ROMANIA REPORT Blog

Romanian ForMin Teodor Baconschi met Ukrainian Minister of Foreign Affairs Konstantin Grishenko on Thursday in Kiev

2011-11-11T00:50:00.001-08:00

Ukraine is closely following the evolution of the anti-ballistic system in Europe and does not want the project to raise controversies among the states in the region, said Ukrainian Minister of Foreign Affairs Konstantin Grishenko on Thursday in Kiev, during a press conference held together with his Romanian counterpart Teodor Baconschi. 'We do not want this project to trace a divergent line between two neighbouring countries and among the countries in the region,' said the Ukrainian minister.

The Romanian Chief Diplomat restated that the Romanian-American agreement on the anti-ballistic shield signed in Washington in September represents Romania's contribution to the future defence mechanism developed within the NATO and that the project is strictly defensive.

'We signed this Romanian-American agreement as a contribution to the future anti-missile system developed within the NATO. It is about a strictly defensive system we discussed with our NATO partners and our partners in the region. We are positive that the NATO-Russia, the EU-Russia dialogue and the US-Russia dialogue will lead to the clarification of the political climate and to the trust that this system is strictly for the protection of the allied territory,' Baconschi said.

'At bilateral level, we are totally open for our military experts to discuss in total transparency to see how Ukraine is interested in this project,' added the Romanian Chief Diplomat.

The Moscow authorities systematically demanded 'written guarantees' that the shield will not be used against Russia. In their turn, the Ukrainian authorities, a state between Russia and Romania, always said they are only interested in a system including Russia as well, Agerpres correspondent informs.
Baconschi also said that the Romanian and Ukrainian sides decided to strengthen their cooperation in the European Union's Strategy for the Danube Region and to carry out trilateral trans-border cooperation projects with European funding, among Romania, Ukraine and the Republic of Moldova.

This is the first visit of Minister Baconschi in Kiev, after the one paid by former Romanian chief diplomat Cristian Diaconescu in January 2009. The tone of the statements the two ministers made was a warm one, both of them voicing their being in favour of the political dialogue and economic cooperation strengthening between Romania and Ukraine.

At the same time, the Romanian Foreign Affairs Minister gave guarantees that the Romanian side would make all efforts for modernizing and completing as soon as possible the bilateral judicial framework.
Romania and Ukraine in Kiev, on Thursday, signed the Cooperation Agreement between Romania's Ministry of Justice and Ukraine's Ministry of Justice and the Collaboration Protocol between MAE and the Foreign Affairs Ministry of Ukraine in the field of European integration.'I am convinced that the protocol signed today concerning the European integration of our country is an important document in the bilateral relations,' Konstantin Griscenko said.
Inquired about the bones of contention between the two countries, such as building the Bystroye Channel, of which Romania does not approve, the Romanian Chief Diplomat said the two parties would be able to find solution just through political dialogue.

'The will to cooperate and to reach reasonable solutions is essential, either related to Bystroye, or to minorities, Krivoy Rog or any other topic,' Teodor Baconschi pointed out.

'It is fundamental that both parties should display a political desire to enter a stage of getting the relation back to normal and of developing it to the common benefit of the two societies and states,' concluded the Romanian Chief Diplomat.
During his visit to Kiev, Romanian Minister of Foreign Affairs Teodor Baconschi extended an invitation to his Ukrainian counterpart Konstantin Grishenko to visit Bucharest in 2012 to initiate annual discussions between the two countries at the level of chief diplomats.

As regards the possibility of a meeting between the two presidents, the Romanian Chief Diplomat has not set a date. 'Our efforts will lay the foundations of a high level political dialogue the moment there is enough substance for this dialogue to take place,' Teodor Baconschi said.

Source: Actmedia Online

Romania Updates -- Nov 11, 2011

2011-11-11T00:40:00.001-08:00

ROMANIA INFLATION QUICKENS TO 3.6 PCT Y/Y IN OCT

Romania's annual inflation quickened to 3.6 percent in October from September's 3.5 percent, above market expectations but still within the central bank's target band, official data showed on Thursday.

2013 BUDGET DEFICIT

Romania plans to reduce its fiscal deficit until it achieves a balanced budget in 2013, President Traian Basescu said at a meeting with German Chancellor Angela Merkel in Germany. Ziarul Financiar, Page 1

OLTCHIM

Russian energy company TISE is interested in buying state-owned chemicals firm Oltchim, which the government aims to sell under its IMF-backed privatisation plan by April 2012, the economy ministry said on Thursday.

Romania Updates -- Nov 10, 2011

2011-11-10T04:19:00.000-08:00

Romania’s inflation rate unexpectedly rose in October for the first time in five months because of higher heating bills after the government cut subsidies to meet pledges to international lenders, Bloomberg reports.

The annual rate advanced to 3.55 percent from 3.45 percent in September, the National Statistics Institute in Bucharest said today in an e-mailed statement. The median estimate of nine economists surveyed by Bloomberg was for a 3.2 percent rate. Prices grew 0.6 percent on the month.

Romania’s inflation, which has slowed more than forecasts since July, prompted the central bank to lower its main interest rate on Nov. 2 to aid an economic recovery. The rate, which will probably end 2011 at 3.3 percent, leave policy makers with more room to reduce borrowing costs, Governor Mugur Isarescu said on Nov. 7.

Non-food costs advanced to 5 percent from a year earlier in October from 4.8 percent in September, mainly driven by surging heating and fuel prices, according to the institute. Food prices grew 1.7 percent in October, matching the September growth pace, while services prices growth accelerated to 3.6 percent from 3.5 percent the previous month, the institute said.

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TRANSELECTRICA RESULTS

Romania's state-owned power grid operator Transelectrica posted a nine-month net profit of 153.5 million lei ($47.8 million), it said on Thursday.

ROMANIA TO START DOLLAR ISSUE ROADSHOW NOV. 11

Romania's finance ministry will start a roadshow for a potential international debt issue, the second this year, on Nov. 11, deputy Finance Minister Bogdan Dragoi said on Wednesday.

ROMANIA JAN-SEPT TRADE GAP SHRINKS TO 6.9 BLN EUROS

Romania's trade deficit shrank by 1.2 percent on the year to 6.89 billion euros in January-September, with exports growing faster than imports, the National Statistics Board said on Wednesday.

ROMANIA POWER GRID NEEDS BIG INVESTMENT-OFFICIAL

Romania's power transmission system operator Transelectrica needs around 500 million euros to upgrade the power grid so it can handle an expected surge of wind generation, a company director said.

NUCLEARELECTRICA

Romanian investment fund Fondul Proprietatea said on Thursday the government's plan to hike the share capital of nuclear power plant Nuclearelectrica by 1.4 billion lei may reduce the fund's participation in the company by up to 1.8 percent. The fund said it will take all possible measures, including legal action, to protect its assets.

BCR

Romanian regional investment fund SIF Banat-Crisana, one of the five minority holdings in Banca Comerciala Romana (BCR), has signed papers to sell its stake in the bank to majority holder Erste Group Bank , it said on Thursday.

The fund will get 123.6 million lei and 1 percent of shares in Erste for its stake in BCR.

Romanian president's official visit to Germany

2011-11-10T04:09:00.000-08:00

Romanian president, Traian Basescu, will meet German chancellor Angela Merkel in Berlin today, where he will also attend the conference ‘Germany and Romania – partners in Europe’, organized at the Deutsche Bank headquarters in Berlin.

Basescu was invited to the German capital by his counterpart Cristian Wulff.

Deutsche Bank representatives have previously said the bank was planning to acquire a Romanain bank, media reports said.

Back in October, Traian Basescu also met Angela Merkel in Bucharest , when the German chancellor asked for a more transparent business framework and for clarity in the Romanian justice, as for German investors that would would seek entering the local market. The two heads of state have also discussed about the Danube strategy.

The Romanian President’s delegation to Berlin includes the European Affairs Minister Leonard Orban and the state secretary in the Foreign Affairs Ministry Bogdan Aurescu.

May 12 (Reuters) - Here are news stories, press reports and events to watch which may affect Romanian financial markets on Thursday.

2011-05-12T06:48:00.000-07:00

TURKMEN PRESIDENT IN ROMANIA

Turkmen President Gurbanguli Berdimuhamedov is on a two-day visit to Romania and is expected to meet President Traian Basescu and other Romanian officials.

PETROM Q1 NET PROFIT RISES ON OIL PRICE, COST CUTS

Romania's top oil and gas company Petrom (SNPP.BX), majority controlled by Austria's OMV (OMVV.VI), posted a 4.6 percent rise in first-quarter net profit on Wednesday, due to higher oil prices and cost cuts.

* Petrom had investments of 633 million lei ($223.1 million) in the first quarter, down 12 percent on the year. (Ziarul Financiar, Page 8)

* The company also said shareholders were not asked to renew an approval to hike Petrom's capital. (Adevarul, Page 20)

TRANSELECTRICA

Romania's economy minister appointed Horia Hahaianu as the new head of state-owned power grid operator Transelectrica (TSEL.BX), replacing former director Stelian Gal.

Since taking his post more than half a year ago, the economy minister has replaced several heads of state-owned energy companies, mirroring similar moves by his predecessors.

NO CONFIDENCE MOTION

Opposition Social Democrats and Liberals may file a new no confidence motion against the centrist coalition government in June. (Adevarul, Page 7)

NATO – Romania, Update

2011-05-12T05:18:00.000-07:00

U.S. and Romania Move on Missile Plan

WASHINGTON, May 3 — The United States and Romania announced an agreement on Tuesday on the location for basing American antimissile interceptors in Romania as part of a program designed to link Washington and its NATO allies against an Iranian threat. The agreement immediately drew complaints from Russian officials.

Officials said the site selected for a key component of the missile-defense system was Deveselu Air Base, near the city of Caracal in southern Romania. The deployment of the SM-3 missiles is expected by 2015, officials said. About 200 American personnel are expected to help operate the system.

Russia immediately complained that the interceptors in Romania could undermine its nuclear deterrent, and said the step ignored commitments made by the United States that Russia would have a role in decision-making.

“We regret to say that practical steps on building the European segment of the U.S. global defense system are being made regardless of Russian-U.S. dialogue on missile-defense problems, which was started under a decision by President Dmitri Medvedev and President Barack Obama,” said a statement from Russia’s Foreign Ministry, according to the Interfax news service.

The statement expressed a Russian desire for legal guarantees from the United States that the missile defense system would not target Russian missiles.

American officials rejected the Russian complaints, and cited the invitation from the United States and NATO for Moscow’s participation in a common missile-defense system for Europe.

“Missile-defense cooperation with Russia is a key U.S. goal,” said a Defense Department official, speaking under standard ground rules of anonymity for discussing diplomatic matters.

“We believe cooperation on missile defense is in the security interest of both our countries,” the official said. “We are actively seeking cooperation with Russia in bilateral channels and through NATO. Cooperation is the best way to provide Russia transparency and reassurances that missile defense is not a threat to its security.”

Russia had vehemently opposed an antiballistic missile shield proposed under President George W. Bush. In September 2009, Mr. Obama announced a reconfiguration of his predecessor’s proposed antiballistic missile shield in Eastern Europe, one that would focus on short- and medium-range missiles, partly quieting Russian objections.

The administration’s new plan would deploy, in four phases, existing SM-3 interceptors using the sea-based Aegis system and an improved version in 2015 on ships and on land. Rather than the 10 bigger interceptors originally envisioned, there could be 40 to 50 of the smaller missiles on land and more on ships.

Russia revived its objections as Moscow and Washington were negotiating the New Start treaty in 2010. Russia tried, unsuccessfully, to include language in the treaty that would restrict the development of the missile shield.

The United States and NATO maintain that the reconfigured missile-defense system based in Europe could not diminish the deterrent power of Russia’s vast nuclear arsenal, and state that the system of antimissile interceptors and radars is designed to halt missiles from Iran.

Stratfor analyst : The Romanian-Russian relations could «suffer» due to the shield, Serbia would be favoured

May, 9 – The Romanian-Russian relations could « suffer » due to the decision to place in Romania some elements of the anti-missile shield, stated for Mediafax Marko Papic, senior analyst Eurasia with Stratfor who made an analogy with the Russian-Serbian relations, as Serbia would get closer to the NATO. « The relations between Russia and Romania could suffer due to this. For example, the Russian ambassador to the neighbouring country Serbia suggested that any attempt on the part of Belgrade to get closer to the NATO would force Russia to respond and such a move would lead to the deterioration of the relations between the two states. Thus, we suppose that a similar reasoning could be valid for Romania as well, especially we take into consideration Bucharest « willingness to confront Russia, in the case of Moldova» the senior analyst with Stratfor commented for Mediafax.

Papici said «Russia could respond to the challenge by building its own fleet in the Black Sea and by reconsolidating Crimea» He thinks that «Russia could start by improving its relations with Serbia, especially due to the building of the gaspipelines South Stream and bring money in the country, to counterbalance Romania’s decision to strengthen its relations with the west. » From the point of view of advantages and disadvantages brought about by the anti-missile shield on the Romanian territory, they should be dealt with interdepedently, another analysts of Stratfor Nathan Hughues said.

« As a whole, this is a more flexible and adaptable architecture than the system which was used for Poland. Any component would « get » into Romania would be connected and would be part of a system, a bigger one, with multiple radar placed at sea and spread all around several states, as well as interceptors at sea and in several states » the military analyst Nathan Hughes commented for Mediafax.
No country is considered essential, geographically speaking. But, as there are more countries in the region that take part in the system, the more equipment is gathered and the system becomes more complex » Hughes said.

The military analysts said that a more active participation on the part of Romania to the anti-missile shield could strengthen the military relations with the US but at the same time, it could « bring Moscow’s rage ». Romania’s CSAT approved on Tuesday as placement of the anti-missile system the former air base in Deveselu in the Olt county, president Basescu mentioning that the base will be under Romanian command.

Romanian soldier killed in Afghanistan, the Western military alliance says.

The International Security Assistance Force (ISAF) said Tuesday that two of its service members were killed on Monday in southern Afghanistan, Reuters reported (May, 10).

Both were killed by improvised bombs in separate incidents, the coalition added.

The exact location of the incidents and the soldiers' nationalities remain unknown.

However, most of the troops in south Afghanistan are purportedly American.

Also on Tuesday, an improvised bomb killed a NATO-led Romanian soldier in the southern region of Zabul.

28-year-old Catalin-Ionel Marinescu was killed during a patrol in the region, Romania's defense ministry said.

He is the 19th Romanian soldier to die in Afghanistan since 2003, when Bucharest joined the military intervention in that country.

There are a total of 1,770 Romanian troops currently deployed in Afghanistan.

U.S. Missile Interceptors Planned for Romania by 2015

2010-02-10T01:20:00.000-08:00

The United States plans by 2015 to field ballistic missile interceptors in Romania, Interfax reported last week (see GSN, Feb. 4).

The U.S. State Department confirmed the statement by Romanian President Traian Basescu that his nation would become part of the European missile shield.

"The choice of Romania extends the missile defense into southern Europe, and we expected, in this phase, this will be online by 2015," said agency spokesman P.J. Crowley last Thursday.

Crowley said discussions with other nations on joint missile defense efforts are ongoing.

"For example, Poland agreed last October, in principle, to host the northern land-based SM-3 missile site. That development is still under consideration and discussion with Poland," he said (Interfax I/Kiev Post, Feb. 5).

The Obama administration intends to deploy land- and sea-based versions of the Standard Missile 3 system around Europe to counter short- and medium-range missiles, primarily those developed by Iran. The plan replaced a Bush administration initiative to field 10 long-range missile interceptors in Poland and a radar installation in the Czech Republic.

Russia -- a loud objector to the old plan -- did not appear pleased Friday by the announcement of Romania's participation in its successor, the New York Times reported.

Moscow's senior envoy to NATO said the new interceptors could impact the Kremlin's stance on negotiations for a replacement pact for the 1991 Strategic Arms Reduction Treaty (see GSN, Feb. 5).

Dmitry Rogozin said Washington had not followed through with its pledge to advise Moscow regarding updates to its plans for the European missile defense. He indicated that the Standard Missile 3 system could present a challenge to Russia's national security interests, though he did say that U.S. and Romanian officials had taken pains to convince Russia that this was not the case.

"They have some thoughts that the system could be targeted against Russia, otherwise why would they dissuade us about something we never asked about"" Rogozin said.

While the START talks are not likely to become undone, the missile-defense deployment could affect negotiations on further reductions to the nuclear arsenals of the former Cold War rivals, said Sergei Rogov, head of the Moscow-based Institute for the U.S. and Canada Studies.

