Romania Economy

The Romanian and the Moldovan Cabinets were holding a joint meeting, Five offers were filed from companies wanting to build the new metro network in Bucharest, Investments in Romania's economy went up by 9.2 per cent last year ADEVARUL The Romanian and the Moldovan Cabinets were holding a joint meeting in Iasi, northern Romania.

In China, Romania, Germany—oh, and jails—cigs are as good as gold for doing business under the table

President Michel Sleiman arrived in Prague Wednesday evening and is expected to hold talks with President of the Czech Republic Vaclav Klaus today.

PRAGUE: President Michel Sleiman arrived in Prague Wednesday evening and is expected to hold talks with President of the Czech Republic Vaclav Klaus today.

PRAGUE: President Michel Sleiman arrived in Prague Wednesday evening and is expected to hold talks with President of the Czech Republic Vaclav Klaus today.

The latest interim forecast of the European Commission, issued today, points to a stagnation of the EU economy and to a mild recession in the euro area. However, modest growth is predicted to return in the second half of the year. Against the backdrop of a waning growth momentum and continued low confidence, real GDP is expected to stagnate in the EU and to shrink by 0.3% in the euro area in 2012. The Maltese economy, however, is projected to grow by 1%, one of the best performers. Estonia and Slovakia and projected to be the best performers in the eurozone with growth of 1.2%. Divergences between Member States remain pronounced At the level of the individual Member States, growth divergences remain pronounced. In 2012, GDP growth is forecast to be positive in seventeen countries (Bulgaria, Denmark, Germany, Estonia, Ireland, France, Latvia, Lithuania, Luxembourg, Malta, Austria, Poland, Romania, Slovakia, Finland, Sweden and the United Kingdom) stagnant in one (Czech Republic) and negative in nine countries (Belgium, Greece, Spain, Italy, Cyprus, Hungary, the Netherlands, Portugal and Slovenia). Growth will be highest in Poland (2.5%),...

Given the economic instability of these years, which destabilised several sectors of interest for the Romanian economy and also imbalanced tourism, what measures did you take and what new offers did you launch on the local market, as hotel operators? 2011 was a demanding year for us and for the whole hotel industry of Romania, a year when we had to ... (more)

Leonard Orban, minister of European Affairs, has said that Romania has few growth options remaining, and a better absorption rate of EU funds could fill the void left by foreign investments.From a maximum of EUR 16 billion in 2008 foreign direct investments plummeted to EUR 2... Leonard Orban, minister of European Affairs, has said that Romania has ... (more)

Romania's newly installed Minister of Economy Lucian Bode, 38 years old, is the head of the Democrat Liberal Party Salaj, president of the Friendship group Romania - Qatar and former president of electricity distribution company Electrica Zalau until 2008.

Romania must make major public investments its priority and channel all available funds to those sectors that can generate economic growth, the head of the IMF mission in Bucharest, Jeffrey Franks told Radio Romania.

Romania's incoming prime minister Mihai Razvan Ungureanu rang the changes at the economy and finance ministries Wednesday when he unveiled his new government.

(This post is by Christine McCann)

Here’s the latest of our news bulletins from the ongoing crisis at Japan’s Fukushima Daiichi nuclear power plant.

State of Nuclear Politics in Japan

Japan will reportedly join the Convention on Supplementary Compensation for Nuclear Damage (CSC), an international pact designed to establish uniform standards for compensation in the event of a nuclear disaster. The convention grants “exclusive jurisdiction” to the country where a disaster occurs, saving it from potentially exorbitant overseas litigation, and decrees that member states will share responsibility for any event for which liability exceeds $465 million. In addition, it guarantees “exclusive liability of the operator,” meaning that only nuclear power companies will be held liable for a disaster, not manufacturers of reactors. The United States, Argentina, Morocco, and Romania have already signed the pact. Up until now, Japan has refused to participate in the belief that a nuclear disaster could never happen on its soil.

Records show that three members of the task force that is revising Japan’s nuclear energy policy have received over 18 million yen in donations from the nuclear power industry over a five-year span. Although the payments were not illegal, critics, including some fellow task force members, say that the men have been influenced by the donations. Hideyuki Ben, who sits on the task force and represents the Citizens’ Nuclear Information Center noted, “All three professors are experts on nuclear power, but they only made remarks in favor of nuclear power generation. It was as if no accident had occurred [at Fukushima.]”

In spite of Nuclear Crisis Minister Goshi Hosono’s promise late last month that employees who worked at Japan’s soon-to-be created Nuclear Regulatory Agency would not be allowed to later return to the Ministry of Economy, Trade, and Industry (METI), in order to prevent conflicts of interest, sources are now reporting that that rule will only apply to the top seven posts at the 485-person agency. Critics are expressing concern about a lack of independence and neutrality.
 
