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Vol 2, No 43
11 December 2000
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Unforeseeable Turning Point
Marius Dragomir

At the end of 1999, incoming Prime Minister and former Governor of the Romanian National Bank Mugur Isărescu declared that the year 2000 had to be a turning point for Romania. Trying to save the tarnished image of President Emil Constantinescu's centrist Democratic Convention of Romania (CDR), elected in 1996, the new Isărescu government focused on the improving the economic and social situation of the country for a population that was bitterly dissatisfied.

Despite the willingness of the new government to implement economic changes, a series of economic scams and political scandals have ruined the long-term "good intentions" of the latest team of Romanian leaders. As a result, the CDR fell victim to the wrath of the electorate in the parliamentary and presidential elections on 26 November 2000.

The current CDR coalition started to disintegrate after President Constantinescu announced his decision to bow out of Romanian politics at the general elections. In its place a new coalition party, CDR 2000, took up the gauntlet. On 26 November they failed to achieve the 5 percent threshold required to gain seats in parliament. Instead, the vote favored former President Ion Iliescu's leftist Party for Social Democracy (PDSR), who governed before 1996, and the Right Wing embodied by the Greater Romania Party (PRM) and its leader, Corneliu Vadim Tudor. (See A Glutton for Punishment)

Immediately after his election in 1996, Constantinescu promised to hold accountable those responsible for the poor state of the economy and the institutionalized corruption within Romania. This was the "real change" that Romanians voted for four years ago. Constantinescu failed to honor the promise and he stepped down.

Financial let downs

Instead, the centrist regime remained aloof, allowing the perpetuation of bureaucracy and political infighting. New scams shook the population without any intervention from the state, including the collapse of the National Investment Fund in the summer of 2000. Thousands of Romanians lost all their savings when the high-interest unit trust fund collapsed at the end of May.

Investors in FNI took to the streets in protest and boycotted the local elections in June, blaming the government for their losses. Already suffering the effects of high inflation and low wages, many of those who lost their life savings voted against the current government in the parliamentary and presidential elections.

The collapse of the FNI had a knock-on-effect in the banking sector, threatening the stability of the Romanian financial sector, and, as a result, the security of the nation. Banca Comerciala Româna (BCR), one of Romania's largest national banks, earmarked for privatization, was subjected to rumors of imminent cash shortages. Fearing a repeat of the FNI crisis, investors began to withdraw their money. The National Bank of Romania was forced to act quickly and buoy up the failing bank with cash reserves. Stability has yet to be restored the financial sector and is a major task that the next government will have to undertake.

Privatization woes

The privatization policy of Constantinescu's administration has been ambitious. Isărescu's predecessor, Radu Vasile, was a champion of unrealized deals. His cabinet failed to push some of the major national companies—for example, IAR Ghimbav and Tractorul Braşov—through the privatization program. However, there has been success with the privatization of the car factory Dacia Piteşti by French business Renault. Renault has plans to make Dacia the "Car of the Balkans," but there is little sign that this approach is succeeding. Indeed, Renault appears to be getting more disillusioned with their investment.

Other privatization deals have not achieved so much. In September this year, the State Property Fund canceled the contract for the privatization of the iron pipe factory, TEPRO Iaşi, with the Czech company Zelezarny Veseli—a company which is on the verge of bankruptcy. The decision to cancel the contract was taken only after the leader of TEPRO's trade union, Virgil Sahleanu, was killed. According to the Romanian police, Sahleanu was opposed to the privatization deal. After an investigation into the death of Sahleanu, the Romanian State Property Fund discovered that the Czech Company was not complying with the terms of the privatization contract.


Corruption in Romania continues to function at all levels of society: a fact exemplified this year by two political scandals implicating, amongst others, Ion Iliescu—potentially the next president of Romania. In April 2000, Iliescu was accused of developing a spy network with Russia, and in May he was implicated in the Adrian Costea money-laundering scandal (see The Red Line and The Parisian Scandal). Both events symbolized the extent of corruption at an official level, but even on an everyday level corruption is an unavoidable part of Romanian life.

After his election as mayor of Bucharest in the local elections on 4 June, Trăian Băsescu has attempted to root out corruption at the local level. One example of his efforts was the removal of illegally positioned kiosks from the Bucharest streets. His moves were met with violent protests, and he came under a barrage of criticism from those who had lost their livelihoods. Corruption has become institutionalized in Romanian society. Romanians know that they only have to bribe the office workers in the police station to remove a poor criminal record, and they know that they don't have to buy a train ticket because they can bribe the inspector, saving half the money they would officially pay for a ticket.