"Additional issues are overloading the [U.S.-Russian] 'reset,' which is not moving very far or very fast," he said. "So I am concerned by it."

Russian Foreign Minister Sergei Lavrov, speaking during the Munich Security Conference over the weekend, said Washington and Moscow had agreed that the "threats and risks of missile proliferation will be assessed jointly as a first step" and that "we expect our American partners to provide exhaustive explanations on those issues," Interfax reported.

Russia's new military doctrine, finalized last week, states that the U.S. missile defense program "undermines global stability and violates the current balance of nuclear forces" (see related GSN story, today).

While the defenses intended for Romania are not thought to pose a challenge to Russia's long-range nuclear missiles, future interceptors expected to go online in 2018 could create a threat as Washington is not required to provide Moscow with information about their workings, Rogov said (Ellen Barry, New York Times , Feb. 5).

Russia's Foreign Ministry said in a statement that it planned to discuss its concerns with U.S. and European officials, Interfax reported. "This is a serious issue, which we will analyze carefully," the ministry stated.

"In order to maintain peace and stability in Europe, there is a need to take carefully planned collective steps based on principles of equal and indivisible security for all states without exception. Other approaches could inflict damage on interests of strengthening European and global security," the ministry said (Interfax II, Feb. 5).

Source: Global Security Newswire (GSN), Feb. 9, 2010

Russia in stand-by mode over US missile plans in Romania

2010-02-08T10:03:00.000-08:00

Anti-ballistic missiles are not aimed against Russia, says the US (Photo: US Missile Defense Agency)

EUOBSERVER / BRUSSELS - Moscow is "concerned" and expects "proper explanations" on US plans to deploy anti-ballistic missile defence systems in Romania, but it is still interested in contributing to a "common assessment" of threats with Europe and the US, Russia's envoy to Brussels told this website.

"We took note of President Basescu's statement on his agreement to host those elements. This is a serious issue which we'll be analysing when we receive all the details regarding what exact equipment is meant to be deployed there," Mr Chizhov said in a phone interview on Monday (8 February).

Last Thursday, Romanian President Traian Basescu announced that his country had accepted an invitation by the Obama administration to host land-based anti-ballistic missiles as part of US plans to defend Europe against Iranian and other regional threats.

The rockets are set to be deployed by 2015, in a second phase of the new version of the US shield, which combines sea and land-based interceptors for short, medium and long-range missiles.

The Romanian approval process is at an early stage, as the actual agreement still needs to be negotiated between the two capitals and approved by their respective legislatures.

However, the Russian reaction contrasts with its response to similar announcements made in 2007 by the Bush administration on deploying a radar in the Czech Republic and missiles in Poland by 2011. Back then, Russian Prime Minister Vladimir Putin warned of a new Cold War and threatened to place nuclear missiles in the Russian exclave of Kaliningrad bordering EU members Poland and Lithuania if the plans were to go ahead.

Asked why the Russian reaction was milder this time around, Mr Chizhov said that this was a "preliminary reaction," pending further clarifications from the American side.

"It is a source of concern for us," he said, adding that Moscow was also interested to know "the reason behind the choice of Romania."

"One could argue that Romania is somewhat closer to Iran than Poland, but still, according to our information Iran will neither now nor in the foreseeable future posses any missiles capable of reaching Romania. Not to mention Poland, central Europe or the United States," the Russian envoy argued.

This view is not shared by Pentagon officials, however, who in a recent review of US' current and planned missile defence architecture note that Iran "has developed and acquired ballistic missiles capable of striking deployed forces, allies, and partners in the Middle East and eastern Europe" at an increasingly rapid pace.

The new system envisaged by Washington would see maritime interceptors deployed in the Mediterranean by 2011 and backed up by a powerful radar whose location has not yet been disclosed.

The Romanian interceptors are part of the second phase outlined in the review, which is planned to be put in place around 2015 and to expand the covered area from southern Europe to "additional Nato allies," the document reads.

A third phase would be operational by 2018 and would have interceptors located in "northern Europe." State Department spokesman Philip Crowley last week confirmed that the US was in talks with Poland for the third stage.

Warsaw is still on the table after being rebuffed by Mr Obama last year when he decided to scrap the earlier plans tabled by his predecessor. Prague is no longer considered as a potential location, however.

Russia on board?

Mr Chizhov did not rule out a future Russian contribution to the anti-missile defence system.

"We proposed to start from the beginning, with a joint assessment of risks and challenges in this field. We're ready to discuss that with the Americans and everybody else," he said.

Moscow's tempered reaction also comes against the backdrop of Mr Obama's efforts to "hit the reset button" in US-Russian relations, after they had reached a Cold War era low point during the Bush administration.

The revised missile shield should be "of no surprise to the Russian side," Nato sources told this website. It was also discussed among European allies, but no decisions on how to integrate that into a Nato architecture had been taken yet, as the upcoming summit in Lisbon this autumn would be a more appropriate occasion for it.

As for the EU side, it considered the Romania missile plan a "bilateral discussion" between a member state and the US, a spokesman for the bloc's foreign policy chief told this website.

Source: EUObserver.com

Gabus takes a chance on new electric vehicles - from Romania

2010-02-07T04:46:00.000-08:00

Iowa car buyers looking for a new way to go green soon will be able to do so via Romania - for somewhere between $34,000 and $38,000.

Des Moines Motors owner Gene Gabus on Friday took delivery of America's first-ever EMC pickup truck, a two-seat, plug-in electric vehicle that soon will be joined by sibling cargo vans and station wagons built on the same Renault chassis.

Gabus, a former Chrysler dealer who began looking for other things to sell when he lost his franchise during the carmaker's bankruptcy last year, said the vehicles - they will be sold under the Electric Motor Cars model name - are being brought to the United States by Envision Motor Co., an Ames firm that did not immediately return phone calls Friday.

Gabus, who said he has signed on to sell the cars in Des Moines and to act as a distributor in 28 states, said the electric vehicles are built on the same chassis as gas-powered versions of the Dacia Logan, a Romanian-made vehicle that's popular in Europe.

The new Iowa models, using what Gabus described as an American-designed motor, currently are being assembled in Romania with Renault-made bodies. Then they will be shipped to the United States.

For now, there are only three - the truck, which arrived in town Friday morning, plus a van and station wagon that are expected to clear customs in Chicago early next week. The three models will soon be available for test drives, weather and Gabus permitting. The dealer said a larger supply should arrive within 45 days.

"We have roughly 100 of them that will soon be ready to be shipped and come over," Gabus said. "Now we've got to find dealers to sell them. ... We will start calling on Monday and trying to get dealers to fly into town."

Gabus, one of three current distributors, said the importers hope soon to be able to assemble the cars in Florida and possibly Iowa using surplus factory labor. No deal for that is currently in place, however.

Gabus said he's seen some significant interest in the vehicles initially from a few unnamed corporations that are intrigued by the eco-friendly possibilities of a small vehicle that can carry up to 2,000 pounds of cargo.

Beyond that, dealers plan to market the vehicles as ideal for in-town driving by "eco-type people" and "anybody that wants to fight oil companies," he said. "It's for people that are in the metro areas, but it'll eventually get out to the rural areas."

The vehicles are projected to have a 260-mile range on a full battery charge. The van will come in 10 color options.

Gabus, who said he also remains on the verge of importing Chinese-made Noble automobiles, insists Iowans are ready for more options in their motorized transportation.

"Is it going to be different? Yes," he said. "You drive into your garage to fuel up your car."

By JEFF ECKHOFF (Feb. 6, 2010)

Moscow 'concerned' by US-Romania missile shield deal

2010-02-07T04:43:00.000-08:00

Russia's foreign ministry voiced its concern Friday at Romania's plans to host part of a new US missile shield system in Europe, saying it would seek explanations from Europe and Washington.

"This is a serious matter which we will be analysing with care," the ministry said in a statement. "Naturally, we are concerned by this. There is a need to obtain clarifications.

"We will raise this in our contacts with our American and European partners," it added.

Romania's President Traian Basescu on Thursday announced his country had agreed to host medium-range ballistic missile interceptors as part of the US system, expected to be operational by 2015.

The US State Department confirmed his announcement, saying the planned anti-missile shield in Europe was intended to protect against the "emergent threat" from Iran.

The United States in September shelved a plan to place missile defense facilities in the Czech Republic and Poland, after strong protests from Russia.

President Barack Obama's administration announced the new program in September, saying it would reconfigure the system after reevaluating the threat from Iranian long-range ballistic missiles, and deciding to focus on protecting against short- and medium-range missiles.

Source: AFP (Feb 5, 2010)

Gates Says U.S., Iran Aren’t Close to Nuclear Accord

U.S. Defense Secretary Robert Gates said he doesn’t regard Iran as close to an accord with international powers on the handling of uranium.

“I don’t have the sense that we are close to an agreement,” Gates said today in Turkey’s capital Ankara. He discussed Iran with Prime Minister Recep Tayyip Erdogan.

Iranian Foreign Minister Manouchehr Mottaki said in Munich yesterday that Iran is “approaching a final agreement” on having nuclear fuel produced outside the Islamic Republic. The country is “serious,” he said. Mottaki also today said he had talks on a possible deal with International Atomic Energy Agency chief Yukiya Amano at the Munich Security Conference.

The U.S., the other four permanent members of the United Nations Security Council and Germany are working to persuade Iran to give up enrichment of uranium, which could be used to produce fuel or make a bomb. The group, which also includes China, France, Russia, and the U.K., offered a proposal that would allow Iran to swap uranium in return for enriched fuel for a medical reactor.

Iran’s response has been “quite disappointing,” Gates said. The country continues to resist the IAEA and the nuclear Non-Proliferation Treaty, he said.

Nothing Done

“They have done nothing to reassure the international community that they are prepared to comply with the NPT or stop their progress toward a nuclear weapon,” Gates said. “I think that various nations need to think about whether the time has come for a different tack.”

The U.S. and its partners have said that Iran’s failure to negotiate an agreement would lead to more pressure, including financial sanctions. The six nations are discussing a potential Security Council resolution calling for another round of sanctions.

Iran has not made an adequate response to the proposals, EU foreign policy chief Catherine Ashton said in Munich today.

Gates travels on to Rome today and Paris on Feb. 8 in a trip that started with a NATO meeting in Istanbul.

President Barack Obama relies on Turkey, one of NATO’s two Muslim members, on a range of national security issues straddling Europe and the Middle East, including Iran and the planned withdrawal from neighboring Iraq. Turkey uses U.S. surveillance data in its fight with the Kurdistan Workers’ Party, or PKK, which attacks Turkish targets from bases inside northern Iraq.

Assisting Turkey

Gates said he told Turkish officials that he would look for more ways to assist Turkey in the effort, citing a visit to Turkey last week by Army General Ray Odierno, the top U.S. commander in Iraq.

Erdogan is struggling to win domestic support for a plan to widen rights for Kurds and encourage the PKK to disarm. Ending a war that has killed 40,000 people, mostly Kurds, and cost $300 billion by government estimates, would bolster Turkey’s status as a safe route to Europe for Eurasian oil and gas. It would also help revive Turkey’s bid to join the European Union, which criticizes the treatment of Kurds.

Gates said Erdogan’s attempts to persuade PKK fighters to abandon violence as “a very positive thing.”

Gates, who also met with Defense Minister Vecdi Gonul and Chief of General Staff Ilker Basbug during his Ankara stop, praised Turkey’s contribution to the NATO-led war in Afghanistan. While U.S. officials have urged other alliance members to provide more trainers, Gates said he didn’t ask for more troops from Turkey.

Turkey has about 1,700 troops in Afghanistan and heads two provincial reconstruction teams as well as the regional military command in Kabul.

Missile Defense

A NATO-wide missile defense system was also on the agenda during Gates’s visit. The parties discussed what role Turkey might play in the network, which would include an overhauled plan Obama unveiled in September, he said.

The system is intended primarily to counter any potential Iranian attack, and Gates said in Istanbul this week that NATO member countries should make it a priority of the alliance, alongside winning the war in Afghanistan.

Poland and Romania have agreed to be part of the U.S. missile defense system. Romania, across the Black Sea from Turkey, said this week it would accept ground-based interceptors as part of the radar network to detect and shoot down incoming rockets and missiles.

Gates declined to say whether he’s looking to place naval vessels carrying Aegis radar in the Black Sea, a prospect that has prompted concern from Russian officials.

Source: Bloomberg (Feb. 6, 2010)

Russia energy deals may carry high cost for Turkey

2010-02-07T04:15:00.000-08:00

By Thomas Grove

ISTANBUL, Feb 4 (Reuters) - Deals that have strengthened energy ties between Turkey and Russia may boost Ankara's much desired control over regional gas and oil transit, but at a cost to other foreign players in its downstream market.

Russian Prime Minister Vladimir Putin and his Turkish counterpart Tayyip Erdogan last year shook hands on agreements ranging from oil and natural gas to nuclear energy technology in return for Erdogan's support for a Kremlin-backed gas pipeline.

Beyond securing the energy supplies needed to feed fast paced economic growth seen returning this year, the deals will help Turkey realise its dream of capitalising on its location between Caspian energy reserves and European consumers.

Apart from Turkey's support for Russia's South Stream gas pipeline, which aims to feed European markets, the deals centred on Russian backing for Turkey's Samsun-Ceyhan oil pipeline that would carry oil from Black Sea ports to the Mediterranean.

But Turkey's blessing of a select handful of Russian and Turkish firms to carry out planned energy projects -- and signs that Turkey may commission Russia to build its first nuclear plant without a tender -- have caused worries.

"Some companies close to the government are being awarded special projects and given special partnerships -- that's how you hurt the market and competition, this will hurt the liberalisation of the market," said energy analyst Necdet Pamir.

Turkey's fast-growing power generation and distribution sectors as well as its gas market, tapped for liberalisation, have attracted the attention of numerous investors looking to build power stations and bid for projects.

Last year Austria's OMV said it wanted European Union member candidate Turkey to become its third strategic centre after Austria and Romania.

But competition may become an issue if the government's favour continues to centre on a handful of companies, including Calik Enerji whose parent company Calik Holding's chief executive is the Prime Minister's son-in-law.

"Concerns regarding competition could arise from greater Russian presence in power generation as well as downstream power and gas markets. This could discourage market entrants upstream and downstream," said Irmak Bademli of Eurasia Group.

Calik Holding has denied receving preferential treatment from the government.

WESTERN ALLIES

On Wednesday the U.S ambassador met with Energy Minister Taner Yildiz to express the desire of U.S. firms to build Turkey's first nuclear power station.

Government sources have said the licence for the Turkish nuclear power station may simply be handed to Moscow, which already supplies 60 percent of Turkey's gas needs, if they can agree over pricing and other technical issues.

Such a move would add to worries over the possibility that NATO-member Turkey's policies are shifting away from Ankara's traditional Western friends.

"Turkey's Western allies would not be happy if the nuclear plant is built without a tender," said Bademli.

Turkey's desire to turn itself into a hub for European and other regional energy supplies has long frustrated partners. The Turks have sought to dominate deals, most notably with the Nabucco Pipeline consortium, to which Turkey belong.

Nabucco plans to pump 31 billion cubic metres of gas to Europe to cut the continent's reliance on Russian gas.

Last year Turkey demanded that it be given special rights to siphon gas off the 31 billion cubic metre capacity pipeline and resell it.

With other sell-offs looming, like power production and distribution assets, analysts wonder to what lengths Turkey will go in favouring its Russian partners and their Turkish counterparts.

"We're concerned about the direction Turkey is heading particularly on the gas side. Companies are looking to see if there is a new policy direction, whether Turkey will remain open to the market or if we could see more opaque policy," said one diplomatic source.

The market is particularly interested in the future of 34 bcm of gas import licences, held by state firm Botas and which were considered for a sell off by the end of last year.

Turkish firm Aksa Dogalgaz, which Erdogan and Putin have paired with Gazprom, is positioning itself to import 6 bcm over Turkey's western line that imports Russian gas. Aksa already has some 10 domestic gas distribution grids.

"We're not only going to be 63 percent dependent on Russia for gas imports, but Gazprom will also have a strong hand in the gas distribution system through Aksa as well. This is a dangerous game for national energy security," said Pamir.

Source: Reuters (Feb 4, 2010)

Romania backs U.S. plan to host anti-missile shield

2010-02-07T04:12:00.000-08:00

BUCHAREST (Reuters) - Romania's top defense body approved a plan by Washington on Thursday to deploy interceptor missiles in the Black Sea state as part of a missile shield to protect Europe, President Traian Basescu said.

