Vol 1, No 7, 9 August 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
It was announced from Washington on Thursday that the International Monetary Fund has approved a USD 547 million loan for Romania. USD 73 million will be available immediately with the rest paid by instalments dependent on the government meeting. The loan promises to target economic reform. The latest loan will run for eight months. The last IMF loan granted to Romania expired before all the loan could be accessed due to the Romanian government not being able to implement the total package of required reforms.
The IMF are determined that Romania also negotiate private loans. Obtaining such loans - to the value of USD 350 million - was one of the IMF's initial requirements. Up to now Romania has only been able to obtain loans of USD 108 million. First Deputy Managing Director, Stanley Fischer, said: "Directors regretted that, despite the authorities' efforts, it had not been possible for them to obtain the desired amount of private sector financing," and "emphasised that it is vital that Romania continue to work vigorously toward obtaining additional private foreign financing in support of its reform programme."
The government is now required to keep pay rises down, make every effort to curb spending at remaining state-owned enterprises, proceed with its process of privatisation and to reach its inflation forecast of 40 percent.
The confirmation of the loan comes at the end of a week which began with positive statements from Romanian President, Emil Constantinescu, after his meetings at the Sarajevo summit with IMF andWorld Bank officials. However, as the week progressed, problems arose - with the final negotiation being extended by a day. This resulted from the Romanian government being unable to fulfil the initial demands of the IMF for obtaining private loans when talks with Credit Suisse First Boston (CSFB) for a USD 200 million loan reached deadlock.
At the Sarajevo summit, the leaders of 40 countries met to discuss the stability pact for the Balkans. The conference was a time for fine words about the role Romania had played during the Kosovan conflict, and a time of many promises for the future. In opening the conference, Finnish and current EU President Martti Ahtisaari, the chairman of the summit, said: "The stability pact envisions a Europe at long last undivided, prosperous and free. A Europe where war becomes unthinkable. It is high time for the region to make up for lost time."
There have been suspicions that NATO and the EU are reluctant to include countries such as Romania, in their expansion programmes. This was refuted in a statement by Bodo Hombach, the German official in charge of the stability pact who told the summit: "It must be clearly spelt out that working together in South-Eastern Europe puts countries not in the slow lane but into the fast lane towards pan-European co-operation."
British Foreign Secretary Robin Cook maintained the positive approach in committing the leaders at Sarajevo to "building democracy and economic reconstruction and making sure there is security and not tension in the region." In a series of articles published throughout South-Eastern Europe, British Prime Minister Tony Blair took matters further by clearly stating that he wanted both Romania and Bulgaria to be full members of the EU and saying that they should be offered accelerated entry into NATO. "If you want to join, it is vital that we help to find a place for you," he wrote. "We want to get you on a fast track in."
In further support, US President Clinton offered an economic support package of USD 700 million. This included steps designed to encourage exports from the region into US markets.
NATO Deputy Secretary General, Sergio Balanzino, said: "NATO's policy...is not exclusive, but inclusive." He urged the Balkan nations to take the necessary steps to work towards membership.
Lack of money seems to be preventing both Romania and Ukraine from taking part in the peacekeeping force in Kosova. After a two day meeting between the chiefs of staff of the two countries, the Romanian Chief of Staff, General Constantin Degeratu, reported that the plans to send infantry, engineers and a hospital were suspended, because there were no funds available. Colonel General Volodymyr Shkidchenko of Ukraine said:"Like the Romanians, we have problems to deal with. Apart from the reasons known to all of us, there was no way of accounting for such activity in budget planning. We tried to resolve these issues by asking a number of countries to provide help to send our contingent and maintain it. The reaction we got has been rather positive."
In a determined effort to gain approval from the International Monetary Fund for standby credits, the government and shareholders of Bancorex agreed to a merger with Banca Comerciala Romana. The State Ownership Fund, which is a major shareholder in both banks, led the decision making process - which culminated in the acceptance of Bancorex being absorbed into BCR within one month. Bancorex has debts of USD 600 million.
Criticism of the merger has been made by Secretary General Mihai Ionescu of the National Association of Exporters and Importers in Romania (ANEIR). He has described the action as a monumental error which will lead to massive damage to Romania's export trade.
Meanwhile, the Bucharest Public Prosecutor's Office have been asked to speed up investigations of "those involved in the Bancorex bankruptcy and, therefore, guilty of causing damages and undermining the national economy." Allegations include the illegal granting of loans to individuals and corporations during the time of Ion Illiescu's presidential term.
An explosion occurred at the Sidex steel mill in Galati on Thursday, killing three workers and injuring a further 14. Production manager Aurel Mocanu said that the explosion took place during routine maintenance of one of the furnaces at the site. The smoke chimney was destroyed, with debris scattered over a radius of 60 metres. Rescue teams believe that more workers are still trapped within the wreckage. Sidex General Manager, Ionel Bors, said: "I think it was a technical accident caused by accumulations of gas which turned into an explosive mixture due to the high temperatures." He announced an investigation into the explosion.
