September 2005

Eleven banks and consortiums were shortlisted out of an overall 12 banks that submitted letters of intent, about the provision of financial consultancy in Romtelecom's privatization process, ACT Media News Agency reports.

The shortlisted banks are ABN Amro, BNP Paribas, Deutsche Bank - BRD Securities consortium, CA-IB, Citibank, Credit Suisse First Boston, the HSBC - BCR consortium, JP Morgan, Merrill Lynch, Morgan Stanley and UBS - ING -CET consortium.

The company will be privatized by the sell-off of the state-held stake via an initial public bid. The deadline for submission of bids is November 2, 2005.

Under Chapter 20 of the Tariceanu Cabinet's governance programme on information technology and communications policy, the Romanian Government set strategic objectives such as increase in the Romanian economy's competitiveness by encouraging the use of state-of-the-art information technology, consolidation of the IT industry, rise in the public administration's institutional performance by the coherent, across-the-board implementation of integrated IT systems.

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9/28/2005, 10:19 AM CDT Top 20 producers added 61,200 new sows last year with more planned

The new Triumph Foods pork packing plant in St. Joseph, Missouri, will open later this fall. Rick Hoffman (above) is CEO.

Last spring, after a solid year of profit in the swine industry, talk began to swirl about 200,000 new sows going into production in the U.S. Three million more hogs on the market might tip the industry back into the red, producers feared. Here's what the exclusive Pork Powerhouses(r) numbers show: The largest 20 producers in the U.S. have 140,700 more sows now than last year. Of those sows, 61,200 are new to the industry, and the rest were already in production and acquired. More than half of that new growth, about 34,000 sows, comes from existing farms where nurseries are converted to gilt development units as farms switch to wean-to-finish production. Iowa Select Farms, for example, is adding 20,000 sows this way. Additional sow growth by the largest producers is planned. The top 20 have new farms on the drawing board, plus plans for more acquisitions. On top of that, there are new units in the Midwest, some as big as 6,400 sows, being built now by smaller independents. That doesn't reach panic levels, but it could mean more market hogs by next fall. Can the industry handle it?

A new plant will help

Triumph Foods in St. Joseph, Missouri, will be online later this fall. At capacity, it is set to kill 1,000 head an hour or about 4 million hogs a year. Triumph is owned by five of the largest producers in the U.S.: Christensen Farms, The Hanor Company, New Fashion Pork, TriOak Foods, and Eichelberger Farms. A sixth owner is Allied Producers' Cooperative, a group of independent producers in Iowa, Nebraska, Kansas, and Minnesota. The plant will be a success because it has "the three C's," says Bob Christensen, owner of Christensen Farms, Sleepy Eye, Minnesota. "Capacity, capital, and commitment." The total number of sows by Triumph owners is 351,350. That's more than enough to produce all the pigs needed by the plant; however, many owners have marketing contracts with other packers. For that reason, the plant will welcome hogs from other farms. "We are out in the industry today looking for producers to source pigs," says Triumph CEO Rick Hoffman. "Our owners have enough pigs, but they are committed to other plants." (For information on selling hogs to Triumph Foods, call Jerry Lehenbauer at 816/238-3551 or e-mail him at jlehenbauer (at) triumphfoods.com). All pork from the plant will be marketed by Seaboard Foods, and much of it is targeted for export.

The design of Triumph Foods, including larger barns to adequately rest all hogs, is focused on meat quality.

Where in the world could you add sows?

If you had the money and could get the permits (never a slam dunk), dropping in a sow farm might be a tiny bit easier today than in the past few years. Producers report that Indiana and Illinois are more welcoming right now to pig expansion than they have been. Texas still wants pigs but has little water and grain, and only one packer in the region. EU excitement The best option, says Smithfield Foods, is to go overseas. "These are exciting times for Eastern Europe," says Joe Szaloky, director of financial planning and analysis with Murphy-Brown, the pig production side of the company. Smithfield now has 47,000 sows in Poland, up by 14,000 over last year. In Romania, the company is getting its feet wet with 20,000 sows. While Smithfield went into Poland at a "rapid pace," says Szaloky, it is taking a more measured approach to Romania, aiming for long-term cost advantages. Growth is dependent on European politics and economics. What about Brazil? Brazil's dependence on export sales has been "a frustration" for Smithfield, says Szaloky, despite the country's "significant production advantages." The company has 14,000 sows down there, but no plans for immediate growth. "At this point, we see Eastern Europe as a more stable growth and investment alternative," says Szaloky. "However, the long-term advantages of pork production in Brazil cannot be ignored." Slow growth in Mexico Mexico still has potential for growth says Szaloky. The company's farms in eastern Mexico have grown steadily and are up to 48,000 sows. In Sonora, Smithfield has 33,000 sows. "People eat a lot of pork and pay a good price for it in Mexico," he says. The bottom line with expansion, says Szaloky, is "we go where there are good

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Romanian telecoms supplier Topex has unveiled its Bytton UMTS, a router for wireless broadband internet access using 3G UMTS technology.

The technology administrates and connects local networks to the internet via UMTS network assuring wireless data transfer up to 384 kbps. It allows voice calls and data traffic simultaneously.

Topex designs and manufactures telecommunication equipment such as GSM & UMTS gateways, CDMA gateways, VoIP gateways, protocol translators, and data transfer gateways.

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DUBLIN, Ireland--(BUSINESS WIRE)--Sept. 30, 2005--Research and Markets (http://www.researchandmarkets.com/reports/c24990) has announced the addition of Romanian TV Sets Market (With Perceptual Maps) - 2005 to their offering.

