role of the National Bank still be, if I were to validate the belief of the market?” the central bank governor asks rhetorically.

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Bid for Tarom fleet insurance contested

2005-09-05T08:21:00.000+02:00

The Ministry of Transports, Constructions and Tourism has suspended the bidding procedures for the insurance of Tarom’s aircraft fleet over the interval 2005 – 2006 until the contestation filed two weeks ago by Astra Insurance is settled.

Astra acquired the technical documentation but did not submit an offer. On the other hand, the Ministry’s decision is contested by Omniasig, the only company that submitted an offer. The representatives of insurers Astra and Ardaf assert that the technical requirements are drafted in such a manner as to disqualify any other bidder but Omniasig, which has been constantly awarded the contract in 2003 – 2004 and in 2004 – 2005.

Astra sales executive Radu Mustatea says that one of the participation requirements was for the bidder to present confirmation letters from the broker of a leading underwriter rated at least AA+. The only re-insurer that meets this requirement is AIG, which collaborates with Omniasig. “We are waiting to see what the authorities decide. If the rating is lowered we will do our best to meet the criteria and submit an offer,” says Mustatea.

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BA-CA merger with Tiriac Bank effective as of this week

2005-09-05T08:20:00.000+02:00

The merger agreement between Bank Austria Creditanstalt (BA-CA) and Tiriac Bank, inked in June this year, became effective on Wednesday, August 31.

According to the agreement, BA-CA holds 50% plus one share of Tiriac Bank, whereas the entities controlled by business tycoon Ion Tiriac hold 50% minus one share of HVB Bank Romania. This structure was accomplished by sales and stock exchange.

Minor Tiriac Bank shareholders will automatically become shareholders with the new bank. The two financial institutions exchanged some of their managerial staff, with a view to smoothing the merger process and for a better integration of the two entities.

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GDP up some 5 percent in H1

2005-09-05T08:17:00.000+02:00

Romania's mid-2005 estimated Gross Domestic Product (GDP) stood at 110.263 billion RON in current prices, by 4.9 percent higher in real terms, as compared to the same period last year, the National Statistics Institute's data say.

The growth was considerably brought about by the increase in the activity and subsequently of the gross VAT on services (plus 6.9 percent), building (plus 3.9 percent) and industry (plus 3.6 percent), expected to contribute 84.1 percent to the GDP. Due to the bad weather conditions and the spring floods, by mid-2005 the agriculture, the forestry and the fisheries accounting for 4.2 percent of the GDP dropped by 7.1 pc. as compared to the same time span in 2004.

The current account deficit grew in H1, 2005 as against the previous year, due to the rise in the imports of goods and services (plus 17.1 percent) vs the exports (5.9 percent), which impinged on the GDP trend.

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No Romanian among Katrina victims so far

2005-09-05T08:16:00.000+02:00

US authorities have informed the Romanian Foreign Ministry (MAE) that there are no Romanian nationals recorded among Katrina hurricane's death toll in the states of Louisiana and Mississippi, a MAE release informs.

Romania's Embassy in Washington is permanently in touch with the US authorities in the afflicted states to check whether any Romanian citizens are reported among the victims, and the situation in Louisiana, especially in New Orleans, is unceasingly monitored both by the authorities and NGOs that provide emergency care, the Foreign Ministry release says.

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Value of lease contracts concluded in Romania stand at over 1 bln euro in H1

2005-09-05T08:14:00.000+02:00

The value of lease contracts concluded in Romania in the first six months of the year stood at over 1 billion euro, while for the whole year their value is expected to exceed 2 billion euro, Chairman of the Association of Romanian Lease Companies (ASLR), Cornel Coca Constantinescu said.

The total value of lease contracts reached 1.09 billion euro in the first half of 2005, up over 30% from the same period last year, data released by the ASLR showed.

Some of the important players on the Romanian lease market, such as Porsche Leasing, BCR Leasing and Motoractive, announced that they have upwardly adjusted their estimates of the 2005 contract volume.

The Romanian lease market was estimated at 1.4-1.5 million euro (representing the value of the purchased goods) or 1.8-1.9 billion euro (including the value of the lease contracts, which comprises costs related to the lease, VAT excluded, plus the price of the leased goods, fees excluded).

In 2005, automobiles made up the bulk of the goods acquired under a lease contract, just like last year.

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Most Romanians wary of EU integration

2005-09-02T14:08:00.000+02:00

According to 56% of the respondents to a fresh survey, in the short run Romania's EU integration will bring more drawbacks than advantages. However, in the longer term 68% of those asked believe that the advantages will prevail.

The researchers have found that while 39% of the Romanians are worried about their country's European integration, 33% are highly optimistic. EU accession is appealing primarily because it holds out the promise of a higher standard of living (39%) and free travel across the continent (30%). Only 2% said that European integration will improve the country's democratic standards.

In addition, 68% expect significant price hikes, 16% fear from a massive increase of unemployment, and 13% believe that EU integration would have a detrimental effect on their national identity.

Every other respondent expressed strong need for information about the EU accession process, and the researchers found that television had the highest potential for reaching the citizens.

The survey was commissioned by the Delegation of the European Commission in Romania and was conducted by the market research company IRSOP in late June 2005.

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Upetrom 1 Mai reports loss of 40.5bln old lei in H1

2005-09-02T14:07:00.000+02:00

Romanian oil equipment maker, Upetrom 1 Mai reported a loss of 40.5 billion old lei in the first half of the year, compared to a net profit of 1.5 billion old lei in the same period last year, in spite of a rise in turnover.

Upetrom 1 Mai reported a 7.25% year-on-year rise in turnover, to 462.3 billion old lei.

The company's total debt reached 662.8 billion old lei at the end of June, with bank loans accounting for 31.8% of the total.

Upetrom 1 Mai is located in Ploiesti, southern Romania.

It employs over 2,900 people.

Romanian-based oil drilling company Aquafor International is its majority shareholder.

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Rehn: EC Showed Yellow Cards to Bulgaria, Romania

2005-09-02T12:49:00.000+02:00

The European Commission sent formal warnings to candidates Bulgaria and Romania, which are equivalent to yellow cards, Enlargement Commissioner Olli Rehn said.

He made the statement at the Gymnich informal meeting of Foreign Ministers from European Union Member States in Newport, South Wales.

The European Commission sent formal warnings to Bulgaria and Romania over the countries' lagging-behind in implementing the required reforms. In Bulgaria, the concerns focused on judicial reforms, agriculture, environment, intellectual property rights and the free movement of services. In Romania, the main issues are corruption and border controls, the enforcement of state aid controls, and the implementation of environmental laws.

Commissioner Olli Rehn said the two countries show willingness for reforms, but noted that the last several months have been marked by political instability.

He urged the two countries to speed up the implementation of reforms to ensure a positive comprehensive monitoring report by the European Commission.

I believe that everybody around this table want to see Bulgaria and Romania accede to the European Union on the scheduled date, British Foreign Secretary Jack Straw said.

The meeting is due to continue on Friday with the agenda including the Middle East peace process.

Discussions have so far centred on further EU expansion with the Turkish foreign minister due to join talks on Friday.

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Romanian CHIR Hotel Operator Cuts H1 Loss by 29% Y/Y

2005-09-02T11:45:00.000+02:00

BUCHAREST (Romania), September 1 (SeeNews) - Romanian company CHIR, which operates Bucharest-based hotels Intercontinental and Lido, cut its loss to 40.88 billion old lei (1.16 million euro/$1.44 million) in the first half of the year, from 57.4 billion in the same period of 2004, as revenue edged up while costs fell.