The announcement came unexpectedly and Basescu gave few details on the project. But it appeared to be part of the revamped approach taken by U.S. President Barack Obama since he scrapped a Bush-era plan for a radar site and interceptor rockets in the Czech Republic and Poland.

The missile shield has angered eastern Europe's former Cold War master Russia, who sees it as a threat to its own nuclear arsenal and has bristled at what it says is Washington's meddling in its sphere of influence.

A Kremlin spokesman declined to comment and said the foreign ministry would issue a statement on the matter on Friday.

Basescu said the Supreme Defense Council -- Romania's top military and security authority -- had approved a U.S. proposal to include Romania in a system against "potential attacks with ballistic missiles or medium-range rockets."

The U.S. offer was brought to Bucharest by Ellen Taucher, Under-Secretary of State for Arms Control who leads a team of American experts in Romania, Basescu said.

"Terrestrial interceptors will be located inside the national territory," he said.

He said the U.S. facilities were expected to become operational in 2015 but the plan's specifics, now under discussion with U.S. partners, would need parliamentary approval in order to come into force.

In past years, parliament has solidly backed participation in U.S. and NATO-led military ventures, including Romanian troop deployments to hotspots like Iraq and Afghanistan.

The leu currency was unchanged after the announcement, trading at about 4.1240 per euro.

NO THREAT TO RUSSIA

Obama's decision to scrap the Bush plan disappointed both Prague and Warsaw.

Poland has expressed a readiness to take part in the new project and could potentially host some of the SM-3 interceptors that target short and medium-range missiles. But officials have made no further public comment on the issue in recent months.

"The U.S. has determined that Romania is well-suited for the location of this system to provide protection for European NATO Allies," the U.S. embassy in Bucharest said in a statement.

Foreign Minister Teodor Baconschi said the plan was first presented to Basescu during a visit by U.S. Vice President Joe Biden to Bucharest in October but was not made public.

"This became official today," Baconschi said.

Unlike some other EU states, popular support for U.S. military policy is very high in Romania. It hosts a small base at the Black Sea and training facilities, part of a Pentagon shift from large Cold War-era centres in western Europe toward smaller installations nearer hot spots such as the Middle East.

Basescu said participation of Romania, a European Union and NATO member of 22 million perched in the southeast corner of the continent, was not meant to threaten Moscow.

"The new system is not against Russia. I want to categorically stress this, Romania (will) not host a system against Russia, but against other threats," he said.

Obama's revamped plan, unveiled last September, includes land-and sea-based missile systems in and around the Gulf to defend against what it says is a growing Iranian missile threat.

His administration argues the plan addresses those threats more effectively than the Bush plan, although it has drawn ire from Tehran, which accuses Washington of stirring up anti-Iranian sentiment.

Source: Reuters, Feb 4, 2010

Romania absorbs 10% of the funds allocated by the EU in three years

2010-01-25T03:32:00.000-08:00

According to a report the Managing Authority of Structural Instruments in Romania, the Balkan country has absorbed only 10% of funds allocated by the EU in the three years that have elapsed since his accession.

Data published on the website of the Authority for the Coordination of Structural Instruments (ACIS) show that three years after accession to the European Union (EU), Romania has absorbed only 600 million euros from the EU, representing a 10% of available funds.

On 12 January, the ACIS published a list with the situation of European funds absorbed in December, when structural payments of approximately 40 million euros were made, almost two times less than in the previous month. According to that list, the value of payments in 2009 has fluctuated, peaked in January (177.6 million euros) and with substantial payments also in August (90 million) and November (82.1 million euros ).

In 2009, the greater absorption of funds was registered in the program of economic competitiveness, with 934 projects, and the regional programme, with 578 projects for implementation, with shares of absorption of 16.40% and 15.35%, respectively. A list with the funded programmes has also been issued, and it can be downloaded at Romanian Authority for the Coordination of Structural Instruments' website.

The programme with a lower progress has been the transport one, which, although it was one of the first projects, in December 2009 had the same level of absorption of 2.4% recorded in November. Also, the take-up has been little significant development programmes of administrative capacity (1.58%) and technical assistance (1.25%).

Source: euroalert.net

Romania’s New Cabinet Approves 2010 Budget Hours After Approval

2009-12-24T00:13:00.000-08:00

Dec. 23 (Bloomberg) -- Romania’s government approved a budget for 2010 to unlock a $30 billion international bailout loan hours after Parliament voted in the administration, ending a stalemate that left the country without leadership since October.

Parliament voted 276-135 yesterday to approve Emil Boc as premier, and 14 other proposed Cabinet members, allowing the new government to give its assent to a budget of spending cuts aimed at repairing relations with the International Monetary Fund.

“The government has the majority it needs to meet IMF criteria,” said Adrian Moraru, a political analyst at the Institute for Public Policies in Bucharest. “It is comfortable enough to ensure passage of the budget and other urgent issues. The majority will also probably increase with time.”

Romania has been without political leadership since Oct. 13 when Parliament voted out Boc amid increasing political infighting, prompting the IMF and the European Union to halt payments on a $30 billion bailout loan. Standard & Poor’s has warned the vacuum may trigger credit-rating downgrades.

“This will bring things back to normal and we can make the political decisions we need,” Boc said in a speech to Parliament. “In the coming years, we need a return to reason and stability.”

Boc predicted in an evening news conference in Bucharest yesterday that inflation will end 2010 at an annual 3.7 percent and the economy will grow 1.3 percent, after shrinking as much as 7 percent this year.

Budget Plan

The IMF said in an e-mail on Dec. 18 that, if Parliament approves a government and passes the budget, the fund’s board may meet in February to discuss resuming loan payments. It also raised Romania’s economic growth outlook for 2010 to 1.3 percent from 0.5 percent.

The 2010 budget plan foresees spending cuts to target a deficit of 5.9 percent of GDP next year, from a target of 7.3 percent this year. Finance Minister Sebastian Vladescu said the budget foresees reducing the 1.3 million-member public service by 100,000 people next year through a hiring freeze and attrition.

The Parliament now needs to approve the 2010 budget by Jan. 16 to release two loan payments the following month totaling 2.3 billion euros ($3.3 billion). That would include a delayed December transfer and advance payment of one slated for March. The EU said it may also release 1 billion euros as part of the delayed package.

Boc said he will maintain the 16 percent flat tax and 19 percent value-added tax next year and direct 20 percent of the budget toward investment. He also said today he will extend a tax exemption on re-invested profit into his new term.

Political Backdrop

Parliament originally ousted Boc in October, leading to the collapse of his Cabinet. Opposition lawmakers then rejected other candidates for premier nominated by President Traian Basescu before Basescu was re-elected in Dec. 6 elections.

Basescu, won the election with 50.3 percent against 49.7 percent for opposition leader Mircea Geoana, a difference of 70,000 votes in the nation of 22 million. Geoana claimed fraud and appealed to the Constitutional Court, which upheld the results more than a week after the election. Basescu then re-nominated Boc, 43.

Romania is the most corrupt nation in the European Union, according to Berlin-based monitor Transparency International. The Balkan state joined the EU in January 2007 along with southern neighbor Bulgaria. More than 20 Cabinet ministers and former ministers have been accused by prosecutors of corruption and the EU in July warned Romania to accelerate steps to fight graft.

The vote backing the government included 167 members of Boc’s Liberal Democratic Party, which is loyal to Basescu, as well as 31 from the Democratic Union of Hungarians in Romania, an ethnic minority party. The rest came from independent lawmakers, other representatives of ethnic minorities, and defectors from the opposition.

‘Traitors’

Geoana, president of the Social Democratic Party, and Crin Antonescu, leader of the opposition National Liberals, said they will remain in opposition. The government has an “unstable” majority based on “traitors,” Geoana said.

“The anti-crisis and economic plans of this government are unclear and that is a principal reason for voting against this government,” Geoana said in a speech before the vote. “What we see he is a recipe for repeating mistakes of government in recent years.”

The leu strengthened as much as 0.7 percent to 4.1915 per euro, the highest intraday level since Sept. 30, in Bucharest after the vote. The currency fell to a seven-month low and bonds plunged after the Oct. 13 government collapse. The BET stock index rose 0.2 percent to 4661.38 after today’s vote.

ANALYSIS -- Democratic reforms at stake in Romanian election

2009-11-17T12:46:00.000-08:00

Romania, Nov 17 (Reuters) - Romania's presidential election may decide whether the European Union's second poorest state will embark on real reforms and could shake up a political class whose bickering has stalled progress and hurt the economy.

If opinion polls prove correct, tough-talking incumbent Traian Basescu will get another try at building political support for combating pervasive corruption and fraud when Romanians go to the polls in a first round on Sunday.

But to succeed, the former sea captain may have to change his confrontational governing style that has alienated politicians across the spectrum during his five-year mandate.

After sweeping into power in 2004 on a promise to reform a democracy steeped in interest-based politics, Basescu has seen his public support crumble to around 35 percent, from 50 percent at its peak, as voters grew angry over slow progress.

A foreign shipping official under communism and former Bucharest mayor, Basescu stormed onto the national scene as a hard-talking opposition figure who promised to jail 'big fish' politicians suspected of enriching themselves through graft.

But corruption is still widespread three years after the country of 22 million joined the European Union, and parliament is actively blocking efforts to investigate senior politicians.

Some commentators warn Basescu's main election rivals, leftist Mircea Geoana and centrist Crin Antonescu offer few convincing solutions to political reform.

Geoana, who heads the ex-communist Social Democrat Party mired in sleaze scandals, is trailing Basescu in close second, winning voters' hearts by promising social protection in the face of a deep economic contraction.

'Basescu's popularity is down (in part due to his) lack of social skills. He is perceived as a troublemaker,' said Laura Stefan of the Romanian Academic Society.

'But in all honesty I believe his line you can't do reforms without kicking and screaming.'

Analysts hope the winner of the election, likely to be chosen in a Dec. 6 runoff if someone does not win 50 percent of the vote, can name a new head of government and end a political crisis that began when opposition parties ousted the Basescu-allied Democrat-Liberal cabinet in October.

TOUGH CHOICES

The political standoff, stemming from inter-party conflict during Basescu's rule that toppled two of his cabinets, has stalled reforms and delayed payments of aid from Romania's 20 billion-euro, International Monetary Fund-led rescue package.

Coming off 7.1 percent growth in 2008, the economy is now expecting a drop of up to 8 percent this year.

Graft is a major problem. Romania was ranked at the bottom of the EU on corruption perceptions by Transparency International in 2009, along with Bulgaria and Greece.

'I feel cheated. I've seen only unfulfiled promises,' said Dumitra Chivulescu, a 76-year-old farmer in Schitu, a muddy farming village 80 km south of Bucharest.

Basescu hopes to address the issue with a referendum tacked on to the Nov. 22 first round by taking on what he says is the biggest roadblock -- elected officials hampering policy-making.

If passed, it would eliminate one of parliament's two chambers, which he says could break a struggle in the ruling elite over money and influence and jumpstart stalled reforms.

But commentators also say it can fan distrust in politicians and fuel voter apathy, giving politicians a free run. Low turnout could scupper the plebiscite, which needs at least 50 percent of voters to take part to be valid.

'Young people are deeply disillusioned,' said Bruno Stefan, of pollster BCS. 'Romania has managed to remain a state where (ex-)communist cliques seem to control the economy. It would be probably too optimistic to see turnout exceeding 40 percent.'

POLITICAL BAGGAGE

Since taking power, 58-year-old Basescu has endorsed criminal probes against top officials, including former premier Adrian Nastase and other ministers.

But some say he was doomed to fail. Opposition parties have blocked prosecutors' efforts to investigate top officials and tried to impeach Basescu in 2007, saying he was abusing power.

He has been praised for condemning communism, and he opened the files of the feared communist-era Securitate secret police in an effort to clean up the political classes.

But he is no stranger to scandal. Opponents have criticised him for racial slurs and insults against journalists, as well as nepotism after his daughter rose quickly through the political class to become an EU parliamentarian.

He was filmed driving after drinking alcohol, and, under pressure from media, asked his brother Mircea to give up his shareholder position in a military hardware firm after reports said it was seeking state contracts.

'Basescu has been seen as a strong father figure,' said Alina Inayeh, director of the Black Sea Trust for Regional Cooperation. 'But I don't think he's perceived as a good father anymore. The fact is that he refuses to answer legitimate questions in the end, which has shaken his image.'

For his opponents, Antonescu's Liberal Party has warred with Romania's European Commission-backed anti-graft prosecutor and Geoana suggests cutting red tape is the best way to fight corruption, which analysts say may signal a softer approach.

But Basescu's patchy record remains the linchpin of the election, analysts say. He has polarised Romanian society after thousands put their hope in him for genuine reforms.

By Radu Marinas (for REUTERS)

Getting closer to Russia? Not yet –

2009-11-05T03:03:00.000-08:00

Recently – as runoffs for Romania’s presidency are heating up --, some SocDem and National Liberal politicians lauds the need for closer relationship with Russia – mainly because energy security reasons, they say. But, in our opinion, Moscow cannot provide its neighbours with a mutual profitable co-operation paradigm, as the Russia's contemporary leaders have chosen a model that cannot hold longer – i.e. growth without development, capitalism without democracy, and great-power policies without international appeal.

“Two decades after the withdrawal of Soviet troops from Afghanistan and the fall of the Berlin Wall, and nearly 20 years after the breakup of the Soviet Union, Russia has shed communism and lost its historical empire. But it has not yet found a new role. Instead, it sits uncomfortably on the periphery of both Europe and Asia while apprehensively rubbing shoulders with the Muslim world.”

“Throughout the 1990s, Moscow attempted to integrate into, and then with, the West. These efforts failed, both because the West lacked the will to adopt Russia as one of its own and because Russian elites chose to embrace a corporatist and conservative policy agenda at home and abroad.”

“As a result, in the second presidential term of Vladimir Putin, Russia abandoned its goal of joining the West and returned to its default option of behaving as an independent great power. It redefined its objectives: soft dominance in its immediate neighbourhood; equality with the world's principal power centres, China, the European Union, and the United States; and membership in a global multi-polar order.”

“Half a decade later, this policy course has revealed its failures and flaws. Most are rooted in the Russian government's inability and unwillingness to reform the country's energy-dependent economy, the non-competitive nature of Russian politics, and a trend toward nationalism and isolationism. In terms of foreign policy, Russia's leaders have failed to close the book on the lost Soviet empire. It is as if they exited the twentieth century through two doors at the same time: one leading to the globalized market of the twenty-first century and the other opening onto the Great Game of the nineteenth century.”

“As the current global economic crisis has demonstrated, the model that Russia's contemporary leaders have chosen -- growth without development, capitalism without democracy, and great-power policies without international appeal -- cannot hold forever. Not only will Russia fail to achieve its principal foreign policy objectives, it will fall further behind in a world increasingly defined by instant communication and open borders, leading to dangers not merely to its status but also to its existence. Russia's foreign policy needs more than a reset: it requires a new strategy and new policy instruments and mechanisms to implement it.” *

*) “RUSSIA REBORN”, by DMITRI TRENIN (Director of the Carnegie Moscow Centre), in Foreign Affairs – November / December, 2009 issue.

U.S. Vice President Joe Biden thanked Romania's President Traian Basescu for "embracing" the new proposal for missile defense system

2009-10-24T04:05:00.000-07:00

BUCHAREST, Romania — A U.S. army official in Romania says an American military base near the Black Sea port of Constanta will become a permanent facility in the spring and be jointly used with Romanian forces, AP reported yesterday.

Lt. Col. Daniel Herrigstad says the U.S. government invested $48 million to modernize the base.

Herrigstad told the news agency Agerpres on Friday that the base would initially host up to 1,700 U.S. and Romanian soldiers.

U.S. Vice President Joe Biden visited Romania on Thursday to discuss the new missile defense system, and thanked Romania's President Traian Basescu for "embracing" the new proposal.

It is unclear what role, if any, Romania will play in the revamped U.S. missile shield.

***

Romanian President Traian Basescu hosted a meeting with U.S. Vice President Joe Biden in Bucharest. The talks focused on the revamped missile defense system unveiled by Washington last month. On October 22, Biden praised Romania for accepting the new arrangements.