The Romanian Television Sets 2005 report provides 2004 year-end market data. The report gives an instant overview of the Romanian TV sets market, and covers

• TV: diagonal 45 - 52 cm
• TV: diagonal 52 - 72 cm
• TV: diagonal 72 cm and larger

Consultants believe that the growth potential of television sets in the next two years will stand at 10-15% per year, given that:

1. The degree of equipping households with TV sets in Romania is

some 2.5-3 times lower than the European average:

2. The economic growth recorded in the past years is sustainable

3. The official estimates of annual economic growth stand at 5-6%

per year

4. The UE entry in 2007 will lead to an increase in investments

(revenues and expenditures)

5. The purchasing power is growing constantly

6. The 2004 market decreased by 15% compared to the 2003 market (when it rose by 84% compared to 2002), and consumption is expected to continue to increase in the future due to the use of loans.

Consumption in 2004 was covered by imports of 93%. Imports are currently ensured (some 90%) by 10 companies, mainly international brands, (established in Romania after 1995). The companies that invested in Romania developed mainly low-end products but also adapted superior ranges in terms of quality, by attacking the medium segment of the market.

The retail market is dominated some 65% by specialised shop chains Domo, Flanco and Altex. Distribution still represents a limiting factor, which is partially accentuated by the rapid development of shop chains for the 3 nationwide retailers (Domo, Flanco and Altex), hypermarkets and cash & carry stores. Such investors are encouraged by the repeated confirmations related to Romania's EU entry in 2007. The working manner imposed by the foreign brands to the 3 large retailers and distributors (brands, planned work, financial instruments, quality of promotions, obligatory training of sales force) will speed up the professionalisation of Romanian partners.

Worth mentioning is the absence of the Western specialized shop chains on the Romanian market for household appliances and TV sets. The TV sets market is defined by the activity of some 10 companies that went through the exploratory phase, continuing at present with the development of partnerships/distribution, consolidation/organizational development, finding integrated strategies to increase market shares. The main companies are: Philips, Samsung, LG Electronics, Sony Representation Office, Romanel, NEI Eltek Engineering SA, Rosal Electronics SRL.

For more information visit http://www.researchandmarkets.com/reports/c24990

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There are about 2,100 companies in Romania with an invested Dutch capital of 2 billion euros, the Netherlands being the second-biggest foreign investor in Romania, ACT Media News Agency reports.

The Netherlands was the first investor in Romania for several years while the Dutch investments currently represent 14.5% in the total direct foreign investments.

The sectors the Dutch companies are interested in are trade, services, industry, agriculture, food industry, metal processing and IT&C sector.

The biggest Dutch companies operating in Romania are ABN Amro, IBG, Philips and Unilever.

In Romania, there are also 1,000 Dutch SMEs.

Several of these companies have been in the past years in a process of consolidating and diversifying their businesses.

The bilateral trade exchanges amounted to 693.3 million euros in the first seven months of 2005.

Romanian exports to the Netherlands totaled 335.4 million euros (the Netherlands ranking 9th in Romanian export by 2.68% in total exports) while imports amounted to 303.9 million euros.

It is stated that the trade exchanges in Romania are on ascending trend, partially due to the growth tendency of the Dutch companies that set up production facilities there.

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OTP intends to have 75 branches in Romania by the end of 2005, irrespective of outcome of CEC's privatisation, Chairman-CEO Sándor Csányi told a conference on Friday. He added that in the longer run they wish to expand their Romanian network to around 200 branches.

Csányi said OTP wanted to conclude at least one acquisition by the end of the year and still wished to enter Ukraine. Turkey is still on OTP's expansion map, he said, adding that they intend to beef up their position in Slovakia, as well.

Back in April OTP was rumoured to be on the brink of completing a bank purchase in Turkey, but the bank refuted speculations. However, it said that if it found an appropriate target bank in Turkey, it would consider buying.

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Alpha Bank Romania recently strengthened its capital base to ¤240 million, through a share capital increase of ¤66 million, as well as a subordinated debt issue of ¤60 million.

Romania is a strong growth hub in the area of Southeastern Europe with a market of 22 million people, where retail banking activity grows fast.

New savings and investment products enhance the banks? offer, with mortgage and consumer credit products taking gradually centerstage.

Alpha Bank has been operating in Romania for 12 years, creating a profitable franchise with about 30 branches and 4% market share.

In 2004, assets, loans and deposits grew by 40%, 35% and 45% respectively.

Retail banking business was especially successful with mortgages and consumer loans rising by 100%.

Alpha Bank decided to expand distribution channels, develop new systems and hire additional personnel in Romania.

It plans to expand efficiently through organic growth, without resorting to mergers and acquisitions in a market where valuations are high due to its strong growth potential.

Alpha Bank expects to have 150 branches by the end of 2008.

Alpha Bank was the first foreign bank to invest in Romania.

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Bulgaria and Romania received the full support of the national assembly of Slovenia and the country ratified the EU accession treaty with 64 votes for and none against, on Thursday.

Slovenia is the fourth country to ratify the treaty, Bulgaria's Foreign Affairs Ministry announced.

Earlier in September, the treaty was ratified by Hungary's parliament with 257 votes for, 6 against and the Czech Senate (79 for, none against).

Slovakia ratified the treaty in the summer of 2005 with 102 votes for and none against.