CHIR turnover grew to 175.8 billion old lei, from 171.4 billion in the first half of 2004, the company said in its half-year report sent to the over-the-counter market RASDAQ, where it is listed.

Total revenue rose 1.7% to 176.8 billion old lei, while total costs fell 5.9% to 217.6 billion.

CHIR said its financial results were hit by low occupancy rate, high maintenance costs and aggressive competition from new hotels. The company's stock gained 1.9% on Wednesday to close at 0.07 new lei.

CHIR operates the four-star Lido and the five-star Intercontinental, a franchise of the international hotel chain Intercontinental.

The increased frequency of terrorist attacks throughout the world has hit the global tourism industry in the past years, the company said. CHIR offers some 80% of its services to foreign travel agencies.

NOTE: Romania slashed four zeroes off its legal tender on July 1, redenominating its currency to reflect slowing inflation and prepare the country for the future adoption of the euro. The country hopes to join the European Union on January 1, 2007.

sourceBUCHAREST (Romania), September 1 (SeeNews) - Romanian company CHIR, which operates Bucharest-based hotels Intercontinental and Lido, cut its loss to 40.88 billion old lei (1.16 million euro/$1.44 million) in the first half of the year, from 57.4 billion in the same period of 2004, as revenue edged up while costs fell.

CHIR turnover grew to 175.8 billion old lei, from 171.4 billion in the first half of 2004, the company said in its half-year report sent to the over-the-counter market RASDAQ, where it is listed.

Total revenue rose 1.7% to 176.8 billion old lei, while total costs fell 5.9% to 217.6 billion.

CHIR said its financial results were hit by low occupancy rate, high maintenance costs and aggressive competition from new hotels. The company's stock gained 1.9% on Wednesday to close at 0.07 new lei.

CHIR operates the four-star Lido and the five-star Intercontinental, a franchise of the international hotel chain Intercontinental.

The increased frequency of terrorist attacks throughout the world has hit the global tourism industry in the past years, the company said. CHIR offers some 80% of its services to foreign travel agencies.

NOTE: Romania slashed four zeroes off its legal tender on July 1, redenominating its currency to reflect slowing inflation and prepare the country for the future adoption of the euro. The country hopes to join the European Union on January 1, 2007.

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Italy's Northern League Says No to Bulgaria, Romania EU Entry

2005-09-02T11:44:00.000+02:00

Italy's populist Northern League, the smallest of the four parties in the ruling coalition, took an official stance against the EU accession of Bulgaria and Romania.

The party's parliamentary group has proposed to the governments of all EU member states that the process of EU expansion be stalled.

The proposal, whose full text was published in the Northern League "Padania" daily, consists of ten points, lashing the European draft constitution, the single European currency, the economic and social policy of the European Commission.

The last four points in the Manifest are dedicated to immigration and EU expansion.

The illegal immigration of people, who are not citizens of the European Union, should be recognized as an element, which poses a danger not only to our safety, but also to the preservation of our cultural identity, reads the document.

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Blue Gecko Entertainment is Launched

2005-09-02T11:40:00.000+02:00

Operating from it's creative base in Timisoara Romania with offices in the UK. A new independent company Blue Gecko Entertainment has formed.

BGE has evolved out of Level7 software and taken it's original online multiplayer games and enhanced the entire gaming experience.

BGE has a vision to become the strategy game provider of choice. To provide a wide range of strategy and board games.

Games can now be accessed via a new gaming client this can be downloaded for free from our new website www.bluegecko.ro

The popular Web Space Alliance game has had an exciting upgrade and become Galactica.

Galactica takes the old WSA and goes further, improved graphics and functionality including waypoints for fleet orders, new planet types and research methods.

There are 2 versions of Galactica available; a Sim version has improved economy and the Arcade version is for more fighting, closer to the original WSA.

Go to the website and click 'play now' to download the game client and start playing.

Chess – the classic game can be played from the client portal too.

Our Wizards & Warlocks game is being upgraded now to go onto the client platform over the next few weeks . It will be re-launched as Genesis.
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Romania: FID reaches 1.5 billion euros in H1

2005-09-02T07:55:00.000+02:00

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

2005-09-02T07:54:00.000+02:00

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

2005-09-02T07:53:00.000+02:00

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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Low-cost airlines –the wind beneath the market’s wings

2005-09-01T13:17:00.000+02:00

Only 30 percent as many Romanians travel by plane as in other countries. Three low-cost airlines are currently splitting the Romanian market: Blue Air from Bucharest, Carpatair of Timisoara, and the Italian My Air.
By Roxana Mihul

EU accession is expected to lift this market, as many other low-cost carriers will want to exploit its potential. From September, Baneasa Bucharest International Airport (BBIA) will be the only hub used by these companies in the capital.

Blue Air is the latest low-cost airline to enter the market. Operating from December 2004, it is 100 percent Romanian, owned by local businessman Nelu Iordache. The airline flies to and from Bucharest, Barcelona, Istanbul, Maastricht, Lyon, Madrid, Milan and Rome. It has a fleet of two leased aircraft from an international company, Boeing 737s, with a capacity of 144 each. More than 500 Romanian and international travel agencies have signed contracts with the company to sell tickets.

“We have invested a lot in our marketing strategy. With pre-opening publicity and marketing since we’ve been operational, we’ve put in about EUR 350,000 – 400,000 so far,” Gheorghe Racaru, general manager of Blue Air, told Business Review. Racaru has more than 30 years’ experience in the field of Romanian aviation, including nine as the general manager of national air carrier Tarom.

Blue Air has recently opened presentation and sales offices in Plaza Romania, the Unirii area and BBIA. The most recent, in Plaza Romania, required an initial investment of about EUR 5,000. These offices were initially intended to be presentation points, but many tickets have also been sold at the locations. One or two more are set to be opened shortly.

The airline, like any other low-cost carrier, sells tickets mainly over the Internet, by e-commerce. Low-cost airlines use this system to cut down on overheads and undercut their traditional rivals.

Ticket prices start at EUR 19 plus taxes and go up to EUR 280 plus taxes for a return trip. Italy, with daily flights to Rome and three per week to Milan, is the most popular destination, followed by Spain. “The majority of our clients are individuals who previously traveled by other means of transport, or did not travel at all because they couldn’t afford to,” said Racaru.

The airline started to offer internal flights, but had to give them up because the flight schedule overlapped with the international one. It is considering introducing two smaller planes of 50 seats, to operate internal and regional flights to destinations such as Kiev, Chisinau and Belgrade.

“External flights are much more profitable, but the internal market has a great deal of potential due to business travel in Romania, which represents more than 90 percent of Tarom’s internal flight passengers. The state of the roads and trains are another reason why this area could grow,” said the GM.

Turning to the issue of price, he added, “The difference between our tariffs and those of the regular carriers comes from the logistics of the airline.” Costs are also reduced through the booking or sales system.

“The price difference between the services offered on board is not big, but the real reduction comes from the logistics you need in order to provide such services as hot meals. The low tariffs we offer do not influence safety in any way. Smaller firms are more strictly supervised by the authorities regarding safety and maintenance measures. An airline’s reputation depends on its flight safety,” Racaru added.