Japan Nuclear Fuel, Ltd., which operates the Rokkasho reprocessing plant in Aomori Prefecture, is delaying scheduled vitrification tests after similar tests failed last week, throwing a wrench into plans for the nation’s nuclear fuel cycle. Vitrification is the process of mixing molten glass with highly radioactive liquid nuclear waste, in order to store it more effectively. However, tests resulted in a blocked furnace at the plant, as well as the unexpected production of unidentified black particles. Rokkasho officials have no prospect of immediately fixing the malfunction. The plant has continued to encounter problems since testing began there in 2008, and this most recent issue is expected to spur a review of Japan’s nuclear policy.

A government investigation has revealed that METI intentionally concealed cost estimates of disposing of spent nuclear fuel in 2004, in order to promote Japan’s nuclear fuel cycle program—and that the cover-up was ordered by Masaya Yasui, who now serves as METI’s Deputy General for Nuclear Safety Regulation Reform. Critics, who say that the subsequent internal investigation was shoddy and incomplete, are calling for his removal.

An employment scandal involving contract workers at Kansai Electric’s Oi power plant in Fukui Prefecture reveals that illegal labor is a common occurrence in Japan’s nuclear industry, and in some instances, involves organized crime syndicates. Workers frequently receive only a small portion of what their contracts promised, with the excess being funneled to the crime syndicates; safety of the workers is often compromised. The Japan Nuclear Energy Safety Organization (JNES) says that of the 83,000 nuclear power workers who were exposed to radiation in 2009, 90% were contract workers not directly employed by utilities.
 
Recently disclosed documents reveal that power companies paid local municipalities over $2 billion over the past 40 years to host nuclear plants. Tokyo Electric Power (TEPCO) alone paid over $460 million, and while it stopped making payments after the Fukushima disaster, other utilities have continued to do so. The money was used to pay for public facilities, sports arenas, scholarships, and to cover budget shortfalls. The costs for those payments were routinely passed along to consumers.
 
The city of Musashimurayama in Tokyo will obtain power from sources other than TEPCO for the majority of public entities in the city starting in April, in order to save money and reduce reliance on TEPCO, which has traditionally held a monopoly on electricity there. City officials estimate that the move will save approximately 14 million yen per year, and will support renewable energy firms, including those that produce wind and solar power.

South Korea is now competing with Japan to build nuclear reactors on Turkey’s Black Coast. Analysts believe that Turkey is intentionally promoting competition between the two nations, in order to get the best deal.
 
TEPCO

Japan’s Nuclear Damage Liability Facilitation Fund (NDF) has agreed to give TEPCO an additional 689.4 billion yen to cover compensation costs for victims of the Fukushima Daiichi disaster, bringing the total amount of government compensation funds to 1.6 trillion yen. Yukio Edano, the head of METI, is expected to approve the fund transfer next week.
 
Reactor Status

TEPCO has begun injecting boric acid into reactor #2 in an effort to prevent recriticality, and has increased cooling water flow to 13.1 tons per hour, after one thermometer showed that the temperature there had increased more than 25 degrees in less than a week, from 45ºC to 70.1, down from an earlier high of 72.2. TEPCO officials believe that plumbing work conducted last week may have shifted the flow of water within the reactor, preventing that water from reaching part of the melted fuel.  The utility said that no xenon-135 has been detected, which could indicate recriticality. Haruki Madarame, Chairman of Japan’s Nuclear Safety Commission (NSC), criticized both the Nuclear and Industrial Safety Agency (NISA) and TEPCO for a lack of transparency about the incident.
 
Meanwhile, in accordance with Japanese law, NISA began a three-week long inspection at the Fukushima Daiichi plant this week, in order to confirm that the reactors there are still in a state of so-called cold-shutdown.

Contamination (Includes Economic Impact and Human Exposure)

Japan will measure aerial radiation over the 20 km no-entry zone surrounding the Fukushima Daiichi nuclear plant for the first time since March.  The government is considering revising the no-fly zone over the plant.

Other Nuclear News

A fire broke out this week at Russia’s Alikhanov Institute of Theoretical and Experimental Physics in Moscow. The Institute is home to a 60-year-old reactor, which is no longer in use but contains large amounts of radioactive materials. Russian officials insisted that no radiation has leaked into the atmosphere, but details about the event conflicted repeatedly. Ivan Blokov of Greenpeace Russia said, “This is extremely dangerous…it shows there has been a major failure in their operations.” During the Chernobyl disaster in 1986, Soviet officials did not inform the public about the meltdown for two days.