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The Romanian Refrigerators & Fridge-freezers Report provides 2004 year-end market data. The report gives an instant overview of the Romanian refrigerators and fridge-freezers market and covers:

- Fridge-freezers

- Refrigerators: capacity > 340 l

- Refrigerators: capacity < 250 l

- Refrigerators: capacity > 250-340 l <

Consultants believe that the growth potential of refrigerators and fridge-freezers in the next two years will stand at 10-15% per year, given that:

1. The degree of equipping households with refrigerators in Romania is some 3-3.5 times lower than the European average:

2. The economic growth recorded in the past years is sustainable

3. The official estimates of annual economic growth stand at 5-6% per year

4. The UE entry in 2007 will lead to an increase in investments (revenues and expenditures)

5. The purchasing power is growing constantly

6. The market in 2004 has decreased by 15% compared to 2003 (when it rose by 84% compared to 2002), and consumption (sales) is expected to continue to increase in the future due to the use of loans.

Consumption in 2004 was covered by import in a proportion of 86%. Import is currently ensured (some 90%) by 10 companies, mainly international brands, (established in Romania after 1995).

Production will go up in the coming 1-3 years, on the basis of investments made by the largest producer - Arctic - and the development of some smaller companies and also the investments to be made by the re-location of some production facilities from Western and Central Europe. The companies that invested in Romania developed mainly low-end products but also adapt superior ranges in terms of quality, by attacking the medium segment of the market.

The retail market is dominated some 65% by specialized shop chains Altex, Flanco and Domo. Distribution still represents a limiting factor, which is partially attenuated by the rapid development of shop chains of the 3 nationwide retailers (Domo, Flanco and Altex), hypermarkets and cash and carry stores. Such investors are encouraged by the repeated confirmations related to Romania's EU entry in 2007. The working manner imposed by the foreign brands to the 3 large retailers and distributors (brands, planned work, financial instruments, quality of promotions, obligatory training of sales force) will speed up the professionalisation of Romanian partners.

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The Ministry of Public Finances will correct through the emergency Ordinance on amending the Fiscal Code that will be enforced next year an incongruity between two paragraphs in the Law on the payment of the tax on profit by BNR (National Romanian Bank).

Until last year, the Fiscal Code stipulated (art. 17, 2nd alignment) a tax on profit on 80% for BNR.

In August last year, the Government approved the Ordinance 83/2004 through which were implemented a series of amendments to the Fiscal Code, including categorizing the central bank as contributor exempted from paying the tax on profit.

Nevertheless, the Fiscal Code still stipulated (art. 34, 2nd alignment) that ?BNR, commercial banking companies, Romanian legal persons and the Romanian branches of the banks and of the legal foreign persons are compelled to pay the tax on monthly profits by 25 of the month after the one for which the tax is calculated?.

The Ministry of public Finances published on the institution?s site on Wednesday the draft for amending the Fiscal Code, due to be enforced next year. It eliminates BNR from the content of the mentioned alignment.

On the other side, the central bank?s status, enacted by law in 2004, establishes that BNR transfers to the state budget a 80% share of the net revenues resulted after applying some deductions.

In fact, starting 1998, BNR has not report profit anymore because of the costs with operations of monetary sterilization.

The operational losses were covered by the favorable differences resulted from reevaluating reserves.

Another amendment of the Fiscal Code refers to the fact that the fund for general banking risks will not be deductible anymore.

In exchange, deductible will be the reserves made by commercial banking companies or other authorized credit institutions, and also those made by mortgage credit companies, according to the laws on organization and functioning.

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by Maria Berindei
29 September 2005

A massive redevelopment project gets under way in a historic quarter of the Romanian capital ? and 10,000 are evicted.

BUCHAREST, Romania | In the last days of 1989, the residents of old Bucharest could breath a sigh of unexpected relief. After a frenzy of urban destruction in the 1980s, it suddenly seemed that some of the historic center of Bucharest might remain. Indeed, their future looked bright. Although suffering from years of neglect, the half-square-kilometer jumble of streets and lanes retained much of its old charm and potential to attract business and tourism.

But redevelopment schemes proposed over the next decade always petered out for lack of financing, or because the political parties that controlled the Bucharest city council feared that the renovation plans could trigger social unrest.

This year, Bucharest city hall has found both the funding and the will. Already underway is a project that will revitalize the area?s economic fortunes ? but that will also culminate in the eviction, in many cases permanently, of its 10,000 residents.

UTOPIAN BUCHAREST

Bucharest was just one of many Romanian cities to fall victim to the huge reconstruction schemes dreamed up by the Ceausescu regime in the 1980s. But the plan for Bucharest was, as befits a capital, particularly grand. Fascinated, according to historian Lucian Boia, by the capital of North Korea, Pyongyang, Ceausescu wanted to turn Bucharest into a similarly utopian city: monumental, uniform, and cold. The project aimed to replace everything ?old? in the city with new buildings that expressed the spirit of the age. A whole picturesque, historic district on the Bucharest hills was leveled in those years to make way for the megalomaniac Palace of the People, which today houses the Romanian parliament. With its 330,000 square meters, the Palace is the second-largest building in the world, second only to the Pentagon, headquarters of the U.S. military.

The "renewal" scheme for Bucharest was brought to a grinding halt midcourse by the revolution of 1989. Only the end of the Ceausescu regime saved from demolition one of the capital's oldest districts, an area known as the historic center. Before the coming of communism, the streets situated between Victory Square, Hristo Botev Street, Coposu Boulevard, and the Independence Embankment were lined with the shops and workplaces of artisans, who plied their trades at ground level and lived on the upper floors. The quarter was also favored by wealthy women who thronged here to show off their chic new French fashions. This was not a style of life favored by the new regime, and in the 1950s the state expropriated and closed down the artisans' shops. The capital was short of living space, and the authorities gave poor families permission to move in.