With upcoming EU accession, the Romanian market is facing an unpredictable future. “Competition will appear when the bilateral agreements between Romania and European countries disappear and the ‘open sky’ policy is applied, after Romania’s accession. I’m sure that at that point many low-cost carriers will invade Romania to exploit the potential of the market,” said the GM.

The barriers that regulate air traffic will disappear with EU membership, when a new kind of global agreement is applied. Trafficking rights will no longer be required and the only remaining concerns will be the agreements between the airlines and airports. EU membership brings higher standards of living, artificially or not, with wage hikes of 30 to 40 percent expected. An average family will be able to put some of the extra cash towards a plane ticket, said Racaru.

Media sources have reported that two other low-cost airlines will enter the Romanian market this year. Meridiana is an Italian company that will operate flights from Bucharest to Florence and Verona. Also touted to start up activities here is Wizz Air, which currently operates in Poland, Hungary and Great Britain.

Racaru stressed that the reports were only rumors and added that he thought the moves would be possible after 2007. “The aviation business is extremely expensive and requires a long-term investment, with more than a year or a year and a half to pay it off. We are also lacking in aviation specialists with the necessary courage to do this or to give good advice to someone tempted to start such a business,” he said. “In the Romanian business environment very few people get involved in businesses with such increased risks as aviation. They prefer IT, insurance or the service industry.”

Currently Blue Air has a market share of around five percent, according to its own estimates, and expects to increase the figure to seven percent by September. “We expect to have around EUR 18 million in turnover for 2005, with an EUR 11 million turnover for H1. We are not in profit yet – from the operational and logistical point of view we need more than a year to reach that point. Aviation is costly – to borrow a plane you need a security deposit which decreases in inverse proportion to the number of planes you have. Being a new company on the market about $2 million is blocked in the warehouse rental and maintenance of the planes,” said Racaru. Blue Air has started to make an operational profit in the last few months, but the overall investment has not yet been recovered.

In the future the airline intends to consolidate the destinations where it currently operates through laying on more frequent flights. The next step is to start up new routes, destinations with increased marketing potential, and afterwards to consolidate them. Any new destination requires a long-term investment, because a flight to a single place becomes profitable and covers the initial investment after at least six to seven months, depending on the marketing possibilities.

“We are not excluding a collaboration with other companies as long as both sides have something to gain from it. We are not ruling out a merger or even a takeover by another company, provided that the owner is willing to take on the necessary risks to maintain the name of the company and the 100 percent Romanian capital,” said the GM.

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The European corridor IV Goes Through Romania

2005-09-01T13:15:00.000+02:00

The European corridor IV won’t go round Romania, as its alternative, Budapest - Nis – Sofia – Istanbul, is already functional since 1997, according to Jonathan Scheele, the head of the European Commission Delegation in Bucharest.

The European corridor IV goes through Nadlac - Arad - Deva - Orastie - Sebes - Sibiu – Ramnicu Valcea - Pitesti - Bucharest - Fetesti – Constanta.

The Transport Ministry and the European Commission signed four ISPA financing contracts of a total value of more than EUR 62 million, for the modernization of the national road Drobeta Turnu Severin - Lugoj, which will be part of the European Corridor IV.

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

2005-09-01T08:20:00.000+02:00

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

2005-09-01T08:19:00.000+02:00

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

2005-09-01T00:13:00.000+02:00

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

2005-09-01T00:11:00.000+02:00

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

2005-09-01T00:10:00.000+02:00

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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RomTelecom: Strong performance

2005-08-31T15:42:00.000+02:00

In the second quarter of 2005, RomTelecom posted revenues of € 232.4 million, up 16.4% from revenues of € 199.6 million in the same period last year. The increase is primarily due to positive evolution of rental, interconnection and leased lines and data services.

Revenues from monthly rental fees increased by 38%, primarily reflecting the February 2005 and June 2004 tariff rebalancing rounds.

Wholesale revenues rose by 21% in the quarter, reflecting a 56% gain in wholesale traffic, a natural consequence of the upward trend characterizing the Romanian telecommunications market.

Retail traffic decreased in comparison to the second quarter of 2004 due to mobile substitution and heightened competition from alternative carriers.

Conversely, tariff rebalancing resulted in an increase in international traffic for residential customers.

Operating income before depreciation and amortization as a percentage of revenues rose to 42.6% in the second quarter of 2005, as compared to 31.7% in the second quarter of 2004, as a result of increased revenues.

Total operating expenses before amortization and depreciation dropped by 2% during the second quarter of 2005, compared to the same period of 2004.

Despite the drop in personnel expenses by 13%, operating expenses before depreciation and amortization remained roughly at the same level as in the second quarter of 2004, mainly due to increased interconnection expenses and expenses related to other services (Universal Service fees, advertising expenses, consulting, etc.).

Interconnection expenses rose by 7.9% as a result of increased traffic.

In the second quarter of 2005, RomTelecom achieved a significant improvement in profitability, posting net income of € 57.6 million, resulting in net profit margin of 24.8%, compared to 4.7% in the second quarter of 2004.

RomTelecom’s management is pursuing the implementation of its Transformation Plan:

• Efficiency improved from 240 Lines per employee at the end of 2004, to 275 Lines per employee at the end of the second quarter of 2005, an increase of 14.5%.

• Headcount was reduced to 15,242 by the end of June 2005 from 18,083 at December 31, 2004.

• Implementation of several projects is proceeding according to plan, including development of a new central billing system, which became operational in July 2005, and deployment of a financial e-business system. Operational and network services improvements are driven by several key projects, including replacement of manual switches which is almost completed, further reduction of operating expenses, and provision of modern services like ADSL, which was launched for both residential and business customers.

OTE, through its wholly owned subsidiary OTE International Investments Ltd, holds a 54.01% interest in RomTelecom S.A., the incumbent telecommunications operator in Romania.

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There is no alternative for us on January 1, 2007, says President Traian Basescu

2005-08-31T12:51:00.000+02:00

President Traian Basescu on Tuesday told the annual meeting with Romania's ambassadors and consuls general that the most important aim of the authorities in Bucharest was the European accession on January 1, 2007, and that the alternative of the year 2008 was not to be considered.

"There is no alternative for us as regards 2007. The President and the Government are not examining other variants. The 2008 variant is not considered. No structure of the Romanian State drew up the variant of the accession in 2008," the head of state told the meeting in Cotroceni Palace.

Traian Basescu mentioned the fact that the aim of the Romanian authorities was a progress report in autumn this year that should ascertain the progress made in the sensitive fields and reveal in April next year it is not necessary to apply the safeguard clause. As the President put it, even if there are critical aspects, what matters is for us to ascertain the fact that progress was made in the difficult areas.

As Traian Basescu said, Romania's accession to the European Union goes on being a top priority. In context the head of state asked Romania's ambassadors to the 25 EU member states to understand they had an important mission to fulfil with a view to pointing out this country's progress and thus facilitating the process of ratifying the Accession Treaty in the European Union states.

"The accession question must not strictly be left to the relation with Brussels," said Traian Basescu, who made it clear that at this time Romania had some pledges it had taken and there was no more room for negotiations.

The head of state informed that after this year's country report was published, both he and Premier Calin Popescu-Tariceanu were willing to start a number of tours directly addressing the national parliaments that will have to ratify the treaty on Romania's accession to the EU.

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Romania's foreign trade advances in first 7 months of 2005

2005-08-31T12:47:00.000+02:00

Romania's FOB exports rose by 15.2% year-on-year in the first seven months of the year, reaching €12.52 billion, data released by the National Statistics Institute shows.

