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| THE WEEK IN REVIEW 26/07-01/08/2010 |
| (2010-07-30) |
| Last updated: 2010-08-02 14:55 EET |
IMF and European Commission experts have returned to Bucharest for a fresh assessment of the stand-by loan agreement concluded with Romania in the spring of 2009, on a mission that is due to end on August 4th. After the first round of talks with representatives of the National Bank, the Finance Ministry and the Labour Ministry, IMF mission chief Jeffrey Franks said that the Romanian authorities had made progress in several field, but had also encountered delays, in particular in the reform of the pension system and in the implementation of the unified salary law in the budget sector. Franks also said that the salary law must be modified in order to show effects in 2011. In his opinion, Romania must ensure that its labour force is more flexible, in order to increase productivity, and must further amend the Labour Code to make hiring and firing easier. He said that talks on changing the budget deficit target set for 2010, of 6.8% of the GDP, would be premature. Franks drew attention to the fact that in the coming period the IMF will revise the estimate regarding the drop in GDP in 2010, which currently stands at 0.5%, and noted that the Romanian economy will be in recession in 2011 as well. The IMF experts also met business people who said they were waiting for government measures to boost the economy, and also came up with their own proposals. These included reductions to the 16% flat rate of income tax, and VAT cuts, which has been recently raised from 19 to 24%, as well as plans for exempting newly established companies from profit tax and eliminating minimum social contribution obligations. The outcome of this new mission will influence the disbursement of a new 900 million Euro installment of the 20 billion loan granted by the IMF, the European Commission and the World Bank.
France’s decision to tighten its policy regarding the dismantling of illegal Rroma and travelers’ camps on its territory has triggered criticism. France has also initiated a rapid expulsion procedure for people guilty of crimes to return them to their countries of origin, mostly Romania and Bulgaria. The left wing opposition in France, along with human rights organizations, denounced these measures. In another move, Paris officials have shown reluctance with regard to Romania’s entry into the Shenghen area in 2011, because of the way in which the Bucharest authorities manage the Rroma issue. The Romanian Foreign Ministry has stated that a European approach to Rroma integration is essential, and that the situation of those citizens who commit crimes in the EU countries must be addressed without resorting to stereotypes or ethnic profiling. The Romanian side has reasserted the fact that it is open to continuing its cooperation with France, both in the field of law enforcement and with regard to the promotion of social inclusion projects.
On Thursday Romania celebrated its National Pavilion Day at EXPO 2010 in Shanghai, marking the most important cultural moment of its presence to this world exhibition. The date was chosen to coincide with the celebration of the national anthem, entitled “Wake up, Romanian”. Attending the events, the Romanian Foreign Minister Teodor Baconschi urged Chinese tourists to visit Romania and encouraged business people to invest in fields such as infrastructure, energy, industry and agriculture. Also, the new country brand was launched on the same day, in the presence of Tourism Minister Elena Udrea. The new logo, with the slogan “Explore the Carpathian Garden”, is aimed at promoting Romania as a tourist destination for foreigners. Activity tourism, spa holidays, as well as historical, cultural and religious tourism are all being promoted. The event was attended by the Romanian sports legends Nadia Comaneci, Gheorghe Hagi and Ilie Nastase.
A tragic helicopter accident occurred on Monday in a mountainous region in central Romania, in which 7 soldiers died – 6 Israelis and one Romanian. The presidents of the two countries, Traian Basescu and Shimon Peres, respectively, extended their mutual condolences. The victims were commemorated on Wednesday in all the Romanian military units and on Friday the remains of the Israeli solders were repatriated. In the meantime, Romanian and Israeli investigators have continued their joint investigation to establish the cause of the accident. The current official version is that the weather was bad, with thick fog, and the Israeli CH 53 helicopter, which was participating in a joint drill, hit a cliff and crashed. Investigators have not ruled out human error as the cause of the accident. The joint military operation, called Blue Sky 2010, included search, rescue and evacuation missions.
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