Today, only a few elderly craftspeople remain in the area: a few furriers, a hatter, and a watch repairer. Once an area to see and be seen, many locals now avoid its streets for the area has decayed over the past decade and become notorious for prostitution and street crime.

?The historic center is a shame? was how Bucharest?s deputy mayor, Razvan Murgeanu, described the area after an incognito visit this July.

THE CLEANUP

Late last year, though, the city hall of the Bucharest 3 district, which administers the entire city center, announced a rehabilitation plan that laid out a series of steps to make the historic center once more a thriving, tourist-friendly quarter of boutiques, restaurants, cafes, and other amenities.

The first step was to ban almost all vehicles to allow easier access for cranes and other equipment. Although criticized by business owners, who complained of problems delivering supplies, and residents who said they now had to park hundreds of meters from home, the decision contributed to a 60 percent drop in criminality within just four months, according to Cornel Drumariu, an inspector with the district?s police department.

In July 2005, the second and most controversial phase of the project kicked off when authorities began evicting the area's estimated 10,000 residents. Although only about half of them have valid residence permits, many have lived here for decades. The city authorities say the houses are so decrepit they cannot be repaired without ousting everyone who lives here, whether they be legal residents or squatters.

?Many of those [living illegally] are Roma who entered these flats by force and nobody could kick them out,? said Bucharest Mayor Adrian Videanu at a June news conference. Videanu took over the job in April after his predecessor, Traian Basescu, was elected to the country?s presidency last year.

There has too been a recent influx, says Catalin Cazacu, the architect who oversees building projects on historic structures in the capital and one of the two authors of the architectural blueprint (along with Stefan Dumitrascu). ?The notion that they will receive flats here after the project is completed became widespread among many people, even those living illegally,? Cazacu said. ?That?s why now five or six people, without even a Bucharest ID, are crammed into a single room.?

Political forces may also have been at work. Videanu, who is aligned with the center-right coalition that ousted the Social Democratic Party (PSD) from power in last year's parliamentary elections, alleged that representatives of the PSD distributed permits to area residents during last year's election campaign with the aim of attracting more votes. These permits have no legal basis, he added. Put under the spotlight, PSD officials refused to answer questions.

When restoration work is completed, only residents with a valid title to their property or a rental contract at least two years old will be allowed to return. ?The others will be sent back where they came from,? Videanu said.

Thirty-eight percent of the buildings in the historic center belong to the municipality, 36 percent are privately owned, and 26 percent are disputed in court, according to data provided by Cazacu.

The first evictions were carried out on 11 July when police ordered some 10 families out. The move was met with fierce opposition by some locals. According to witnesses quoted by local media, one desperate resident, 28-year-old Leonard Ionescu, was on the verge of throwing his baby up in the air until a passer-by stopped him. ?I don?t want to leave,? Ionescu said. ?The shelter offered by the city is full of beggars. I'd rather stay in the street than there.?

But even the squatters won't be kicked out on to the street, city authorities argue. ?The people evicted will be given the chance to find housing and we?ll cover their rent for up to six months," said Carmen Duca, deputy director of the district?s social protection unit.

Those evicted will receive the equivalent of 85 euros to 140 euros a month ($102-$169) for housing, depending on the size of the family, she said, and ?those who have no income will be taken to our shelters where they receive accommodation and food.?

The average rent for a two-room flat in Bucharest hovers around 150 euros ($180). The minimum salary in Romania is no more than 80 euros ($96), according to data from the EU?s statistical office, Eurostat.

BACK TO THE PEOPLE

The authorities are now completing the evictions. In November, workers are due to start completely replacing the gas, water, and sewer systems. ?We?ve got a hundred-year-old infrastructure here. ? Many of the buildings in the area were so worn out they couldn?t even be hooked up to the sewer or water pipes,? said Stefan Dumitrascu, the Bucharest 3 district chief architect.

Next comes the cosmetic phase, set for next spring, when the streets will be paved with cobblestones and new lamps installed to recreate the look of the interwar years, Dumitrascu said. The entire restoration job will take two years, although delays can be expected if archeological remains are found. The total cost of the project is put at 29.5 million euros ($35.6 million). The municipality contributed $1.5 million (1.24 million euros), with much of the rest to come from loans taken by the Romanian government from the European Bank for Reconstruction and Development (EBRD).

Those funds are available only for public projects, however. To refurbish the quarter's privately owned buildings, the city appears to be relying heavily on owners' readiness to follow the revitalization scheme. Liviu Negoita, the mayor of Bucharest 3, told Radio Romania International that ?the restoration of historic monuments ? is the responsibility of the owners," but added that the Culture Ministry can cover up to 12 percent of certain restoration costs. If the owner cannot come up with the remainder, "there are two possibilities: either to attract other European and international funds, or to sanction the owner, if they fail to renovate the building, especially if the building is a historic monument."

By 2010 parts of the quarter will evoke the ambiance of the 19th century, Bucharest Deputy Mayor Murgeanu says. Some streets will have wooden sidewalks, and one, yet to be selected, will be recreated as a "bohemian alley" of wooden restaurants and terraced housing.

When the project is finished, the city plans to offer the space to small entrepreneurs and craftspeople, as it used to be between the world wars.

?Within five years, we're going to try to bring back to the historic center things like arts and craft shops and travel agencies that will help us return the investment to the people,? Dumitrascu said.