Foreign relations

Economic and political instability has blemished the reputation of the country abroad. What seemed to be a success of the latest Romanian cabinet—the decision of the European Council in Helsinki to begin EU accession talks with Romania in February 2000—was shattered by the domestic situation and the incapacity of the Romanian government to implement a foreign policy that would improve the domestic situation.

Hopes for visa free travel in Europe crumbled in December this year, when EU ministers agreed to unconditionally remove Bulgaria from the Schengen blacklist, but set certain conditions for Romania, creating uncertainty for the future.

Another chapter of Romanian foreign policy that has not yet been achieved is the "adoption of practical measures and initiatives in the fight against non-conventional threats against stability and security." The number of Romanians leaving the country and illegally migrating to other countries is a major concern for the Romanian government, despite a significant fall in the amount of Romanians who did this in 2000. According to official reports of the Foreign Affairs Ministry, 90 percent of the illegal Romanian immigrants are Roma who travel to Central Europe to beg.

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Romania seems caught in a time reminiscent of the interwar period. Then, the National Peasants' Party took the helm at the time of a European crisis. Their inability to lead the country out of cruel poverty opened the way to extreme nationalist parties with their demagogical political platforms appealing for a pure national state and making the "others" (Jews especially) responsible for the poor situation of the country.

In 1996, the National Peasants' Christian Democrat Party (PNŢCD) dominated the CDR and were elected at a time when the economy was failing. With real wages falling, galloping inflation (40 percent this year), and a growing unemployment rate that has doubled in 2000 (from 5 to 11 percent, according to Economic Intelligence Union Country Report, 2000), Romanians voted out the centrist coalition for their incapacity to eradicate economic ills and chasten the "founders" of their corruption and bureaucracy-laden society.

These "founders" have been reelected in the November elections and still show the same contempt for Europe: "We will enter EU, but only with dignity," said Ion Iliescu. The Romanian vote also blazed the trail to power for the right wing—a party that can only soothe the despondency of the 40 percent of Romanians living in poverty today by giving isolationist speeches filled with demagogical, old-fashioned promises.

Despite all the disillusionment, the year 2000 did bring the first steps forward for Romania's integration into the EU—however unsubstantial. Nonetheless, there is little evidence of any real outward change. As a result, the electorate, sick of poverty, chose an alternative route. The general elections in November saw the unexpected rise of the far right and a return to the dominance of a leftist governmental party. Rather than choosing another step forward, Romania voted for a reversal of policy and a return to the past.

Marius Dragomir, 6 December 2000

Moving on:


Roman Didenko
Ukraine in Crisis

Tiffany G Petros
No Czech Feminism

Geneva Anderson
Albanian Arts Pyramid

Sam Vaknin
The Black Economy

Year 2000 Review:
Magali Perrault
Austria: Developing Divisions

Catherine Lovatt

Brian J Požun
Bosnia: Deep Scars

Dan Damon
Croatia: Life without Franjo

Tiffany G Petros
Czech Republic: Stable but Lagging

Mel Huang
Estonia: Prosperity and Apathy

Ivana Gogova
EU: Biggest Problems Remain

Gusztáv Kosztolányi
Hungary: Identity Reconsidered

Jens Boysen
Germany: Post King Kohl

Dan Damon
Kosovo: Survival as Victory

Daria Kulagina
Latvia: An Eventful Year

Mel Huang

Wojtek Kość
Poland: Searching for Normalcy

Marius Dragomir
Romania: From Bad to Worse

Slavko Živanov
Serbia: Trouble at Home

Robin Sheeran
Slovakia: The Struggle Goes on

Brian J Požun
Slovenia: A Stable Success

Sarah Whitmore
Ukraine: Life on the Brink

Charlene Caprio
Zagajewski's Memoirs

Brian J Požun
Shedding the Balkan Skin

Martin D Brown
Czech Historical Amnesia

Dejan Anastasijević (ed)
Out of Time

Gusztáv Kosztolányi
Hungarian Oil Scandal

Sam Vaknin
After the Rain

Press Reviews:
Andrea Mrozek
Germany: From Warsaw to Nice


Mixed Nuts

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