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Monday, December 27, 2004
Business in Romania blog
The five financial investment companies (SIFs) have ended the first eleven months of the year with profits amounting to 2,539 billion ROL (65 million euros), three of these institutions having logged significant increases in earnings as compared to the corresponding period of last year.

Early this year, the SIF officials had forecast small profit spurs, or even drops. Last year brought smaller profits for banks, which reflected into the level of dividends they distributed in 2004. Banking stocks make up the bulk of the SIFs' portfolio, sometimes accounting for more than 50%, which means that the safest source of revenues for the financial investment companies in the past five years have been the dividends paid by banks.

Still, some of the SIFs managed to offset the drop of dividend-related revenues by selling stakes for higher prices than the levels registered in the accounting books.

SIF Transilvania, which posted the highest profit among SIFs in eleven months this year, sold almost 10% in Rompetrol Rafinare in 2004, which allowed it to log exceptional results. The company's profit amounts, after the first eleven months, to 823 billion ROL (21.1 million euros), the equivalent of more than 1,500 ROL/share.

The highest profit growth of all the five SIFs was posted by SIF Oltenia, which reported profit was up 163% after the first eleven months of 2004 as compared to the corresponding period of last year.

Source: reporter.gr

Posted by Mihai : 12/27/2004 02:23:00 am
Business in Romania blog
Saturday, December 25, 2004
Business in Romania blog
Here are the latest investment news, courtesy of ZF.

- SIF Muntenia sold 5.1% of stocks in Banc Post to the bank's majority shareholder, Greek group EFG Eurobank Ergasias.

- Dan Adamescu, a Romanian businessman that is also owner of UNIREA Shopping Center, bought some stocks in the company that edits the Romania Libera daily newspaper. I wonder if this is going to affect the editorial policy of Romania Libera...small chances though, as WAZ still holds the majority of shares.

- The mergers and acquisitions conducted in Romania during 11 months from the beginning of the year amount to $717 million (approximately 651 million euros), 28.7% more than last year, according to the data provided by the professional service company KPMG.

- Slovenia-based Kemofarmacija put up an offer to buy Pharmafarm for 2.5 milion Euro.

Posted by Mihai Botea : 12/25/2004 10:14:00 pm
Business in Romania blog
Business in Romania blog
The Business-in-Romania Blog Team wishes you all a MERRY CHRISTMAS AND A HAPPY NEW YEAR !

May you have great holidays and we wish you a very succesful year in 2005.

Thank you for reading our blog and we assure you that 2005 will be a very high quality year for the Business-in-Romania Blog and we hope you will all benefit from our efforts.

ALL THE BEST AND MAY SANTA TURN ALL YOUR DREAMS TO LIFE !

The Business-in-Romania Blog Team

Posted by Mihai Botea : 12/25/2004 01:29:00 am
Business in Romania blog
Thursday, December 23, 2004
Business in Romania blog
President Traian Basescu yesterday nominated Liberal-Democratic Alliance (PNL-PD) politician Calin Popescu-Tariceanu as the country's next prime minister.

Tariceanu announced he will propose his government to the Parliament as soon as possible so it can be approved by December 29 at the latest.

The stake for having the government working before the first day of 2005 is issuing an emergency ordinance in 2004, so that the 16 percent flat tax proposed by the Alliance is applied in 2005.

Tariceanu announced the core of the future government is centered on the two components of the Alliance: Liberals (PNL) and Democrats (PD).

Resume: Calin Popescu-Tariceanu

Born: January 14, 1952, Bucharest
Married with 2 children

SCHOOLS:
1981 - Master of Science in Informatics and Mathematics
1976 - Technical University of Construction in Bucharest, Specialized Engineer at the College of Hydromechanics

POLITICAL ACTIVITIES
Oct. 2004 - present - Interim President of the Liberal Party (PNL)
1993-2004 -Vice President of the Liberal Party (PNL)
1990-1992 - Member of the Constitutional Assembly (Parliament)
1990 - Executive Secretary of the Liberal Party (PNL)
1990 - Founder of the Liberal Party (PNL)

STATE FUNCTIONS
1996-1997 - Minister of Industry and Commerce
1996-1997 - Minister of the State
2000-2004 - Deputy, Vice President of the Budget Commission, Finance and Banks
1996-2000 - Deputy, member of the Political- Economic Commission; Reform and Privatization

WEALTH
According to his declaration of wealth published on December 15, 2004, the prime minister nominee owns:
1 apartment, (120 sqm apartment with a property tax value of 511 million lei)

two holiday residences, (One of his two holiday houses, purchased in 2002, is 200 sqm and a property tax value worth 3 billion lei. The house is situated on 1,700 sqm land, but is 85 percent finished. The second holiday house was bought in 2004, is 136.91 sqm and a property tax value of 2.8 billion lei)

four cars (three Citroen cars bought in 1999, 1996 and 2002 and a Fiat he inherited in 2000)

400,000 euros in a bank account and 100,000 euros in dividends.

He is a shareholder of Automotive Trading Services and importer of Citroen vehicles in Romania, owning 1 million stocks worth 3.5 billion lei, a shareholder of Intervam, Financial Investments Companies (SIF) and Siretul Pascani.

He is also the unique shareholder of Romtrucks.

Tariceanu is both a member of the Director Council of Auto Vehicle Importers and Producers' Association (APIA) and of the Directors Council of Free Initiative Institute.


Posted by Iulia Rasoiu : 12/23/2004 11:31:00 am
Business in Romania blog
Business in Romania blog
Shareholders of the Romanian oil giant Petrom will elect a new chairman of the company on January 11 next year, when they are also expected to confirm the members of the Managing Committee.

OMV, who last week completed the takeover of Romania's largest oil company Petrom, installed in accordance with the privatization agreement two Austrian managers on December 15 as interim directors.

They are OMV's Werner Schinhan and Hilmar Kroat-Reder.



Posted by Iulia Rasoiu : 12/23/2004 11:09:00 am
Business in Romania blog
Business in Romania blog
Dan Corneliu Pascariu, HVB Bank president, will replace Teodor Melescanu on the board of directors of Rompetrol SA, the management division of the oil group, Rompetrol.

The president of the group is Dinu Patriciu.




Posted by Iulia Rasoiu : 12/23/2004 09:44:00 am
Business in Romania blog
Wednesday, December 22, 2004
Business in Romania blog
The International Commercial Court in Washington will make a decision in the case between U.S. company Noble Ventures and Romania.

The company is claiming more than 350 $million in damages from the Romanian state for canceling the privatization of the Resita Iron and Steel Plant (CSR).

Mircea Ursache, president of the Authority for State Assets Recovery (AVAS), yesterday said the final pleading has a 30 day term to be analyzed and a 30 day term in which to make the final judgment.

The privatization contract signed with Noble Ventures was cancelled in December 2002 after the investor failed to pay two successive parts of the transaction.

The trial started in 2001. CSR has since been bought by the German company Sinara Handel.


Posted by Iulia Rasoiu : 12/22/2004 10:17:00 am
Business in Romania blog
Business in Romania blog
The Romanian Agency for Foreign Investors (ARIS) yesterday confirmed a record 3.4bn euros in foreign direct investments (FDI) by yearend.

ARIS also said that foreign investors in Romania have recently changed their focus, leaving behind traditional fields such as textile manufacturing and related sectors in favor of sectors in the economy that use new technology.

According to ARIS, forthcoming investments will generate over 8,900 new jobs in Romania.

After ten months this year, the National Bank of Romania (BNR) witnessed FDI inflows worth 1.88 billion euros, about 45% up on the same period a year-ago, the release added.

Under these circumstances, the Agency confirmed FDI would exceed 3.4 billion euros record by the end of this year.

The record high index occurred thanks to the completion of Petrom's privatization, the Romanian oil giant that was taken over by Austria's gas and oil group OMV for 1.5 billion euros, and to an increase in greenfield and brownfield investments.

Other privatization contracts signed this year will also contribute to a surge in the index next year.

Power companies Electrica Dobrogea and Electrica Banat, which were taken over by Italy's Enel and the sale of gas producers and distributors Distrigaz Sud and Distrigaz Nord to Gaz de France to German Ruhrgas, will add over 700 million euros to the FDI volume in 2005.

ARIS also said it would support several greenfield investment projects that will be completed in 2005-2006.

Projects announced by the Agency for this fall include the German group Tengelmann, which will invest 200 million euros in Romania, generating 3,000 new jobs and France's Montupet, whose planned 120 million euros of investments will create 2,150 new jobs.

Celestica is set to inject 100 million euros in a project requiring 1,000 employees, Saint-Gobain will invest 100 million euros and create 200 jobs, whilst Coficab have said they will invest 25 million euros and create 200 jobs.

Furthermore, Ruwel AG will invest 80 million euros, while the Italian firm Pirelli will place 40 million euros in the Cord Romania plant and another 110 million euros in a plant to produce tires.

FDI per capita will amount to 150 euros this year, double the level reported last year.

However, Romania lags behind other countries from Central and Eastern Europe, such as Croatia - 331 euros, the Czech Republic - 190 euros, Estonia - 497 euros and Hungary - 185 euros.


Posted by Iulia Rasoiu : 12/22/2004 10:12:00 am
Business in Romania blog
Business in Romania blog
CEC chairman Enache Jiru yesterday said investment bank JP Morgan, the privatization consultant, will develop the CEC privatization strategy by February 2005 when it will deliver it to the government.

According to the privatization schedule, the government plans to approve the strategy by the end of March 2005.

Romanian state will forward in the second half next year the bid offers to several banks and financial institutions interested in taking over CEC, and the entire process will be completed by the fall of 2005.

Posted by Iulia Rasoiu : 12/22/2004 09:52:00 am
Business in Romania blog
Business in Romania blog
Wolfgang Schoiswohl, director of HVB Romania's Corporate Banking division, was appointed vice-president of the bank.

He will replace Helmut Bernkopf, who will direct the Bank Austria Creditanstalt coordination division for Central and Eastern Europe.

The new vice-president has been working as HVB Bank's executive director in Romania since 2002.

In addition, he has been working for Bank Austria Creditanstalt for more than 20 years.
Before coming to Romania, Schoiswohl directed the Central and Eastern Europe division of the Bank Austria Creditanstalt London subsidiary.
Bernkopf has been directing HVB Romania since 2001.



Posted by Iulia Rasoiu : 12/22/2004 09:46:00 am
Business in Romania blog
Business in Romania blog
Mircea Ursache, president of the Authority for State Assets Recovery (AVAS), said yesterday that there will be a selection of public offers.

He added that the notice for the privatization offer will be published in local and international press by this yearend.

