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Vol 2, No 19
15 May 2000
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Catherine LovattNews from Romania
All the important news
since 6 May 2000

Catherine and
David Lovatt

The investigations by French magistrate, Henri Pons, into the financial affairs of Romanian born businessman Adrian Costea have continued to make the news throughout the week. The magistrate's probing into the allegation of money laundering against Costea has given rise to a scandal which could involve senior politicians, political parties and former members of the secret service. Romanian Minister of Justice Valeriu Stoica indicated that the Romanian authorities were also investigating Costea. He said, "The Prosecutor's Office is investigating several people in this case. The setting up of a rogation commission was requested, but Adrian Costea has not been prosecuted yet, as the verifications from France are expected. There is another file there, and the French party has requested on its turn the setting up of a rogation commission. I want to point out that all the deeds in those files were committed before December 1996. The investigation is currently in progress." (Mediafax - 10 May 2000)

There has been much debate and contradiction as to the reasons why Costea and his wife have had the privilege of using diplomatic passports. These passports date back to the Iliescu presidency in 1993 when Costea was supposedly an advisor and roving ambassador to the President. Former President Ion Iliescu said, "At the Presidency, Adrian Costea did not have a position to justify a diplomatic passport. This issue must be related to a certain status that the Foreign Minister granted to Costea, which thing had nothing to do with the Presidency." (Mediafax - 10 May 2000) As a direct contradiction to this statement, the then Foreign Minister, Teodor Melescanu said on Wednesday that the Foreign Ministry had allocated the passports to Costea and his wife on the instructions of the President. Melescanu is the present leader of the Alliance for Romania Party (ApR). Nine o'clock published details of letters from the President Emil Constantinescu to Costea dated 5 May 1999 and 13 March 2000, which stated, "Mr. Adrian Costea's mission, which is in a national and regional interest, is that of an ambassador in the large sense of the term, that of an ambassador at large."

To muddy the waters still further, it appears that in 1996 Petre Roman set about rescinding the diplomatic passports to Costea and his wife. A list of diplomatic passport holders published on 13 January 2000 revealed that the Costeas no longer held such a document. This absence from the list of the names of Costea and his wife has been linked by the press to the dismissal of the head of the Consular section of the Foreign Ministry. Petre Roman is Romania's Foreign Minister.

The investigators of this case have begun the long and tortuous process of speaking to witnesses. These have included former Bucharest prosecutor Ion Cazacu, Viorel Hrebenciuc and Dan Nicolae Fruntelata, who were both ministers in the Nicolae Vacaroiu Government. One thing is clear: as the case continues, more and more people and organisations are going to be implicated through their links with Costea and his business interests. On Tuesday EvZ published an interview with the former secretary of the ApR, Mircea Ursache. In the interview Ursache revealed that funds for the setting up of ApR came from the Costea empire. [ApR was set up in 1997 following a split in the Social Democracy Party of Romania (PDSR).]

RFE carried a report of an interview given by Costea to Pro-TV on 11 May where he said that he had acted as a counsellor to former President Iliescu and, until quite recently, to current President Constantinescu. Costea also agreed that he played a role in the setting up of the Alliance for Romania Party. Costea told the daily Adevarul, "I will not give up and I will not hide. I am ready to do everything to clarify this affair." The three main candidates for the presidential election in November - Iliescu, Constantinescu and Melescanu - are apparently all involved to some extent. What impression will this give to the leaders of the European Union (EU), NATO, the World Bank and the International Monetary Fund (IMF) as Romania seeks accession to or acceptance by these institutions?

The Senate passed a draft law on Tuesday that provides severe penalties for drug trafficking. The law is seen as a means of reducing drug taking in Romania and at the same time bringing in stricter controls, which are in line with European Union requirements. Penalties range from six months to five years detention for encouraging others to take drugs and from two years to five years imprisonment for cultivating, preparing or buying drugs. More severe penalties of 15 years to 25 years imprisonment are reserved for those who sell, export or import drugs, and life sentences are held over drug dealers whose activities lead to the death of drug takers. The law also includes reduced sentences for those who provide evidence for further action by the state.

Minister of Justice Valeriu Stoica announced on Thursday that the Government had approved an emergency ordinance which rescinded the 1974 press law. This law, which was established during the Communist regime in Romania, has been used too frequently to silence the press. The only remaining facet of the law is the right of reply. Stoica said that the new law requires that anyone seeking damages for slander must lodge five percent of the damages being sought with the court before an action can commence. This sum will be returned to the plaintiff if successful in their action but will be used to offset costs if the action fails. Stoica said that there were no longer any grounds for court action based on the 1974 law.