After last week’s reports of a radiation leak and severely worn tubes at its San Onofre reactor, Southern California Edison Power Company admitted that a worker fell into a nuclear reactor pool there. The utility said that the worker was not exposed to significant amounts of radiation. However, critics are questioning quality control procedures at the plant, and asking how so many incidents could take place in just a week. The San Onofre plant has a history of safety issues and other infractions.

The Romanian Government is considering offering state aid to German group Bosch, which is preparing a EUR 77 million investment in the Cluj area of Romania, and for De'Longhi's planned take over of the former Nokia factory at the same site.

South African investment fund New Europe Property Investment NEPI has taken over the majority stake in ModaTim Investment Properties, the developer of the City Business Center CBC in Timisoara.

Robert Bosch GmbH, the world's largest supplier of automotive components may invest as much as 60 million euros in a new factory in Jucu - Romania, Bloomberg reports citing Romanian business daily "Ziarul Financiar". "The contract is completed, it just needs to be signed, or to be more exact, we are waiting for it to be signed after Ministry of ... (more)

Público, Adevărul, Dnevnik , The Scotsman, Die Presse, The Irish Times (Today's front pages)

Thousands of Romanians, including teenage students who cut class, marched through their capital on Thursday to demand the resignation of their government for imposing harsh austerity measures in order to receive international loans for the nation's battered economy.

As DACHSER opens a new state-of-the art dangerous goods warehouse in Romania, the company is well placed to build its business as trade grows between Asia and the emerging markets of Eastern Europe Kempten/Ploiesti, January 16, 2012.

Government efforts to enact a controversial healthcare bill sparked protests, some violent, that mushroomed into demonstrations of broader discontent over the economy and national leadership.

More »

The 7.2% y/y growth the Romanian construction market had in Q3, 2011 sends a deceiving hope.

Romania's Directorate for Investigating Organized Crime and Terrorism started to investigate 40 individuals in the management of Romgaz, in the Economy Ministry and the Romanian Energy Regulatory Authority for having allegedly undermined the Romanian economy by selling natural gas at preferential prices.

At the end of September, the Finnish group Nokia announced it would close down its production unit in Jucu, Cluj County, which happened in early December.

As the year approaches an end, Romania-Insider.com looks back at the biggest business and political developments of 2011 in Romania.

Romania's first ice hotel has opened for business, with temperatures at around 2C.

Several Eastern European banks have started notifying their customers in the beginning of last week that their cards have been blocked and will be replaced with new ones. Most of the banks did not give out any more details about what happened, and in many cases even failed to notify their customers prior to actually blocking their cards. Is it just another day in the payment processing business? Based on the rushed response from banks and the lack of information surrounding the case, I would say no.

It all started one week ago after the state-owned Romanian bank CEC Bank blocked ~17,000 cards in response to a security breach at one of VISA’s European payment processor.

The reaction of other banks followed soon. The Romanian branch of ING Bank also confirmed to have blocked compromised cards, but didn’t put out a number. They say they’ve only blocked a few cards, but are closely monitoring the situation.

A few days later, Serbian banks also started blocking thousands of cards for security reasons. Raiffeisen Bank, Komercijalna and Societe Generale confirm they have been informed by VISA about some of their customer’s cards being compromised. Very similar to what happened in Romania.

Rumors indicate the European branch of an electronic payment services provider, Euronet Worlwide, to be the source of this breach. This information has been going around Romanian business media (1, 2) - and though it hasn’t been confirmed officially, it would explain why customers from different banks in different countries were affected.

It’s very hard to assess the severity of this security breach, as the banks’ reaction to these events was very mixed. Some banks proceeded immediately to blocking and replacing all affected cads, while others decided to monitor the situation more closely.

Currently, it’s very hard to get a full picture of what is going on, but as it usually happens, these are unlikely to be isolated incidents. Actually, these stories could be just the tip of the iceberg. If you have recently received such a notification from your bank, we’d like to hear from you, especially if it’s outside Serbia and Romania.

Meanwhile, make sure to follow these 3 basic steps to make sure you don’t become a victim of credit card fraud:

1. Check your statements as often as possible. Make sure all payments showing up are actually made by yourself. In case you suspect a fraudulent transaction, get in touch with your bank as soon as possible.
2. Enable instant SMS notifications if your bank offers it. Some banks offer it for free, others charge for this option. No matter what, it’s worth it. You’ll be able to get instant reports of payments made with your cards.
3. Make sure you keep most of your money in an account that has no card linked to it. Having to move money from an account to another on a weekly or monthly basis might seem annoying, but it can save you a great deal of pain in case your card gets compromised.

Last, but not least, we know it’s the holiday season and shopping is on everyone’s mind. So if you want to keep your money safe when doing online shopping, this insightful article we’ve put together is for you: Online shopping made safe and convenient.