At the beginning of November, AVAS said it intends to negotiate to sell the shares it owns at Electroputere to the corporation formed by Siemens Aktiengesellschaft Transportation System, the ELPAS Craiova employees' association and DAB Greece.

In October, Ursache said AVAS was in final negotiations with the companies General Electric, Bombardier, Siemens and Electroputere employees' association.



Posted by Iulia Rasoiu : 12/22/2004 09:41:00 am
Business in Romania blog
Business in Romania blog
“Taking into account that wine production increased this year to six million hectolitres compared to 5.4 million hectolitres in 2003, the total turnover of this sector worth approx. USD 300 M,” said Ovidiu Gheorghe, the General Manager of Vineyard and Wine National Employers’ Association (PNVV).

Romania exported 420,000 hectolitres worth approx. USD 25 M, but PNVV officials consider that, compared to 2003, in 2004 the value of exported volume is superior thanks to the reduction of the exported bulk wine.
The main countries for the wine exports in 2004 were Germany, Great Britain, Israel and Republic of Moldavia. According to PNVV General Manager, the reduction and the elimination of the taxes positively affected not just the wine market but more important it affected investments policy of the grapes and wine producers from Romania, who are able now, through fiscal abatement, to use those monies for programs of investments in vineyard and technology.

Thinking ahead of Romania’s accession to European Union, the Romanian legislature is updated in wine-making sector 100 percent. PNVV and Inter-professional Wine-making National Organisation (ONIV) and the National Office for Origin Names for Wines and Other Wine-making Products (ONDOV) collaborated in a project for changing and addition of vineyard and wine law.

Source: reporter.gr



Posted by Mihai : 12/22/2004 08:50:00 am
Business in Romania blog
Tuesday, December 21, 2004
Business in Romania blog
This year, Oltchim Ramnicu Valcea estimates a raw profit of approximately ROL 600 bln (about EUR 14,8 M), 17 times higher than the initially estimated ROL 35 bln level, as a result to putting into operation new installations and to the International oil price increase.

“Our accomplishments regarding raw profit, amounting to ROL 600 bln, are mainly the result of putting into operation two installation, earlier than expected. At the same time, export prices have increased a lot, supported by the oil prices increase, also causing a higher price for derived products,” stated Vasile Mandica, Economic Manager for Oltchim.

Company’s income and expense budget (BVC) afferent to 2005 and approved by shareholders at the end of last week, includes reaching a raw profit of ROL 582 bln. “Next year we are counting on keeping the same ascendant trend for export prices or on their constant evolution as opposed to this year’s fourth trimester,” said Mandica.

According to company's calculations for 2005, the incomes will reach ROL 15,255 bln (approximately EUR 380 M) while expenses will amount to ROL 14,673 bln. Sums obtained from exports will represent more than two thirds from industrial complex’s total income, reaching more than ROL 11,380. The largest part of Oltchim exports are destined to countries in the Middle East, including Turkey and to West-European countries.

Posted by Mihai Botea : 12/21/2004 02:25:00 pm
Business in Romania blog
Business in Romania blog
Romanian off-road vehicle producer ARO, controlled by U.S.'s Cross Lander, will sell its vehicles in the U.S. as of next year, after American environmental authorities gave the go-ahead for the 244X model, equipped with a Ford engine.

According to a Cross Lander release, the model was approved by the Environmental Protection Agency (EPA). The company plans to increase production in order to develop a stock that will be sold on the U.S. market.

The sale price is expected to be around $20,000.

Cross Lander announced earlier this year that EPA analysis targets the materials that the seats are made of. If the sale is approved, 244X will be the first Romania off-road model launched in the United States.

Cross Lander has already signed distribution partnerships with over 140 car dealers and built a network for connected services, such as spare parts distribution, service, warranties, promotion and personnel training, the release said.

The officials of the U.S. company estimated in January the American market could absorb 8-10,000 ARO vehicles.


Posted by Iulia Rasoiu : 12/21/2004 01:10:00 pm
Business in Romania blog
Business in Romania blog
Adidas, the world's second- largest sporting-goods maker, will cut almost 10 percent of the French workforce at its winter-sports division as it shifts production of snowboards and skis to China and Romania.

Salomon will cut 160 jobs over the next two years in its native France and reduce the level of production there to 35 percent from 55 percent, according to an e-mailed statement released today.
The business, which Adidas took over in 1997, employs more than 2,800 people, more than 1,700 of whom are in France, Adidas said.

Most of the transferred ski production will go to Romania, while Adidas-Salomon will begin making products such as inline skates and snowboards in China, the company said.
The elimination of jobs will be negotiated with labor groups and involve retirement packages, job transfers and other measures.

Most of Adidas-Salomon's shoes are made in Asia, where the company has benefited from lower labor costs and the falling dollar, which shrinks production costs as purchasing prices for materials taper off.


Posted by Iulia Rasoiu : 12/21/2004 01:01:00 pm
Business in Romania blog
Monday, December 20, 2004
Business in Romania blog
Montero Group - a Romanian group primarily occupied with distributing pharmaceuticals said on Monday it has invested 2.4 million euro ($3.2 million) in two real estate projects.

Montero Group said the projects total 42,500 square metres and will be sold once completed. The first is in a Bucharest suburb and includes 50 single-family and several commercial buildings. The project should take two years to build.

The second project is in the Snagov mountain resort and includes 12 homes. It should take just a year to finish.

This year, MONTERO celebrated 10th year of existence. They started the business in 1993 with a single pharmacy situated in the center of Bucharest. Over the years, MONTERO has gained a reputable national network for distributing pharmaceuticals and medical devices.

Their activities focus on the pharmaceutical sector which makes up 90% of MONTERO Group’s turnover and profits. They’ve also developed a chain of medical device stores, an IT business focused on pharmaceutical companies as well as a production sector of dental materials and medical equipment.

Montero has about 450 employees throughout Romania and a turnover of about 60 milion Euro (in 2002).

Posted by Mihai Botea : 12/20/2004 05:49:00 pm
Business in Romania blog
Business in Romania blog
The National Bank announced the seventh interest rate cut to 17% a year, that is 4.25 percent below the 21.25% wherefrom the downward trend started this June.

The central bank's Board decided to adjust the interest rate by 0.75 percentage points on December 16, six days after the national Statistics Institute had announced the twelve month inflation had gone down below the 10% threshold (9.9% November 2004 compared to November 2003) for the first time. This and the prospect of this downward inflation trend continuing in December were the arguments that lent support to NBR's decision.

"The annual inflationary rate fell to 9.9% in November 2004, with the near future forecast pointing to the continuation of the decline in December. In order to validate this inflation deceleration process, the National Bank of Romania's Board of Governors decided to cut the interest rate by 0.75 percentage points to 17%," a press release of the central bank says.

"The market had seen the decision coming. The cut is a bit more aggressive than I had expected, but it is probably the outcome of the impact of the ROL's appreciation on the positive inflation trend. NBR is therefore betting on the inflationary trend reversal anticipated for the first quarter of 2005 not being a very important one," Radu Craciun, ABN Amro Romania chief analyst commented.

Source: Reporter.gr

Posted by Mihai : 12/20/2004 01:34:00 pm
Business in Romania blog
Business in Romania blog
The Romanian Commercial Bank will start today to buy gold coins, medals, ingots, jewelry of at least 14 carats and dental plates from individuals and companies.

BCR is the only credit institution in Romania providing such services to private individuals and companies.

This services is available at BCR Lipscani branch in Bucharest. In the future, this service will be extended to other offices of the bank based in the capital and across the country.

BCR will also display every day, along with the exchange rates, the purchase price for 24 karat gold.

For the gold less than 24 carats, clients will receive money according to the number of carats. However, the bank will not buy gold of less than 14 karats, nor other metal or precious stones.


Posted by Iulia Rasoiu : 12/20/2004 10:10:00 am
Business in Romania blog
Business in Romania blog
The merger between the Bucharest Stock Exchange and the electronic stock exchange RASDAQ was extended to the first quarter to mid next year.

BVB-RASDAQ merger is likely to be concluded at the end of the first half of next year, as several legal requirements need to be fulfilled regarding BVB turning into a shared capital company and the unification of the two markets.

According to the officials from the two institutions, the first step in the merger process - transforming BVB from an institution of public interest to shared capital company - will be concluded no sooner than next February.

The unification of the two institutions will require having both BVB and RASDAQ titles listed on the same technical platform.

Whereas all the companies traded on BVB meet the conditions for a joint trading, only a part of the firms listed on the RASDAQ meet the new conditions. Therefore, most of the RASDAQ companies will be traded on an alternative system, which would be similar to the BVB's section for unlisted companies.


Posted by Iulia Rasoiu : 12/20/2004 10:00:00 am
Business in Romania blog
Business in Romania blog
Privately-owned Dutch steelmaker Ispat International, headed by billionaire Lakshmi Mittal, completed its acquisition of LNM Holdingse, which controls Sidex.

The company, which will trade on the New York Stock Exchange and Euronext's Amsterdam stock exchange under the ticker symbol "MT", said that following the completion of the transaction its name was officially changed to Mittal Steel Company.

The new industry leader will outstrip current global No. 1 Arcelor in terms of output.
Steel magnate Lakshmi Mittal announced in October that he had agreed to buy International Steel Group (ISG) for $4.5 billion and merge it with his other assets.

Ispat operates in six countries in Europe and North America, has annual raw steel production capacity of over 18 million tons and expects to have $8.3 billion in revenue this year. Ispat shares have more than tripled over the course of the year, mostly following news of the merger.


Posted by Iulia Rasoiu : 12/20/2004 09:53:00 am
Business in Romania blog
Business in Romania blog
All car owners will have to pay by January 1 an annual public road tax, the amount of which will depend on the vehicle category, the vehicle weight and its pollution emissions.

The amount of the tax to pay for each vehicle category increases depending on the pollution emission degree of the vehicles, as they have been established for Europe.

The fines for not paying the road tax will range from 3 million ROL (76 euros) to 4.5 million ROL (115 euros) for car owners, from 15 million ROL (384 euros) to 25 million ROL (641 euros) for vans, from 30 million ROL (769 euros) to 45 million ROL (1153 euros) for coaches and from 10 million ROL (256 euros) to 70 million ROL (1794 euros) for merchandise transporters.

Currently, cars, vans, buses, coaches and merchandise transporters of less than 3.5 tons are currently exempted from this tax. The annual road tax can be paid at post offices, in Petrom gas stations and special stations along the national roads.


Posted by Iulia Rasoiu : 12/20/2004 09:48:00 am
Business in Romania blog
Sunday, December 19, 2004
Business in Romania blog
Galati-based steel smelter Ispat Sidex, controlled by LNM Group, expects a 2004 turnover of 2.1 billion USD, nearly doubling its 2003 result, company officials said. The company's output could reach five million tonnes of steel, from 4.6 million tonnes last year.