Maria Berindei is a Bucharest-based journalist with the daily newspaper Realitatea romaneasca.
Translated by Marius Dragomir.

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Experian, the global information solutions company, has signed an agreement to acquire Expert Credit Bureau (ExCB) from UCS Romania.

ExCB has been in operation since early 2005, serving clients from the banking and non-banking industries in Romania. ExCB currently holds mostly negative data but plans to move into both positive and negative data processing shortly.

"This acquisition represents a significant increase in Experian's consumer information activities in the new Europe," said John Saunders, Chief Executive Officer, Global Operations, of Experian. "It compliments the activities of our specialist decision support solutions business, Experian-Scorex and consolidates its position in the region as a leading provider of information solutions and risk management. ExCB has been a pioneer in the credit bureau business in Romania and we believe that this acquisition will bring considerable benefits to our clients already operating in this country.

"Experian is the world's leading credit bureau operator and has built up considerable expertise and knowledge, and already operates credit bureaux in 12 international markets, including the Bulgaria and Russia. We shall combine this expertise with the predictive analytics, decision support technologies and strategy optimisation skills of Experian-Scorex to enhance ExCB's services to address issues such as fraud, overindebtedness and controlling credit risk.

"The consumer economy is growing rapidly in Romania and we believe that introducing shared credit information via credit bureaux will result in better risk management for lenders and sustainable financial market stability for lenders and consumers."

The acquisition is consistent with Experian's global strategy of acquiring complementary businesses that provide new products, new data or entry into new vertical or regional markets, while leveraging the core assets of Experian.

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DUBLIN, Ireland--(BUSINESS WIRE)--Sept. 29, 2005--Research and Markets (http://www.researchandmarkets.com/reports/c24958) has announced the addition of Fish 2005: How Does the Romanian Industry Operate? to their offering.

In 2003, total fish & seafood consumption was 70.819 tons (53.6 mil EUR). Total consumption registered a small increase of 15% comparing with 2002 and for 2004 an increase of 7% (75.642 tons / 57.920 mil EUR) was estimated. These values represent an average consumption of 3.48 kg/capita (for a population of 21,733,556). This average consumption is very small if we take into account consumption before 1989 (10 kg/capita in the '80) and also compared to the EU average consumption of 20kg/capita.

Stakeholder's expectations confirm a potential increase of 4.3 times for internal consumption in the next ten years (it means 320,000 tons /230,000,000 EUR). Maximum production and consumption for Romania was about 2,000 tons, with a maximum internal production of 91,990 tons in 1988 and catches in international waters of 190,000 tons in 1986). We estimate that with modern technologies, market oriented business relations and better motivation of workers, internal production could be bigger between 2005 and 2010.

If we take into account Romania's fish resources, we could justify even bigger objectives/regional ambitions, such as export: 240 million persons live on a range of 1000 km and after the EU integration we could export to developed countries (Germany, France etc) that in 2002 registered a deficit of 10.5 billions EUR for these products. Thus, we estimate an increase of 3-7 times in next 5-15 years (210,000 - 490,000 tons / 160.8 -- 375.2 mil EUR).

Romania's competitive advantages are: ownership of the Danube Delta, access to over 800 km along the Danube River, access to the Black Sea at a length of 245 km, a few hundreds lakes and small inshore rivers, so the total water surface with fish potential cumulates to about 1,300,000 hectares (over 3% of Romanian territory). In the '70s and especially in the '80s, Romania had a well organized fishery infrastructure (disorganized by transition and privatization in the '90s). So, for the moment we have the know-how and almost all the infrastructure (landscape) for aquaculture. Romania differs from her neighboring countries because of these elements. High expectations could be justified if we look at Hungary that registers remarkable results (prevalent from aquaculture) -- and it doesn't have the hydrographic potential (natural resources) -- like Romania does.

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Total costs enforced by the European directives' implementation in the drinking water and urban waste water fields amounts to some 14 billion euros, ACT Media News Agency reports.


It is estimated that until 2018, when the transition periods in this field will come to an end, total investments required for the implementation of these directives will reach 14 billion euros.

Starting next year, huge investments will be necessary for the water quality improvement in Romania, in conformity with the European Commission's Water frame directive from 2000 on the quality of water.

The funds required for these investments will be derived from European programmes, such as ISPA and SAPARD and from cohesion funds in a proportion of 40 percent, the remainder coming from the state budget, local budgets and public-private partnerships.

Regarding the mining sector, the efforts in the environment protection field need to be correlated with those of some exploitations' closing down or with their ecologization, given the fact that the mining is a pollution producer, while this sector restructuring has a very strong social character, the majority of the mining exploitations being situated in mono-industrial zones. "The United States will aid Romania, through the USAID and the American companies in the field, so that hundreds of millions of dollars will enter Romania in the future to be used for environment infrastructure upgrading", Charge d'affaires of the US Embassy in Bucharest Mike Taplin added.

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The price will represent 90% of the evaluation score to delimit competitors in the Romanian Commercial Bank's (BCR) privatization.

Only 10% of the score will take technical criteria into consideration, according to the State Assets Capitalization Authority (AVAS.)

This decision was made in the BCR privatization committee meeting led by the minister of public finances, Sebastian Vladescu.

The offers will be selected in accordance with the established scoring criteria and two investors will be selected for negotiations to finalize transaction documents.

The winner of the privatization process is the investor that bids the best price for the shares in the second stage.

Fortis, Banco Comercial Portugues, The National Bank of Greece, Intesa Bank, Deutsche Bank AG, Dexia, KBC and BNP Paribas are the bidders.