Exports stood at €1.993 billion euro in the first seven months of 2005, up by 8.2% compared to the same period last year.

The value of trade recorded in July 2005 is the highest since 1990.

Romanian exports to the European Union (EU-25) increased by 7.1 percent compared to the first seven months of 2004, with 68.6 percent of Romanian exports having been bound for the EU.

CIF imports in the first seven months reached 17.49 billion euros, up by 21.8 percent compared to the same period last year.

CIF imports totalled 2.546 billion euros in the first seven months of 2005, up by 16.2 percent compared to the same period of 2004.

Imports from the EU-25 rose by 17.7 percent year on year, making up 63 percent of Romania's imports.

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Romania’s Mittal Steel Romania reports €5 mln

2005-08-31T12:46:00.000+02:00

Pipe producer Mittal Steel Roman had a good start this year, registering a net income of €4.6 million (RON 16.9 million) in the first half of the 2005 year. In the similar period of 2004 the company reported losses of more than €3.7 million.

Mittal Steel Roman is part of Mittal Steel, the world’s biggest steel producer. Mittal owns other facilities in Romania, such as the iron and steel mill in Galati, the Tepro Iasi steel pipe producer and the alloy and non-alloy steel firm Siderurgica Hunedoara.

Mittal Steel Roman had a turnover of €107.1 million for the first half of this year, more than double compared to the same period of last year, when the turnover only amounted to €47.2 million.

The whole iron and steel industry benefited from the increased demand coming from the Asian markets this year.

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Bucharest welcomes photo exhibition “Kazakhstan: History and Modernity,” devoted to 10th anniversary of Kazakhstan Constitution

2005-08-31T12:29:00.000+02:00

A presentation of photo exposure “Kazakhstan: History and Modernity”, initiated by Culture and Religion Ministry of Romania August 29 in Bucharest was devoted to 10th anniversary of Kazakhstan Constitution, Kazinform refers to the MFA’s press service.
Representatives of political and business circles, mass media of Romania attended the opening ceremony.

Charge d’affaires of Kazakhstan to Romania Bakhytzhan Ordabayev noted that owing to the Constitution, adopted ten years ago at the nationwide discussion, had been conducted country’s socio-economic and political reforms.

As Secretary of State for Romanian Culture Ministry said, Kazakhstan is a unique state not only in the region but also worldwide by virtue of domestic stability and dynamically developing economy.

The exposure is a bright evidence of the strengthening friendship and cooperation of both nations and is believed to contribute to further development of bilateral ties.

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Rabobank confirms its interest in buying majority stake in CEC

2005-08-31T10:41:00.000+02:00

The Netherlands' Rabobank confirmed its interest in acquiring a majority stake in state-owned Romanian savings bank Casa de Economii si Consemnatiuni, or CEC.

Romania, which is privatizing its entire banking sector, has asked foreign investors to express formal interest in CEC before August 31 and will then form a shortlist by September 9.

CEC has EUR1.3 billion of assets under management and a network of 1,400 branches - the largest in Romania.

Apart from Rabobank, French-Belgian bank Dexia SA and France's Societe Generale have expressed a formal interest in CEC.

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Rapid appreciation of leu against euro creates problems to managers

2005-08-31T10:39:00.000+02:00

The rapid appreciation of the local currency, the leu, against the euro is creating increasingly bigger problems for local managers, who claim the developments in the exchange rates of the leu are triggering major economic perturbations, ACT Media News Agency reports.

According to a recent study conducted by the National Bank of Romania (BNR), 21 percent of the managers interviewed, up from 16 percent in 2004, say the appreciation of the leu poses problems to them. The developments in the exchange rate are now the second most economically perturbing factor.

The most perturbing is said to be insufficient demand (33 percent, down from the previous study).

Also mentioned as causing economic disruption are the financial blockage (13 percent, the same as in the previous study), the level of interest rates (11 percent, up from the previous study) and supply (7 percent, down from the previous study).

The leu has strengthened almost 11 percent in nominal terms against the euro, in the year to the present date, which made almost one quarter of the respondents rate this phenomenon as hindering production the most.

The study was conducted on a national sample of approximately 420 industrial and construction companies selected to represent the economy of the county in which they operate.
Source: ACT Media News Agency

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Romania and Bulgaria: A Difficult Integration

2005-08-31T10:37:00.000+02:00

By EUexpands.com

Romania and Bulgaria have lost time for reforms and the EU Parliament remains critic at their regard, BBC informs quoting Socialist MEP Jan Marinus Wiersma.

Mr Wiersma said that Romania has lost time because of the internal quarrel between the political forces in power and the opposition.

Bulgaria has somehow stopped the reforms during the two months of negotiating over the new government.

Meanwhile, the Bulgarian Prime Minister Sergei Stanishev that visited Brussels Monday 29 August received positive signals from the EU Commission.

The president of the institution, Jose Manuel Barroso stated that the EU Commission has already addressed the difficulties of Bulgaria in June and that he is not going to come back to the issue.

Concerning Romania, the EU Commission is more worried.

Also according to the BBC, the EU enlargement Commissioner Olli Rehn addressed a letter to Romanian ambassadors in which he encourages them to purse their lobby in Brussels.

He says that the tense climate in the EU regarding the enlargement brought higher expectations from Romania that needs to speed up reforms.

Romania must meet all its obligations in order to avoid any complaint, the commissioner assess in his letter.

Romania and Bulgaria await their country report due to be published by the EU Commission in October. However, their EU integration, due to happen in 2007, could be postponed for 2008 but only a second EU Commission report, in April 2006 would be likely to recommend this.

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Romanian Government Plans to Privatize Companies

2005-08-31T09:50:00.000+02:00

"Romania will privatize its postal and national radio communication companies, the government said.

The radio communication company would be sold by the end of next year, while the postal company would have to be restructured first and could be sold by 2008, Communication and Information Technology Minister Zsolt Nagy said.

The state is interested in finding a strategic investor to take over the postal company, Nagy said.

The government also intends to list its minority stock in national telephone company Romtelecom on the stock exchange. The state owns 46 percent in Romtelecom, which is majority owned by Greek company OTE.

Consultants for the sales would be hired after a public auction, Nagy said.

About 25 percent of the state-owned stock in the Romanian Post and 20 percent of Romtelecom's stock would be transferred to a fund which compensates people whose property was confiscated during the communist regime.

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Romanian Olympic women's team disbanded

2005-08-31T09:49:00.000+02:00

BUCHAREST (Reuters) - Romanian gymnastics was in disarray on Tuesday when the women's national team, winners of four Olympic golds in Athens, were disbanded after two of their leading members went nightclubbing without permission.

The Romanian Gymnastics Federation (FRG) said it broke up the team after state television station showed triple Olympic champion Catalina Ponor and Floarea Leonida returning from a Bucharest nightclub to their hotel early on Sunday morning.

"At an FRG emergency meeting, we decided to dismantle the female Olympic team following a string of unacceptable events," FRG sport director Anca Grigoras told Reuters.

"Ponor and Leonida spent a night in a nightclub without the permission of their coaches and this behavior is unacceptable for top-level sports performance."

Romania's national coaches Octavian Belu and Mariana Bitang, with no team at their disposal, have asked the FRG if they can resign.