The EBRD is continuing to support Romania's energy security strategy by boosting funding to the real economy to increase energy savings and reduce carbon emissions.The Bank selected the 10 best projects financed under a joint EU-EBRD programme called the Energy Efficiency... The EBRD is continuing to support Romania's energy security strategy by ... (more)

The Economist magazine has joined the chorus of voices warning of a tough time in Romania in 2012.

There is a long history of Romanian and Turkish relationships and Turkish entrepreneurs were among the first to develop business in Romania in the early 1990s.

Mario Badescu skin care, a cosmetics business created by Romanian born chemist and cosmetologist Mario Badescu in the US, has branched out to Romania, where it has already opened a store and plans to add three next year.

Bucharest and its environs could be the city equivalent. I recently had the pleasure of visiting Romania for a business meeting and it was a wonderful trip.

IT SOUNDED like the jaded complaint of an "Occupy Wall Street" protester: banks are greedy, they gambled with risky loans and now they are holding their hat out again.

German business software maker SAP plans to announce a major investment in Romania next week, the president of SAP Europe, Middle East & Africa was quoted as saying by local media on Friday.

Iana Matei, a psychologist by training, is the leading figure in Romania's fight against human trafficking.

A large talent pool and advanced broadband infrastructure make Romania fertile ground for start-ups. The challenge is cultivating a culture of entrepreneurship.

Film News: Anim'est fest draws biz pros, cartoon lovers -- Romania's Anim'est film festival drew 150 film professionals from around the world and 22,000 ticket buyers, but the biggest winner of the event may be the Eastern European animation business.

International News: Anim'est fest draws biz pros, cartoon lovers -- Romania's Anim'est film festival drew 150 film professionals from around the world and 22,000 ticket buyers, but the biggest winner of the event may be the Eastern European animation business.

International News: Anim'est fest draws biz pros, cartoon lovers -- Romania's Anim'est film festival drew 150 film professionals from around the world and 22,000 ticket buyers, but the biggest winner of the event may be the Eastern European animation business.

Enel Green Power has signed an agreement with Danish Government-owned Export Credit Agency and Citigroup for a EUR 112 million loan over 12 years, which should fuel investments in wind energy projects in Romania.

South African investment fund New Europe Property Investments , the first real estate investment fund listed on the Bucharest Stock Exchange from June 20 this year, it is in the process of raising EUR 40 million in underwritten rights issue.A "Funds raised will be used for further acquisitions and investments in Romania," said Martin Slabbert, CEO ... (more)

China Guangdong Nuclear Power Group may invest in a project to add two more reactors at Romania's sole nuclear power plant in Cernavoda on the Danube river, Romania's economy ministry said on Wednesday.

Retailer real, - Hypermarket, part of Metro Group, has reached a level of investments of EUR 550 million in the five years since it entered the Romanian market, the retailer has announced.

Nokia always said there'd be "substantial reductions in employment" but it's still brutal to see it happen. The manufacturer just revealed it intends to close its massive manufacturing plant in Cluj, Romania (pictured above) in order to shift high-volume feature phone production to Asian factories. The Cluj plant currently employs 2,200 people. Further "consolidation" of Nokia's Location and Commerce business will result in the closure of sites at Malvern in the US and Bonn in Germany, impacting around 1,300 employees. Finally, the company also says it'll review its production operations at Salo in Finland, Komarom in Hungary and Reynosa in Mexico, but we won't know how many workers this will affect until a further announcement at the beginning of next year. Nokia's press release says these cuts will take place by the end of 2012 and be in addition to the 4,000 job losses announced back in April -- it's copied in full after the break.

[Thanks to everyone who sent this in]

Continue reading The Nokia contraction continues: 3,500 further job losses and more on the horizon

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The Netherlands-Romanian Chamber of Commerce has expressed its support of Romania's joining the Schengen area, but has asked the Romanian state to enforce non-discriminatory controls and not target any specific industry or business community.

PRAGUE, Sep 20, 2011 - The economic crisis has led Romanian authorities to take some of the toughest austerity measures in Central and Eastern Europe.

The amount injected into the Romanian economy through foreign direct investment is dropping, prompting disagreements about whether the global crisis or the government is to blame.

The low-cost carrier Blue Air may struggle with the intense competition in the Romanian market, but its parent company, which is in the construction business, wants to improve the conditions for low-cost carriers in the country capital Bucharest by constructing a new airport.

In a bid to attract more tourists, Romania is working on a "red circuit" tour to include traces of the communist dictatorship in the country, Tourism Minister Elena Udrea said on Thursday, according to Romania Business Insider.

CooperStandard Automotive Inc. is expanding its auto production in Eastern Europe, set to build a body sealing and fluid handling business in Craiova, Romania.