AVAS is BCR's main shareholder, with 36.88% capital share.

In the first semester, BCR announced EUR 121 million in net profit, for an assets total of EUR 7.18 billion.

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The Ministry of Communications and Information Technology (MCTI) sent notifications to 11 shortlisted banks and consortiums, of an overall 12 banks that submitted letters of intent, about the provision of financial consultancy in Romtelecom's privatization process.

The shortlisted banks are ABN Amro, BNP Paribas, Deutsche Bank - BRD Securities consortium, CA-IB, Citibank, Credit Suisse First Boston, the HSBC - BCR consortium, JP Morgan, Merrill Lynch, Morgan Stanley and UBS - ING -CET consortium.

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Romania made exports worth more than 12.52 billion euros in the first seven months of 2005, up by 1.93 billion euros or 15.2 percent from the same period a year ago, the National Commission for Prognosis (NCP) announced on Wednesday.

This was mainly the result of higher export values, with this July seeing the highest monthly export value in Romania's modern history at 1.93 billion euros, followed by June at 1.86 billion euros. Exports in July rose by 7.1 percent from June.

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Romania has registered a trade deficit (FOB-CIF) worth 4.9 billion euros in the first months to July, up by 1.5 billion euros as against the same period one year ago, according to the National Prognosis Commission.

The negative balance of trade (FOB-CIF) was mainly caused by deficits registered for products coming from the area of machine building industry (2.9 billion euros), mineral products (1.437 billion euros), products of chemical industry (1.36 billion euros).

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Romania's imports in the first seven months of this year exceeded 17.49 billion euros, up by 21.8 percent as against the same period last year, according to the national prognosis Commission. Imports are by 3.1 billion euros higher over those registered in the first seven months of 2004, being by about 450 million euros above the average registered in the same period the previous year.

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In 2004, Romania ratcheted up 12 slots in the yearly GCI (Growth Competitiveness Index) rankings built up by the World Economic Forum (WEF) to hit the 63rd position in the 2005/2006 edition, scoring 3.86 in GCI, the WEF said on Wednesday.

The GCI rankings take account of 117 economies across the world in terms of their capacity to notch up medium and long-term sustainable growth. The top countries in these rankings are Finland, the US, Taiwan, Denmark, Norway, Singapore, Switzerland, Japan and Iceland.

Romania (63rd position) is followed by Turkey (66), the Russian Federation (70), Serbia-Montenegro (89) and falls behind Hungary (39), the Czech Republic (43), Bulgaria (59) and Poland (60).

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By Hayri Gul
Published: Wednesday, September 28, 2005
zaman.com

Romanian President Trajan Basescu will visit Turkey on Wednesday as an official guest of Turkish President Ahmet Necdet Sezer. Basescu commenting on Turkey-Romania relations and the European Union (EU) to Zaman conveyed friendly messages ahead of his two-day visit to Turkey.

Basescu spoke about regional and EU-related issues in addition to his two-day visit to Ankara.

The president thanked Turkey for its support of Romania in its plans to join the North Atlantic Treaty Organization (NATO) and said that his country will also support Turkey on its way to the EU.

Noting that the trade volume between Turkey and Romania has exceeded three billion dollars, Basescu expressed his hope that this amount will reach four billion dollars in 2005.

The Romanian president asked Turkish businessmen not to miss out on the investment opportunities available in Romania.

How do you perceive the current situation with Turkey-Romania relations? Do you think the relations are currently at a satisfactory level?

Bilateral relations between Turkey and Romania have been progressing perfectly and dynamically in all areas. Economic cooperation forms the basis of our bilateral relations. Last year, trade volume between our countries reached a record level, totaling three billion dollars. We hope that this figure will reach four billion dollars this year. As for the areas of investment, our relations are better than we expected. More than 8,500 Turkish or Turkish-Romanian joint companies operate in Romania. The total capital of these firms has been recorded at $440 million as of 31 July 2005. I hope that the Economy Forum that will be held in Istanbul on September 29 will pave the way for new commercial developments specifically in the energy and infrastructure sectors. One of the aims of my visit is to reach an agreement with Turkey and shift our bilateral relations to a regional cooperation. We aim to develop democracy, provide stability in the Black Sea region and extend the Euro-Atlantic entry region. Needless to say that our current cooperation reflects the traditional friendship and numerous common points between Romanian and Turkish societies, as well as the turning point that our cultural relations reached with the Turkish-Tatar minorities in Debrecen.

What kind of expectations do you have from Turkey and Turkish businessmen regarding the economic aspect of the relations?

Economic cooperation is the foundation block of our bilateral relations and a measure for success. There are indicators that the trade volume between Turkey and Romania will exceed four billion dollars this year. I recommend that Turkish businessmen monitor the Romanian economy and make use of the opportunities, because the opportunities that do arise may be missed due to increasing competition. We are about to complete our privatizations but there are new opportunities coming up in the energy and infrastructure sectors. I expect the Turkish business world to take action and step forward on this. They may take roles in modernization projects of the two countries together with Romanian businessmen. There is a considerable need n all sectors and production areas. Romania with its population of 22-milion is the second largest in Eastern Europe and the seventh largest in Europe in terms of consumer markets. Conducting investment in Romania is good trade and a safe enterprise. Laws were highly complex at the beginning of the 1990s but today we have adapted to the EU rules and regulations.

Romania prepares to become an EU member on 1 January 2007. Does your country still face some difficulties during its membership process?