"Coaches Belu and Bitang have no athletes to train so they have no purpose in their job," said Grigoras. "They will receive an answer to their request within the next few days.

"The team has been disbanded and the athletes will now train at their own clubs, if they want."

Earlier this month, double Olympic champion Monica Rosu and Alexandra Eremia quit the team after gaining weight and losing interest in their national training programme.

A fifth member of Romania's Olympic team, Daniela Sofronie, has since followed suit.

"We cannot continue in such conditions," Belu told Reuters. "The medals Romania have won so far were the result of a clear training system under an iron discipline ... giving this up means we have no chance for further medals.

"We can speak about a new Romanian Olympic team next year, when a new generation of gymnasts comes through," Belu added. "This year's world championships are compromised for Romania."

The 38th world championships will take place in Melbourne, Australia from November 21 to 27.

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Romanian Main Opposition Party Attacked from Within and Without

2005-08-30T17:09:00.000+02:00

The main opposition party - PSD - has recently appeared as a political formation under siege, being the target of attacks - from the media and not only - coming both from within and without. It is enough to think to the transcripts’ scandal, the defrauding of the elections, or the investigation of certain leaders over the allegedly illicit character of their wealth in order to have a rather complete image of the situation of the social-democrats.

If we add the offensive connected with the replacement of the speakers of the two Chambers of Parliament, or of the chairmen of some of the County Councils, then we can believe that the party of Messrs. Geoana-Nastase is subject to a major offensive, further to which, if it resists it will grow stronger and will re-launch in view of the future elections, and, if not, it will slowly but surely slip on the slope of decline. The removal of the all-dominating President, acquired since the revolution of December 1989 in the person of Ion Iliescu, has generated a dissipation of power in the social-democrat formation; coming from a weak platform and with a feeble personality, Mircea Geoana did not impose himself over the barons of the party. A state of competition and tension took birth immediately between him and the Executive President A. Nastase, with frequent public outbursts.

The attempts of the new President to impose himself through the thesis of removing the corrupts as a condition sine qua non for the re-launching of the party has met with major reactions and resistance. His move instead of conducting to deep evaluations and significant discharges had the effect of a boomerang: the case of Geoana’s mother in law, Margareta Costea, who seems to warn him: keep a low profile, because you are one of ours (meaning corrupt!). Even the attitude and the suspicions towards the dossier of the transcripts of the meetings of the PSD Standing Delegation show that some people are trying to detach themselves (such as Miron Mitrea) pushing into the ring people belonging to a certain group (such as Rodica Stanoiu or Florin Georgescu). Concurrently, it is obvious that resuming in this period certain themes which had already been discussed previously reveals the existence of powerful interests of a different type, coming from the current power. It is not difficult to notice, for instance, that the problem of the transcripts raised initially on November 23, 2004, in the middle of the electoral campaign, views people such as Florin Georgescu, who occupied a much coveted position of Vice President of the National Bank of Romania, or Rodica Stanoiu, who also holds a not negligible position, that of chairman of the Commission on petitions and abuses of the Senate.

Beyond the juridical scent which is tentatively imposed on them, or the attempt to exploit non-governmental organisations (headed however from the shadow by persons such as Minister of Justice Monica Macovei, or presidential counsellor Renate Weber), the character of political struggle is obvious. It is difficult for someone, somehow familiar with the matter he is, to believe that in all these cases investigated by the Prosecution Office the viewed persons will be finally charged and prosecuted. What is even more serious, Justice is used in such a way in order to stir the media campaign of the public disparagement, with the hope to strike in this way a political blow. Indubitably, in this swing of the games of all types - judicial, image, but with a political ending - all the (grim) facets of the Romanian political life are coming up. A fishy, incompetent political class, pushed only by personal or group interests, with political men who hate and pursue one another in the harsh fight over the bone of power. The sad image of a pack, in which the weak one is torn to shreds by the stronger one, but who knows, if necessary, to defend his fundamental interest: namely to benefit from his position in order to get rich, by cheating the electorate.

In spite of the concentrated attack coming from everywhere, PSD appears united enough, at least at the level of its leaders. The interior danger of breaking into pieces is little probable at this time, when any lonely baron would be easier to tear apart by the adversaries. Especially that the departure of one person would also mean the tearing away of a significant share of the local political clientele. At this moment we cannot make a correct evaluation of the victims and losses suffered by one party or another. It is only after the settlement of the latest objectives of the total conquest of the power by the current rulers that we can make a first evaluation.
by Mircea Dutu
Source: Nine O'Clock

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ROMANIA: Consolidated Budget Deficit 2005 May Widen to Some 1% of GDP

2005-08-30T17:08:00.000+02:00

According to Romanian Prime Minister Calin Tariceanu, the consolidated budget deficit 2005 will most probably widen to some 1% of GDP, Reuters reports.

Romania, which hopes to become an European Union member in 2007, had already agreed with the International Monetary Fund (IMF) to limit the budget deficit to 0.74% of GDP.

However, this proved to be unfeasible due to spending needs resulting from extensive floods the country has suffered this year. Source: REUTERS

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ROMANIA: Basescu - Nastase Dispute over Pan-European IV Corridor

2005-08-30T17:07:00.000+02:00

While on a visit in Constanta County, President Traian Basescu denied rumours that Romania could be left out the “operating plan” of the pan-European IV Transport Corridor, stating that such rumours were launched by the main Opposition party, PSD.

“This is a story launched by PSD leaders these days, to accuse the Government of jeopardising the Fourth Corridor in Romania, but it is a huge lie. I can tell you that in 1997 in Helsinki, after lengthy negotiations and enough hindrances, it was I who managed to introduce Romania in the Pan-European IV corridor and to have Constanta Port agreed on as the terminus point of this main transport route.
Later on, on this basis, I signed the EUR 220 M financing agreement with the European Investment Bank (EIB) in 1999, for the Bucharest-Cernavoda motorway, whereas PSD in the 2000-2004 mandate only managed to boycott the idea of a pan-European transport route taking the motorway to Cornu, because they were concerned with anything but the development of IV Corridor. The Nastase Government never invested any funds in this project,” Traian Basescu said.

The Head of State assured the audience that the transport infrastructure continues to be one of the main concerns of the incumbent Government, but also of the Presidential Administration.

In reply, former Premier, incumbent PSD executive president Adrian Nastase stated that construction of the Pan-European Corridor has nothing to do with Cornu locality, where one of his residences is located. “As a sailor, he (Traian Basescu, editor’s note) has travelled less on the country’s roads. Corridor IV has nothing to do with Cornu, and if he imagines the Brasov-Bors motorway crosses Cornu, it means he has lived too long on the sea and less in the country,” Nastase said. Source: Nine oClock

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Palmdale dealership to sell Romanian SUVs

2005-08-30T17:04:00.000+02:00

A unique dealership is expected to join Palmdale's auto mall, selling off-road vehicles from Romania.

Auto dealer Mike Taheri is buying 3.1 acres from the city in the Antelope Valley Auto Mall to build a Cross Lander dealership, expected to open by December 2006.

"This will be one of the few places where you can buy one," said Councilman Mike Dispenza. "It's a good fit for our area. It's a very affordable vehicle."

In keeping with similar land transactions at the auto mall, Taheri will not actually pay for the property. Instead, the city would write off the $810,000 sales price through sales tax revenue generated by the new business over the next 10 years.

The total taxable sales projected from vehicle sales on the property are expected to exceed $7.8 million.

