Romania's PM-designate renouncing premiership

Romania's Prime Minister designate Theodor Stolojan said, today, that he renounces the premiership in favor of a younger candidate. At 2 p.m. (Bucharest time), Romania’s President Traian Basescu said he will sign new decree to designate the Democratic-Liberal leader, Mr. Emil Boc, instead.

Stolojan, 65, said in a short statement that he would let Traian Basescu nominate somebody who will "give a hope to the young generation."

Stolojan was nominated by Basescu last week as prime minister designate following Nov. 30 elections.

Mr. Basescu later made a statement, shortly on Stolojan's decision, and said he will sign new decree to designate Mr. Emil Boc, instead. Mr. Boc is president of the Democratic-Liberal party, which won the parliamentary elections by a slim margin, on Nov 30.

The new government had been expected to face a parliament vote on Dec. 22 but it was unclear whether this would now be possible.

A former World Bank expert, Stolojan was prime minister between 1991 and 1992. He also served as finance minister. Mr. Emil Boc is the boss of Democratic-Liberals since 2005, and is in his second term as mayor of Cluj-Napoca (the second largest city of Romania).

Romania's coalition government will be formed by the left-leaning Social Democrats and the centrist Democratic Liberals who have about a 70 percent parliamentary majority.

Romania’s Prognosis Commission: it is likely to have a 4 to 6% economic growth in 2009

An economic growth of 4 to 6% in 2009, as against the extraordinary economic evolution in 2009, is a natural situation, head of the National Commission for Prognosis (CNP) Ion Ghizdeanu said on December 3 at a conference on the retail market in Romania.

Also, the CNP representative estimated an unemployment level of maximum 5% in 2009 against its 4% level so far.

The GDP has soared, in real terms, 8.9%, in the first nine months of the year against the same period in 2007, standing at 335.2 billion lei, according to data centralized by the CNP.

In Q3 of 2008 the GDP stood at 139.4 billion lei, some 9.1% more than over July-September 2007.

The European Commission forecasts that Romania’s economic growth will exceed expectations this year, going up over 8.5%, while in 2009 it will drop to 4.75% and to 5% in 2010.
In its turn, the International Monetary Fund (FMI) is expecting an economic growth of 8-9% in 2008, followed by a significant slowdown in 2009, up to 4-5%.

Romania’s centre right Democrat-Liberals won parliamentary elections

The official results from Romania’s elections have given the centre-right Democrat Liberal (PD-L) party a thin margin lead over their Social Democrat (PSD) rivals, overturning exit polls that had forecast a resounding win for the Left, last Sunday.

As expected PD-L, PSD+PC, the national Liberal Party (PNL), and the Democratic Union of Hungarians in Romania (UDMR) will be part of the future Parliament, as being the only parties that beat the electoral 5 percent threshold.

The Central Electoral Bureau (BEC) has announced that, according to the data centralized from all of the voting centers, the Democrat-Liberals (PD-L) won 115 seats in the Lower Chamber, while the PSD+PC alliance received 114 seats, the National Liberals (PNL) won 65 seats and UDMR 22 seats.

In the Senate, PD-L managed to get 51 seats, with PSD+PC coming second with 49 seats. PNL won 28 senators, while UDMR has but 9 seats.

The initiative now passes to Traian Basescu, the president, who must invite a party to form a government. Alina Mungiu, director of the Romanian Academic Society, a think-tank, said: “It’s always been more likely that the Democrat Liberals will form a government, because the president prefers them.” Mr Basescu was a senior figure in the Democrat Liberals’ predecessor party before ascending to the presidency four years ago.

With no party likely to achieve an overall majority, a coalition government is a certainty. The National Liberals, who came third, are regarded as potential coalition partners for either of the two leading parties. Until two years ago, they governed in coalition with the PD-L, and have subsequently run a minority government with ad hoc support from the PSD.

”The PD-L will first try for a coalition with the Liberals, but if their price is too high, then a grand coalition with the PSD is a possibility,” Ms Mungiu said.

Sebastian Lazaroiu: We will rather have a 2-year Government instead of a 4-year one

Presidential adviser Sebastian Lazaroiu stated that it is possible for early elections to be held two years after the start of the new Government’s term, arguing that in the first two years the parties will close ranks in order to overcome the crisis, with their competition set to restart after that period.

‘We might have a two-year Government instead of a four-year one. But it is hard to anticipate at this time,’ the Presidential advisor answered when asked if the new Government will resist throughout its current term, set to expire in 2012, or if he foresees early elections.

All parties have promised a combination of public-sector pay rises tax cuts and infrastructural spending as a means of economic stimulus. But with growth set to plummet to as low as 3 to 4.5 per cent next year from its current level of 7.5 per cent, and the budget deficit forecast to widen from this year’s level of 2.4 per cent over the next two years, the next government will have little leeway on spending. Already, analysts are warning that Romania may have to follow its neighbours Hungary and Ukraine in turning to the International Monetary Fund for help financing its $75bn external debt.

