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| THE WEEK IN REVIEW 19-25/01/2009 |
| (2009-01-23) |
| Last updated: 2009-01-26 17:35 EET |
This week, the Romanian government has continued discussions on the 2009 draft budget and the anti-crisis plan. The cabinet must take measures to prevent the economic decline and recession in this country. After a nearly 8% economic growth in 2008, in 2009, Romania is preparing for an economic downturn, enhanced by the collapse of markets and the devaluation of the national currency, the leu. The draft budget is based on a budget deficit of 2% of the GDP, a moderate 2.5% economic growth, an exchange rate of 4 lei for one Euro and a 5% inflation rate.
These optimistic figures are contradicted by the European Commission, which on Monday made a 2009 forecast for EU countries. According to the Commission’s forecast, economic growth in Romania will not exceed 1.75%, while the budget deficit will reach 7.5%, that is three times higher than the one estimated by the authorities in Bucharest. Analysts also express fears and point out the three components that have ensured economic growth in recent years: private consumption, constructions and foreign direct investment, which are all seriously affected at the moment. Adding up to all this are the depreciation of the leu, the collapse of exports and rising unemployment. The national currency has plummeted by over 10% since the beginning of the year, exceeding the historic threshold of 4.3 lei for one Euro.
A law providing for the recording and storing of phone calls, e-mails and SMS by phone operators and Internet providers for six months took effect in Romania on Wednesday. According to the law, the information is made available, upon request, to the Interior Ministry, the General Prosecutor’s Office, the Romanian Intelligence Service and the Foreign Intelligence Service and can be used by prosecutors, in case there is suspicion about serious crimes being committed. The law complies with a European directive in the field and was passed by Parliament late last year. Its provisions were received by the Romanian civil society with reticence, justified in an ex-communist country. Several NGOs claim that the law regards Romania as a country of criminals and blatantly violates the right to private life.
The situation in the national gas transport system is back to normal in Romania. On Wednesday, after a two weeks interruption, triggered by the conflict with Ukraine, which it accused of stealing gas from the pipelines, Russia resumed the gas supplies to the EU states, via Ukraine. Romanian Minister of Economy, Adriean Videanu said that during that period, Romania had proven its capacity to successfully manage a crisis and furthermore, it had stated its readiness to supply its neighbors with energy. Videanu made it clear that the population had not suffered when the gas imports were halted and industry was helped overcome the crisis.
The inauguration of Barack Obama, the US’s 44th president and its first African American leader, took place on Tuesday. The first Romanian response after the inauguration came from president Traian Basescu.
“For Romania, its strategic partnership with the USA is a basic element of its foreign policy interests and vision. We want to cooperate with the new administration in Washington to deepen and reconfirm our solid transatlantic relationship, to maintain the relevance of NATO as a cornerstone of our security, to connect the geographical areas in our vicinity to the Euro-Atlantic area.”
Romania’s Higher Defense Council headed by president Traian Basescu has approved the Romanian-Iraqi memorandum of understanding regulating the activities and status of Romanian servicemen in Iraq in 2009. The latter will provide humanitarian and medical aid in the Talil and Baghdad areas and will provide training and counseling for the Iraqi security forces. Last December, the Romanian Parliament endorsed the maintenance of the 500 Romanian military in theatres of operation in Iraq. The UN mandate under which the international coalition troops carried out their missions in Iraq expired on December 31st. The authorities in Baghdad have concluded separate bilateral accords with 6 states, including Romania.
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