Targeted at off-road enthusiasts rather than at SUV owners who seldom need their four-wheel-drive capability, the Cross Lander 244X sport recreation vehicle is tall and boxy, described by manufacturer Auto Romania as a no-frills vehicle.

The vehicle gained U.S. Environmental Protection Agency certification last December.

Manufactured in Campulung, Romania, the vehicles will be equipped with a 4.0-liter V-6 engine and are expected to sell in the low- to mid-$20,000 range, the company said.

There are 148 dealerships signed up nationwide, but sales have not started, company officials said.

The company calls itself the only international manufacturer aggressively targeting American off-road enthusiasts.

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Romanian IT services market to reach €297m in 2009

2005-08-30T07:28:00.000+02:00

he Romanian market for IT services grew a healthy 28.3 per cent to €136.5m in 2004, according to a report from market advisory firm IDC. A combination of economic growth, large privatisation deals and vertical market development spurred investment in IT services. The Romanian IT services market should expand by an annual average of 16.8 per cent over the next few years, reaching €297m in 2009.

There was a considerable shake-up in the vendor rankings on the Romanian IT services market last year. S&T jumped from sixth to first, Siveco fell from first to third, and new entrants Softwin, Forte and Romysm Consulting all cracked the top ten. IBM held on to second position while HP dropped a notch to fourth. Despite the shuffle, the market further consolidated in 2004, with the top 10 vendors representing just under 70 per cent of market revenue, up from 60 per cent in 2003.

Systems integration was the largest single area in the IT services market in Romania in 2004. Hardware support and installation was a close second, as enterprises continued to replace obsolete equipment. Custom application development and software support and installation were a distant third and fourth, respectively. Together these four areas accounted for 66.5 per cent of IT services revenue.

The utilities sector was the single largest vertical in the Romanian IT services market last year due to a number of major projects in the sector. The privatisation of the country's biggest bank helped make banking the second largest sector, as did the implementation of e-banking services and additional steps towards satisfying Basel II requirements. The central government was the third largest vertical. Together, these three verticals comprised 34.0 per cent of IT services spending.

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The Romanian IT Market

2005-08-30T07:24:00.000+02:00

2004 was an advantageous year for most of the 84 thousand companies in Romania, operating in the IT field. In 2004, Romania’s IT market reached 770 million euros in value, an increase of 10 percent as compared to the previous year. A survey conducted by the US-based International Data Corporation, estimates growth of over 11 percent for the IT market for 2005 also forecasting significant growth in the Internet and IT service sectors. The number of computers in Romania has increased from 700 thousand in 2001 to 2.45 million in 2004, while the number of Internet users has reached 5 million, as compared to 950 thousand four years ago.

Another indicator, well underlining the development of the IT sector in Romania, are the developments in terms of ‘.ro’ domains, whose number has increased from 16 thousand in 2000 to 85 thousand at the end of 2004. But what’s really happening on the Romanian IT market? Let’s take for instance, Hewlett Packard’s subsidiary in Romania, which in 2004 reported 100 million euros in sales, 24 percent more than in 2003. Radu Enache, director of Hewlett Packard Romania has shared with us his opinions concerning the Romanian IT market.

“Romania benefits from an IT market in line with international standards. In my opinion, the professionalism of Romanian IT experts, the managers’ abilities, and the high level of technical information is increasing competition, which is an excellent thing for Hewlett Packard - for only in this way can a company grow and develop. The Romanian IT market, will continue to grow, with forecasts standing at around 10 percent, but as far as our firm is concerned I believe we’ll experience a growth rate higher than that in the country on average.

This is the time of complex solutions and systems, and this is one of our strengths, if you take into account what we have on offer. We are determined to continue to invest in our team in Romania, and in the resources we have in this country. And by our resources, I mean, besides our team, the well-trained, skilled partners, that we have. These two elements are part of a whole which plays an extremely major role in our activity.”

In turn, the Romanian branch of the US company Dell has reported a sales increase of 176 percent against 2003, without giving further information concerning the number of home PCs sold or the turnover. It is true this US company opened a branch in Romania only in early 2003, and that could be a good explanation for the soaring sales.

The Taiwanese company Gigabyte has recently opened a branch in Romania, although its products have been on offer on the Romanian market for much longer. Here is Alexandru Ticea, head of Gigabyte’s Romanian subsidiary, with more.

“By opening its branch in Romania, Gigabyte is continuing its regional policy of enlargement towards south-eastern Europe. Four other Gigabyte subsidiaries have been opened in countries in our region, such as Poland, Serbia Montenegro, the Czech Republic and Turkey. In another development, Gigabyte is the number one brand in Romania in terms of motherboards and video cards, and our main aim is to maintain this leading position and if possible to widen the gap between us and the other big producers. About the Romanian IT market, I would say that it has a significant potential and it has developed considerably of late. Let’s take for example the year 2001 as a reference point; well, we can say that as compared to that year, the IT market in Romania has doubled. That’s a fantastic growth, a growth which can be experienced only in Eastern Europe.”

Another good example, is the Romanian subsidiary of the world’s biggest business software producer, the German company SAP. Its returns from licenses and maintenance grew by 72 percent in 2004, in comparison with 2003. Valentin Tomsa, manager of SAP-Romania told the Romanian daily paper Ziarul Financiar, that the company he was leading had the biggest rate of returns as against the objectives agreed upon by the subsidiaries of the German company. The SAP business solutions have so far been employed by over 7 thousand users in Romania.

Microsoft-Romania also increased its revenues in 2004, by 30 percent, reporting an annual average growth in its eight-year activity of over 60 percent. Xerox has been present on the Romanian market for 35 years, and the results the company obtained in 2004 are the best in the history of its presence on the Romanian market, as Marius Persinaru, general manager of Xerox Romania has confessed to us.

"In 2004, the company’s revenues in Romania totaled 40 million dollars, and the year is definitely the best Xerox has ever had in Romania. Its growth, compared to 2003, hit 16 percent, and practically all our divisions contributed to it. Our goal for 2005 is to obtain growth of at least 15-20 percent, for the market’s potential allows us to do that. That means we are seeking faster growth than the market’s actual pace.”

The Romanian software companies managed to obtain better results in 2004 as compared to those they achieved in the previous year. Softwin, one of the best known companies, thanks to their BIT DEFENDER anti-virus technology, obtained a 60% higher turnover than during the year 2003. BitDefender is directly distributed in 37 countries, the company’s objective for 2005 being that of covering more than 40 markets. All in all, SOFTWIN estimates that by the end of 2004 the BitDefender technology was already protecting over 41 million users from about 100 countries. BitDefender is currently available in 17 languages of international circulation, the programme’s latest upgrade being in Korean, Japanese and Russian. BitDefender employs a revolutionary method of virus detection, being recognized by 28 Science academies in the European Community.

In December 2004, Softwin was shortlisted by the BBC from among 25 providers, in an international bid for a project involving the use of computers to improve the teaching of certain subjects in schools, targeted at pupils between 5 and 15 years of age. The project value stands at 215 million euros. Softwin was the only non - British company winning the agreed provider status. Within the project, Softwin’s aims at providing interactive educational content covering several age groups and school subjects, especially Physics, Biology, Chemistry and Mathematics. At present, Softwin is a company with 600 employees having branches in Germany, Spain and the US.

Another major Romanian Software company, GeCad, also reported good results for 2004. GeCad is also known due to the fact that Microsoft purchased the RAV anti virus technology from them in 2003. GeCad’s main objective for this year is the launch, on the international market, of a new software product, developed using the firm’s own technology.