[Joe Biden, U.S. Vice President]:
"I really appreciate your embrace, your government's embrace of the new missile defense architecture that we are introducing into Europe. There is the SM-3... will replace what was originally going to be intended to provide for security. But it will in fact... it is a much better architecture. It has the benefit of protecting Europe physically as well as the United States. And I must tell you I appreciate your almost instant embrace of this new architecture. As well as was embraced by our colleagues in Poland and others. As people look at this... you understood from the beginning, that this makes more sense."

The revamped missile defense system is superior to a previous version that had caused friction with Russia.

Eastern European nations are still getting used to U.S. President Barack Obama's decision to scrap Bush-era plans.

But Russia strongly opposed the new plans, fearing they would neutralize its own nuclear arsenal.

Obama plans to roll out sea-based interceptors first, followed by land-based systems. Under this arrangement, Poland could host SM-3 interceptors targeting short and medium-range missiles.

PRAVDA: "USA Prepares to Attack Russia in 3 or 4 Years?"

2009-10-23T16:26:00.000-07:00

(23.10.2009 Source: Pravda.Ru)

US army bases will appear on the Black Sea Coast – in Bulgaria and Romania. About $50 million will be assigned to build the base in Romania, and the Pentagon plans to spend $60 million more for the same purpose in Bulgaria.

The Romanian base is expected to be put in operation in 2010, whereas the second one will most likely be launched in 2011 or 2012. Over 4,000 US military men are expected to serve at the two bases: 1,600 in Romania and 2,500 in Bulgaria. The authorities of the two nations expect that the US military men will settle there for a long time.

Col. Gary Russ, commander of Joint Task Force-East, sad that no one in Bulgaria and Romania had anything against the US military presence in the two countries. Vice President Joseph Biden, who recently visited several countries of Eastern Europe, including Romania, stated that the European nation supported a new configuration of the US missile defense system.

It is not ruled out that elements of the US missile defense system may eventually appear in Eastern Europe. US officials say that the appearance of army bases in Bulgaria and Romania strictly corresponds to the plans of the US administration to relocate troops in foreign countries (George W. Bush announced the plans in 2004).

It goes about the Pentagon’s intention to cut its 55,000-strong group in Germany and redeploy a part of the troops in several countries of Eastern Europe, including Bulgaria and Romania.

Alexander Khramchikhin, deputy director of the Institute for Political and Military Analysis, said in an interview with Pravda.Ru that the plans of the United States to build army bases in Romania and Bulgaria were exposed nearly a decade ago.

“Indeed, the Americans need more bases for their actions in the Middle East. They have bases in Bahrain, Qatar and Saudi Arabia, but they are not enough to satisfy all of Washington’s needs. The Pentagon needs new bases in Eastern Europe to maintain its troops in the Middle East,” the expert said.

Another expert, Konstantin Sivkov, told Pravda.Ru that the appearance of new army bases in Bulgaria and Romania would pose a threat to Russian interests.

“The number of US military men at the two bases is not going to be large, but who can say that it will not be doubled, tripped or quadrupled in the future? Furthermore, the appearance of NATO bases on the Black Sea coast will come as an addition to the US military objects in the Baltic region. As a result, Russia will find itself trapped.

“Why does the USA need these two bases on the Black Sea? To struggle against terrorism? This explanation does not withstand any criticism. There are nearly 4,000 kilometers between Romania and the Middle East. This distance is too large for the nation to maintain its groups in Iraq and Afghanistan.

“One should bear in mind the fact that the Americans started withdrawing their troops from Iraq. Therefore, there is no need to strengthen the infrastructure. To crown it all, American army bases in the Middle East are plentiful.

“I would also like to pay your attention to the fact that the US Military Academy at West Point has recently launched extensive courses to study the Russian culture and language. They started teaching the Iraqi culture and the Arab language three years before invading Iraq.

“Washington is also interested in the energy sources of the Caspian Sea. The bases will probably be established in Romania and Bulgaria to secure the transportation of the Caspian oil and gas,” the expert concluded.

Sergey Balmasov

Bucharest: US VP Warns Europe of Missile Threats

2009-10-23T04:52:00.000-07:00

US Vice President Joe Biden and Romania’s President Traian Basescu – at Cotroceni Palace in Bucharest, Romania, 22 Oct 2009

U.S. Vice President Joe Biden has called on America's European allies to step-up their defense efforts in the face of security threats from outside Europe. Biden made the comments in Bucharest, Romania on Thursday, before ending his Central and Eastern European tour in the Czech Republic.

Biden spoke to political leaders and students at Bucharest's Central University Library, after receiving assurances from Romanian President Traian Basescu that Romania supports plans by the Obama administration to revise missile defense plans for Europe amid new concerns over the continent's security.

The system will replace the one proposed by former President George W. Bush. The Bush plan, which Russia strongly opposed, would have placed 10 interceptor missiles in Poland and a radar base in the Czech Republic to intercept long-range missiles from such states as Iran.

Although the revised plan involves anti-ballistic missiles installed at a former air base in Poland, defense experts say Moscow perceives the new project as less threatening to its security.

Biden said the defense system comes as Europe faces a serious threat. "Today, a new major threat is growing that could reach all our European allies well before it reaches the United States. It comes from ballistic missiles -- short-range and intermediate-range ballistic missiles. The technology has spread to many new countries and less stable countries since the end of the Cold War," he said.

Biden stressed that the new missile defense system would provide more security for the United States and the North Atlantic Treaty Organization, or NATO. "We are determined to ensure that our NATO allies have the protection they need, when they need it because that is our solemn obligation under Article 5. Our missile defense plan means greater security for Europe and greater security for America," he said.

His one-day visit to Bucharest was part of a trip through Eastern Europe intended to reassure Romania, Poland and the Czech Republic that America's commitment to the region remains strong.

The three countries are viewed as close U.S. allies. Romania hosts a small American base and training facilities.

Biden also expressed concerns about energy. He said the United States wanted to work with Europe on a new strategy that would provide energy security for the future. "One lesson we need to work together toward is a more secure energy future. We need sustainable energy security that includes diversification of supplies and transit routes," he said.

Energy has become a major concern in several Western countries, after a dispute between Ukraine and Russia over prices led to major natural gas shortages in Europe earlier this year.

Biden's trip to Eastern Europe comes as the region commemorates the 20th anniversary of the fall of communism.

The vice president said that the world watched in awe and admiration in 1989 as the men and women across the region broke the shackles of repression and emerged as free people.

Traian Basescu ready to run for a second term as Romania’s president

2009-10-21T03:41:00.000-07:00

Romania’s president, Traian Basescu, today announced that he will submit his candidacy for the presidential election. He thanked Democrat-Liberal Party (PD-L) members for their support and said them he’s confident he would win the coming polls.

President Basescu added the he will no longer summon the opposition political parties for consolations as for nominating Romania's PM and said that the true reason for dismissing the Boc Government – following a no-confidence vote -- was the senators and deputies' wish to avoid a referendum for a single-chambered Parliament.

"I will write it back at them", was President Basescu's reaction after the opposition MPs voted in favour of supporting Klaus Johannis, Sibiu's mayor, for the premiership on Wednesday morning. The Liberal-Democrats (who still run the interim Cabinet) gathered on Wednesday morning, after 10 a.m. for a Managing Council meeting. President Traian Basescu took part as well. PD-L is the only party to have announced its support for Lucian Croitoru as Romania's future PM.

"We have the urgent need to attract the 3.5 million euros missing from the budget in November and December", Basescu added, insisting that the political crisis needed a quick solution.

***

Earlier, this month, EPP’s President Joseph Daul said: “a courage government as the Boc government should have been maintained”

A courageous government such as the Boc government should have been maintained, European Popular Party President Joseph Daul declared. Referring to the Romanian political climate, Daul said that the executive lead by Emil Boc proved its courage and has positive reviews, at a difficult time for Romania.

Boc's government launched the state's reform, maintained Romania's economic stability and balanced the state's salary system and budgetary pensions, Daul said. He added that the pensions law was received with hostility by those priviledged, directly affected by it.

EPP President declared that he is convinced that such a courageous government should have been maintained because it is the only way reforms can move forward to modernize Romania and protect the population.

Daul expressed his regret that the government was dismised. The EPP group is the biggest political group in the European Parliament with 265 members.

Romania to ask IMF for more leniency on budget gap

2009-07-28T01:26:00.000-07:00

BUCHAREST, July 27 - Romania will ask the International Monetary Fund to allow it to raise its budget deficit goal this year, and thus prevent the need for further austerity measures that could stifle the struggling emerging economy, Reuters reported yesterday.

Mirroring Hungary, now facing the worst downturn in two decades as a collapse in demand in Western Europe cuts jobs and incomes, the new EU member enforced drastic cuts as part of a 20-billion-euro foreign aid package it secured in March.

But first-quarter growth data showing a worse than expected contraction at 6.2 percent, have prompted officials to say that Romania needs increased funding to finance infrastructure investment and fight the world financial woes more resolutely.

A senior official told Reuters his centrist cabinet would try to persuade the Fund during the first review of the IMF-led loan from July 29 to Aug. 10, to accept a target of 5-5.5 percent of gross domestic product against 4.6 percent.

In May, under a similar agreement with the IMF and the European Union, Hungary was allowed to hike its deficit ceiling to 3.9 percent of GDP from a previous 2.9 percent target.

'So far, the deficit figure envisaged is bigger than 5 percent. It could range from 5 to 5.5 percent of GDP,' a senior government official told Reuters.

The official said a cabinet decision on the final level has yet to be taken: 'A lot will depend on the level of budget revenues for July and these figures are due in early August.'

PROJECTS

Romania needs the increased funding to fund badly-needed road, rail and energy projects, the official added, echoing comments made earlier in July by government officials.

'There's a need for a higher gap due mainly because of worse than expected contraction for the first quarter and expectations of further contraction in the second quarter,' the official said.

The IMF declined to comment, but bank analysts said Romania's argument looks sound, given that the rise in the deficit is due to a deeper-than-expected recession and not lack of fiscal discipline. They said forcing further cuts in spending at this stage might only drive the economy deeper into crisis.

'It was expected that the government would ask for a wider gap ... Figures seem realistic as there have been no chances to attain the current target given economic recession,' said Rozalia Pal of UniCredit Tiriac Bank in Bucharest.

'I do not expect any tax hikes ... a certain flexibility is to be expected from the Fund ... it seems that the IMF will show some openess as in the case of Hungary's (deficit).'

Romanian President wants legislator prosecuted

2009-07-23T10:42:00.000-07:00

BUCHAREST, Romania — President Traian Basescu urged a Romanian legislator on Thursday to surrender his parliamentary immunity so he can be prosecuted on corruption charges.

The European Commission said Wednesday that Romania is not doing enough to fix its flawed justice system. It also said the parliament shows little commitment to pursue the fight against high-level corruption.

On Thursday, Basescu told reporters that legislator Adrian Nastase, who served as Romania's prime minister from 2000 to 2004, is damaging the credibility of the country and its parliament by refusing to face a trial.

There was no immediate reaction from Nastase. In the past, he has said charges against him were politically motivated.

Nastase faces charges in two separate corruption cases.

In one, prosecutors allege that companies and state agencies were forced to pay fees to attend a conference, and the money was then used to pay for Nastase's unsuccessful run for the presidency in 2004. Parliament lifted his immunity in that case, and a trial began in February. But it was indefinitely adjourned for technical reasons.

In June, Parliament refused in to lift Nastase's immunity in the second case about alleged corruption in a real estate deal.

In Romania, legislators have parliamentary immunity from being tried while serving in Parliament. It can only be lifted if a lawmaker surrenders his immunity, or Parliament votes to withdraw it.

Romania also has other politicians suspected of corruption who have managed to avoid trial.

Source: AP

Decades of Suicidal Policies Vis-à-vis Russia and China

2009-07-22T11:41:00.000-07:00

Two critically important (and crucially intertwined) events that concern our national security — and our survival — occurred during the week of July 5-11, but you almost certainly didn’t hear a peep or read a word about either one of them. Apparently, our political and media elites think it’s not important for us to know about such things.

Here is the first event to which I refer, as presented by the Sino-Soviet “news” agencies.

“Russian troops are getting aboard a Chinese train Wednesday to take part in joint anti-terrorist exercises Peace Mission 2009, that will be held on the Chinese territory,” the Russian agency ITAR-TASS reported on July 8, 2009. In addition to a Russian motorized rifle battalion and an airborne company, the Chinese train also transported 150 Russian tanks, armored personnel carriers, and trucks. Some 20 Russian aircraft — bombers, fighter jets, transports, and helicopters — were flown to the exercise site in northeast China.

The headline of a July 12 story for Communist China’s Xinhuanet news agency reported, “More Russian military forces arrive in China for joint anti-terror exercise.” The massive five-day war games, held July 22-26 in the Shenyang Military Area Command, are a repeat of similar China-Russia joint military exercises in 2005 and 2007, which also took place under the name of “Peace Mission.” A shorter two-day joint “anti-terror” drill took place in April of this year. The operation, dubbed Norak-Antiterror 2009, was conducted in Kazakhstan on April 17-18 with units from the armed forces of the Shanghai Cooperation Organization (SCO): Russia, China, Tajikistan, Kazakhstan, and Kyrgyzstan.

These military operations (which have gone virtually unreported in the United States) underscore the extensive and growing military, economic, technological, and political cooperation between Moscow and Beijing over the past decade and a half. They also demolish the supposed wisdom of the prevailing “experts” at the CIA and State Department, who contended that the “Sino-Soviet split” was “permanent,” and that the United States should encourage this perceived split by wooing both communist regimes with diplomatic overtures, aid, and trade.

Four decades of this bipartisan wisdom by U.S. policymakers has resulted in the transfer, virtually, of America’s entire manufacturing base to China and the transformation of Mao’s “People’s Republic” from a weak and hopelessly primitive Third World state into a global economic and military superpower.

The second event to which I referred above took place in Moscow about the same time as the Sino-Russian military operations were being set into motion in China: President Barack Obama and his entourage landed in Russia on July 6 for a three-day state visit. In addition to meeting with Russian President Dmitry Medvedev and Prime Minister Vladimir Putin, Obama met with former President Mikhail Gorbachev and Gennady Zyuganov, chairman of the Russian Communist Party, who said he complimented President Obama on his economic stimulus program. “I said that I had thoroughly studied [Obama’s] anti-crisis program, that I liked it, as well as that it is socially oriented and primarily aimed at supporting poor people and enhancing the state’s role,” Zyuganov told Interfax, a Russian news agency. “I said all this to President Obama.”

These two events illustrate two fatal fallacies that underlie our decades of suicidal policies vis-à-vis Russia and China, as implemented by both Democratic and Republican administrations.

“Splits” and Scissors
Belief in a strategically exploitable Sino-Soviet split became not only the foundation for U.S. policy toward Communist China, but also provided the rationale for our relations with all communist regimes. If the world communist monolith was fragmenting owing to internal fissiparous forces, the argument ran (and continues to run today), then why not speed the process? Thus we saw policies aimed at courting communist regimes in Yugoslavia, Romania, Poland, Hungary, Czechoslovakia, and elsewhere, with the announced aim of wooing them from the Soviet orbit.

From the strategic “split” doctrine came a corollary: besides working to create cleavages between communist countries, why not also work to create cleavages within communist countries by supporting “liberal” and “democratic” political factions among the ruling communist elites?

Of course, that is what the bipartisan strategists such as Henry Kissinger and Zbigniew Brzezinski claim to have done. Communism has collapsed, they say; the former Soviet Union has fragmented, with the former Warsaw Pact nations joining the European Union and NATO, and the Communist Party of the Soviet Union (CPSU) no longer holds sway in Russia. Yes, China is still ruled by the Communist Party of China (CPC), but the “hardline” Marxists in Beijing have lost out to the regime’s pragmatic capitalists, goes the argument.

Unfortunately, the delusional acceptance of these fatal fallacies has achieved the exact opposite of the benefits promised by the “wise men” of foreign affairs. The supposed permanence of the Sino-Soviet split — as noted above, and as could be demonstrated by hundreds more examples — has proven as evanescent as a popsicle in Hades. The new Sino-Soviet axis, thanks to our aid, is far more dangerous now than ever it was during the Cold War.

As far as Russia goes, even many of the erstwhile enthusiasts of the so-called sea-change events of 1989-1991 have been forced to admit in recent years that Vladimir Putin has, in many ways, reinstated the Soviet model of dictatorship. In fact, by 2006 much of the western media had finally awakened to the reality that KGB veteran Putin had stacked the top levels of the Russian government with comrades from the KGB (and its successor, renamed the FSB) to the tune of 80 percent — a higher percentage than had ever been seen in Soviet history. The iron fist is now showing through the velvet glove in ways that were predictable, and were indeed predicted.