December the 1st: The 90-th anniversary of the Great Union of 1918, the National Day of Romania

The popular assembly of Alba Iulia on Dec. 1, 1918 (archive photo)

On December the 1st, 1918, at Alba Iulia, in the e center of Transylvania, the Great National Assembly (Marea Adunare Nationala) approved the unification of Transylvania, Banat, Crisana and Maramures with Kingdom of Romania.

The first of December 1918 represents, for the Romanian people, the triumph of centuries of struggle and sacrifices for achieving the national unitary state. This historical process, taking place on the entire Romanian area, scored significant developments in the 1784's popular revolts, 1821 and 1848's revolutions, the unification of Moldova with Wallachia (Muntenia) in 1859, the Proclamation of Independence after the 1877-78 anti-Ottoman war and was completed with the expression of the self-determination's will, in Chisinau, Cernautzi and Alba Iulia, during the year 1918, of the Romanians living under foreign domination.

Living in separate States, always threatened by the powerful neighbors, with parts of its original territory - Transylvania, Bessarabia, Bucovina, sometimes Dobrogea too - annexed to the three big empires - Ottoman, Habsburgic (later, known as Austro-Hungarian) and Russian, the Romanians always preserved the philosophy of being part of the same nation.

This philosophy of the Romanian nation unity was permanently strengthened by political, military, economic and cultural relationships between the Romanian Kingdoms along the centuries. The 19th century, called the "century of the nationalities", brought a new reality in the Romanians-living space, the consolidation of the Romanian nation, based on unity, consciousness and a common destiny.

The accomplishment of the national aspirations of all Romanians at the end of the First World War (WWI) should be understood as a natural and logical fulfillment of an historical necessity imposed by the evolution of the national state, and not as a result of the Romanian military effort. The WWI did not create the Great Romania, but the will of the Romanian nation did so.

The military victory was not the basis of the national Romanian state, even though the unification of the Romanian provinces was the only reason behind the Kingdom of Romania's entering WWI. The huge human and material sacrifices in the military campaigns in 1916-1918 were rewarded with the collapse of the irrational empires and the affirmation of the right of peoples to self-determination, based on the Woodrow Wilson's principle of nationalities.

The Romanian troops entered Bessarabia at the beginning of 1918 not to install a military dictatorship, but to re-establish order and peace and to hinder the Bolshevik actions aiming at imposing the Soviet power in the province.

The Romanian military had the same role in Bucovina, at the request of the Romanian National Council (the parliament), taking into consideration the disorder created by the retreat of the Austrian military units and the plan of the Ukrainian National Council to annex the Northern Bucovina to Ukraine. The Romanian military intervention came only after the Constituent Assembly of Bucovina decided, in October 14/27, 1918 "the unification of the entire Bucovina with the other three Romanian provinces in one national and independent state".

On 1st of December, 1918, at Alba Iulia, in the e center of Transylvania, the Great National Assembly (Marea Adunare Nationala) approved the unification of Transylvania, Banat, Crisana and Maramures with Kingdom of Romania. The large impressing popular gathering represented the crowning of the previous self-determination acts of unification from Chisinau (March 27/April 9, 1918) and Cernautzi (November 15/28, 1918) stipulating the return of Bessarabia and Bucovina to Romania, respectively.

At the time of the Paris Peace Conference, the Romanian unitary State had been already a reality: The Conference had only to endorse the legitimate decisions taken in Chisinau, Cernautzi and Alba Iulia successively, in 1918. The Versailles and Trianon Treaties represented a political and diplomatic acknowledgement of an inalienable historical right of the Romanian nation.

Romanian Voters May Turn to Ex-Communists on Economic Concerns

Romania's President, Traian Basescu

The Romanian Social Democrats, led by former communists, may win the most votes in Nov. 30 parliamentary elections by promising increased social benefits as the global financial crisis threatens job losses and economic stagnation, Bloomberg reported today.

Support for the Social Democrats rose to 35 percent in the last opinion poll before the vote from 25 percent in September, overtaking the Liberal Democrats, who had 32 percent. In third place was the governing National Liberal Party, with 21 percent.

After years of economic boom, Romanians are seeking to prolong the good times and shelter from the worst of the global crisis as emerging markets are buffeted by tumbling stock prices and falling currencies. The Social Democrats, aspiring to power after four years in opposition, risk exacerbating financial instability by increasing social spending in the second-poorest country in the European Union, economists warn.

“The Social Democrats are benefiting from the instability of the global crisis but that’s what we don’t need right now,” Nicolaie Alexandru-Chidesciuc, a senior economist for ING Bank Romania in Bucharest. “We really need a government that can say ‘we need to cut back spending’ and promote fiscal responsibility. The Social Democrats are the very last party that would do it.”

The INSOMAR poll of 12,494 people between Nov. 21 and Nov. 23 showed voter support for the Democratic-Liberals, who back President Traian Basescu, has fallen from 39.4 percent in September while support for the governing Liberals has risen from 19.9 percent. The poll has a margin of error of 1.5 percent.