In 2003, the company reported a turnover of 1.28 billion USD and obtained a profit for the first time since its privatization in 2001. According to Mediafax, Ispat Sidex general manager Narendra Chaudhary did not specify the value of this year's expected profit, but said it would exceed last year's figure, which stood at 114 million USD.

Posted by Mircea : 12/19/2004 11:51:00 pm
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Business in Romania blog
Fragments from an interview by Seeurope.net with Mr Declan Murphy, Programme Director of the Investment Compact for Southeast Europe

Q: How do you assess the policies of Bulgaria and Romania as the most advanced EU applicants in Southeast Europe in achieving the objectives of the Lisbon strategy? Do they have a coherent policy of achieving a knowledge society, don’t they ignore this priority?

No, on the contrary, both Romaina and Bulgaria can point to some very interesting development. The investor of the year award in Bulgaria this year will be given to a software company. This is the only regional award given to a software company, unlike other countries where the award goes to more traditional spheres such as manufacturing. In Romania we have seen, for example, Microsoft taking over of two local companies. Having said that, there are enormous opportunities to build on these achivements. Of course, I am not saying the problems with educaton have been solved. All the countries in the region have not analysed yet what kind of experts they need, what educational disciplines are the most perspective and necessary for their development. But still, even some EU countries are struggling to meet the requirements of the Lisbon strategy, that’s why there is a good progress in Bulgaria and Romania.

Read full article at:
http://www.seeurope.net/en/Story.php?StoryID=53876&LangID=1

Posted by Mircea : 12/19/2004 11:45:00 pm
Business in Romania blog
Business in Romania blog
Source: www.seeurope.net

Half of all the insurance companies active in Romania will disappear from the market before 2007, after a series of mergers and takeovers, said yesterday Dan Odobescu, general manager at Unita Group Wiener Stadtische.

According to Odobescu, after 2007, the top five insurance companies will control 80% of the market. "Many small companies will disappear, but it is still possible for a multi-national company to become active on the market. A market concentration is to be expected”, says Odobescu.

Read full article at:
http://www.seeurope.net/en/Story.php?StoryID=54165&LangID=1

Posted by Mircea : 12/19/2004 11:33:00 pm
Business in Romania blog
Friday, December 17, 2004
Business in Romania blog
Quite some things are going on in Romania today.

First of all, Mr. Basescu refuses to go to Bruxelles in the same plane as Iliescu, following Iliescu's decision to set Cosma free. Instead, Basescu flies to Bruxelles with a TAROM plane.

But this is nothing. Just look what follows:

While in Bruxelles, mr. Iliescu decides to RETREAT the decrete he gave yesterday about setting Cosma free, and he says he will dismiss it for now and think about it later. But he doesn't publish yet (he's in Bruxelles) this retreat order in Monitorul Oficial. Still, the Police in Timisoara arrests Cosma (what for? he is, for now, a free man...).

In the same time, Mr. Voiculescu (leader of the PUR Party) and Mr. Marko Bela (leader of UDMR party) say they reached the conclusion to form an alliance with D.A. So PSD is "left outside alone".

Well, this is it for now. But there are some bad things that can happen:

1. First of all, all this politics up and down is looking quite bad in International Press. Mr. Iliescu managed, in 2 days, to make Romania look not only irresponsable but also chaotic.

2. Second, if Mr. Cosma now is arrested without any legal paper behind this, he can afterwards attack this decision in the Court of Law and WIN! And the entire process of retreating the freeing order mr. Iliescu did today will have no value.

Hopefully, all this will turn out well.




Posted by Mihai Botea : 12/17/2004 02:02:00 pm
Business in Romania blog
Business in Romania blog
Banca Transilvania signed a financing agreement of EUR 10 mln. with the Netherlands Development Finance Company (FMO) to support SME, stated the general manager of the credit institution, Robert Rekkers.

FMO was founded in 1970 as collaboration between the Dutch Government and the private sector in this country. The state holds 51% of the institution shares, and the Dutch banks 42%. In March 2003, Banca Transilvania signed an agreement with the Dutch institution on opening a credit line of USD 10 mln. for mortgage loans for the population with a maturity up to ten years.
"The EUR 10 mln. loan maturity is seven years. No matter the domain of activity, the SME will have the possibility to access credits with a maximum value of EUR 750,000 for investments or work capital. Credits can be assigned for a maximum period of seven years”, Rekkers added.

At the same time, Rekkers announced that Banca Transilvania would contract on Friday a unionist credit of EUR 22.5 mln. from several international banks, in order to diversify financing sources and to favor the credit activities development.

A part of the financing summing up EUR 7.5 mln. will come from the European Bank of Reconstruction and Development (EBRD), and the rest from a commercial banks consortium. The credits’ maturity will be up to 5-7 years. The loan will allow the bank to assign medium and long-term financings to small and medium-sized enterprises to companies and individuals in Romania. Banca Transilvania, with the headquarters in Cluj-Napoca, will hold at the end of this year, 116 territorial units in Romania, according to Rekkers.

Source: Reporter.gr

Posted by Mihai : 12/17/2004 01:12:00 pm
Business in Romania blog
Business in Romania blog
Investments in Romania's Carrefour network this year hit more than 140 million euros. Following the first Carrefour, which opened in the first half of 2001 in the Militari area of Bucharest and which generated sales double the amount forecasted, the store opened last autumn in the Orhideea area of Bucharest has entered the ranks of the best performing Carrefour hypermarkets in the world.

"Orhideea is the world's third Carrefour hypermarket in terms of the daily number of people visiting it," says Andreea Mihai, marketing manager with Carrefour Romania. Mihai declined to specify the exact number of visitors, saying only that the amount of consumer traffic was higher than at other Carrefour stores in Romania.

Posted by Mihai Botea : 12/17/2004 09:17:00 am
Business in Romania blog
Thursday, December 16, 2004
Business in Romania blog
NEWS UPDATE: Miron Cosma has left the Rahova prison at 16:30. Just one hour after the decrete has been published in Monitorul Oficial. So he did see it comming !!

******************

Ion Iliescu, (still) president of Romania, signed yesterday a decrete through which he is setting free Miron Cosma.

Miron Cosma has been emprisoned for conducting the revoltes in Romania started in Valea Jiului in 1990, 1991 and 1999.

In 1990 and 1991, under the leadership of Miron Cosma, the miners from Valea Jiului marched into Bucharest in protest against government opposition. In January 1999, Cosma again attempted to assert his power by calling the miners to protest once more.

Miron Cosma is known to be an ally of Mr. Iliescu, helping him in 1990 and 1991. At the same time, Miron Cosma is hated by the Romanian people for conducting revoltes that killed many people (specially students) in Bucharest, in 1990 and 1991.

Miron Cosma has been sentenced to 18 years of emprisonment in February 1999, under the presidency of Mr. Constantinescu.

The decrete that is setting up Cosma has been signed by Mr. Iliescu yesterday (15 december 2004) and will be applied when published in the Monitorul Oficial.

Most of the Romanian Civil Society, as well as lots of Romanians have to be extremely dissapointed by this decrete.



Posted by Mihai Botea : 12/16/2004 01:33:00 pm
Business in Romania blog
Business in Romania blog
It seems everytime a EU official congratulates Romania, in a couple of days some other EU official comes up and cool things down, reminding us that the EU accession is not something we have to take for granted.

This time, mr. Olli Rehn, the European Commissioner for Enlargement, said Romania and Bulgaria still have to do a lot before joining the EU. In an interview Helsingin Sanomat, the Swedish newspaper Dagens Nyheter, and the Danish Politiken said:

"We should learn that the schedule must not supersede the content. Timetables must not force us to conclude negotiations before we are ready to do so", Rehn says in reference to Romania.

You can read the full article here: http://www.helsinginsanomat.fi/english/article/1101978018047

Thanks to Oana Brasoveanu for letting us know :)


Posted by Mihai Botea : 12/16/2004 01:00:00 pm
Business in Romania blog
Business in Romania blog
In his first interview since the elections, granted to EurActiv Romania, Stolojan expresses his trust in Basescu and underlines the new president's determination to rid the public institutions of all forms of political interference.

He said that he was "sure" that a new government will emerge in Romania out of the predictably tough coalition talks ahead, if only because "Romania needs a government".

Since the results of the November parliamentary elections in Romania were inconclusive, leaving no single party holding a majority, the political parties are now vying to set up a coalition.

Basescu is determined not to settle for a government led by a Social Democrat prime minister, since he believes that a 'cohabitation' would "lead to political instability".

Under Romanian law, if parliament proves unable to approve a government within 60 days, the president can dissolve the legislature and new elections would have to be called.

As to the chances for his staging a political comeback, Stolojan would only say that "I will see in a few days".

You can find the full interview at: http://www.euractiv.com/Article?tcmuri=tcm:29-133425-16&type=Interview

Posted by Iulia Rasoiu : 12/16/2004 10:25:00 am
Business in Romania blog
Business in Romania blog
The building that hosts one of the oldest hotels in Bucharest, Hilton Athenee Palace Hotel shall be put on sale by negotiaton, a week from now. The six Romanian-French shareholders announced their intention to sell the 5 star hotel for almost 17 million dollars. The companies wishing to attend the sale of a symbol of antebellum Bucharest should have tourism as main object of activity, a turnover of 40 million dollars in 2003, audited accounts and ISO 9001 certificates, reads the sale announcement published by the Ministry of Transport, Buildings and Tourism. The nominal value of a share is of 3,000 lei and the bid will take place on December 21st, around 11:00 a.m.

The hotel is currently owned by Athenee Phenix Group, founded ten years ago as a joint venture between a state owned company - owner of the hotel - with a Romanian businessman - Mihail Circiog - and three French companies, divisions of Vivendi group. The shareholders at Athenee Phenix Group SA, the owner of the hotel, are three Romanian companies: SC Athenee Palace SA, CMC International, Hapcorp Romanian SA and three French companies: Compagnie Immobiliere Phenix, Feal International and Etudes Generales Constructions Internationales. In 1996, before the hotel was re-launched following 42 million dollars worth of investments, the shareholders signed a 20 years management contract with Hilton international hotel chain. Thus, the historic building became the first Romanian hotel operated by an international hotel chain and now it is the first hotel ever to be sold in Romania. Last year, the hotel had a turnover of more than 527 billion lei and a net profit of 113 billion lei (3.5 million dollars.)

Posted by Mihai : 12/16/2004 09:58:00 am
Business in Romania blog
Business in Romania blog
The Bucharest Stock Exchange (BVB) and RASDAQ will suspend trading during the winter holiday, the institution said on its Web page.