When the delusions of the Sino-Soviet split and “democratization” were being sold to the American people and U.S. policymakers a generation ago, there were many who soundly warned against accepting such dangerous deceptions. The most cogent and authoritative analysis exposing the looming danger came from KGB defector Anatoliy Golitsyn. For the past nearly 50 years he seems to have been destined to experience the agony of Cassandra, who in vain warned her disbelieving countrymen against bringing the Greeks’ gift horse inside Troy’s impregnable walls. In a series of memoranda to the CIA, which were later published as two books — New Lies for Old (1984) and The Perestroika Deception (1995, U.S. edition) — Golitsyn provided a remarkably detailed exposé and penetrating analysis that is probably without parallel in human history.

Over the past 90 years, there have been many defectors (both genuine and false) from communist countries, some of whom have provided us with very valuable information and insights. What makes Golitsyn so unique? Golitsyn was a member of the super-secret “inner” KGB — Department D — which planned long-range, strategic disinformation. Other members of the “outer” KGB did not even know of Department D’s existence. It was a crucial creation engineered during the 1959 reorganization of Soviet intelligence by KGB Chairman Alexander Shelepin. Shelepin and the top Soviet leaders determined to undo much of the damage caused by the recently deceased Soviet dictator Josef Stalin, whose paranoia and bloody purges had devastated not only the USSR but the entire global communist system. The KGB would be redirected away from Stalin’s ham-fisted use of the agency primarily for espionage and brutal police-state oppression, into Lenin’s conception of the “Cheka” (NKVD, predecessor of the KGB) as an instrument of strategic deception that would manipulate and control the Soviet Union’s enemies (the United States and the West) by manipulating and controlling the enemy’s perceptions of geo-strategic realities. Shelepin and the Kremlin strategists set out to recreate and test two of Lenin’s most successful strategic deceptions of the 1920s: the New Economic Policy (NEP) and the “Trust.”

Lenin’s Models
Under Lenin’s NEP, limited private enterprise was allowed. This was heresy to communists, of course, but Lenin the pragmatist explained that this was just a temporary step backwards in order to gain strength for the next steps forward in the socialist revolution. The NEP was necessary both to provide the Russian people with incentives to produce and to lure western capital to the Soviet Union. It worked: Ford Motor, DuPont, General Electric, U.S. Steel, and other western companies flocked to Russia, providing the essential wherewithal and technical assistance needed to reindustrialize the Bolshevik regime. When the Kremlin strategists determined that the NEP had finished its usefulness, they shut it down, renationalized all private enterprise and reinstituted the harsh Bolshevik program. The NEP deception would be repeated again (and again) to win further western concessions and aid under new labels: “peaceful co-existence,” “détente,” “glasnost,” and “perestroika.”

Lenin’s “Trust” was the forerunner to the KGB’s fake revolutions and dissident movements that would be unleashed later in the USSR and the Warsaw Pact countries. The Trust, supposedly, was a powerful, secret anti-communist group within Russia that had widespread support among the people and even among leading officials. The Trust carried out spectacular raids and guerrilla activities throughout the USSR and convinced western intelligence agencies to support it. But after several years of this elaborate charade, the Trust was revealed to have been purely an invention of the Cheka, and is the case study par excellence of what the KGB terms the “scissors strategy.”

The term derives from the application of the Marxist-Leninist dialectic methodology, which allows communists to achieve victory by creating phony struggles in which they control both sides. The unwitting adversary is lured into making alliance with the ersatz “dissidents,” “liberals,” or “democrats,” only to be trapped and cut in half by two sides he thinks are opposed to one another. Through its adroit use of the Trust, the Cheka manipulated western government policies regarding the Soviet Union and lured many true Russian anti-communists into the open, so they could be arrested, tortured, imprisoned, and executed.

According to Golitsyn, the Kremlin strategists used the newly reorganized KGB (of which he was a key “inner” member) to launch a succession of Trust and NEP deceptions that would be part of a decades-long process to implement “a strategy for ‘restructuring’ the whole world.” In The Perestroika Deception, Golitsyn argues:

The Soviets are not striving for genuine, lasting accommodation with the Western democracies but for the final world victory of Communism.... They intend to exploit the same illusion to induce the Americans to adopt their own ‘restructuring’ and convergence of the Soviet and American systems using to this end the fear of nuclear conflict.

According to Golitsyn, Gorbachev (and his predecessors and successors) is pursuing an incredibly intricate “global strategy … to lure the United States into convergence and World Government.”

The charge would be too fantastic even to contemplate except for two things: 1) Anatoliy Golitsyn has correctly called the shots — often years in advance — on some of the most astounding geo-political events of our age; and, 2) The verifiable facts on the ground more accurately fit his analysis than all the wishful thinking and deceit peddled by the acclaimed (but always colossally wrong) “experts” of the disinformation axis in Washington and Moscow.

Concerning the first point, we should note that author Mark Riebling (Wedge: The Secret War Between the FBI and CIA, Knopf, 1994) conducted a systematic analysis of Golitsyn’s book New Lies for Old, and found that out of a total of 148 falsifiable predictions, 139 had been verified by 1993, giving Golitsyn an accuracy rating of 94 percent. And his predictions were not small matters; they included details of the forthcoming fake liberalizations throughout Eastern Europe, followed by similar developments in the Soviet Union. He predicted the removal of the Berlin Wall, the unification of Germany, and the admittance of former communist Warsaw Pact nations into the European Union.

Facts on the Ground
Concerning the second point, the facts today argue more strongly than ever that Golitsyn’s analysis was — and is — correct. Among the literally hundreds of examples that could be cited that have been barely mentioned, completely ignored, or misreported in the western media:

• Contrary to the claims of the “end of communism” school of thought, “former” KGB and Communist Party leaders continue to dominate the former USSR and Warsaw Pact countries, occupying the crucial centers of power: the military, the security services and police, the main political parties, the media, the financial institutions, the educational institutions, virtually all economic sectors, and all branches of government.

• This overwhelming dominance by unrepentant and unchastened communists accounts for the fact that “lustration” laws aimed at ferreting out those responsible for murder, torture, imprisonment, and oppression on a scale never previously seen in history have been almost completely thwarted. Nothing remotely comparable to the post-World War II de-nazification of Germany has occurred; only a handful of communists have been prosecuted.

• Russian Orthodox Christians continue to suffer horrible betrayal by their KGB-controlled clergy, who fully support Putin and the Kremlin leadership. The death in 2008 of Patriarch Alexy II, head of the Russian Orthodox Church (and a dedicated KGB agent since 1958), showed the continuity of the Soviet state. All three replacement candidates were identified KGB operatives, including Archbishop Kirill I, who was chosen to be the new patriarch.

• In Russia, Putin has been able to use his KGB-FSB siloviki to harass, intimidate, kidnap, torture, imprison, and assassinate his opponents, whether journalists, politicians, businessmen, or activists.

• The European Union is being drawn ever tighter into Moscow’s noose of energy dependency through the Russian state oil and gas mega-corporations — Rosneft, Gazprom, Nord Stream — run by Putin’s “former” KGB-FSB comrades.

• The United States is traveling the same path, with the KGB-run LUKoil taking over more than 2,000 gas stations on our eastern seaboard that formerly were owned and operated by Mobil and Getty Oil.

• KGB operatives who have been exposed in top positions of the “post-Soviet” European countries include Polish Prime Minister Jozef Oleksy; Polish President Aleksander Kwasniewski; Lithuanian Prime Minister Antanas Valionis; Lithuania’s head of State Security, Arvydas Pocius; Hungarian Finance Minister and Prime Minister Péter Medgyessy; Hungarian Prime Minister Gyula Horn; and Bulgarian President Georgi Sedefchov Parvanov.

• Hungarian KGB agent Sandor Laborc was made head of Hungary’s secret services and then intelligence chief for NATO, where he was put in charge of the West’s most sensitive secrets. Estonian Defense Ministry official Herman Simm was recently exposed as an FSB asset who has passed many NATO secrets to Moscow.

• While pretending for decades to oppose the European Union, the KGB’s most trusted moles played major roles in building the “Europe from the Urals to the Atlantic.” Two key French KGB agents on the EU project were Alexandre Kojeve and Charles Hernu. Kojeve wrote that a world socialist state could be realized through the gradual expansion of European integration across the globe.

• Lifelong Marxist-Leninist Mikhail Gorbachev has approvingly described the EU as “the new European Soviet.” Russian dissident Vladimir Bukovsky has disapprovingly warned that “having just buried one monster, the Soviet Union, another remarkably similar one, the European Union, is being built.... The EU is the old Soviet model, presented in Western guise.”

• Western politicians and intellectuals may insist that Beijing has abandoned Mao’s communist ideology, but Hu Jintao, Chinese president and general secretary of the Communist Party of China (CPC), and other top CPC officials regularly affirm their commitment to Marxism-Leninism and point to market “reforms” as a temporary expedient along the lines of Lenin’s NEP.

• Before he was murdered, former KGB-FSB Lt. Col. Alexander Litvinenko revealed that al-Qaeda’s No. 2 man, Ayman al-Zawihiri, was an operative of the FSB, as are many of the other so-called “Islamic” terrorists. “The bloodiest terrorists of the world were or are agents of the KGB-FSB,” he said.

Written by William F. Jasper
Wednesday, 22 July 2009

Romania interested in exploration for gas in Turkmenistan

2009-07-22T02:28:00.000-07:00

Romania is looking for an opportunity to participate in natural-gas exploration in Turkmenistan.

Romanian president Traian Basescu said so yesterday (Tues) before leaving on a two-day visit to that country.

"Our intention is to explore for gas deposits in Turkmenistan and to provide the Turkmen side with drilling equipment," Basescu declared.

Basescu said his visit would be in line with Romania’s foreign policy to improve political and economic ties with states in the Caspian region and in Central Asia.

The visit takes place at an anniversary moment for Romanian-Turkmen relations since it has been 17 years since the establishment of diplomatic relations and 16 years since the Romanian embassy in Turkmenistan began to operate.

Basescu and his Turkmen counterpart Gurbanguly Berdymukhamedov will sign an agreement providing for future bilateral cooperation, mainly in the energy sector.

Turkmenistan, with a population of around five million people, has some of the largest natural-gas reserves in the world.

Euro Parliament Sending Romanian-Led Mission To Moldovan Elections

2009-07-22T02:20:00.000-07:00

STRASBOURG -- The European Parliament has said the seven-member delegation that will monitor Moldova's parliamentary elections on July 29 will be led by a Romanian, RFE/RL's Moldovan Service reports.

Conservative Romanian parliamentarian Marian Jean Marinescu, who has been critical of Moldova's handling of the crisis that followed the controversial elections of April 5, will head the group.

Two other Romanian members of the European Parliament will be in the delegation, which is scheduled to be in Chisinau from July 26-31.

The other four members of the team are from Poland, Lithuania, Latvia, and Bulgaria.

Moldova's Communist government -- which won the spring elections -- has accused Romania of meddling in its internal affairs and fomenting unrest in Chisinau after the vote.

Romania denies the accusations, but several Romanian officials have expressed concern over the way the last Moldova elections were held and have asked Chisinau to ensure free and fair polls this time around.

RFE/RL

Romania unveils digital strategy

2009-07-21T02:25:00.000-07:00

Romania’s Ministry of Communications has produced a strategic plan for the transition to digital broadcasting. According to Media Expres, it envisages a maximum of five national UHF multiplexes, a national VHF multiplex and a multiplex allocated to regional and local services, all in accordance with the ITU Geneva Conference RRC-06.

DTT services will make their debut in Romania this December, and given the short timeframe it seems almost certain that the state-owned transmission company Radiocom will operate the first multiplex.

It is expected the first two multiplexes will reach 60% of the population and cover 50% of Romania by the end of 2010, with the figures rising to 90% and 80% respectively at the end of 2011.

ASO will take at the beginning of 2012 at the latest.

Source: broadbandtvnews.com

Romanian President Says Moldova Protests Reminiscent Of 1989

2009-07-19T08:46:00.000-07:00

Romanian President Traian Basescu at RFE/RL's headquarters

Romanian President Traian Basescu has said that April's post-electoral clashes in Chisinau were a sign that Moldova’s young generation wants real political and economic change. In an interview at RFE/RL's Prague headquarters with correspondent Eugen Tomiuc, Basescu strongly rejected Moldova’s accusations that Romania was behind the violence, and said that Romania's stance toward Moldova will always be “one people, two countries.” The president also spoke about the EU’s eastward expansion plans and about relations with Russia and the United States.

RFE/RL: Romania’s relationship with the Communist leadership of Moldova has gone from bad to worse over the past couple of months, particularly after President Vladimir Voronin accused Romania of being behind the post-election violence in early April. Chisinau introduced visas for Romanians, expelled the ambassador, and restricted Romanian media access to the republic.

The day-to-day economic and social ties between the two states have all but come to a standstill. What can EU member Romania do to help Moldova out of its current political crisis without being blamed for undue “interference in Moldova’s internal affairs?”

Basescu: We will always reject such accusations -- that Romania was involved in the post-election uprising, or that it would get involved in the domestic affairs of the Republic of Moldova. What I can tell you with certainty is that we have seen such events before. We saw them in December 1989, when another Communist leader [Nicolae Ceausescu] failed to understand his own people, and furthermore failed to understand the younger generation.

Mr. Voronin might want to take a look at the footage taken in December 1989 in Bucharest. He will see that there were young people on those streets who wanted liberty, young people who were looking toward Europe, not those voting for Ceausescu.

RFE/RL: This year we mark 70 years since the infamous Molotov-Ribbentrop Pact was signed. You have stated that you will not sign a bilateral treaty with Moldova which would enshrine the pact. There is actually a region called Moldova in eastern Romania, which sometimes adds to an outsider's confusion regarding what exactly a Moldovan identity represents.

Millions of Romanians consider themselves Moldovan -- but only as a regional identity subsumed to their Romanian national identity. Moldova’s leadership, however, has promoted the notion of a separate Moldovan identity, language, and history -- reminiscent of Stalin’s concept of a Moldovan “people.” How can a modern, European Romania hold on to its ethnic and language ties with Moldova without risking being accused of revisionism, chauvinism, and other evils?

Basescu: We will not fall into the trap of timidity when it comes to accusations or political games played by Chisinau toward Romania. We have a policy of explaining to all our European and NATO allies the history of these places and the history of these people. Our concept is clear: one people, two countries. Therefore, in this respect the propaganda coming from Chisinau will not fool anybody.

Furthermore, Romania will not watch events passively. We have increased the number of vacancies in Romanian universities and high schools for Moldovan youths; we will try and support Romanian-language democratic media [in Moldova]; and we will not hesitate to fight within the European Union to convince our friends and allies that Moldova shouldn't be left in the integration package with Ukraine, but packaged together with the Western Balkan countries as far as integration objectives are concerned.

These are but a few examples to show that we are not being intimidated by Chisinau's brutal behavior. With regard to trade, we have given instructions that no exports from Moldova to Romania be hampered in any way. You may remember that when Mr. Voronin was in big trouble because Moscow had blocked Moldova's wine exports to the Russian market, I brought Mr. Voronin to Bucharest and organized a big Moldovan wine exhibition, and since then, the Romanian market has absorbed a large part of Moldovan wine production.

Currently, Moldova is exporting more wine to Romania than to Russia, which has eventually reopened its market to Moldovan wines. Therefore, we will not do anything that could resemble hostility toward Moldova. Furthermore, we are ready to offer any kind of assistance that Moldova might need, in every economic area.

RFE/RL: Who should ask for such assistance?

Basescu: The [Moldovan] government. But we are also trying to stimulate a different way to keep in touch with the Romanians from the Republic of Moldova by stepping up ties at the local community level, and with intellectuals from Moldova.

I had a meeting recently in Bucharest with civil society representatives from Moldova. We have increased the number of places in summer camps for Moldovan youths. Therefore, we are doing our job both as good neighbors and brothers to the Moldovans, although for the moment we do not communicate with Moldova's leadership.

RFE/RL: Romania’s usually cool relations with Russia seem to have become even cooler since the beginning of the Moldovan crisis. Some analysts argue that Moscow is promoting the idea of a “Romanian threat” to Moldova’s feeble statehood to gain even more influence over Chisinau. Can Romania improve its ties with Moscow and hold on to its interests in the region at the same time?