Hungarian Minority

It also showed the Democratic Union of Hungarians in Romania, favored by the 1.4 million-member ethnic minority in the nation of 22 million, had 5 percent support. The nationalist New Generation Party, led by soccer financier Gigi Becali, scored 3 percent.

Though all parties promise to boost spending and shield the country from the global crisis, none is likely to gain a majority, meaning they must seek alliances to form a government. In 2004 elections, that process lasted until Dec. 28 and ended with the appointment of the Liberal Calin Tariceanu as prime minister, excluding the Social Democrats from government.

Alliances forged in Parliament are likely to shape the policy of the future government more than party platforms, said Alina Mungiu-Pippidi at the Romanian Academic Society in Bucharest.

“Controversy is likely to start on Dec. 1, after the elections,” she said. “They have to start talks to form a coalition government and they will have trouble finding any prime minister that they can agree on.”

Coalition Talks

Social Democrat leader Mircea Geoana, 50, a former foreign minister and ambassador to Washington, told foreign reporters on Nov. 14 that he will negotiate with any party to form a majority coalition and return to power.

“Everything is on the table,” he said. “If we get 40 percent of the vote, though, we will be in a much better position to form an alliance than if we get 25 percent.”

Mihaela Lazar, a 34-year-old clerk in a cable and wire shop that earns her $335 a month, has yet to decide if Geoana should lead the nation. Still, her town of Targoviste, where declining demand forced steelmaker Mechel Targoviste SA to lower production this month, may support the return of the Social Democrats, especially among pensioners.

“The older people trust them because they governed the country for a long time and they think they helped raise pensions,” said Lazar, pacing the unheated shop to stay warm.

Economic Focus

Elections in 2004 were focused on graft in the nation rated by Transparency International as the most corrupt in the EU. In the only televised debate between the three main candidates for prime minister, held on Nov. 26, none mentioned corruption, focusing instead on growth, multiannual budgets and potential finance ministers.

Increased wealth associated with EU membership is tangible as cranes bristle on the skylines of Romania’s major cities. Foreign trips, including many who had never been on an airplane, jumped an annual 21 percent in the first nine months of the year. New cars clog streets and imports more than doubled since the last ballot.

Soaring foreign investment, annual net wage increases of as much as 30 percent and a lending boom have spurred shop openings by retailers such as Carrefour SA, Ikea and Starbucks Corp. and driven real estate prices up as much as 10-fold.

Economists say Romanians may have to give up some of those gains as the international financial crisis translates into higher unemployment, factory closures, a weaker local currency, credit rating downgrades and a sharp slowdown in lending.

Spreading Layoffs

Companies including carmaker Dacia SA, food processor Kraft Romania SA and steel manufacturer Arcelor Mittal Romania have announced cutbacks or layoffs totaling 4,000 in October alone and many of their suppliers have said they will fire workers as well.

Gabriel Pana, a 50-year-old technician who earns $410 a month at the Russian-owned Targoviste steel plant, said he is bucking the trend to the Social Democrats and will cast his vote for the Liberal Democrats because the local politicians are younger and Romanian politics “need fresh views.”

“Geoana’s popularity has improved, but nothing else has changed,” Pana said as he closed the plant’s rusty gate behind him and started his walk home. “The promises are too many and too big, you have to be blind not to notice there’s nothing much they can do.”

Romania gets €1 billion loan from EIB

BUCHAREST, Nov 24 -- Romania Monday signed with the European Investment Bank (EIB) a credit agreement worth €1 billion (1.266 billion U.S. dollars), for co-financing the EU-funded projects.

The loan will be granted as matching funds for implementation of projects in Romania financed under the EU Structural and Cohesion Funds, said Finance Ministry's Sate Secretary Eugen Teodorovici, after signing the agreement with the visiting EIB Vice-President Mathias Kollatz-Ahnen.

The loan will be directed toward environmental, economic competition and transportation operational programs, he added.

The loan will be disbursed in maximum 15 tranches of €25 million ($31.65 million) to €250 million ($316.5 million) each, the deadline for attracting the entire loan being August 31, 2013, according to the agreement.

According to local analysts, the loan will contribute to a better absorption of the resources under the EU Funds.

The 1-billion loan was approved by the EIB Board of Directors on October 21, 2008 and Kollatz-Ahnen said EIB might increase its financing to Romania from €1 billion to €1.3 billion for the coming years, in view of the undeniable impact of the international financial crisis.

"We will do our best for the year to come, to prepare a higher volume for Romania, let's say a third more," said Kollatz-Ahnen, adding that "talks are held at European level on ways to support, encourage investments in this context."

EIB and Romania in Oct. 2006 signed a Memorandum of Understanding, setting a framework for the EIB's support to the country's investment program during the next years. While financing will be based on specific project proposals, the agreement indicates that such financing may be in the order of €1 billion per year and can be adjusted in line with needs.

Since 1990, the EIB's lending in Romania has reached €5.1 billion to finance investment projects relevant for Romania's successful integration into the EU. Since Romania joined the EU in 2007, the EIB has sought to play an important role in supporting the country's successful development within the union.