Romania?s putting its signature on the EU membership agreement on 25 April 2005 means the approval of my country?s efforts to access the Union on 1 January 2007 and the EU?s full acceptation of Romania into the Union. Romania is a significant market for the EU. Romanians? purchasing power is gradually increasing and the Romanian market has also begun to be perceived as prominent by European companies. I know that if we want to compete in the free market we have to make more of an effort.

Initially, we may receive more money from the EU than we give; however, Romania will have a share in the accession of countries like Moldova and Turkey into the EU a few years from now. We do not pursue financial interests. We want to regain our place in the Europe that Brussels called ?Small Paris? just before the Second World War. It is certain that the EU wants Romania to be a successful country obeying European standards before its accession. We have two areas they and I have some concerns in terms of the EU: Judicial efforts to fight against corruption and the issues of competition. We have to persuade EU authorities about our progress in those two areas. This process will also constitute a great deal of significance after our accession to the Union and reforms that encourage all institutions to have authority in the public sphere to be effective should be completed.

Turkey showed a great deal of support to Romania for its accession to the North Atlantic Treaty Organizations (NATO). Will you make the same contribution to Turkey when you access the EU in 2007?

Turkey giving importance to the bilateral relations pleases me, and as I noted before, our bilateral relations may evolve into a strong regional cooperation against major regional ups and downs. Our spirit of assistance may form the essence of the cooperation. Really, the West can take our spirit of assistance in the West Balkans as well as the Black Sea region in the East. Turkey actively backed Romania for its NATO membership. I presented my appreciation to the Turkish authorities through your newspaper. Turkey is a friendly nation and I hope beginning EU negotiations on October 3 will have a satisfactory outcome. But, the speed of EU accession depends on the Union?s absorption capacity.

Do you have any message for Turkey and the Turkish public ahead of your visit?

I want to tell the Turkish public that they should trust Romanian friendship and our support for Turkey?s EU accession. I also call on Turkish businessmen to focus more efforts toward investment and surpass their current examples of investment for the new investment opportunities arising in Romania.

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BUCHAREST, Romania (AP) - Romanian prosecutors questioned the chief executive of the country's second-largest oil company, Rompetrol, on Wednesday over accusations of manipulating the stock exchange.

"I was formally accused of a couple of things," said deputy Rompetrol CEO Phil Stephenson, a U.S. citizen. "I think the accusations are wrong, and I am here to explain why they are wrong," he told the media before going into the prosecutors' office.

Prosecutors claim the company undersold its own stock on the Bucharest stock exchange in an illegal financial operation last year, causing some investors to lose money.

In May, prosecutors briefly detained Rompetrol Chairman Dinu Patriciu on charges of money laundering and tax evasion. That investigation relates to money received by Rompetrol from Libya for a debt from the 1980s when Rompetrol was owned by the state.

Prosecutors say the state is owed more than $30 million, but Rompetrol claims it implicitly bought the debt when it acquired the company.

Patriciu has also denied any wrongdoing and said the detention cost his company hundreds of millions of dollars. The company has threatened to sue the prosecutors for abuse of power.

After Patriciu's detention, the U.S. Embassy warned Romania that its business climate could be hurt if the allegations against him turned out to be baseless. Several U.S. citizens, including Stephenson, are on the board of Rompetrol.

Patriciu set up Rompetrol in the late 1990s and purchased the massive Petromedia oil refinery on the Black Sea coast in 2000.

The company had gross revenues of about $1.6 billion last year.

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Romanian oil company Petrom, 51%-owned by Austria's OMV, is in parallel talks to buy petrol station networks in Bulgaria and Serbia. The transaction might take place at year-end or early next year, according to company sources quoted by news agency Rompres.

The source did reveal the names of Petrom's negotiation partners.
The Bulgarian and Serbian markets have matured and therefore buying petrol stations instead of greenfield investment is a more appropriate strategy for extension, said company representatives.

The consensus among experts is that the retail fuel market in Bulgaria has reached the saturation point, leaving no room for newcomers. The biggest fuel retailers controlled half of the market last fall, shows data of oil company LUKoil Bulgaria.
Petrol leads the market with a 17.55% share, followed by LUKoil with 12.49%, Shell with 10.74% and OMV with 8.6%.(Dnevnik)

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The largest Russian oil business group LukOil is to post on the Romanian market this year a turnover worth about $2 billion (1.6 billion euros), ACT Media News Agency reports.

The race for the second place on the Romanian oil market puts the Russian oil giant against Rompetrol group (the first place is held by OMV-Petrom).

Besides, LukOil's future plans, which include the purchase of chemical works Oltchim Ramnicu Valcea and the expansion of petrol stations' network, outline a competitor like Petrom, a company which has been recently bought by Austrian group OMV.

Business LukOil Romania is made up of LukOil Downstream (operating the network of petrol stations and storages) and Petrotel refinery in Ploiesti (southern Romania) plus the deliveries made by the mother-company on the local market towards branches and third companies.

The Petrotel refinery, one of the five big refineries of the Romanian market, has been re-commissioned last autumn, following an upgrade programme, which entailed investments worth $283 million with a view to the production of Euro 3, Euro 4 and Euro 5 fuel.

The LukOil refinery from Romania operates this year at full capacity and serves not only the local market, but also exports to Hungary, the Republic of Moldova, Ukraine and Serbia.

LukOil's upward trend in Romania over the past years contributes to the Romanian market being dominated at present by three big players which cumulate business worth over 5 billion euros per year and have a say in economy.

On the other hand, the three - Petrom, Rompetrol and LukOil - control four refineries in the market and own networks of petrol stations.