Basescu: I do not believe that those who say Romania has bad relations with Moscow are right. Our commercial exchanges are on the rise, political contacts are very frequent -- this year alone there were five or six visits by Romanian ministers to Moscow to improve cooperation.

And I will tell you one other thing: I don't think Moscow is so engaged in backing Voronin that it's going to become hostile to Romania because of Moldova's relations with Romania. And I know all the details when I am saying this. On the other hand, Moscow definitely has interests in Moldova, and of course Romania has an interest in Moldova's citizens.

We want the citizens of Moldova -- our brothers from the Republic of Moldova -- to have the chance to strive for prosperity. This cannot happen unless Moldova vigorously and steadily chooses the path toward integration into the European Union.

And I would like to clarify this -- you spoke about the confusion between Moldova and the Republic of Moldova. This is a valid issue for those who do not understand that Romania has several historical regions: Moldova, which, if we are to talk about Romanian regions, stretches to the Dniester River -- Banat, Oltenia, Bucovina, Transylvania -- all these are regions inhabited by Romanians, regions where the same people have lived -- and will live -- for many millennia.

RFE/RL: Ever since you became president, you have been a strong proponent of a strategic partnership with the United States. Romania has contributed troops to Afghanistan -- and until recently, to Iraq -- and has offered Black Sea air bases to the United States. Can Romania do more to consolidate its strategic partnership with Washington under the new U.S. administration?

Basescu: It definitely can, and I can tell you that the new U.S. administration gave us all the signals that its policy toward Romania remains unchanged. The objective of both countries is the consolidation of the strategic partnership in two directions -- [military and economic].

Under the security or military dimension, we have offered facilities to the U.S. military at Romanian military bases such as Kogalniceanu, Babadag, and others. Furthermore, we are participating together with troops in missions outside our borders.

But there are [also] U.S. investments in Romania such as those of [automaker] Ford, or investments in the food industry or in agriculture, and many others. This partnership is developing well, in all its dimensions, including the political dimension, where Romania has enjoyed U.S. support and has been a partner of the United States on foreign policy issues.

And, I can tell you that we are developing an equally strong partnership with France within the European Union. It is a partnership that is rapidly gaining ground. And for us, the two strategic partnerships -- with the United States and France -- are two extremely important pillars of our foreign policy.

RFE/RL: Mr. President, thank you.

Basescu: I thank you too, and I wish all the best to the Moldovans!

Source: RFE/RL (Jul 16)

Ethnic Hungarians boo Romanian president

2009-07-19T02:31:00.000-07:00

BAILE TUSNAD (Romania) -- Romanian President Traian Basescu was treated to boos and hisses as he spoke during an open university event organized for his country's ethnic Hungarians.

Those gathered in the town of Baile Tusnad reacted negatively to his statement that Romania is a national, united, sovereign and independent state.

Basescu first received the boos when he said that autonomy should be equal in all parts of the country, including in the region of Transylvania, where ethnic Hungarians live.

After he quoted from the Romanian Constitution to say that the country is "a national, united, sovereign and independent state", there was another expression of disapproval.

He then proceeded to twice again repeat the same quotation, and added that he believed that dialogue was possible, but that he recognizes that those present "do not know it".

The 20th open university in the town was also attended by former Hungarian PM and opposition leader Viktor Orban, the Hungarian Parliament's Foreign Policy Commission chairman, and other Hungarian officials and citizens.

Source: BETA

Conference of foreign ministers of Serbia, Romania and Hungary

2009-07-19T02:02:00.000-07:00

In Timisoara (Jul 18, 2009), Serbian, Romanian, and Hungarian foreign ministers, Vuk Jeremic, Christian Diaconescu and Peter Balasz respectively, discussed the European integration of the Balkan countries, cross-border projects, the Nabucco pipeline and the EU strategy for the Danube.

Cooperation of the tangential regions of the three countries sends an important message to Europe and it is extremely important for five million people who live in this area, Hungarian Foreign Minister Peter Balasz told the press conference. Balasz mentioned projects such as the joint industrial park and expansion of trans-European transport and energy supply networks in the region.

The Euro-regional cooperation may become a model for the period following Serbia’s EU integration, said Balasz. He pointed that Hungary and Romania could jointly mobilize EU funds for Serbia and added that cooperation of the two EU member states and their neighbour is ideal from the EU point of view.

The Serbia-Romania-Hungary trilateral was launched in Belgrade in May 2003 at the meeting of foreign ministers of the three countries, who are having their fourth gathering on Saturday.

On Monday (Jul 13, 2009), the EU’s "pipeline politics" took another step forward with the signing in Turkey's capital, Ankara, of an agreement to build a new, 3,300-kilometre gas pipeline called Nabucco, running between eastern Turkey and Vienna, Austria.

MIDEAST: Turkey Gets Boost from Pipeline Politics

2009-07-19T01:52:00.000-07:00

The political geography of the modern Middle East has been affected for one hundred years by the appetite of Westerners and other outsiders for the region's hydrocarbons.

On Monday (Jul 13, 2009), the region's "pipeline politics" took another step forward with the signing in Turkey's capital, Ankara, of an agreement to build a new, 3,300-kilometre gas pipeline called Nabucco, running between eastern Turkey and Vienna, Austria.

The project underlines the new influential role that Turkey, a majority Muslim nation of 72 million people, is playing in the Middle East, and far beyond.

The new project's name was chosen, Austrian officials said, after the Verdi opera that representatives of the five participating countries - who include Bulgaria, Romania, and Hungary, along with the two terminus states - saw together during an earlier round of negotiations in Vienna.

But the name also gives clues to two intriguing aspects of the project's geopolitical significance. The theme of the opera is the liberation from bondage of slaves held by the ancient Babylonian king Nebuchadnezzar ('Nabucco') - and it is a widely discussed feature of the Nabucco project that many European nations want access to a gas source that is not under the control of Russia.

Last winter, several European nations suffered severe gas shortages after Russia, locked in a tariff dispute with transit-country Ukraine, closed off the spigots completely.

But the other implication of the name is more strictly Middle Eastern. The modern-day home of Nebuchadnezzar is Iraq. Washington has given strong support to the Nabucco project - and one of the reasons U.S. officials give for this support is their hope that once Nabucco is up and running in 2015, Iraq can be one of the nations that reaps large profits by feeding gas into it.

However, construction of the pipeline is estimated to cost some eight billion dollars, and many officials in the participating countries are still unclear where they will get enough gas to make it economically viable.

The Nabucco participants had been hoping that a key feeder state would be one of Turkey's eastern neighbours, Azerbaijan. But on the eve of the project's inauguration in Ankara, Russian President Dmitry Medvedev took the CEO of the vast Russian gas company Gazprom to Azerbaijan, where they signed a contract with the state gas company that will force Nabucco to compete hard against Gazprom for any purchase it wants to make from Azerbaijan.

One fairly evident other source for Nabucco's would be Iran, which is reported to have considerable amounts of new gas coming online in the next five years.

Paul Stevens, an energy specialist with London's Chatham House think-tank, recently told the Christian Science Monitor that an Iranian deal alone could put the Nabucco project close to operating in the black. But he noted that the current political crisis in Iran makes that less do-able and thus, "makes the immediate commercial goals dimmer for Nabucco".

On Thursday, the U.S. State Department's special envoy for Eurasian energy, Richard Morningstar, told the Senate Foreign Relations Committee in Washington that, "This would be the absolute worst time to encourage Iran to participate in a project like Nabucco, when we have received absolutely nothing in return."

He did, however, argue that the prospect of inclusion in Nabucco could be one incentive used to help persuade Iran to cooperate with the international community.

Regardless of whether that comes about or not, this week's formal birth of the long-negotiated Nabucco project underlines modern Turkey's steady emergence as a significant player in Middle East politics, as well as its continuing role as a bridge between Europe and the countries of the Middle East and the Caucasus.

In many of the Arab countries of the Middle East, as in Bulgaria and some other countries in the Balkans, there was until recently much lingering hostility towards Turkey, based on the resentment earlier generations felt about the harsh way they were treated by the former Ottoman Empire.

But the present-day Turkish republic replaced the Ottoman Empire in 1923 and in the Arab Middle East, the earlier hostility towards Turkey now seems largely to have dissipated.

Even in Syria, which for several decades nursed a strong sense of grievance against Turkey for its 1938 annexation of the north-western province of Alexandretta (now Hatay), that grievance has now been replaced by generally warm ties - and much admiration of Turkey's recent economic progress.

In Iraq, there was also for decades strong resentment of Turkey, among both the country's majority Arab population and from its minority of Kurds, who are concentrated along Iraq's mountainous northern border with Turkey.

But the moderately Islamist 'Justice and Development' Party (AKP) that has governed Turkey since 2002 has built good relations with Iraq's central government in Baghdad.

It has also built a decent working relationship with the Kurdish Regional Government (KRG) - in spite of the sympathy that many Iraqi Kurds feel with their fellow Kurds inside Turkey, who for a long time were treated very badly by Ankara. (In Turkey's 2007 general election, however, the AKP attracted a clear plurality of support from Turkey's Kurds.)

Turkey now holds several significant levers of power over Iraq. It controls the headwaters of the Tigris and Euphrates Rivers, which together are vital to the wellbeing of Iraq's people. It provides an important existing pipeline that takes Iraqi oil to a shipping terminal on Turkey's Mediterranean coast.

It is the only one of Iraq's neighbours apart from Iran that has a military capable of deterring other powers - inside or outside Iraq - from launching aggressive military adventures inside the country as the U.S. military draws down its presence there.

Turkey also projects considerable "soft power"- both in Iraq and in the rest of the Muslim Middle East. It strongly opposed the United States' invasion of Iraq in 2003, a stance that most Iraqis today strongly appreciate. But it also remains on good terms with Washington, as a much-valued member of NATO. And most Iraqis probably appreciate that pragmatism, too.

The AKP also provides an interesting example, to Islamist parties both in Iraq and further afield, of how an intelligent Islamist party can succeed both at home and abroad.

At home, the AKP government has shown moderation and toleration. In foreign affairs, it remains committed to strengthening Turkey's ties with the west, including by continuing Turkey's push to join the European Union.

Now, with the launching of the Nabucco project, Turkey has added to the influence it can exert with many Middle Eastern - as well as European - countries.

Analysis by Helena Cobban - veteran Middle East analyst and author. She blogs at www.JustWorldNews.org

The Craftsmen Fairs—Bringing to Life Romania’s Traditions

2009-07-18T03:10:00.000-07:00

Through a series of events taking place across Romania, the Craftsmen Fairs offer tourists an opportunity to explore the beauty of Romanian traditions from different parts of the country, and for genuine traditional artists to express and sell their original artifacts.

As trying to keep alive the old crafts, the fairs are periodically held in most cities in Romania, and many of these traditional craftsmen attend them on a regular basis, while some of them were invited to go abroad to display their creations.

The most recent fair was held in the city of Galati in the first days of July. Besides the display and the selling of handmade items, local promoters also organized shows with folk music and dance.

The craftsmen do their work out of passion and out of commitment to the old ways.

“The satisfaction that results from our work is primarily moral in nature; each item we make is handmade, each is unique,” says the potter Simon Stoica, who hails from the city of Chisinau in the nearby Republic Moldavia. He presented his products, souvenirs made from red clay such as bottles, key rings, bells or decorative wall panels.

The creation of clay objects, as he describes it, is one that requires much dedication and patience: they are spun on the potter’s wheel, decoration is applied, then left to dry for one week, painted and baked in the oven at a temperature of 1000 degrees Celsius. For medium-sized objects the whole process takes a whole month and the smaller ones can be completed in up to two weeks. “We are three craftsmen, each one having his own unique style, but our common aim is to promote traditional cultural values and keep alive the things that were used in the old days,” adds Stoica.

Ionelia Stoica is a painter that specializes in native painting featuring themes inspired by Romanian rural life. She does this kind of painting not only on canvas but also on clay pots and braids of rushes. Her greatest joy is that of creating beautiful objects with her own hands that are admired and appreciated by others.

What these craftsmen all have in common is the revival of the spirit of the traditions, and the way they feel about their work: they take work to be an opportunity for relaxation, and more than that, it is a spiritual experience.

Adam Curta, icon painter from Cluj-Napoca confesses, “My work brings me enormous satisfaction and peace of soul.” He and his wife, both teachers, have set up in their school a glass-painting coterie that is both helping to keep the traditions alive and being a form of what he calls “art-therapy.” Adam particularly stands out among the other craftsmen as he is dressed from head to toe in a traditional costume, with not a single piece of modern clothing on him.

As a specialized glass-icon painter, he has a genuine approach to painting, different from other artists. While the latter made icons as already aged, imitating patina using certain techniques and colors, Adam leaves time itself to work its ways and he paints the icons as they should be: clean, using fresh and vivid colors, without tricks designed give customers the illusion that they have bought a hundreds-year-old icon. This authenticity of his style conquered the hearts of foreigners—Adam showcased his creations in exhibitions in France, Italy, Poland, Israel, and Belgium.

Folk masks, traditional costumes, dolls, icons, paintings, bells, pottery made of black and red clay, wooden spoons and more such things are available at the fairs, all made with the purpose of bringing a cramp of authentic tradition in our often dull contemporary modern homes.

Events like Craftsmen Fair are helping maintain authentic local identity and traditions in the era of technology and globalization. As we rediscover and return to the traditional arts, we have the opportunity to see the true beauty of old times.

Romanian Team Wins First Place in Microsoft's Imagine Cup 2009 For Software Design

2009-07-09T02:23:00.000-07:00

Jul 9, 2009 (softpedia.com)

Team SYTECH, a group of four students from Iasi, Romania, has won the first place in Microsoft's Imagine Cup 2009 competition for Software Design. SYTECH won the first prize with a project dubbed UpCity, a collaborative platform designed to bridge the gap between citizens and government agencies.

“There are absolutely no words to describe what we’re feeling right now. Thank you everyone,” said SYTECH's Adrian Buzgar after the winning team for Software Design was announced. “The project will be developed for the city hall of our city at the end of this month. Then we’re going to try to build a company.”

Microsoft revealed that in excess of 300,000 students from over 100 markets around the world signed up for the competition this year. The finals, which took place in Cairo, Egypt, saw no less than 444 students attempt to win in the nine categories of the competition.

“The creativity and imagination that students poured into their projects this year was incredible,” revealed Joe Wilson, senior director of Academic Initiatives, Developer and Platform Evangelism Division at Microsoft. “We hope that all of the students who participated this year will continue their pursuit of creating technology in the service of making the world a better place.”

Here is a list with all 2009 Imagine Cup winners:

Software Design
First place: Romania, SYTECH
Second place: Russia, Vital Lab
Third place: Brazil, Virtual Dreams

Source: softpedia.com

Romania: to get €18-20 billion in IMF-led bailout

2009-03-19T02:51:00.000-07:00

Bucharest, March 18, 2008: Romanian President Traian Basescu met Thomas Mirow (EBRD President).

BUCHAREST, Romania: Romania will get an emergency credit-line for €18-20 billion ($24-26 billion) from the International Monetary Fund, the European Union and the World Bank to survive the global economic crisis, a Romanian official said Wednesday.

Although a final agreement has yet to be announced, Mihai Tanasescu, the country's representative to the IMF, said the deal is imminent and will help stabilize and boost the economy.

An IMF delegation is currently on a visit to Romania to discuss the loan.

Prime minister Emil Boc said Wednesday that two-thirds of the loan will go to the National Bank, to boost foreign currency reserves and keep the national currency, the leu, at a level that will not hurt the economy. Another part of the bailout funds will go to commercial banks to support mortgages and other loans.

Tanasescu warned economic activity would slow further in April but that if the government manages the loan well, the economy would gradually improve.

He tried to ease fears that taxes will rise as a result of the loan and said that the social implications of the economic crisis — such as higher unemployment and cost of living — were an important issue in the negotiations with the IMF.

Romanian President Traian Basescu, Prime Minister Emil Boc and National Bank Governor Mugur Isarescu met with IMF officials on Tuesday to discuss the loan.

Basescu has said that money from the IMF is the "cheapest that Romania could receive."

The country's central bank warned last month that it might need help to shore up its foreign currency reserves, which amounted to €26.2 billion ($33.2 billion) in December.

Financial analysts have said the expected influx of capital from the loan should calm fears of an immediate meltdown in the economy and could lead to a near-term bounce in Romanian markets. However, it won't eliminate the need for a fundamental depreciation in the leu, they say.

IMF: Romania's 2009 GDP forecast to minus 4%

The International Monetary Fund(IMF) forecasted Romania's gross domestic product in 2009 to minus3 percent or even minus 4 percent, Mihai Tanasescu, Romanian representative to the international lender, said on Wednesday.