The last stock transaction will be performed Friday, December 24, at 12 o'clock.

The activity of the two stock exchanges will be resumed on January 3, 2005, resuming their regular schedules.


Posted by Iulia Rasoiu : 12/16/2004 09:55:00 am
Business in Romania blog
Business in Romania blog
OMV Wednesday installed the interim directors at Petrom, who will keep their positions until the next Petrom shareholders' meeting, scheduled for mid next month.

The two are OMV's directors are:

Werner Schinhan, who has acted as observer in Petrom since signing the privatization contract, and
Hilmar Kroat-Reder, head of OMV's Mergers & Acquisitions.

Schinhan will act as deputy CEO responsible for Corporate Development, Corporate Affairs, Treasury and Chemicals after his resignation as interim director scheduled for mid-January.

Also, the Managing Committee was reappointed. The Managing Committee includes four members of OMV and two members of Petrom.

The two Romanian are: Gheorghe Constantinescu, who will continue as Chief Executive Officer (CEO) and Florian Constantinescu who will oversee the Refining division.

In addition, OMV managers Reinhard Pichler, Werner Ladwein and Tamas Mayer, will resume positions in the Committee.

Pichler will act as Chief Financial Officer (CFO), Ladwein will be in charge of upstream operations, Mayer will be responsible for the Marketing business of Petrom.

Pending the decision of the shareholders' meeting, the future Petrom Board of Directors will consist of seven members, four of which will be the OMV Executive Board Wolfgang Ruttenstorfer, Gerhard Roiss, David Davies, Helmut Langanger.

Two Board members will be appointed by the Romanian government and one member will be independent.


Posted by Iulia Rasoiu : 12/16/2004 09:45:00 am
Business in Romania blog
Wednesday, December 15, 2004
Business in Romania blog
The Romanian millionare Ion Tiriac might approach Guillermo Coria, ranked 7th in the ATP chart, to coach him.

Tiriac has a very good experience in being a tenis coacher with Boris Becker and many other tenismen.

Still, in order to finalize the contract with Coria, Tiriac must wait for the tenisman to finalize his contract with the IMG company that handles him at present time.


Posted by Mihai Botea : 12/15/2004 07:30:00 pm
Business in Romania blog
Business in Romania blog
Well, it's final.

Austria’s OMV has finalized the takeover of the stake representing 51 percent in Petrom, an OMV release informed. The Austrian company paid EUR 669 million for the direct purchase of a 33.34 percent stake in Petrom and contributed another EUR 830 million in the equity increase operation to the majority stake. EBRD has 2 percent of the stock, as it also participated in the capital increase through a convertible loan extended in the past to Petrom, while minority shareholders get another 6 percent.


Posted by Mihai Botea : 12/15/2004 03:18:00 pm
Business in Romania blog
Business in Romania blog
Romania will start negotiations next year, after the elections, with the future government of Iraq in order to settle the $2.6 billion historic debt claim.

Tanasescu said that Romania is far from ready to commit to a deal to forgive 80 percent of that debt, as rich creditors did few weeks ago.

The issue was discussed as Iraq's Finance Minister, Adil Abdul Mahdi, and the governor of the National Bank of Iraq, Sinan Al-Shabibi paid a visit to Bucharest on their way to Washington, where they will start negotiations with the International Monetary Fund (IMF) on a reform program agreement.

"Back in 1990 we signed an agreement with Iraq in which they accepted only $1.2 billion debt out of the $1.7 billion debt claims Romania had. Now the debt claim stands at $2.6 billion, and we are going to start negotiations to settle the issue. First we'll have to agree on figures, and other matters, such as when and how the debt will be recovered. We made it clear to Iraq's finance minister that Romania can't afford to write off the debt, following the Paris Club creditor's example, but we will have to work on a solution," said Tanasescu.

"We already contacted Ernst & Young to revise the debt figures and then we'll start negotiating at an experts' level," said Al-Shabibi, Iraqi's national bank governor.

Tanasescu said that after the elections, a Romanian team of experts from the Finance Ministry, the National Bank of Romania and the Romanian Commercial Bank will start technical negotiations with their Iraqi counterparts.

Iraq's debts date back to the communist rule of Nicolae Ceausescu, who had strong ties with Saddam Hussein. The $2.6 billion (over 1.9 billion euros) figure now accounts for approximately 3% of Romania's Gross Domestic Product (GDP), estimated at 55 billion euros this year.

"We understand Romania's position, but we agreed with Paris Club creditors on a framework based on the principle of comparable treatment, that means we can not negotiate any privilege with any other country," said Mahdi. In other words, Iraq will start negotiations with what he called an 80 percent benchmark on debt relief.

Iraqi officials didn't say clearly that they will start negotiation with Romania from the same base of debt relief as the Paris Club, and they did not elaborate on possibilities to recover the debt.
But Tanasescu said that "We are going to start negotiations from 100 percent debt value. Probably we will obtain a 75-85 percent deal. We hope to recover some 65 percent of the total debt claims, but only 20 percent will be in cash”.

Posted by Iulia Rasoiu : 12/15/2004 10:05:00 am
Business in Romania blog
Business in Romania blog
After almost five years of tough negotiations Romania completed yesterday the negotiations that are to bring her into the European Union in 2007, a date EU leaders are expected to confirm at a meeting this week.

The EU did not guarantee the entry in 2007 by any means, because the accession treaties for Romania and Bulgaria contain "super safeguard clauses" that could delay their entry until 2008 if they are not deemed to be ready by 2007.

The negotiations with Romania began in February 2000. Officials said that Romania worked hard to bring his laws and economic practices in line with EU requirements, yet still have some way to go.

Geoana said "there will be no need to activate the safeguard clauses," because Romania will complete the necessary reforms.

In an interview with the BBC, the future president of Romania, Traian Basescu, said that his government will ask to renegotiate two of the EU accession negotiation chapters, energy and competition, in order to reach a better agreement for the country.

Basescu is dissatisfied with how the two chapters were closed which stipulate the reduction of steel production by 2 million tons per year and the alignment of energy prices starting in 2007.

In response, Dutch Foreign Minister Ben Bot, whose country is currently leading the EU, said that reopening negotiations would be to Romania's detriment.

Bot said Romania has the right to reopen the negotiations, but strongly recommended the country not to take this path.

The minister added that during the Brussels summit scheduled to take place this Thursday and Friday, the government leaders of EU countries will announce that they plan to sign the accession treaty with Romania and Bulgaria as late as the beginning of May, 2005.

He said that this date will be maintained even if Romania decides to reopen the negotiation chapters.

"That would mean four more months for the negotiations," said Bot, expressing his hope that the negotiations would be closed by the end of April. Romania and Bulgaria are tied together by one accession treaty, he concluded.


Posted by Iulia Rasoiu : 12/15/2004 09:38:00 am
Business in Romania blog
Tuesday, December 14, 2004
Business in Romania blog
The Mercer Human Resource Consulting company recently released a report analysing the salaries growth compared to inflation in 63 countries.

For Romania, salaries will increase (december 2004 - december 2005) by 10.4% while inflation will reach 9.2%. This will result in a real growth by 1.2%.

This trend is also visible in many other Eastern-European countries, with Lituania having the highest mark, 7.7% REAL growth. Our friend in UE integration, Bulgaria, will have a growth of 5.6% in real terms.

Links: an excerpt of the report, purchase the full report.

Posted by Mihai Botea : 12/14/2004 10:51:00 am
Business in Romania blog
Monday, December 13, 2004
Business in Romania blog
PUR reaffirmed its political and doctrinal independence as a behavioral constant of the Party… in their first official statement after the runoff. The word INDEPENDENCE could be important and I am sure that both Basescu and Nastase know why.

The Executive President of UDMR, Mr. Takacs Csaba, affirmed today for Mediafax that UDMR is OPEN for any alternative that can bring political stability in Romania

With Basescu as our new President, the word OPEN and political stability can be very important. And "any alternative" includes, I can bet, a D.A. + UDMR Government.

Should we expect a D.A (PNL-PD) + UDMR + PUR + minorities Majority Government or a D.A. Minority Government endorsed and accepted by some or all the UDMR , PUR and maybe even PRM parliamentarians ?

What do you, our involved, informed and smart readers think?

In my personal view, things are getting interesting in Romania.

I, personally, hope that The D.A. Alliance and Traian will not dissapoint their supporters and electors!

GOD BLESS ROMANIA!

Posted by Cristian C. Francu : 12/13/2004 03:06:00 pm
Business in Romania blog
Business in Romania blog
Finally, all the votes are counted and cetralized and BASESCU WINS!

It's a spectacular victory, even though the score was very tight, Basescu winning about 2 percents in front of Adrian Nastase.

We all hope this will be the best for Romania.

You can read a fresh interview with mr. Basescu (from BBC) HERE (thanks, Cristi).

Posted by Mihai Botea : 12/13/2004 01:06:00 pm
Business in Romania blog
Business in Romania blog
The minimum wage is likely to increase from 2.8 million ROL to 3.1 million ROL as of January 1st, 2005, but may be even more than that as trade unions, employers and authorities have scheduled two more rounds of negotiations by the year-end.

Unions claim that, inflation and productivity increase considered, the minimum wage should be at least 3.55 million ROL and are asking for 4 million ROL.

The average amount of man-hours per month has been set at 171.33 hours per month.

Posted by Iulia Rasoiu : 12/13/2004 09:21:00 am
Business in Romania blog
Business in Romania blog
The governor of the National Bank of Romania (BNR) Mugur Isarescu reiterated late last week the single digit inflation rate expected for the end of this year could hit 9.4%.

The index is slightly above the 9% level the BNR and the Romanian government set as their target for this year.

The fall months brought the highest growth in prices this year, when inflation climbed to 0.9% in September and to 1.2% in October.

The inflation rate halved from the yearly record of 1.2% in October to 0.6% at the end of November as tariffs for services diminished, the National Statistics Institute (INS) announced Friday.

The rate for November is below BNR estimates regarding the increase of consumer prices by 0.7-0.8% and well below banking analysts' expectations who forecast a level of 0.9%.

If consumer prices go up by 1% in December, the inflation rate for 2004 will be close to 9.7%.

For the entire 11 months this year, INS said the inflation rate was 8.6%, a level favoring single digit inflation for the overall year.

The cumulative inflation rate for the year between November 2003 and 2004 hit 9.9% - which is the first time since 1990 the index has gone below 10%.



Posted by Iulia Rasoiu : 12/13/2004 09:16:00 am
Business in Romania blog
Sunday, December 12, 2004
Business in Romania blog
At 16:00, Insomar said that Nastase and Basescu are equal, 50% to 50%. Even more, Nastase is dropping, Insomar said...