The rate on inflation for April seen a rise to 4.8 percent but this still remains within the government's target figure for the year. The first four months of the year have seen inflation rise by a total of 13.7 percent. The month's rise has been put down to increases in the service sector of the economy with consumers experiencing price rises of up to 21 percent in water charges, communications and health care. Overall food prices rose by 2.3 percent with chicken costing almost ten percent more than in March. Even so, a range of further price rises are about to confront Romanian consumers. Petrol prices were increased by about seven percent per litre during the week, while natural gas costs are set to rise on 15 May and a rise of almost 20 percent in the cost of electricity is expected on 1 June. Warnings have gone out from producers and distributors that their increased costs will have to be borne by consumers with indications that items such as meats and sugars will go up by about 10 percent.

The rate and control of inflation are included by the IMF in their criteria for Romania to receive a stand-by loan. Negotiations ended last week and sources believe that the successful conclusion will be announced when Prime Minister Mugur Isărescu visits Washington later this month. The importance of the loan was highlighted by the Head of the European Commission in Romania, Fokion Fotiadis. He said that a grant of EUR 200 million to Romania from the European Union for macroeconomic stabilisation was conditional on the IMF loan. The grant is being given under the EU programme to provide economic help and support to states in Central and Eastern Europe which were previously under communist control.

9 May, Europe Day, was a day of celebration in Bucharest. This day, on which Romania became an independent state and which saw the end of the Second World War in Europe, was particular significant this year as it marked the 50th anniversary of the foundation of the European Union. Prime Minister Mugur Isărescu linked the day's celebrations to Romania's integration into Europe. He said, "The first key step towards accession is the drafting of an economic development strategy. This document of national importance becomes a creed for Romanians and a guarantee Romania will go on the road towards European integration." (Nine o'clock - 10 May 2000) The Head of the European Commission in Romania, Fokion Fotiadis, echoed the Prime Minister's words on integration and offered the support of the EU states in helping Romania achieve this goal. Foreign Minister Petre Roman was clear that this would be a year of economic growth and reduced inflation and that Romania would work towards successful integration into the EU.

The Cabinet concluded a series of measures on Thursday that provide programmes of reform for child protection, the integration of handicapped children and the status of institutionalised children. They also updated the National Admission Plan to the European Union to bring it into line with the Action Plan for the implementation of the medium term economic development strategy. Prime Minister Isărescu will present these measures to representatives of the European Commission and the international finance bodies in Brussels on Monday 15 May.

Reuters carried a report on Monday which said that wheat trading in Romania had virtually come to a halt. Constantina Nica of Cerealcom said, "The business was good, we sold an average of 10,000 tonnes a month to mills and bakeries across the country over the past months. But one can't buy a single kilogram now. Farmers either don't have wheat or they await better prices." (Reuters - 8 May 2000) Millers and bakers have said that bread prices would have to increase by up to 25 percent because of the difficulties they are having in obtaining wheat. However the Government have denied that there is a shortage of milling wheat saying that stocks of 825,000 tonnes were held - the bulk of this, however, remained in the hands of farmers.

The resignation of the Minister of Agriculture, Ioan Muresan has been called for by Member of the Chamber of Deputies Nicolae Popa (ApR). Popa says that Muresan has ordered the movement of 90,000 tonnes of wheat from the country's reserves to deal with a wheat crisis. This has caused the wheat reserves to shrink to a level which will only last for two weeks whereas the law demands that sufficient reserves for 6 months are maintained.

Muresan said on Wednesday that about five million tonnes of wheat would be produced by Romania at the next harvest. This could mean a slight increase over last years production which came out at 4.65 million tonnes. Farmers are disputing the estimate, however, saying that the growth looks good at this stage of the year but lack of funds will prevent farmers from carrying out essential work to ensure good high yielding crops.

Heavy rain storms hit Hunedoara, Alba and Bacau counties during the week with hundreds of hectares of farmland being damaged. Orchards, vineyards, vegetables and corn crops were affected.

On Thursday, President Emil Constantinescu outlined a project to establish the Superior Council for Representing Romanians from Everywhere. The purpose of this elected body will be to work alongside the Romanian Parliament and act as a consultative organisation. He said he wanted to promote Romania to Romanians who live beyond the country's borders and to encourage them to promote Romania in their adopted countries. Constantinescu called on the political parties to institute a law to set up this body as soon as possible. He said, "Our country can no longer afford to lose such valuable human resources." (Nine o'clock - 13 May 2000)

Catherine Lovatt and David Lovatt,
12 May 2000

Moving on:


Evenimentul zilei / EvZ online
Agence France-Presse
Associated Press
Nine o'clock



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