IMF's report said that Romanian budget deficit might be higher than 4 percent of the GDP, significantly above the 3 percent Maastricht Treaty threshold, according to Tanasescu, a former Finance Ministry from December 2000 to December 2004.

Last Thursday, Romania's Finance Minister Gheorghe Pogea said that the country is considering an economic growth at between minus one percent and 1.5 percent, although this year's state budget is built on 2.5 percent growth.

The European Commission recently revised downwards Romania's projected growth to 0 - 0.5 percent, after having previously estimated the Romanian GDP would expand at 1.8 percent this year.

In 2008 Romania recorded 7.1 percent economic growth, but such pace slowed down to 2.9 percent in the last quarter.

An IMF mission is visiting Bucharest over March 11-25 in order to continue its assessment of the Romanian macroeconomic conditions.

The delegation will hold talks on a possible IMF program for Romania. Such program will be part of a multilateral pro-active and safety financial package to be backed by the European Union and the World Bank among other international financial institutions.

According to government sources, the Romanian authorities intend to borrow 19 billion euros (23.75 billion U.S. dollars), 12billion euros from the IMF and 7 billion euros from the EU, following an evaluation made by the Finance Ministry and the central bank.

Italian Interior Minister hired illegal immigrants in the past

2009-02-19T23:00:00.000-08:00

Italy's Interior Minister, Roberto Maroni hired illegal Romanians. Some years ago, Maroni allegedly called Romania's Embassy to extend working permits for three illegal Romanian immigrants. However, he is among those Italian politicians to take a stand against Romanian immigrants.

Romania's General Consult to Turin, Mrs. Iulia Buje stated for the newspaper that Italy discovered that Romanians are felons only in 2007, because before that, many employers wanted illegal Romanian immigrant workforce, since Italians refused to work in certain sectors.

Mrs. Buje declared that Maroni called a couple of times at the Romanian consulate to help his three Romanian workers to get a working permit. She added that there were a lot of Italians who would rather hire Romanians illegally to avoid paying taxes.

Maroni, Italy's Ministry of Interior and a prominent 'Northern League' politician, is lately supporting an anti-immigration bill.

The 'League', however, is now the oldest political party in Italy, indeed the only one that can look back on 30 years of activity. This is not an accident produced by the random workings of the break to the Second Republic. It reflects the second peculiarity of the League, its dynamism as a mass organisation, possessing cadres and militants that make it, in the words of Roberto Maroni, perhaps Bossi’s closest colleague, ‘the last Leninist party in Italy’. Over much of the North, it now functions somewhat as the PCI once did, as rueful Communist veterans often observe, with big gains in one formerly ‘red’ industrial stronghold after another: the Fiat works in Mirafiori, the big petrochemical plants in Porto Marghera, the famous proletarian suburb of Sesto San Giovanni outside Milan, setting in the 1950s of Visconti’s Rocco and His Brothers. This is not to say that it has become a party based on labour. While it has captured much of the working-class vote across the North, the League’s core strength lies, as it has always done, among the small manufacturers, shopkeepers and self-employed in what were once fortresses of the DC: the Catholic provinces of the North-East, now increasingly secularised, where hatred of taxes and of interference by the central state runs especially strong. Here resentment of fiscal transfers to the South, perceived as a swamp of parasitic ne’er-do-wells, powered the League’s take-off in the late 1980s. Immigration from the Balkans, Africa and Asia, which has quadrupled over the last decade, is now the more acute phobia, laced with racism and prejudice against Islam. The shift of emphasis has, as might be expected, been a contributory factor in the spread of the League’s influence into the Northern working class, more exposed to competition in the labour market than to sales taxes.

The truculence of the League’s style has been perhaps an even more important source of its popular success. Defiance of the sickly euphuism of conventional political discourse, as cultivated in Rome, confirms the League’s identity as an outsider to the system, close to the blunt language of ordinary people. The party’s leaders relish breaking taboos, in every direction. Its political incorrectness is not confined to xenophobia. In matters of foreign policy, it has repeatedly flouted the official consensus, opposing the Gulf War, the Balkan War and the Lisbon Treaty, and advocating tariffs to block cheap imports from China, without inhibition. Breaking verbal crockery, however, is one thing; effecting policy another. Since its period in the desert between 1996 and 2001, the League has never rebelled against the orthodox decisions of the centre-right governments to which it has belonged, its rhetorical provocations typically operating as symbolic compensation for practical accommodation. But it is not a dependency of Berlusconi. The boot is rather on the other foot: without the League, Berlusconi could never have won the elections in which he has prevailed, least of all in 2008.

CRM the savior in times of need

2009-02-19T22:09:00.000-08:00

IT integrator Vector is warning end-users to cut investments in customer relationship management (CRM) solutions at their peril and instead look towards this aspect of their business for inspiration. It argues that survival depends on the strength of a company’s clients and the relationship they enjoy with them more than it ever has done before.

Although its main headquarters are based in Romania, Vector Software has been making inroads in the Middle East market for just over three years now.

In those three years the systems integrator has snared contracts with some high-profile customers, including Emaar, Gulf Bank and The National Bank of Abu Dhabi.

Vector primarily serves as an Oracle enterprise solutions provider, working tirelessly to promote the vendor’s business intelligence and ERP offerings. As a European systems integrator Vector is in a position to compare the Middle East market with that of continental Europe.

The Middle East market is much more open to Oracle," claimed Ovidiu Oancea, executive director at Vector Software. "Fortunately the competition in the Middle East market is not as high as it is in Europe. Technology services for Oracle products are offered only by a few companies here compared to Europe where the number is significantly higher."

Despite the comparatively low number of Oracle partners on the ground in the Middle East - a number that if the huge size of last year’s GITEX ‘Oracle World’ hall was anything to go by is only likely to increase - Vector remains conservative in its approach to the market.

The firm does claim, however, that it brings an edge to this market and that it has the experience and expertise that it can transpose from its European business to the Middle East.

"We are bringing not only the Oracle implementation expertise, but also the project management knowledge, and how we deliver the service is our competitive edge," insisted Oancea.

"We are learning by doing and if we have expertise that we gain here we will also take that back to Europe. If we are implementing for a large company in, for instance, real estate, that expertise will increase our value. That way, we can bring more value and we now have over 100 implementations," he added.

Vector Software is currently trying to position itself in the Middle East market as one of the primary choices for enterprises when it comes to implementing the Oracle-owned Siebel CRM system.
"This is a new direction for Oracle and for the partners. We have some experience and after we compared the features and the functionalities we came to the conclusion that the way Siebel is specialised on verticals and industries is the future," asserted Oancea.

Despite the global financial crisis, the company is confident that the pace of the Middle East market will hold up, ensuring a sustained demand for business intelligence and ERP solutions.
"What we can see here is that companies are interested in seeing value and new products which are state-of the-art - the demand is more than Europe," said Oancea.

"Companies will be slowing investment in IT systems and budgets to see what is going on around them. But these systems are critical, and if you are talking about customer relationship management you have to invest in retaining customers. You cannot just stop because there is a financial crisis, the core of your business is the customer so you have to invest there as normal."
Vector’s view that the services sector in the Middle East arena will continue to grow is in common with many of its solutions peers.

But the firm’s management is more than aware of the fact that, despite strong margins in the solutions business, the sector relies on heavy investment from the very enterprises that are in a cautious mood at the start of 2009.

GEOPOLITICS: The Decline of the Petro-Czar

2009-02-18T02:40:00.000-08:00

Plunging oil prices have created an unexpected diplomatic bright spot in the global recession by weakening unfriendly regimes.

What a difference a half a year makes. Last summer, when oil prices hit an all-time high of $147 a barrel, so did the hubris of the petro-czars. Vladimir Putin sent Russian tanks rolling into Georgia, laying bare his ambition to restore Russian dominion over the lands of the old Soviet empire. In Iran, President Mahmoud Ahmadinejad was busy bashing the dollar, which he had declared "worthless," and transferring Iran's reserve wealth into euros. Meanwhile, Venezuelan President Hugo Chávez was in Russia meeting with Putin to negotiate arms deals.

The rise of these leaders was the dark side of an otherwise golden era of growth in the global economy. A prospering world was thirsty for oil, and had little choice but to buy heavily from them. Not now. With the world economy collapsing in recession, and falling demand driving the price of oil down to $37 per barrel, the trio of Putin, Chávez and Ahmadinejad are losing their strength. The empires that they built on oil are proving rickety, vulnerable to inflation and joblessness, and now mounting political unrest is jeopardizing their personal power. "High oil prices and oil wealth reshaped geopolitics in recent years," says energy expert Daniel Yergin. "Now we're seeing the reversal of all that."

The decline of the petro-czars is an unexpected bright spot in a grim global recession. Barack Obama has invited America's enemies to talk, and Putin, Chávez and Ahmadinejad are responding with surprising alacrity, in no small measure because the price of oil no longer supports their geopolitical ambitions. Suddenly, these bold challengers of U.S. "imperialism" want to sit down and have a nice chat with the new administration. Chávez, who frequently referred to George W. Bush as "the Devil," has said that he is willing to talk "on equal and respectful terms" with Obama. Last week, on the 30th anniversary of the Iranian revolution, Ahmadinejad declared his nation "ready for talks." Although Putin is still rattling regional sabers, his aides are starting to make friendly noises: "Relations between Russia and NATO," said Foreign Minister Sergey Lavrov, "should get back on track."

It's been widely noted that Obama comes to power facing an extraordinary array of foreign challenges, from Sudan to North Korea, but what distinguished the petro-czars was the scale and aggression of their ambitions. Putin hoped to create a gas cartel to rival OPEC, and continues to battle the U.S. for political influence and control of gas pipelines across Eastern Europe and Central Asia. Chávez had aspired to finish building the Latin empire that his hero Simon Bolívar once dreamed of, including a regional bank controlled by Chávez himself. Ahmadinejad wanted to restore Iran as a regional powerhouse, backed by nuclear weapons, in a Middle East without Israel. It would be very hard to name three leaders whose declining fortunes better serve U.S. interests.

The decline is dizzying. The petro-states are getting slammed harder than most by the global credit crunch. All three had built their popularity on programs of oil-fueled welfare spending, food and energy subsidies, and other favors to the public. Initial 2009 budgets built around all that spending assumed oil would stay between $86 and $100 a barrel. The result is that falling prices threaten not only the economy, but also the political legitimacy of these regimes.

The impetus to keep spending is driving up deficits and fueling inflation, now in the high double digits, despite falling growth. Morgan Stanley predicts Russia will contract by 3.5 percent this year, and that the Venezuelan economy will contract 1 percent (comparable figures for Iran are not yet available). As foreigners flee Russia faster than from any other emerging market, its stock market has fallen further than any other in the world, down 75 percent since last summer. No wonder Putin, whose men turned a blind eye to Russian partners' expelling executives from big Western oil companies like BP as recently as last May, is now sending welcome signals to foreign investors.

The collapse was far from inevitable. The petro-czars set themselves up to fail, by neglecting to invest enough either in improving their oilfields or developing export-income sources other than oil. Other oil states like Saudi Arabia and the Gulf nations are still comfortably flush, according to Washington-based PFC Energy. Meanwhile, Iran and Venezuela are drawing down their savings just to keep their government budgets running. Russia has spent nearly a third of its $650 billion in foreign assets defending the ruble over the past couple of months. PFC estimates that by year's end, Venezuela will have run through 38 percent of the foreign assets it had at the end of 2008, and Iran will have spent some 25 percent. In short: under the current economic conditions, these petro-nations simply can't stay afloat much longer.

Rising unemployment and deteriorating finances are leading to a political backlash. In Iran, factories are closing en masse, and popular former president and reformer Mohammad Khatami is back to challenge Ahmadinejad in national elections in June. In Venezuela, antigovernment protests are intensifying ahead of this week's referendum, which would allow the president to run for re-election indefinitely. In Russia, numerous street protests have broken out over tax hikes and unpaid wages in the steel and manufacturing industries. In response, the Kremlin has passed a raft of nasty new laws. One makes participating in "mass disorders" a "crime against the state." Plans to fire 280,000 Army officers have been shelved, and the Interior Ministry has set up three "special-purpose centers" in major cities, packed with surveillance equipment designed to combat street unrest.

The petro-czars run among the least efficient oil and gas businesses in the world, in large part because they've made it so difficult for outsiders to do business. In Iran, U.S. and U.N. sanctions mean that most foreign companies won't go near the world's third-richest oil reserves. Russia's recent conflicts with BP, as well as Shell, ended with Russian partners' unilaterally redefining contracts and terms of business in their own favor. When oil prices were way up, Chávez renationalized much of his country's petroleum industry and introduced 16-fold tax hikes for foreign companies; many of them subsequently picked up and left. Now that prices are down, he is quietly trying to coax them back in.

Ties to the West are critical, even though they refused to admit it. In the Russian case, particularly, many of its reserves are tough to reach, buried under layers of Siberian permafrost. Tapping them requires both capital and expertise, which are still found in greatest abundance in American and European companies. Consider that while Qatar can break even when oil costs $10.18 a barrel, Venezuela requires more than nine times that to do the same. The petro-czars might have been able to meet their spending commitments when the average price of oil was a hundred bucks. But this year, without big cuts, all their nations will likely fall into deficit.

The smart thing to do would be to reinvest some of the remaining oil windfall to raise efficiency, in order to compensate for lower prices. That is what some Gulf nations are doing, but the autocrats are taking just the opposite approach. "These countries are trying to maximize revenue, not thinking about the longer-term health of the industry," notes Goldman Sachs's chief energy economist, Jeffrey Currie. "Venezuela in particular isn't doing any proper field maintenance, which ultimately could result in a supply interruption." Whether or not he wins the upcoming referendum, most experts believe that dicey finances and growing tension mean that Chávez's hold on power is the most tenuous of all the petro-rulers.

Ahmadinejad's days in charge may also be numbered. The populist leader campaigned on reforming the oil industry; yet, during his tenure, two central-bank governors have resigned, the last one publicly accusing him of plundering the country's sovereign fund. In January, Iran's Supreme Leader Ali Khamenei ordered 20 percent of future petroleum revenues to be banked in a new fund, which some read to mean that he was putting it out of Ahmadinejad's reach. It's not a bad idea given the president's record of economic mismanagement: his energy subsidies, designed to boost popular support, have grotesquely distorted Iran's internal petroleum markets, helping turn the country into a net gas importer. Inflation is running at 26 percent thanks to the president's ill-conceived interest-rate policies, and tens of billions of dollars of handouts to businesses that were supposed to create new jobs have been largely wasted. Even Ahmadinejad's grandstanding moves to switch oil wealth into euros now seems silly, with the dollar lately rising against the euro. Recent human-rights crackdowns by the president might have been ignored when oil revenues were expected to exceed $100 billion this year. Now that lower prices have put estimates closer to $30 billion, the reform faction, led by Khatami, has a decent shot at winning the election.

Though Russia has been perhaps hardest hit by the downturn, Putin is likely to survive. A good chunk of Russia's oil industry still remains in private hands, so "it's mainly been the oligarchs that have suffered so far in Russia, not Putin," argues Bernstein oil analyst Oswald Clint. And as early as 2004, the Kremlin began placing surplus oil revenue in a rainy-day fund, which is protecting Putin now that the rains have come. While there are growing tensions inside the Kremlin over how to spend the money—Putin wants to bail out favored banks and oligarchs, his finance minister wants to build schools—Moscow is still in stronger shape than Tehran or Caracas. Even after spending billions to prop up the ruble since November, Russia's per capita foreign-currency reserves are still $2,734, much higher than Iran's ($1,421) or Venezuela's ($1,046).

Putin, however, continues to insist that Russia will weather the crisis better than the West. He also continues to promise billions in loans and handouts to neighbors like Belarus, Kazakhstan, Kyrgyzstan and Tajikistan in order to prevent the U.S. or Europe from making diplomatic inroads. Can he afford those promises? That depends on how long the recession lasts: Russia's oil coffers could run dry by the end of 2010 if prices don't recover.

There is, however, one scenario in which the oil czars benefit from their own incompetence and the West loses big. As PFC chairman Robin West points out, their mismanagement will eventually cut global supply. "The danger then is that as the global economy begins to come out of recession in a couple of years, you could see oil prices shoot up, in part because these countries didn't invest as they should have." PFC is predicting $60 oil by 2010; plenty of others think it will go even higher.