So people, go out and vote ! Any vote counts !!!



Posted by Mihai Botea : 12/12/2004 05:37:00 pm
Business in Romania blog
Business in Romania blog
The Romanian Central Election Bureau (a.k.a BEC) has alerted the Ministry of Internal Affairs after being signaled by the Romanian Ambassy in Libia about some news that said that "In order to avoid over-crowding, the Romanians that intend to vote for mr. Basescu to go to vote on Sunday, while the other to go and vote on Monday."

Obviously, this was a joke that was forwarded through SMS by thousands of people (specially youngsters) in Romania.

Another joke was a different SMS that said: "If you vote with Bombo (a.k.a), I will emigrate in Congo", that was heavily forwarded before the first elections tour, two weeks ago.

Seems that BEC is very busy investigating SMS jokes instead of doing their job they are supposed to do (remember the LOUSY explanations they gave for the frauds in the first electiouns tour).


Posted by Mihai Botea : 12/12/2004 03:43:00 pm
Business in Romania blog
Business in Romania blog
Almoust 31.000 Romanians abroad voted on 28 November.

Here you have some figures:

9703 Romanians voted outside the country with Adrian Nastase

While 21 157 Romanians form abroad voted with Traian Basescu

If you want the document where you can see in details how the Romanians living abroad voted for the main two candidates in the first round, please email me or make a comment on the site and let me know your email address.

Here you can find all the voting bureaus outside Romania.

And here you can find all the addresses and contact details for all the Romanian diplomatic Missions abroad.

Waiting for the exit polls...

Yours,

CF


Posted by Cristian C. Francu : 12/12/2004 03:35:00 pm
Business in Romania blog
Saturday, December 11, 2004
Business in Romania blog
Cristi said that there will not be any official DA alliance manifestation on December 9th.

But it turns out there was. Hundreds of people, supporters of Traian Basescu and the DA alliance, protested against the frauds in the first elections round-up. They said the total fraud consisted of about 5% for Adrian Nastase and his party.

The new motto for tommorow's elections is "They can't steal as much as we vote" and. Hopefully, tommorow's elections will carry out in good conditions.


Posted by Mihai Botea : 12/11/2004 10:44:00 am
Business in Romania blog
Business in Romania blog
Fast Company Blog has a great post about the best business books of the year.

The top 10 looks like this:

10. Word Spy by Paul McFedries.

9. The Allure of Toxic Leaders by Jean Lipman-Blumen.

8. Why People Buy Things They Don't Need by Pamela Danziger.

7. Free Prize Inside by Seth Godin.

6. Call of the Mall by Paco Underhill.

5. The Wisdom of Crowds by James Surowiecki.

4. Unstuck by Keith Yamashita.

3. Alexander Hamilton by Ron Chernow.

2. Managers Not MBAs by Henry Mintzberg.

1. The Fortune at the Bottom of the Pyramid by C.K. Prahalad.


In order to read also the reasons why each book has been selected and also to get more insight, please visit the original post on Fast Company website.

Posted by Mihai Botea : 12/11/2004 10:32:00 am
Business in Romania blog
Friday, December 10, 2004
Business in Romania blog
Parties, customs and justice are seen as the most corrupt institutions in Romania, according to Global Corruption Indicator published yesterday by Transparency International Romania.
http://www.transparency.org./surveys/barometer/dnld/barometer_report_8_12_2004.pdf

According to an opinion poll made by Gallup International, from a scale from 1 to 5, political parties are seen worldwide as the most corrupt institutions (4.0), the parliament has 3.7, police are third with 3.6 and tax authorities get 3.6.

In Romania, political parties get 4.2, public administration and customs also get 4.2, while justice comes in third with 4.1.

For Romanians, inflation and unemployment are more important than high level corruption.

The report also says Romanians give more bribes than people in other countries.
A quarter of Romanians said they gave bribes during the last year, compared to 10 percent worldwide.

Still, compared to expectations for the next three years in fight against corruption, Romanians are more optimistic than people in other countries.

26 percent of the Romanians say corruption will increase, 32 percent said it will remain at the same level, while 17 percent expect a drop in corruption.

Transparency International noticed corruption also remains a serious problem in many of the east-European countries who joined EU in May.

The study was made from a sample of 50,000 people from 64 countries, during June-September 2004.

Cameroon is top of the list, as 52 percent of its population was involved in corruption.

The second most corrupt state is Kenya, with 36 percent of the population having admitted to corrupt practices.

The report was made public yesterday, on the International Day for Fighting Corruption.


Posted by Iulia Rasoiu : 12/10/2004 10:09:00 am
Business in Romania blog
Business in Romania blog
The Finance Ministry yesterday responded to the accusations of the car leasing companies, rejecting fears that ongoing leasing contracts will suffer.

"The new way of calculating the excises for cars bought through leasing would only apply to contracts concluded after the new law comes into force," Finance Ministry official, Mihai Hura, said on Thursday.

Fiscal consultant Emil Duca stated the main issue is that the legislative did not take into account the running leasing operation.

The government decision, valid since November 18, stipulates that excises for leasing-purchased cars will be applied to the whole entry value.

Previously, the excise was applied to the cars' residual value.

According to the fiscal code, excises for new and second-hand cars range from 0% to 9%, respectively and 1.5% to 27%.


Posted by Iulia Rasoiu : 12/10/2004 09:53:00 am
Business in Romania blog
Business in Romania blog
Here comes another one...even harder.

The TV station that I appreciated the most (Realitatea TV) fired one of its employees, mr. Andrei Gheorghe, because of the way he conducted a TV show in which Adrian Nastase was appreciated as having a mediocre presence in the TVR 1 show between himself and mr. Basescu.

Mr. Andrei Gheorghe, invited several (independent) analysts and have marks to both mr. Nastase and mr. Basescu and all analysts gave a 6 to mr. Nastase and an 8 to mr. Basescu.

Mr. Andrei Gheorghe was fired apparently because he let such a bad thing happen to mr. Nastase. This is supposed to happen after a meeting between mr. Nastase and mr. Liviu Luca, owner of Realitatea TV.

Now, from my point of view, this things are totaly out of control. Some TVR 1 guys complained about press freedom in their TV station, we all know Antena 1 is ruled by mr. Voiculescu, an ally of mr. Nastase, Prima TV is influenced by mr. Mitrea and now it seems Realitatea TV is going to serve PSD as well....is anyone not corrupted and not under PSD control in Romania?

I hope so. But it's only hope...

Posted by Mihai Botea : 12/10/2004 09:49:00 am
Business in Romania blog
Business in Romania blog
On the Romanian Academic Society' website you can find the new report on the November 2004 election. http://www.sar.org.ro/files_h/docs/publications_pr/Policy%20memo12-en.pdf

"We do not know how big the fraud was in Romanian elections.

What we do know and can prove is that fraud did exist, and in more than one type.

What we also know is that the possibility to avoid fraud was willingly implanted in the electoral legislation, and that the reason we do not know much about this fraud is that political will was used not to investigate the fraud, but prevent any investigation into it.

The backup systems which operate where rule of law exists did not work in Romania due to severe politicization of the judiciary. "

Posted by Iulia Rasoiu : 12/10/2004 09:18:00 am
Business in Romania blog
Thursday, December 09, 2004
Business in Romania blog
The transportation ministry has concluded negotiations with construction company Ashtrom Group of Israel for the third stretch of the Bucharest - Brasov highway, between Predeal and Brasov.

The other two parts of the road will be build by France's Vinci and Austria's Strabag, under agreements negotiated earlier this year.

The contracts, based on public-private partnerships (PPP) will be signed after the government's approval, while works, due to last four years, will begin in 2005.

Overall costs amount to EUR 1.2 billion, while the total value of the three contracts' execution will rise to EUR 1.7 billion, according to local media.

Thus, the average price per kilometer is of EUR 9.7 million, much higher than in the case of Brasov-Bors route - EUR 5.7 million, due to the difficult land structure.

The highway crossing Transylvania will be build Bechtel of the US, also under a contract closed after a selection of offers.
Contractors will recoup their investments by operating and managing the stretches of highway over the long term, after completion.

The execution costs for this stretch, due to be built by France's Vinci, will amount to EUR 379.3 million, with four tunnels along the 22 kilometers.


Posted by Iulia Rasoiu : 12/09/2004 05:05:00 pm
Business in Romania blog
Business in Romania blog
The list of no-tender privatisation continues.

After several EU officials warning Romania against doing such privatisations, after a shoking declaration of Adrian Nastase yesterday (on Evenimentul Zilei) from which it can be deducted that a PSD member took a 700 milion EURO commision on the Petrom privatisation (Nastase was recorded saying this !!), the Government comes and makes another no-tender privatisation. The Craiova-based company Electroputere goes to Siemens.

AVAS said that the privatisation was suitable for such a process (is there a profile?). This kind of privatisation kept out companies like General Electric and Bombardier that were interested in Electroputere, but now don't stand a chance.

Before selling the company, Electroputere will be wiped out of any debts to the State. AVAS currently owns 62,5% of Electroputere.

Thanks to Realitatea Romaneasca and to the romanian-economics@yahoogroups.com for the info.

Posted by Mihai Botea : 12/09/2004 01:26:00 pm
Business in Romania blog
Business in Romania blog
source: AFP

BRUSSELS : Romanian Foreign Minister Mircea Geoana said his country had completed its negotiations to join the European Union in 2007 with the closure of the last two chapters outstanding.

"The negotiations for joining the EU are closed," he told reporters. "Romania has finalized tonight the two remaining chapters," he added after the end of talks on the issues of justice and competitiveness.

The end of Romania's accession talks is to be endorsed at an EU summit in Brussels December 16-17.

Geoana expressed hope that the entry deal for Romania and Bulgaria, which completed its own accession talks in June, could be signed in late April or early May.

The two neighbours dragged their feet in implementing reforms after the collapse of communism in 1989 and as a result were left out of the "big bang" expansion in May which saw eight central and eastern European countries plus Cyprus and Malta join the EU, boosting its membership to 25.

Posted by Mihai Botea : 12/09/2004 09:59:00 am
Business in Romania blog
Wednesday, December 08, 2004
Business in Romania blog
Hello,

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Posted by Mihai Botea : 12/08/2004 06:18:00 pm
Business in Romania blog
Business in Romania blog
A Romanian stock index will be listed on Vienna Stock Exchange as of next year as part of a collaboration programme between the Bucharest Stock Exchange (BSE) and the Austrian capital market, according to market sources. The Vienna Stock Exchange and the BSE are currently discussing a collaboration memorandum which will most likely be signed by the middle of this month.

The Vienna Stock Exchange could have computed and traded an index of Romanian stock without the agreement of the Bucharest market, but BSE representatives preferred that the new index be traded on the basis of a collaboration agreement, sources say.

