Emergency governmental mission takes off for Brussels tomorrow

The delay in privatising Banca Comerciala Romana (Romanian Commercial Bank – BCR) and Petrom is now showing. The too high weight of the State in the economy, along with the lack of public administration and justice reform are the main causes undermining Romania’s chances of getting the functional market economy status from the European Union at least this year. The accession side by side with Bulgaria planned for 2007 is jeopardised, as well.

Prime Minister Adrian Nastase together with Finance minister Mihai Tanasescu and Foreign minister Mircea Geoana are leaving for Brussels tomorrow in an attempt to prevent the Government from getting a negative verdict in the 2003 Country Report.

The three need to persuade the European Commission that Romania is capable of seeing the reform programme through and, moreover, make up for the delays. What matters most is not a quantitative assessment, but an evaluation of the capacity to maintain an economic and institutional improvement pace.

Finance minister Mihai Tanasescu has repeatedly tried to take the “functional market economy” issue up with the European Commissioner for economic and monetary affairs Pedro Solbes over the last few weeks in order to present him the efforts Romania has made. No meeting took place, though, because of the Eurostat scandal involving the commissioner himself.

The country report on Romania’s 2003 performance is largely finished, with only the conclusions and the chapter-specific recommendations left to be included. The document should be publicly released with a certain delay, i.e. on November 15.

Romania has already faced a recommendation to break the accession process made by Baroness Emma Nicholson, EU’s Rapporteur for Romania, in May 2001.

The European Commission is very concerned by the lack of significant reform progress, so that it is requesting additional assistance from the International Monetary Fund and World Bank mainly, but also from the US Treasury, OECD and UNDP. Unofficial sources say the representatives of the about-mentioned institutions are supposed to convene for a videoconference this evening in order to debate a new strategy for Romania. One of the main requirements for getting the functional market economy status is to have production means largely privately held. Romania does not meet this condition at the moment, albeit its private sector contributes nearly 70% to the Gross Domestic Product. The Privatisation Authority (APAPS) says only 55% of the total share capital of the companies in Romania are currently in private hands, compared with 70% in Bulgaria.