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Romanian President Wants Black Sea Port to Become Major Transit Port

2005-08-30T06:14:00.000+02:00

President Traian Basescu has paid an informal meeting at the headquarters of the Constanta Port National Administration Company to discuss with officials for freight transport operators and navigation service providers.

The president said the aim of the meeting with the over 25 officials of operators, state authorities and companies administering the local port domain and maritime traffic ways was to identify the main manners for turning the Constanta Port, the largest Black Sea port and one of Europe's biggest, into a transit port.

"I asked the officials to submit to me in 30 days a comparative analysis between the Constanta Port and the main ports in Eastern Mediterranean Sea because these are the ports we compete with in freight transit and traffic. This will help us build up a strategy. It is a sure fact that in order to attract freight transit to Constanta, the port operators and administrators here will have to charge accessible tariffs and provide quality shipping services. The Constanta Port has many facilities that no other port in Eastern Mediterranean Sea possesses, as it is linked to Central Europe through the railroad, road, river and air transport networks", Basescu said at the end of the meeting.

He also gave assurance that investment in transport infrastructure will continue to be one of the main concerns of the government and the presidential administration. "I have good news: By the end of this year all the documents will be signed for raising a loan to finance construction works on the Cernavoda-Constanta motorway, which will have a special by-pass to Constanta Port. At the same time, we will raise a non-returnable loan of 150m euros, under the [EU's] ISPA Programme, for the rehabilitation of the Bucharest-Constanta railroad route, while next year we will start works on the motorway segment linking Timisoara to Nadlac," Basescu also said.

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Romania: In or Out of the Anglo-American Axis?

2005-08-30T06:12:00.000+02:00

Manuela Paraipan - 8/30/2005
From the beginning of his mandate as a President of Romania, Traian Basescu declared himself a supporter of the so-called Axis of Washington-London-Bucharest. The idea was received with a cold attitude by the European powers, especially by the Germans and the French - long time friends of the country. Nonetheless, it became the leit motif of Romania's foreign policy.

But apparently the interest for this friendship axis is almost non-existent from both the UK and the USA. When the Romanian authorities asked for a visa-free entry in England and America for the Romanian citizens, the response was a clear and concise 'no'! But, when the Romanian troops were needed in Afghanistan, Iraq and elsewhere on this globe, the answer was "Yes, Sir!"

Some felt that there is something wrong with this picture. Is Romania a friend country of the world powers? Or merely their hobbyhorse?

For over half a year now, the United States delayed sending an Ambassador in Romania. Ever since Ambassador Crouch ended mission, this official position has been available. Most of the politicians, from both the opposition and the ruling alliance see it to the very least as a sign of indifference towards Romania. What's the point of having an axis, but no Ambassador to work with?

A former Foreign Minister, and member of the Commission for Foreign Affairs of the Senate, Teodor Melescanu said "the situation we are confronting with is not one that makes us content. The presence of an Ambassador is very important for the diplomatic contacts between the two countries."

Vasile Puscas, opposition deputy and former Minister of European Integration declared "from the point of view of the diplomatic principles, when a state delays the appointment of an Ambassador in other country, it means there is no interest toward that respective country; no geostrategic interest, geopolitic or economic interest. Objectively, between Romania and USA functions the Strategic Partnership that would request the presence of an Ambassador."

Anca Petrescu, member of the PRM nationalist party in Parliament believes that "the axis is not compromise, but we should not count only on this axis […] we should not forget the relations we have developed with other states."

Eugen Mihaescu, Vice-President of the Commission of Foreign Affairs in the Senate when asked about this issue said "well, but who is the Romanian Ambassador in Washington? Is the Ambassador of Iliescu! Anyway, the fact that we do not have an American Ambassador in Bucharest is showing the extraordinary interest of the Americans to maintain a good working relation with Romania.

Generally speaking, with all the efforts of our young Foreign Minister, the foreign policy of our country is unchanged, frozen into a refrigerator since the times of Gheorghiu Dej, Ceausescu, Iliescu and now, President Basescu."

But, besides being ignored by the USA, Romania is not in good terms with its European partners, either. This summer was an agitated one; there were catastrophic floods, political disagreements between the President and the Prime Minister and between the opposition and the ruling alliance; the economy also suffered because of the euro and dollar fluctuation, the increasing number of the unemployed people, and the numerous social and civic frustrations.

Olli Rehn, the EU enlargement Commissioner expressed in various circumstances, that if Romania or Bulgaria cannot or do not want to implement the reforms asked by the EU, then their membership should be postponed.

If this were to happen, Romania will lose more than 2 billion euro, money offered by the EU for the socio-political and economical reform of the country.

In this regard, Mihai Razvan Ungureanu stated that the EU officials in spite of their critiques do not have a plan B in case Romania and Bulgaria fail to join the EU in January 2007. Ungureanu said: "Not even the Brussels bureaucracy has considered the accession of Romania and Bulgaria in 2008. There is much trust that the two states will accomplish missions and become members of the EU in January 1, 2007."

Guenther Beckstein, Interior Minister of Bavaria declared to Reuters that the referendums in France and the Netherlands proved that the accelerated enlargement of the European Union would be further criticized by the European citizens. Therefore, the January 2007 or even 2008 is probably premature" for both Romania's and Bulgaria's accession.

With a poor Romanian lobby for the accession, with a political class lacking the stamina to urge clear reforms, with a justice obedient to the interests of various politicians and mafia bosses, the chances of seeing an European Romanian any time soon are indeed very low.

Manuela Paraipan received a Political Science degree in Romania, concentrating on Arab/Muslim domestic and external policy. She has been published in The Wall Street Journal, The Washington Times, World Security Network (WSN), World Press, Yemen Times and other publications. She has also been invited as a speaker at multiple political conferences. In addition to Romanian and English, Ms. Paraipan speaks French, Spanish and Italian. Her web site can be found at www.manuelaparaipan.org

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Floods in Romania Lead to Compulsory House Insurance

2005-08-29T18:16:00.001+02:00

This year alone, Romania was hit by four major floods, which caused damage totaling more than 2 billion euros. Over 25,000 houses were totally destroyed or seriously damaged, 40 people died and hundreds of roads, railways and bridges were affected. Smaller catastrophes were caused by tornadoes -- a new phenomenon in the region -- as well as landslides triggered by the unusual amount of rain.

"One of the most important consequences of the climatic changes in Romania is the forming of huge freshets on small water courses," explains Ion Tecuci of the National Hydrology Institute.

With the government caught off guard by the weather woes, funds for helping people and reconstructing damaged infrastructure have proved hard to find. Besides channelling money from asphalting or construction projects, the authorities are also counting on EU financial assistance."We will be able to access European funds, eventually by redirecting some money from the PHARE, SAPARD or ISPA programmes," says Prime Minister Calin Popescu Tariceanu.

To avoid such delicate financial situations in the future, his administration has decided on a radical measure: introduction of compulsory house insurance against floods, earthquakes, landslides and storms. Premiums will vary for urban and rural areas, based on exposure risks.

According to a draft likely discussed by parliament this fall, the insured value of a building should be the same as its fiscal value, but should not exceed 15,000 euros.

"This way, the premium would not exceed 30 euros," Secretary of State Radu Mircea Popescu said during a radio show. As this sum is still high in a country where the average monthly salary is 200 euros and the average pension is 80 euros, the state will subsidise the premium for those with low incomes.