Stock indices take into account the values of several shares on one or several markets, providing investors with a market overview. The possibility of trading in an index offers investors a simple way of diversifying their portfolio and thereby reducing risk.

The new index will be the only option for foreign investors speculating on Romanian companies without bringing money to Romania. In the last ten years, several Romanian companies, like Banca Turco-Romana (The Turkish-Romanian Bank) and furniture producer Elvila, have had their stock listed on a foreign capital market, but currently there are no Romanian shares or indices listed on foreign markets.

The memorandum also stipulates the inclusion of the Romanian capital market within an index calculated by the Austrian stock market for Central and Eastern Europe. This is the CECE Index, which currently includes the most representative companies on the capital markets of Hungary, the Czech Republic and Poland. Globally, there are several thousand stock indices.

The best-known indices worldwide include the Dow Jones Industrial Average of the New York Stock Exchange, the FTSE-100 of the London Stock Market and the DAX of the Frankfurt Stock Exchange.

The Romanian capital market index that is to be listed in Vienna will be different from the three official market indices - the BET, BET-C and BET-FI - and will include the most representative 6-7 companies listed in Bucharest, including Petrom, BRD and Banca Transilvania. Besides being traded on the Vienna Stock Exchange in the form of futures, the same index is likely to be traded on the BSE after the start of derivatives trading on the market next year.

In recent years, foreign investors have become increasingly interested in the Romanian capital market due to the growth potential of the Romanian economy.

Source: Ziarul Financiar, Vlad Nicolaescu

Posted by Mihai : 12/08/2004 01:43:00 pm
Business in Romania blog
Business in Romania blog
The Economy and Trade Minister Dan Ioan Popescu Tuesday said Austrian gas and oil group OMV transferred in to the escrow account 669 million euros, representing the purchase of 33.34% in Romania's largest company, Petrom.

"OMV has already delivered into the escrow account this week the amounts needed to acquire the stake (...) and it would inject in Petrom another 830 million euros to increase participation (i.e. to 51%)," Popescu yesterday was quoted as saying in Targu Mures.

The escrow account was opened by a third party, neutral to the transaction. The escrow agent was appointed the Bucharest-based branch of the ING Bank N.V. (Netherlands).

Posted by Iulia Rasoiu : 12/08/2004 09:38:00 am
Business in Romania blog
Business in Romania blog
The European Parliament will debate on December 15 the report completed by the Parliament's Rapporteur for Romania, Pierre Moscovici, regarding the progress made by Romania, according to a press release on the European Parliament's Web site.
http://www2.europarl.eu.int/omk/sipade2?PUBREF=-//EP//TEXT+PRESS+BR-20041213-S+0+DOC+XML+V0//EN&L=EN&LEVEL=2&NAV=X&LSTDOC=N#SECTION6

Moscovici said the report already adopted by the Commission for External Businesses is "encouraging, but solicitous, solicitous, but friendly."

The Commission's members saluted the important steps taken by Romania, but said there are still a lot things to do, especially regarding administrative reform, the judicial system, the fight against corruption and the protection of minorities and children.

The report asks for the quick finalizing of the negotiations by the end of 2004 and warns that the "artificial earlier closing of the chapters might hurt rather than help Romania and its people."


Posted by Iulia Rasoiu : 12/08/2004 09:35:00 am
Business in Romania blog
Business in Romania blog
Bogdan Baltazar, former chairman of the Romanian Development Bank (BRD) - Groupe Societe Generale (SocGen), who will leave the banking executive position in January next year, said he would open a consulting company.

Baltazar, Bloom & Pirvulescu company have already registered the name at the Trade Registry.

The joint firm was opened in partnership with Phil Bloom, U.S. citizen, owner of the Global Business Group, and Selena Pirvulescu, Vice President of the above mentioned company.

The new company is likely to receive authorization to start work within a month.

Baltazar chaired the bank for more than six years, also contributing to BRD privatization when French banking group SocGen bought the main stake in the local credit institution.

Posted by Iulia Rasoiu : 12/08/2004 09:26:00 am
Business in Romania blog
Business in Romania blog
Government Office to Speed Business Processes, Better Serve Citizens

Captiva Software Corporation a leading provider of input management solutions, announced today that the National Trade Register Office (NTRO) of Romania has selected InputAccel(R), Captiva's flagship document capture solution, to capture and process the more than 77 million pages of business registration and trade documents it receives and processes annually.

The value of the contract to Captiva is in excess of $200,000. The deal was facilitated by the Star Group, Captiva's systems integration partner and reseller in Eastern Europe.

The NTRO will use InputAccel at its 42 offices throughout Romania to capture incoming paper documents and convert more than 3 million pages of archived documents into digital content.

The electronic data will then be delivered to an IBM DB2 Content Manager enterprise content management (ECM) platform. NTRO will grant secure access to the documents to its employees, other government agencies and citizens.

"The National Trade Register needed a robust document capture solution that would support a large number of concurrent users and a substantial volume of incoming documents, and be scalable enough to sustain future growth," said Mark Lewis, Captiva's Vice President of Europe, Middle East and Africa (EMEA) Operations.

"We were pleased to work with IBM and the Star Group to meet the NTRO's desires. InputAccel will allow NTRO to speed business processes, better serve Romanian citizens and significantly reduce the amount of manual intervention needed to process paper documents."
About National Trade Register Office of Romania

The National Trade Register Office (NTRO) operates on a local and national level in Romania, with 42 county offices and a centralized national office organized under the coordination of the Ministry of Justice.

The NTRO supports businesses and consumers by providing information on registered companies and legal provisions concerning commercial activities.

The NTRO keeps records on the legal and financial status of all businesses and provides that information to the public, giving individuals and companies a way to research the companies with whom to do business.
It also helps simplify procedures concerning incorporation and authorizing of companies.
To learn more about the National Trade Register Office of Romania, please visit www.onrc.ro/english/

About Captiva
Captiva Software Corporation (NASDAQ:CPTV) is a leading provider of input management software solutions.
Since 1989, the company's award-winning products have been used to manage business critical information from paper, faxed and scanned forms and documents, Internet forms and XML data streams into the enterprise in a more accurate, timely and cost-effective manner.
These products automate the processing of billions of forms and documents annually, converting their contents into information that is usable in database, document, content and other information management systems.
Captiva's technology serves thousands of users in insurance, financial services, government, business process outsourcing, direct marketing and other markets. For more information, visit www.captivasoftware.com.


Posted by Iulia Rasoiu : 12/08/2004 09:16:00 am
Business in Romania blog
Tuesday, December 07, 2004
Business in Romania blog
07 December 2004 - SIF Muntenia bought most of the bonds issued by Navol Oltenita shipyard, paying more than 500,000 euros for them. Navol issued bonds that can be swapped for equity when they fall due, worth approximately 780,000 euros. As soon as the bonds are converted into shares, SIF Muntenia will become the yard's majority shareholder.

The capital market legislation says the convertible bonds must be first offered to the company's shareholders depending on their actual interest in the company. SIF Muntenia is Navol's principal shareholder at the moment, due to its nearly 50% stake. It acquired control of Navol following a capital increase by contribution in cash.

The stake of Ioan Alexandru, the former majority shareholder who bought the yard back in 1999 went down to nearly 30% as a result of the capital increase. The bond sale price is 2,100 ROL, equal to the par value of a Navol share. One bond will be possible to swap for two shares.




Posted by Cristian C. Francu : 12/07/2004 10:04:00 pm
Business in Romania blog
Business in Romania blog


Anlysis By James Thornhill

LONDON, Dec 7 (Reuters) - It's difficult for foreign investors to get exposure to Romania's soaring currency, but that hasn't stopped some of them and the attraction of high yields and EU entry in 2007 means more are likely to follow.

The leu is up around six percent against the euro since November 3 -- when the central bank announced a shift to a flexible managed float currency regime -- driven, at least in part, by speculative foreign inflows.

Romania's central bank intervened aggressively on Monday to stem the leu's charge, but analysts say it can probably only slow the pace of gains, given the growth of interest in Romania.

Romania's benchmark Eurobond maturing in 2012 also underlines the strength of interest, with the risk premium having dropped to 4.0 percent, from 6.285 percent in May.

Investors' confidence that Romania will remain on track for EU entry has insulated markets against a bout of political turbulence in the wake of last month's inconclusive parliamentary elections.

"In spite of capital restrictions, Romania has benefited from the plentiful global liquidity chasing yield and, with better macro policies, approaching EU membership and high domestic rates, money has moved in," said Erik Nielsen, head of new European markets research at Goldman Sachs.

The central bank's reduced participation in the market since November has encouraged leu bulls, salivating at the prospect of Romania's high yields -- the key deposit rate is at 17.75 percent -- and the convergence anchor of European Union entry in 2007.

"People are looking for vehicles to express their bullish leu view. Interest rates are only a couple of percent below Turkey, but Romania is a lot closer to EU entry. From that perspective it's very attractive," said Koon Chow, emerging markets currency strategist at CSFB.

Domestic traders corroborate the view from outside: "Foreign inflows are picking up and are set to grow on expectations of further liberalisation of capital flows, maintaining upward pressure on the leu," said one senior dealer in Bucharest.

STRICT DOOR POLICY

The attraction of Romanian markets to foreign investors are obvious. The trouble is, as Chow at CSFB puts it, it's still "hard as hell" for foreigners to buy leu assets and get in and out of the market easily.

"It's definitely nowhere near as liquid as other parts of central Europe, there is an NDF (non-deliverable forward) market, but investors tend to take very small positions," said Ivailo Vesselinov, emerging markets analyst at Dresdner Kleinwort Wasserstein.

NDF markets allow investors to take forward positions in non-convertible or thinly traded currencies, like the leu, with contracts settled in hard currency.

"They're still testing the waters, but we expect the market to develop quite rapidly over the next year," Vesselinov added.

That development should be enhanced by the gradual lifting capital controls, in line with EU entry requirements.

Romania has promised to allow foreigners access to leu deposits starting next April, with the full liberalisation of the capital account to take effect in time for EU membership in 2007.

Bankers in London say hedge fund involvement in leu markets so far has been very limited, but that could change if these markets are opened up.

"If these opportunities were there with an open market, people would be a lot more interested," said Goldman's Nielsen.



Posted by Cristian C. Francu : 12/07/2004 10:02:00 pm
Business in Romania blog
Business in Romania blog
Disclaimer:
The Business in Romania blog is not currently involved with any Romanian Political Party. The post below reflects the opinion of its author.


Romania, December 2004
...15 years after December 1989

We lived enough to see ‘the voting tourism’ and at least the incompetence and malpractice if not the bad faith of some elections' officials...

