Vol 1, No 5, 26 July 1999
C E N T R A L E U R O P E A N N E W S:
Romanian News Round-up
Catherine and David Lovatt
The 15-year jail sentences conferred on generals Victor Athanasie Stanculescu and Mihai Chitac last week have received much criticism across the political spectrum. The sentences stipulated that Stanculescu and Chitac, as well as the Defence Ministry, pay USD 2 million to the relatives of the victims from the Timisoara protests in December 1989. Romania's Defence Minister, Victor Babiuc asserted that "such a trial is not just a legal mistake, it is a blunder, with a strong political bias." He went on to suggest that the trial did nothing to reveal what actually took place in Timisoara and it failed to highlight the role played by the Securitate and the Communist Party. Moniturul reports that the Defence Ministry are to appeal the judgement. The President, Emil Constantinescu, entered the debate on 20 July condemning the criticism of the judiciary. He went on to say that the sentences should not be considered as being "passed on the army as a whole," nor should it "affect the army's honour and prestige."
A former colonel of the Securitate, Adrian Zeno has alleged that President Constantinescu worked as a spy for the CIA. The leader of the Greater Romania Party (PRM), Corneliu Vadim Tudor, made the allegation public. The President is accused of passing information about Romania’s uranium mines to the CIA while working as a geologist between 1982 and 1985. Presidential spokesman Razvan Popescu refuted the charges dismissing them as merely further attempts by Tudor and ex-Securitate officers to undermine the President.
The miner's riots of June 1990 were alleged to have been organised by N S Dumitru, the former head of the National Salvation Front. Mugurel Vintila, an Alliance for Romania Party (ApR) deputy, revealed that Dumitru was indeed a key player but refused to elaborate any further.While visiting the wheat producing area of Insula Mare a Brailei, Romania's agriculture minister, Ioan Muresan, admitted that this year's average yield was down to 3800 kg per hectare from the expected 8000 kg per hectare. He went on to criticise the management of the land at Insula Mare, a wheat production project covering 58,000 hectares of arable land. The general manager of the farm ascribed the poor yield to high interest repayments that had diverted funds from the purchase fertilisers and herbicides. Despite the expected shortfall, Muresan said that his ministry was determined to promote wheat exports. Part of his strategy includes subsidising the production and storage of wheat, which would encourage farmers to grow the crop.
Senator Trita Fanita has forecast that the price of bread will rise by 40% by the end of the year as a result of wheat shortages. He said that so far only 14,000 tonnes of wheat had been bought in and predicted a bread crisis next year caused by a combination of the reduced area of farmland allocated to wheat crops and the low yields expected this harvest.
Ali Ettefagh, spokesperson for the Turkish company Akmaya, stated "Romania appears to be unstable for foreign investments and perhaps it is." The Romanian government has been sued by Akmaya following the collapse of the USD 725 million deal which would have bought them a stake in the Petromidia Black Sea refinery. "The government has dealt with us in bad faith. This is no way to treat a foreign investor," Ettefagh stated. The Romanian government is accused of failing to maintain the tax incentives initially promised as part of the deal - the incentives were excluded following pressure from the International Monetary Fund. The State Ownership Fund stated it would re-launch the Petromidia sell off should the current deal fall through.
On a more positive note - Petrom, the national oil company, revealed that the oil deposit it purchased in Kazakhstan should deliver 30 million tons of crude oil. Petrom bought the rights to exploit the oil reserves on a 25-year lease. Ion Popa, Petrom's general director also revealed that they hoped to gain controlling interest in the Moldovian Republic's Tirex Petrol.Mugur Isarescu, governor of the central bank (BNR) has said that the inflation target for this year is now set at 40%; the rate was initially forecast at 25%. BNR also backed a rapid rise in rates of interest for short-term deposits in order to infuse the market with liquid funds. On 16 July the interest rate for one-day deposits soared to almost 200% while the exchange rate stood at 16,010 lei to the USD.
World Gold Council data shows that Romania has massive gold reserves standing 29 in the world. BNR have said that they are not presently involved in gold transactions since the market is volatile and the price low. 27.4% of Romania’s foreign currency is held as gold.
Foreign Minister Andrei Plesu joined a meeting of EU members and prospective members in Brussels to discuss the Reconstruction Plan for South East Europe. The province of Kosovo, Republic of Montenegro and Yugoslavia will take priority with the neighbouring countries such as Romania benefiting from the second phase of the plan. It was also announced in Brussels that the EU is about to make a decision concerning the lifting of the oil embargo against Yugoslavia.
Meanwhile, Romanian businessmen have been discussing reconstruction plans with Yugoslav officials with attention focussing on the petrochemical, construction and finance industries. The major success was an agreement with Yugoslav banks to establish direct financial links between the two countries. A further economic and business mission is to visit Yugoslavia in August to talk about the reconstruction of the power industry.
The protocol signed by Bucharest public transport workers and the mayor following the wildcat strike that hit the capital two weeks ago is likely to be broken. The agreed upon wage increase of 65% has been deemed illegal as it contravenes the 1999 budget law. "It is likely that the RATB employees will start an open-ended strike... and if the protocol and the collective employment agreements are not observed, they can also take legal action against the regie board", said RATB trade union leader Mircea Ionescu,.
Evenimentul zilei reported that postal workers in the counties of Mures and Sibiu were forcing pensioners to buy special glasses to protect them during the solar eclipse. The pensioners were apparently threatened with having their pension witheld if they did not buy the glasses. Dumitru Moinescu, Chairman of the Board of Directors of the Posta Romana, expressed his displeasure at the actions of the employees. However, a representative of the workers said that they were acting under instructions from the central post office in Bucharest - a charge Moinescu denied.
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