In the short term, at least, falling oil prices (some analysts see $25 in view) will ease the pain of recession, and the pain in the neck caused by petro-czars. When U.S. National Intelligence Director Dennis Blair testified that the global recession was now the biggest security threat to the United States, having already produced "low-level instability" in roughly one out of four nations of the world, he did not mention the opportunity at hand. It is the opportunity to exploit the even more glaring weaknesses of one's rivals, to talk to enemies whose problems at home open them to compromise. "It's easy to shrug off the effect of sanctions or corruption or bad financial decisions when oil is in the triple digits," says Vali Nasr, recently tapped to work with Richard Holbrooke, Obama's special envoy to Pakistan and Afghanistan. "That's much harder when the revenue is no longer pouring in." And for now, the oil money is pouring out of these petro-nations.

With Owen Matthews in Moscow, Babak Pirouz in Tehran and Michael Miller in New York

(Source: NEWSWEEK—Published Online: Feb 14, 2009)

Romania wins the litigation with Ukraine over the EEZ in the Black Sea

2009-02-03T05:15:00.000-08:00

THE HAGUE, Feb 3 (Reuters) - The International Court of Justice drew a new maritime border between Romania and Ukraine on Tuesday to settle a dispute over parts of the Black Sea believed to hold significant oil and gas reserves.

At stake are exploration and drilling rights in a 12,000 sq km (4,600 sq mile) area which Romania says may contain reserves of more than 100 billion cubic metres of natural gas and more than 10 million tonnes of crude.

The unanimous decision by the court's 15 judges, which both parties agreed in advance would be binding, ends a long-running dispute that began more than a decade ago and was submitted to the court in 2004.

Romania had claimed a border extending into the northern part of the Black Sea, excluding an area surrounding Ukraine's Serpent Island or Snake Island, as the rock formation located 40 km (25 miles) offshore is known.

Ukraine had claimed a border closer to the western coast of the Black Sea, saying that Serpent Island gave it territorial rights over the waters.

The ruling gives Romania about four-fifths of the area it claimed, said Bogdan Aurescu, Romania's agent on the case.

"We consider this an equitable and correct solution by the court," Aurescu told reporters after the ruling.

The new border takes into account a small 12 nautical mile section of the arc surrounding Serpent Island, and then splits the maritime border between Romania's 248 km (155 mile)-long coast and Ukraine's 705 km (440 mile) coast.

"The decision is a wise compromise and both parties will abide by the decision," Ukrainian Deputy Foreign Minister Oleksandr Kupchyshyn told reporters.

As part of its judgment, the court also determined that Serpent Island could be considered an island, rather than just a rocky outcrop.

Ukraine argues that Serpent Island -- about the size of 20 soccer pitches -- is an inhabited, economically active island where around 100 people including military personnel, lighthouse keepers and scientists live with their families.

Romania says that Ukraine has only developed activity on the islet with the court ruling in mind, and that it is really an uninhabited rock.

The Government may cut off jobs in the public sector with about 20%... Romania's agricultural output decreasing...

2009-01-22T05:51:00.000-08:00

Democrat Liberal and Social Democrat leaders take into account sacking 20% of employees in the public sector, so that salaries in the system may increase without affecting the budget deficit target, sources in the two parties declared for NewsIn.

The only problem so far seems to be the fact that none of the ministers is willing to announced jobs cuts. "In case an agreement is reached, the Finance Ministry will put up the budget draft to be presented in the Parliament", Governmental sources said for NewsIn.

Romania's agriculture sector share in the the GDP constantly decreased in the past years

Agriculture Minister Ilie Sarbu declared in a press conference on Thursday that the Agriculture's contribution to the economy decreased constantly during the past four years, from 12% of the GDP in 2004 to 7% in 2008. At the same time, European funds for Agriculture were not accessed.

In brief, Minister Sarbu stated that:

- We made compensation payments for mountain areas and offered subsidies for agriculture;
- The livestock decreased during the past years. There are less pigs and fowls. The milk production also decreased.
- Romania imports 70% of the pork meat and 35% of the fowl meat interior consumption;
- We have 230 million Euros rendered available for Agriculture and we haven't accessed it, we're not even prepared to access it;
- We put up a team to solve the problems with the irrigation system;
- We failed to attract any funds in the fishery sector.

Former Romanian PM charged with corruption

2009-01-22T05:38:00.000-08:00

Prosecutors from the National Anti-Corruption Directorate on Tuesday indicted former Prime Minister Adrian Nastase and five others on corruption charges.

Prosecutors from the National Anti-Corruption Directorate on Tuesday indicted former Prime Minister Adrian Nastase and five others on corruption charges.

They allegedly siphoned state funds -- as much as 1.55 million euros -- to finance Nastase's 2004 presidential campaign.

Previous attempts to prosecute Nastase for corruption failed, as they failed to gain parliament's approval.

This time, prosecutors do not need parliamentary backing, as the allegations stem from a time when Nastase was not a cabinet member

Obama urged to boost priority of BMD development

2009-01-22T04:49:00.000-08:00

WASHINGTON -- Newly inaugurated U.S. President Barack Obama has confirmed the wisdom of the allied approach to missile defense. The existing missile defense program involves allied participation in Asia, Europe and the Middle East, and this should continue. Key among the various cooperative efforts are the agreements with the Czech Republic and Poland, both NATO allies, to field a missile defense radar and 10 Ground-based Midcourse Defense interceptors on their territories to counter longer-range missiles, UPI reports.

If Obama wants to send a signal that the United States intends to use missile defense cooperation to reinforce its alliance relationships, he should make it clear that the United States will move to implement these agreements.

What Obama should not do is adopt the position of French President Nicolas Sarkozy, who urged a moratorium on the fielding of missile defenses in Europe. Sarkozy's statement serves to undermine the solidarity of the U.S.-led North Atlantic Treaty Organization in favor of the program that was adopted by NATO leaders at their summit in Bucharest, Romania, in the spring.

Obama also needs to recognize that ballistic missile defense (BMD) has been the least developed component of the forces necessary to protect and defend the United States and its allies around the world.

IMF comes to Bucharest to discuss potential arrangement

2009-01-11T13:07:00.000-08:00

An IMF mission is due to arrive in Bucharest in two weeks' time, to evaluate the macroeconomic situation of Romania and launch talks to conclude a support agreement to cover the financing deficit for 2009, official sources say.

"The mission is coming for a first contact with the new government and to assess the viability of an arrangement. A deal will probably be agreed upon in the end because Romania needs an anchor and even if it were to turn to the European Commission for aid it would still need an arrangement with the IMF to monitor tax and salary policies. Brussels relies on the IMF's expertise as it did in the case of the aid for Hungary," the quoted sources say. The Government is also expected to discuss the issue with the European Commission, as well.

The big question for Romania this year is how it can finance both the foreign deficit, considering the significant decline of foreign direct investment, as well as the budget deficit, considering revenues are already dwindling fast. According to the latest estimates, the budgetary deficit slipped at the end of the year to about 5% of GDP, because of the abrupt decline in revenues.

Eleven months into the year, they stood at some 29% of the GDP compared with an annual projection of 36.5%. In addition, the foreign deficit rose to 14.4 billion euros, increasing by almost 11% compared with the first ten months of 2007. The medium and long-term foreign debt exceeds 50 billion euros and the short-term foreign debt exceeds 20 billion euros.

"Romania needs a buffer-resource in case it is faced with withdrawal of even higher amounts of foreign capital, which cause the RON to depreciate, as well as a sustainable and durable fiscal policy that can be built with the Fund's help," the quoted sources explain.

The former government did not feel necessary to start talks for a financial aid from the IMF, EU or the European Central Bank, but Sebastian Vladescu, former Finance minister, said at the end of last year that Romania would need up to 20 billion euros to cover its financing needs for the next two or three years from the aforementioned sources.

A potential arrangement with the IMF, however, comes with budgetary constraints that are hard to assume from a political point of view. The Fund might demand a deficit of less than 1.5% of GDP, which could only be reached by raising one of the taxes, considering the IMF has traditionally blamed the Finance Ministry for overestimating its revenues. On the other hand, the Emil Boc's Cabinet could use an agreement with the IMF as an excuse for unpopular measures to tighten fiscal and salary policies.

Gazprom slashes supplies to Europe

2009-01-06T13:00:00.000-08:00

Gazprom, the Russian gas monopoly, halted nearly its entire export of natural gas to Europe on Tuesday in a sharp escalation of a dispute over prices with neighboring Ukraine that also underscored Russia's increasingly confrontational stance toward the West, IHT reported.

Across Europe, supplies of Russian gas stopped in whole or in part. From France to Turkey, countries reported sharp drops in gas supplies, at the peak of the winter heating season in a bitterly cold January.
In one sign of the extent of the shutoff, Ukraine's president said Gazprom intended to halt all shipments that pass through his country, which account for about 80 percent of Russian gas exports to Europe. Gazprom said it was continuing to ship about a fifth of its typical exports across Ukraine, and still supplying via other routes.
Still, with temperatures plunging, European leaders expressed mounting concern.
A European Commission spokesman said the cut came "without prior warning and in clear contradiction of the reassurances given by the highest Russian and Ukrainian authorities," adding that "this situation is completely unacceptable."
While both sides blames the other for the scope of the shutoff, Russia's prime minister, Vladimir Putin, had personally ordered the gas shutoff on Monday evening on state television here. For a leader who has taken a personal interest in the energy business, the escalation was a gambit at a perilous time for Russia. Revenue from oil and gas that underpinned the country's resurgence are drying up.
Putin, a man some analysts of Russian politics thought might become more conciliatory as energy prices fell, has, instead, consistently taken a hard line, and the dispute with Ukraine proved no exception for a leader who has often blended the country's political and economic agendas.
Ukraine has angered Russia by seeking membership in the North Atlantic Treaty Organization, as has Georgia, a country Russia fought a brief war against in August.
"They're still playing hardball, when they have to realize the rules have changed," Marshall Goldman, a senior scholar for Russian studies at Harvard and the recent author of the book "Petrostate: Putin, Power, and the New Russia," said in a telephone interview. "It happened so quickly that I don't think they've had time to realize the implications."
Putin, under heavy domestic and budgetary pressure, is using the crisis with Ukraine to jack up natural gas prices that are critical for the Russian budget and economy.
Ukraine has paid lower-than-average European rates for natural gas, in unspoken exchange for charging less than it might as the near monopoly shipper of Russian energy to higher-paying customers in Europe.
Oil and gas exports make up about 60 percent of the budget. Oil prices, meanwhile, have fallen by about two-thirds since their peak last summer and the effects are rippling through the economy. The ruble is devaluing, Russian companies are facing bankruptcy and the budget will be in deficit next year if oil prices do not rebound.
At the same time, Russia's relations with the West skidded to post-Cold War lows after the war in Georgia in August and options are dwindling for attracting foreign investors to a country with a poor track record of property rights, at a time of tightening capital markets globally.
Gazprom is seeking to raise the price Ukraine pays for gas from $179.50 last year to $450, and to collect what it says are fines for late payments on previous shipments. Ukraine, in exchange, wants to raise tariffs for gas shipped across its territory.
As they have in the past, Gazprom executives blamed Ukraine. In his announcement, Putin and Gazprom's chief executive, Aleksei Miller, said they would cut 65.3 million cubic meters of gas supply intended for European customers. In fact, the cut totaled about 240 million cubic meters, out of Russia's total exports via Ukraine of 300 million cubic meters.
Company officials said they had intended to ship more fuel Tuesday, but Ukraine had blocked two of three principal export pipelines. Ukrainian energy officials denied this.
"We are shocked that we're not in the position to bring gas to the border of Ukraine because they shut down the pipelines," Aleksandr Medvedev, a deputy chief executive of Gazprom, said at a news conference in London. "We are now seriously thinking about our reputation as a reliable supplier. There is no reason to blame Russia or Gazprom."
Medvedev declined to say how much longer before European consumers would feel the gas shortage but said "the situation is very serious."
In Ukraine, Sergiy Teriokhin, former minister of economy, said the talks with Gazprom were often fruitless because there was no market for gas or transit services: Both are monopolized.
As there are no alternative players on either side of the transaction, the deal cannot be based on market principles, said Teriokhin, who is a parliamentarian allied with Ukraine's prime minister, Yulia Tymoshenko.
"When there are two monopolies, then you need a political negotiation," he said. "It is not just any two corporations talking. It's a political problem. It's a problem of the European Union. It is not just a problem of Ukraine and Russia."
Oleh Dubyna, the director of Ukraine's national energy company, Naftogaz, said he would fly to Moscow on Thursday to resume negotiations. Gazprom's spokesman, Sergei Kupriyanov, said the company was "ready to begin negotiations at any moment. Gazprom was, and will be, a reliable supplier."
Also, countries in Western Europe have greater interconnectedness, ample reserves, spare pipeline capacity, the flexibility to draw on reserves of neighbors or swap Russian gas with flows from the North Sea. As countries succumb to the shortages, authorities will likely interrupt service to industry and electrical power generating stations that can swap coal or bunker oil first to maintain pipeline pressure for residential users, energy experts said.

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European Union demands Russia restore gas supplies as fuel prices rise

The European Union has demanded the immediate restoration of gas supplies from Russia as the East-West energy crisis sharply pushed up fuel prices and as shortages began to bite across a freezing Europe, The Daily Telegraph reported.

Gas prices, traded in London, were up 18.5 per cent as energy operators, national and EU officials warned that a protracted energy dispute between Russia and Ukraine would start to hit consumers, including Britons, during a hard winter.
Furious EU officials hit out at Vladimir Putin, Russia's prime minister and Victor Yushchenko, Ukraine's President, for breaking personal pledges that a bitter gas price dispute between Moscow and Kiev would not spill over into Europe.
Following instructions from Mr Putin, Russia's Gazprom energy giant on Tuesday cut gas supplies, carried across the Ukraine by pipelines to Europe, by almost 80 per cent, with Greece, Bulgaria, Hungary, Turkey, Serbia, Macedonia, and Croatia cut off completely.
France, Italy, Austria and Romania reported drops in supply of between 70 and 90 per cent as Germany, Europe's largest economy, warned of an energy crunch if the crisis dragged on and sub-zero temperatures continued across Europe.
A statement issued by the EU Presidency, currently held by the Czech Republic and the European Commission, with British support, has demanded "that gas supplies be restored immediately to the EU".
"Without prior warning and in clear contradiction with the reassurances given by the highest Russian and Ukrainian authorities to the EU, gas supplies to some EU member states have been substantially cut. This situation is completely unacceptable," said the statement.
Russia has drastically cut energy supplies after accusing the Ukraine of siphoning off gas meant for Europe after Kiev, reeling from the global financial crisis refused to pay a Moscow demand for a huge price hike.
President Yushchenko telegrammed EU governments to deny that the Ukraine was stealing gas.
But Gazprom Deputy Chief Executive Officer Alexander Medvedev, brother of Russia's President, accused Ukraine of having "throttled deliveries to western Europe to one- quarter of normal". "Regrettably, Ukraine has threatened to cut deliveries further," he said. "This is an example of real barbarian behaviour."
For the first time since the Russia-Ukraine crisis broke on Jan 1, countries across Europe, both in the prosperous West and poorer East, have begun to feel its effects, with emergency situations declared in Bulgaria, Slovakia and Serbia.
"The situation has dramatically changed. Supplies have been substantially reduced," said a Commission official.
The head of Ukraine's state energy firm said he would fly to Moscow on Thursday. Gazprom, which held talks with EU officials in Berlin on Tuesday said it was ready to talk any time but did not expect Ukraine to return to the talks table for now.
EU sources have told The Daily Telegraph that officials are drawing up a contingency plan should the situation continue over the next 48 hours.
European foreign ministers meet to discuss the issue in Prague on Thursday and an emergency meeting of the EU's "gas coordination group" of national experts will take place on Friday.
"We are not yet detailing all the things that we could do as that would take the pressure off Russia and the Ukraine to sort out the problem," said an EU source.
"There are possibilities of extra measures to help countries in distress."
Analysts have suggested that while Moscow will seek to avoid a head on confrontation with the West the dispute could drag on because of its political roots in Russia's hostility to Ukraine's Western ambitions and Kiev's request to join Nato.
"This is Russia's way of meddling in Ukrainian politics," said Nick Day, CEO of Diligence, a private business intelligence firm. "At the same time, they don't want to allow it to get to the stage where Europeans are starting to freeze in their houses.”

Romania's PM-designate renouncing premiership

2008-12-15T13:29:00.000-08:00

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.