Do not choose to stay indignantly inside your homes.

Lets go and VOTE!

You and your family and friends, go and vote this Sunday!
Make the right choice for justice and truth! The right choice for yourself and for Romania!

We have to be the CHANGE we want around us!

After a quiet and obedient electoral campaign, after still no real face to face debate between the two mane candidates (it seems it will be one debate only tomorrow evening on TVR 1, at 22:00 hours when many of the electors form the Romanian villages are already asleep), Friday, in the last evening of the electoral campaign this country is not going to watch a live debate between the main two contenders.
Instead we will have 'the opportunity' to watch Mr. Iliescu's monologue most likely explaining us why things are better now and telling the country how they should vote.

I think we should not stay indignated in our homes and be quiet and disapointed about it.
We, the Romanians have to decide who are those who deserve to rule us. And not our 'equidistant' president and at the same time PSD senator and supporter or the masters of the voting boxes, of the opinion polls, the 'chosen' political analysts, the TV station managers or the 'voting toursits'!

This Sunday we can show them we are stronger, smarter and twice as many as them.

Because… They can not steal and rob as much as we can VOTE against them!

This Sunday is our 'Tour de Force'.
Get your friends and family to vote this Sunday. Call, email and talk to your friends and relatives, especially those from the Romanian villages. Talk them into Voting!

I used to blame our parents and grandparents for accepting the communism.
I urge and instigate you to get involved. To Vote and make your opinion heard...

Posted by Cristian C. Francu : 12/07/2004 08:33:00 pm
Business in Romania blog
Business in Romania blog

Combinatul de Oteluri Speciale Targoviste (C.O.S.T.)- (The Special Steel Plant) will supply its main steel producing shareholder with products worth more than 59 million euros, based on a contract closed at the end of November.

The steel products will be delivered to Mechel Metal Supply, a company registered in Liechtenstein, which is part of the Mechel Group, COST's majority shareholder.

The contract will be valid until the end of next year. COST officials could not be reached for comment. A release sent to the Bucharest Stock Exchange where COST is listed says,"The contract was closed with the best interest of COST relative to the similar offers on the market in mind."

The companies listed on the capital market are bound to go public with contracts closed with their majority shareholders and be mindful of the interests of all the shareholders when they sign such contracts.


Posted by Cristian C. Francu : 12/07/2004 07:13:00 pm
Business in Romania blog
Business in Romania blog
Gold developer International Goldfields Ltd (IGL) has expanded work at its Sacu copper-gold project in Romania after encouraging results from its maiden drilling program.

Although the initial drilling was limited, it provided enough encouragement for IGL to commit $1 million towards follow-up work and an extended drilling program that would commence immediately.

The initial exploratory drilling was designed to determine if the project area contained similar rocks to the nearby Certej gold-silver deposit or the Rosia Montana gold deposit, which contains 14.6 million ounces of gold and 67 million ounces of silver.

The 500 square kilometres of western Romania known as the Golden Quadrilateral that includes IGL's project was once Europe's most prolific producer of gold and copper.

Posted by Mihai Botea : 12/07/2004 11:21:00 am
Business in Romania blog
Monday, December 06, 2004
Business in Romania blog
Today (December 6) Microsoft Romania and Orange Romania released on the local market, the mobile telephone Smartphone SPV (Sound, Pictures, Video) of the family Orange Signature, with Microsoft Windows Mobile operation system and interface in Romanian language.

The SPV C500 phone can be used for both business and entertainment purposes. It has a 65.000 colors display and includes MMS, games, movies and high-speed Internet access. The operating system is Windows Mobile 2003. Main applications include Pocket Outlook, Pocket Internet Explorer, Windows Media Player, MSN Messenger and more.

Smartphones represent the top category of mobile telephones, offering complex agenda functions and also functions specific for computers like text process and e-mail. The users have also the possibility to change the phones’ software.

Posted by Mihai Botea : 12/06/2004 09:14:00 pm
Business in Romania blog
Business in Romania blog
source: Evenimentul Zilei

Romania will have to export a lower number of horses to the European Union after the Brussels officials came to the conclusion that the animals reach the destination in a very poor health condition.

The European Commission announced the other day that it asked for a limiting of horse exports from Romania because of "precarious health and caring conditions of the animals, as well as of unacceptable transport conditions". In other words, the animals have limited access to water and food.

The domestic horses are one of the most wanted merchandise on the Western markets. For a few thousands horses exported every year, Romania gets revenues of about 40 millions euro. The biggest importer of horses from Romania is Italy, accounting for 80% of the exports.

Posted by Mihai Botea : 12/06/2004 08:37:00 pm
Business in Romania blog
Business in Romania blog
Quite an interesting analysis about Romania under the new perspective with the elections' results in mind is features at PINR.

Here are some excerpts:

"On November 28, Romania held general elections for its presidency and parliament. On November 29, President of the European Commission Jose Manuel Barroso announced that the European Union intends to sign an accession agreement with Romania in 2005 that would put the country on track to full membership in 2007. The two events are closely linked; the major issue in the electoral campaign concerned which of the two major candidates was best equipped to lead Romania into Europe successfully."

"Along with and in consequence of its economic disadvantages, Romania has been plagued by public corruption -- Transparency International estimates that people spend 10 percent of their earnings on bribes -- and a slow pace of market reform. Its politics have been dominated by the successor of the Communist Party -- the Social Democratic Party (P.S.D.) -- which was led by Ion Iliescu, who has been president of Romania for eleven of the last sixteen years. Under Iliescu, the former Communist elite benefited from privatization of state industries and kept control through a support base in the impoverished peasantry that feared even worse immiseration if the meager social safety net were to be removed by market reformers."

"As Romania stumbles through a period of political incoherence, if not yet serious instability, its progress towards E.U. accession in 2007 remains on track. E.U. Enlargement Commissioner Guenter Verheugen had planned to complete Romania's accession talks on November 24 -- on the eve of the general elections -- but finalization was delayed for "technical reasons," after complaints that it would give a boost to the P.S.D. campaign. An accession agreement, however, is not yet in serious doubt, although there remain outstanding issues on steel subsidies, politicization of the judiciary, corruption and government influence on the media, among others."

"In embracing Romania with misgivings, the E.U. probably commits itself to pouring large amounts of extra aid into the country, if for nothing else than to tighten the security of its borders. Europe will most likely pay for its acquisition, fill out its current projected borders and, in the process, become more a power bloc than the community envisioned by its proponents."



Posted by Mihai Botea : 12/06/2004 11:43:00 am
Business in Romania blog
Business in Romania blog
Golden Tulip Hotels, Inns and Resorts announces the signing of its second franchise agreement in Romania's capital Bucharest.

The newly built Tulip Inn Bucharest is centrally located near the business district of Bucharest on Nerva Tralan Boulevard No. 3. The property offers 88 spacious, modern and nicely furnished rooms. The hotel also features two fully equipped meeting rooms that can accommodate up to 80 delegates and its restaurant "Panorama" on the ninth floor of the property, giving its clientele a breathtaking view over Bucharest.

The Tulip Inn Bucharest complements Golden Tulip's recently franchised hotel, the 83 room Golden Tulip Bucharest (Calea Victoriei Street), which is still under construction and due to open its doors in January 2005. The Tulip Inn Bucharest is currently under construction and is due to open in September 2005.

Hans W.R. Kennedie, President & CEO of Golden Tulip Hotels Inns & Resorts, comments: "We are extremely delighted by our fast developing network in Romania and believe there is high potential for Golden Tulip to grow further in this evolving market. Having a perfectly located Tulip Inn property in Bucharest combined with a magnificent Golden Tulip gives us a comfortable position on this promising market"

Mr. Raafat Sarieddine, owner of the Tulip Inn Bucharest adds: " We are very pleased with the new franchise agreement recently signed with Golden Tulip Hotels, Inns & Resorts. We strongly believe that flagging our property with a internationally recognized brand will give us the tools and necessary supports to market our hotel in the most profitable way."


Posted by Mihai Botea : 12/06/2004 11:40:00 am
Business in Romania blog
Business in Romania blog
The Economy and Trade Ministry (MEC) last week announced it has shortlisted 7 companies interested in building in public-private partnership Unit 3 of the Cernavoda-based nuclear power plant.

The Ministry had received 12 letters of intent.
The shortlisted companies are LNM Holdings, Enal and Ansaldo (Italy), Atomic Energy of Canada Limited (AECL), Hidro Nuclear & Power (South Korea), Tender Group (Romania) and AEFM, MEC head Dan Ioan Popescu said.

Among the five rejected bidders, were General Electric (U.S.) and Hitachi-Itochu (Japan).

D.I. Popescu added that Unit 3 in Cernavoda needs funds of 748 million euros, and works are scheduled to begin in 2006 and end in 2012.

According to the MEC head, the total investments made in the last years to modernize the Romanian power system topped 3-4 billion euros and estimated some 10 billion euros of funds are needed to be invested by 2012.


Posted by Iulia Rasoiu : 12/06/2004 10:23:00 am
Business in Romania blog
Business in Romania blog
The European Commission has set itself on a collision course with the European Union's most powerful leaders by demanding that Romania meet tougher standards before it is admitted into the EU.

At a summit in June, EU leaders demanded that negotiations with Romania be concluded this year for scheduled entry in 2007. The governments of the EU's biggest states - Germany, France and the UK - believe it would be counterproductive to delay further before the ex-communist state is let into the fold.

But the Commission told member states this week that Romania had made insufficient commitments to reform its system of subsidies, particularly in the steel sector.

As a result, the Brussels body wants the formal talks to be put on hold while the Commission and Romania work on far-reaching reforms to the country's rules for state aid.

The issue is highly sensitive because the country, which is home to 21m people, will become the EU's seventh largest state, but even its government admits that it has enduring problems with corruption and authoritarianism.

But EU member states could still overrule the Commission in coming days and conclude negotiations this year, even though the outstanding area - competition - is one over which the Brussels body has considerable powers.

One possible compromise may be for the EU to conclude talks with Bucharest this year but make its signature of the final treaty admitting Romania conditional on further reforms in state aid.

Romania has also been criticised by non-government organisations for the conduct of parliamentary elections last Sunday, in which the ruling Social Democrats won most seats but lost their overall majority.

The Organisation for Security and Co-operation in Europe gave the elections a relatively clean bill of health.

The OSCE mission to Romania of 18 international election experts contrasted with the 600 observers the organisation sent for the second round of Ukraine's presidential election.


Posted by Iulia Rasoiu : 12/06/2004 10:05:00 am
Business in Romania blog
Business in Romania blog
E.ON AG won a tender for Romania's Electrica Moldavia, allowing it to bid for the utility, a company spokesman said confirming a report in the Financial Times Deutschland.

