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Austrian Epa Acquires Romanian Euromedia and Beta Cons for 20 Mln

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


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

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

Euromedia reported a turnover of 10 mln euro in 2004.

Beta Cons reported a 1.6 mln euro turnover for 2004.

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

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

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

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Taxation Blues

Romania, Volume 100
08.09.2005

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Romania's Premier: Foreign Investment Up

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

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

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

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

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

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

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

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

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

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

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Through The Customer's Eye

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

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

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

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

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

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

Know Your Subject

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

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

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

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

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

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

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

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

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

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

Act With Integrity

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

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

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

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

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

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

Challenged To Grow

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

He cites his dealings with Colgate.

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

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

Leadership isn't a popularity contest, he notes.

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

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

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

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

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Wolf Thiess Hires For New Romanian Office

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

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

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Pack and plan: destination Romania

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Alexandru Paleologu was a Romanian diplomat

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

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

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

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

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

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Romania's Main Opposition PSD to Propose Joint Political Platform

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

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ROMANIAN GROUP CLONED CREDIT CARDS AND CASH CARDS IN SUPERMARKET

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

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


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