Sidex is Romania's main producer of steel plating. On Thursday, a government spokesperson announced the appointment of Petrisor Peiu as chairman of the Sidex board of directors, replacing Flavius Moldovan. Moldovan left office after failing to explain to the Romanian government some of the financial decisions he had made. Peiu has indicated that the restructuring of the company will be speeded up.
The meningitis outbreak in the north of Romania has worsened, with more than 300 cases now being recorded. On Tuesday, the Ministry of Health said that the city of Iasi had become an epidemic zone and set out restrictions and special measures to be put in place by the local authority. In the poor areas of the city, where the outbreak is worse, it is reported that the affected areas have been without water mains since May.
Doctors believe that bathing in local lakes has been a contributory cause to the epidemic. In Iasi there are already 176 confirmed cases, with a further 90 people suspected of being infected with the virus - these are mainly children and young people. The Iasi hospital where infectious diseases are treated is understaffed and overcrowded - with five patients having to share 2 beds. The medical staff at the hospital believe that the Health Ministry are being less than helpful, particularly in their reluctance to provide funds for the hospital. EvZ has reported that a statement from the ministry said that it lacked the necessary funds to help "the filthy, dirty Moldavians who caught the meningitis."
Poor water supply has also been blamed for the outbreak of 350 cases of hepatitis in the city of Baia Mare. Doctors expect the epidemic to increase to over 5000 cases during the month of August.
Three people out of 32 have died, after also being diagnosed as having contracted the disease leptospirosis in Buzau. The people are reported to have been swimming in a river that was infested by rats.
It has been suggested that these diseases, together with typhoid and cholera, are recurring in Romania for the first time since the end of the Communist era some 10 years ago and are attributed to a rapid decline in the standard of living.
July came to an end as it began - with bad weather being responsible for more deaths. In the town of Petrosani, lightning set fire to a house in which a mother and her seven-month-old baby died. Over 20 people have been killed as a result of landslides, floods and storms, which have also caused severe damage to agricultural land and many houses.
Dragos Nicolescu, vice-president of the Romanian Medical Council (CMR), spoke out about the death of Astra Ploiesti player Stefan Vrabioru, who collapsed during a match against Rapid Bucharest. Nicolescu said: "The player could have been alive now, if he had been attended to by a doctor and a properly equipped ambulance soon after he collapsed." Allegations about absence of doctors, forged documents, unequipped ambulances, delays of investigations and poor refereeing have all been aired. National Bucharest coach Mihai Stoichita said: "The system is responsible for Vrabioru's death."
Nadia Comaneci, the Romanian gymnast who won three gold medals, a silver and a bronze as a 14-year-old at the Montreal Olympic Games, is to visit her home town of Onesti with a group of American female gymnasts. She will visit the town's gymnastics school - which is now named after her - where she trained prior to her triple gold medal. She has said she would like to see a gymnastic academy set up in Romania. "This academy should be open not only to gymnasts from Romania, but to young talent from around the world," she said.
Camelia Potec, aged 17, won Romania's first gold medal at the European swimming championships in Istanbul in the 200 metre freestyle. Potec also took the bronze medal in the 400 metre freestyle.
Finally, as we approach the total eclipse of the sun, which will be seen to full effect in Romania where it is expected to last for 2 minutes and 23 seconds, criticism has been made of the country's preparedness for an influx of visitors. Magda Stavinschi, manager of the Romanian Academy's astronomy institute said: "The eclipse will be at its maximum in Romania. The country should have also been prepared to the maximum. The eclipse could have served to take our country out of darkness."
Visitors to the country have few options for hotel accommodation - with a total of only 160,000 beds available. The roads are in a very poor state, with only a short stretch of motorway. Plans for improvement have been affected by the July weather - with roads to the Retezat and Paring mountains being washed away by the floods. The industrial town of Rimnicu Vilcea, 350 km (200 miles) northwest of Bucharest, has been overwhelmed by requests from 10,000 visitors for accommodation.
In Bucharest itself, a spectacular concert, featuring Luciano Pavarotti, is to take place outside the People's Palace - with tickets selling at USD 200. A commemorative postage stamp bearing Pavarotti's portrait will be on sale for USD 2. Promotions schemes for the eclipse have also played on the legend of Dracula to encourage tourism. A new Romanian plastic banknote, Europe's first, with a face value of 10 US cents, will be on sale to souvenir hunters for USD 2.
The National Post Office has started selling special glasses for watching the eclipse. Some postmen, who earn commission on sales, have been using dubious methods to increase their sales."Unless you buy these glasses, I can't give you your state pension," seems to be a favourite.
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