The newspaper reported that E.ON has now entered into final negotiations with the government over the price it will pay.

The spokesman declined to state how much the German utility is offering for Electrica Moldavia.

Posted by Iulia Rasoiu : 12/06/2004 10:03:00 am
Business in Romania blog
Friday, December 03, 2004
Business in Romania blog
The Authority for State Assets Recovery (AVAS) transferred to the Autonomous Department for the Administration of the State Ownership (RAPAPS) the theme club based in the French Village in Bucharest.

The government approved the ownership transfer of the French Club, which covers 1,500 square meters and is estimated to be worth 2.3 million euros.

French Club is in the heart of French Village, situated on North Avenue (Soseaua Nordului).

The French Village complex includes 69 houses.
Shareholders of the World Trade Center, controlling the main stake in the French Village agreed earlier this year to pass ownership to AVAS, which took over the company's debts.

Posted by Iulia Rasoiu : 12/03/2004 04:27:00 pm
Business in Romania blog
Business in Romania blog
Before and during the elections period some analysts compared the situation in Romania with the one in Ukraine.

Even though the diffrences are huge (Romania had a revolution 15 years ago, Ukraine didn't, Comunism is - at least in theory - out of Romanian political landscape, Romania's relationship with Russia is beyond any political influence - hopefully), some similarities can also be found.

A very interesting similarity can be found in the colors that sparkle in both countries in this period. While in Ukraine the communist party is BLUE, the opposition is ORANGE. Same in Romania, where PSD, the rulling party promotes itslef using mainly the BLUE color and the DA alliance is using ORANGE sa its electoral color.

Youn can find a map of Ukraine elections results (in orange and blue) HERE.

A map of Romania's elections results is unavailable right now, but as soon as I find one it will be published here.





Posted by Mihai Botea : 12/03/2004 01:09:00 pm
Business in Romania blog
Business in Romania blog
As you probably know already, the Austrian oil company OMV bought Petrom Romania earlier this year for a total of EUR 1.5 bilion.

Recent news say that OMV will issue some 3 milion more shares in order to increase its share capital.

OMV will also issue about 2 million bonds for a total of EUR 550 milion in order to raise some capital money to support the Petrom price. Each of the bonds is directly convertible into OMV shares.


Posted by Mihai Botea : 12/03/2004 11:58:00 am
Business in Romania blog
Business in Romania blog
A Romanian stock index will be listed on Vienna Stock Exchange as of next year as part of a collaboration programme between the Bucharest Stock Exchange (BSE) and the Austrian capital market, according to market sources. The Vienna Stock Exchange and the BSE are currently discussing a collaboration memorandum which will most likely be signed by the middle of this month.

The Vienna Stock Exchange could have computed and traded an index of Romanian stock without the agreement of the Bucharest market, but BSE representatives preferred that the new index be traded on the basis of a collaboration agreement, sources say.
Stock indices take into account the values of several shares on one or several markets, providing investors with a market overview. The possibility of trading in an index offers investors a simple way of diversifying their portfolio and thereby reducing risk.

The new index will be the only option for foreign investors speculating on Romanian companies without bringing money to Romania. In the last ten years, several Romanian companies, like Banca Turco-Romana (The Turkish-Romanian Bank) and furniture producer Elvila, have had their stock listed on a foreign capital market, but currently there are no Romanian shares or indices listed on foreign markets.

Posted by Mihai Botea : 12/03/2004 11:54:00 am
Business in Romania blog
Business in Romania blog
According to the Constitution, the new Parliament has to meet at the president's call in less than 20 days after the elections, which means before December 18, six days after the second round of presidential elections.

After the new Parliament chooses its leading structures, the incoming president will take the oath of office in front of the senators and deputies.

The president will then name a candidate for prime minister, after consulting the party with the parliamentary majority or, if none of the parties have a majority, then all the parliamentarians have to be consulted on the matter, according to the Constitution.

In less than 10 days after he is nominated, the candidate for prime minister will ask for the Parliament's vote of trust.

The results of the presidential elections are validated by the Constitutional Court.

In case of government reshuffling, the president has the right to dismiss and name, at the prime minister's proposal, some members of the government.

An alliance with the Hungarian Democratic Alliance (UDMR) is not enough to get majority in Parliament both for the Social Democratic Union - Humanist (PSD+PUR) Union and for the Liberal and Democratic (PNL-PD) Alliance.

The Union needs two more senators and 13 deputies, while the Alliance needs ten senators and 33 deputies.

The absolute majority in the Deputies Chamber is 167 votes, while in the Senate it is 69 votes.

The results for the Deputies Chamber released by Central Electoral Bureau show that the Union has 132 seats, the Alliance 112, followed by the PRM with 48 and UDMR with 22.
In the Senate, the Union has 57 seats, the Alliance 49, PRM has 21 and UDMR with 10.

The PNL-PD Alliance together with UDMR would not get the Senate majority even with the support from the other minorities, as they only reach a number of 152 seats.

Both in the Senate and in the Deputies Chamber, the PSD+PUR might try to persuade several parliamentarians from PRM or even from the Alliance to side with the Union.

As far as the Senate is concerned, the Union would only need two senators to obtain the majority. The scenario of forming the majority through parliamentarians' "migration" is less probable in the case of an understanding between the Alliance and UDMR, as they would need a massive number of members from the Union or from PRM to migrate, according to a Mediafax news agency comment.

Both the Union and the Alliance have so far ruled out an alliance with PRM. The nationalist party has more members in the parliament than UDMR does, as it has 48 deputies and 28 senators.

If either of the two major parties would go for an alliance with PRM, they would much easier form a parliamentary majority. Additionally, the PRM might give its support to the future government only with members in the Parliament, without having members in the government.

This way, the Union together with PRM would have a comfortable majority of 180 deputies and 78 senators. If the Alliance would ally with PRM, it would have 160 deputies and would need other seven votes from the minorities, and at the Senate they obtain 70 votes.

A collaboration between the Alliance and PRM would be the only possibility for the Union to become part of the opposition.
After the elections, UDMR wants to have members in the government, but even in this case the PRM might only support certain laws proposed by the government, according to their interests.

On the other hand, an opposition formed by the PRM and the Alliance would be a strong political force which may block the works of the Parliament and might lead to an eventual fall of the government, as it would only need five more votes to pass a no- confidence vote. Plus, PRM might tilt the balance with only a few parliamentarians during legislative debates.

If the Alliance allies with UDMR, they wouldn't have the same power and the hypothesis is least probable because this way the Union would have a minority government supported only by PRM.

Only four political groups will get in the Parliament, but in fact there are six parties: PSD, PUR, PNL, PD, UDMR, PRM that may form separate parliamentary groups, which may lead to other formulas for the majority and the opposition.

The stability of the future government will depend on the future president and on the following political understandings - new alliances, migrations, personal and party interests - that might lead to unexpected changes in the situation regarding the make up of the Parliament. In addition, the process of European Union integration and social elements might influence the Parliament.


Posted by Iulia Rasoiu : 12/03/2004 11:24:00 am
Business in Romania blog
Business in Romania blog
According to the Constitution, the new Parliament has to meet at the president's call in less than 20 days after the elections, which means before December 18, six days after the second round of presidential elections.

After the new Parliament chooses its leading structures, the incoming president will take the oath of office in front of the senators and deputies.

The president will then name a candidate for prime minister, after consulting the party with the parliamentary majority or, if none of the parties have a majority, then all the parliamentarians have to be consulted on the matter, according to the Constitution.

In less than 10 days after he is nominated, the candidate for prime minister will ask for the Parliament's vote of trust.

The results of the presidential elections are validated by the Constitutional Court.

In case of government reshuffling, the president has the right to dismiss and name, at the prime minister's proposal, some members of the government.

An alliance with the Hungarian Democratic Alliance (UDMR) is not enough to get majority in Parliament both for the Social Democratic Union - Humanist (PSD+PUR) Union and for the Liberal and Democratic (PNL-PD) Alliance.

The Union needs two more senators and 13 deputies, while the Alliance needs ten senators and 33 deputies.

The absolute majority in the Deputies Chamber is 167 votes, while in the Senate it is 69 votes.

The results for the Deputies Chamber released by Central Electoral Bureau show that the Union has 132 seats, the Alliance 112, followed by the PRM with 48 and UDMR with 22.
In the Senate, the Union has 57 seats, the Alliance 49, PRM has 21 and UDMR with 10.

The PNL-PD Alliance together with UDMR would not get the Senate majority even with the support from the other minorities, as they only reach a number of 152 seats.

Both in the Senate and in the Deputies Chamber, the PSD+PUR might try to persuade several parliamentarians from PRM or even from the Alliance to side with the Union.

As far as the Senate is concerned, the Union would only need two senators to obtain the majority. The scenario of forming the majority through parliamentarians' "migration" is less probable in the case of an understanding between the Alliance and UDMR, as they would need a massive number of members from the Union or from PRM to migrate, according to a Mediafax news agency comment.

Both the Union and the Alliance have so far ruled out an alliance with PRM. The nationalist party has more members in the parliament than UDMR does, as it has 48 deputies and 28 senators.

If either of the two major parties would go for an alliance with PRM, they would much easier form a parliamentary majority. Additionally, the PRM might give its support to the future government only with members in the Parliament, without having members in the government.

This way, the Union together with PRM would have a comfortable majority of 180 deputies and 78 senators. If the Alliance would ally with PRM, it would have 160 deputies and would need other seven votes from the minorities, and at the Senate they obtain 70 votes.

A collaboration between the Alliance and PRM would be the only possibility for the Union to become part of the opposition.
After the elections, UDMR wants to have members in the government, but even in this case the PRM might only support certain laws proposed by the government, according to their interests.

On the other hand, an opposition formed by the PRM and the Alliance would be a strong political force which may block the works of the Parliament and might lead to an eventual fall of the government, as it would only need five more votes to pass a no- confidence vote. Plus, PRM might tilt the balance with only a few parliamentarians during legislative debates.

If the Alliance allies with UDMR, they wouldn't have the same power and the hypothesis is least probable because this way the Union would have a minority government supported only by PRM.

Only four political groups will get in the Parliament, but in fact there are six parties: PSD, PUR, PNL, PD, UDMR, PRM that may form separate parliamentary groups, which may lead to other formulas for the majority and the opposition.

The stability of the future government will depend on the future president and on the following political understandings - new alliances, migrations, personal and party interests - that might lead to unexpected changes in the situation regarding the make up of the Parliament. In addition, the process of European Union integration and social elements might influence the Parliament.


Posted by Iulia Rasoiu : 12/03/2004 11:24:00 am
Business in Romania blog
Business in Romania blog


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