"Not all the insurance companies will be allowed to practice this kind of insurance. It will be the same as in the case of the third-party compulsory car insurance -- only 13 of the 43 companies are authorised to sell this kind of policy," Nicolae Crisan, the president of the Insurance Supervising Commission, was quoted as saying by the daily Cotidianul.

In a departure from the regulations on car insurance, however, there won't be fines for those who are unwilling to buy the compulsory house policy. "There will be still some constraints. Those without insurance won't be able, for example, to sell their properties," said Crisan.

Not everybody is welcoming the idea. For example, some companies don't want to take a chance on the thousands of old jerrybuilt blocks in Bucharest or the approximately two million trellis and adobe houses in the countryside.

Others criticise the initiative as unethical. "The state gives the insurance companies some contracts which generate profit. Normally, the Competition Council should intervene," the daily Adevarul quotes real estate analyst Artur Silvestri as saying.

Many ordinary people also believe the draft could be more specific. "I live in Bucharest, on the seventh floor. I guess floods and the landslides are out of question, but I still would have to pay for them," says 35-year-old teacher Dan Tudorescu.

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New Strategy for Romanian Defence Industry Nearly Complete

2005-08-29T18:16:00.000+02:00

The economy ministry announced on Saturday (27 August) that the drafting of the new national strategy for the defence industry would be completed by 7 September. The document would focus primarily on restructuring measures for Brasov-based plants administered by the state-run company Romarm.

In other news, Deputy Prime Minister Marko Bela says government officials will meet with Hungarian officials in late October. The focus would be on concrete bilateral projects and issues related to the environment and minorities.

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Romanian Government approved subsidizing of wheat storing and trading

2005-08-29T17:34:00.000+02:00

The Romanian Government okayed on Thursday the subsidizing of wheat storing in special spaces, and its trading. Farmers will be granted subsidies for storing a total of 1.5 tonnes of wheat, or 20.4 percent of the crop. Minister of Agriculture, Forestry and Rural Development, Gheorghe Flutur, said subsidies will be given over six months, January 2006 included. As many as 2.5 euros per tonne will be paid for the first month, Flutur also said. For the farmers to enjoy fair participation, the programme does not work according to the principle that the first served is one having come first. The step has been taken for the regulation of the wheat market and for protecting it from speculation.

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Romanians Win Top Prizes in Copenhagen

2005-08-29T17:29:00.000+02:00

COPENHAGEN, Denmark - Romanian-born director Radu Mihaileanu won awards at the Copenhagen International Film Festival for best movie and best script for "Live and Become," a film about an Ethiopian boy who struggles to integrate into Israeli society.

Cristi Puiu, also of Romania, was given the Grand Jury Special Prize for his film "The Death of Mr. Lazarescu" at Sunday's Golden Swan ceremony.

Norwegian director Bent Hamer won best director for his film "Factotum."

Lili Taylor, ho stars in the film, was tapped best actress while the best actor title went to Ioan Fiscuteanu for his part in "The Death of Mr. Lazarescu."

More than 100 films and documentaries, most of them European, were screened during the 11-day festival, 10 of which competed for the Golden Swan awards.

During the festival, British director Niicolas Roeg and Greek-born director Constantin Costa-Gavras were given lifetime achievement awards. Roeg is known for his 1973 movie "Don't Look Now," while Costa-Gavras' political movie "Z" won an Oscar in 1970 for Best Foreign Language Film.

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Eastern Europeans counting the cost of floods

2005-08-29T17:27:00.000+02:00

Bucharest - Across eastern and central Europe on Sunday, work began to clean up after the disastrous downpours and flooding that have taken at least 26 lives across the region.

The Harghita region in Romania, where 15 lives were lost in a week and 33 people have died since mid-August, was among the hardest-hit.

Three hundred people have been washed out of their homes there and will not be able to return until mid-October, local authorities said.

"About 30 houses have been completely destroyed by the floods and several hundred seriously damaged," the head of the local authority said.

"Reconstruction work cannot begin until the roads have been rebuilt." He said 200 troops were busy clearing away "mud and debris."

The cost to Romania of damage since the start of the month has been put by the interior ministry at €260-million.

In Switzerland, where six people have died in the last week, the 70 inhabitants of Oey-Diemtigen, near Bern, have been told they will have to wait weeks, if not months, before their homes can be lived in again.

In Bern itself about 340 people living in the lower town along the river Aar have been able to go home but many other local residents have had to stay in temporary shelters because electricity and gas supplies have not been restored.

In Austria, where four lives were lost, thousands of troops, firefighters and volunteers - among them 100 asylum-seekers - have been cleaning up in the western provinces of Vorarlberg and the Tyrol.

Priority is being given to clearing river beds to lessen the risk of future flooding. In most communes electricity supplies and phone lines have been restored.

First estimates put the cost of damage to the rail system in the two provinces at €15-million and to the main highway system at €5-million.

Many roads remained impassable, in particular in the Paznau valley in the Tyrol and in Vorarlberg, where damage to local roads is put at €30-million.

Gargellen in Vorarlberg will have to be supplied by helicopters for several days to come.

Further west, in Carinthia and Styria, more landslides were reported late on Friday and rain was forecast for Sunday, raising fears of further damage.

In Germany, where one person died, levels of the Danube and its tributary the Isar were falling, police said.

"But we shall have to wait several days for all the water to leave for good," a spokesperson said.

At Passau, at the meeting of the Danube, the Inn and the Ilz, water levels were almost back to normal and sandbags used to form dykes were being removed and streets cleaned.

In Poland electricity and gas services have been restored in flooded areas near the Czech border but movement by road remains difficult, according to local authorities who complain of the lack of reaction by central government.

On the side of the continent, in Portugal four new wildfires broke out as temperatures rose, just hours after firefighters tamed three blazes overnight, including one that raced through a nature reserve, officials said.

Two fires were burning in the northern districts of Braganca and Vila Real, one was burning in the central district of Aveiro and another in the southern district of Faro in the Algarve, Portugal's main tourism centre, the civil protection agency said in a statement.

A pilot was killed when his plane crashed while water-bombing a wild fire in Mallorca, Spanish emergency services said. - Sapa-AFP

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New Kopel expands operating leasing business in Romania

2005-08-29T15:51:00.000+02:00

The car leasing market in Romania is expected to reach €1 billion within two years.

Car leasing company New Kopel is expanding its operating license activity in Romania.

The company, which began operating in Romania several months ago, is one of the first companies offering the full operating leasing services available in the Israeli market.

New Kopel’s current leasing fleet in Romania is estimated at 200 vehicles, consisting mostly of popular models, such as Skoda, Renault, and Honda. The company is focusing on large business customers in Bucharest, most of which are international or Israeli companies aware of the advantages of leasing.

Operating leasing services are provided through a central garage near Bucharest owned by New Kopel. Large international banks operating in Romania provide financial coverage, and New Kopel also uses its own independent sources. The company will begin a nationwide campaign in Romania next month.

Most of Romania’s estimated €385 million car leasing market is confined to finance leases. A number of leasing entities owned by auto manufacturers operate in the country, but they also offer finance leases with no operating component.

According to projects, the Romanian car leasing market will reach €1 billion within two years, and continue to grow as the date of Romania’s accession to the European Union nears. The Romanian auto leasing marking grew 112% last year.

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