The EC announced there are clues that the Romanian state may have unduly interfered with the decisions to sign the contracts that are being investigated. European commissioner for competition Joaquin Almunia said that indirect subsidies to reduce ordinary spending may affect competition just as direct subsidies do. The authorities in Brussels want to check if the preferential prices offered by Hidroelectrica have put the beneficiaries at an advantage. In response, Hidroelectrica announced that the EC has been provided with copies of all the contracts for purchase or supply of energy that were requested late last year. Referring to the situation of the national company, economic analyst Radu Soviani told us:

“I understand that the European Commission has a major interest in these bilateral contracts, which are colloquially known as contracts made with a number of ‘’wise-guys’’. As far as I’m concerned, if there are suspicions, these contracts must be annulled and any necessary damages must be paid. The parties that signed contracts that put Hidroelectrica at a disadvantage have to answer in criminal court and pay the penalties. Incompetent managers or ministers have to be put under criminal investigation and should have their wealth seized if they have caused losses to the Romanian state”.

The Romanian Competition Council had been investigating the Romanian electricity market, scrutinizing all the bilateral contracts signed by Hidroelectrica. In turn, the company announced it would annul most of the contracts for the direct purchase of energy. The company sold around 70% of the electricity it produced at below-market prices through contracts signed between 2001 and 2003, contracts that were set to expire between 2014 and 2018.

Late last year, Hidroelectrica started re-negotiating these contracts under pressure from the IMF. The initial deadline for finalizing the negotiations was set for the end of last year, but it has been extended several times.