Besides the networks of petrol stations, the Russian company also holds Neftochim refinery from Burgas (Bulgaria) and a refinery in Odessa (Ukraine), which together with the Ploiesti-based refinery make up a real ''vertebral column'' of its operations in the Balkans.

The Russian company entered the Romanian market in 1998 by purchasing the majority stake in Petrotel Ploiesti refinery for about $53 million.

The company is present in Romania in the area of insurance too, through LukOil Asito, soon to be renamed Asito Kapital.

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GECAD ePayment International, company member of GECAD Group, has launched Avangate, a brand new online payment solution dedicated mainly toward software authors, content delivery companies and web services providers.

(OPENPRESS) September 29, 2005 -- On top of the online payments engine, Avangate offers software key delivery and additional services for increasing sales via the Internet and for marketing products on the web. The entire Avangate solution has proved to be effective in Romania, where its functionality under the highest security standards has been proven for more than a year.

Avangate was developed by the GECAD team that had 7 years experience of selling online antivirus solutions under the RAV AntiVirus brand. In 2003, Microsoft bought RAV technology but its eCommerce team developed a new solution for online transactions.

?Avangate is a solution mainly for software authors intending to sell their products online and decrease their costs by outsourcing their online payment system and marketing solution over the Internet. Our tool will spare their time and costs enabling them to dedicate more resources on improving products and applications?, says Cristian Badea, CEO Avangate.

Any shareware author, content and web services provider can easily and quickly implement the Avangate solution. Their customers can then order and pay online, using different payment methods receiving the ordered products or services in a matter of minutes. All popular credit card payment methods are supported: VISA, Mastercard, American Express, JCB and DinersClub. Both merchants and their customers will benefit from the highest security standards in fraud detection. Avangate also uses 3D Secure systems developed by VISA and Mastercard as well as its own diligent anti-fraud detection system.

?As we promised a year ago, we have developed our own online sales solution with support from the Romanian market and now the time has come to deliver it internationally. It?s not an easy task but we are convinced Avangate will become an important competitor offering e-commerce services in the years to come.?, states Radu Georgescu, President of GECAD Group.

In the last 14 months, since it was launched in the Romanian marketplace under the brand name ePayment, the solution has been implemented by more than 200 local merchants. All of these companies have a monthly average of approximately 4500 transactions and in this time since its introduction, our technology has detected every tentative fraud, totaling almost 450 attempts in the last 12 months.

Avangate delivers all of the standard expected services plus a whole lot more. The customers will benefit from company?s 7 years experience of successfully selling online solutions. These vary from simple but ingenious automated after sales cross selling solutions to sophisticated and easy to implement sales tool add-ons. Moreover, Avangate doesn?t believe chargebacks should be part of daily online business.

?Since implementing their solution we have not suffered the cost of any chargebacks as the result of fraudulent online sales? - Adina Gorita - Distribution Manager - PRO TV International (www.protvintl.ro)

Recognized for its hands-on manual approach, as well as utilizing its sophisticated electronic anti fraud processes, Avangate e-commerce solution is implemented by shareware authors wishing to secure increased sales and profits.

?For the future, we will prove to be a significant player in the international arena amongst competition that includes some great names and old players. We constantly strive to support our objectives in effectively delivering very efficient and very secure solutions?, ends Cristian Badea.

About Avangate:
Avangate is a brand of GECAD ePayment International. Avangate is an online payment solution created by GECAD ePayment International for Worldwide markets. It addresses mainly software authors, web content and online services providers. Avangate offers a secure system for online payments and provides services for increasing sales and marketing of products over the Internet.

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Oltchim chemicals maker will establish, in the medium-run, a far-reaching investments programme totaling 200 million euros, ACT Media News Agency reports.

The investments are aimed at creating a facility for the purification of carbon dioxide and obtaining carbon monoxide - the raw material for some of the Oltchim plants.

The project also involves the construction of its own lime factory and developing other business in fields such as the building materials and PVC profiles (Oltchim's main product).

Oltchim earned a net profit worth 6 million euros, in the first half of the year, by over one third more than during the same time span in 2004.

The company's turnover grew by 10 percent amounting to 193 million euros as compared to 175 million euros during the first half of 2004.

The plant's main stockholder is the Romanian State through the Ministry of Economy and Trade (MEC).

MEC prepares to put Oltchim up for privatisation again, after several failed attempts to sell it to strategic investors.

To prepare the privatisation process, Oltchim has recently announced its intention to sell several assets, mainly those in the food and agriculture sector, namely those having nothing to do with the plant's main activity.

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Polish-American Can-Pack company concluded an investment of 45 million euros in a Romanian aluminium packaging factory for soft drinks and beer, ACT Media News Agency.

"Up to 2007, we foresee an annual sales value of 45 million euros and, were our predictions prove to be true, we would increase our production capacity at our factory in Bucharest through investments of around 30 million euros so that the sales could jump to 100 million euros", Can-Pack President-Director general Wieslaw Smulski stated.

This investment covers a land of 22,000 square meters and benefits of equipments imported from the United States and Germany.

The installed production line has a capacity of 1,700 tins/minute, but it can be raised to 2,800 tins/minute.

Approximately 50 percent of the output is earmarked for export.

Can-Pack Romania produces metal packaging both for the internal market and for several Balkan, Mediteranean and Middle East countries.

Can-Pack is also the owner of a food metallic packaging factory in Romania, Amep-Pack in Tecuci (north-eastern Romania), taken over in 1998.

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OTP Bank announced that it will increase the share capital of its branch OTP Bank Romania by 30 million euros, ACT Media News Agency reports.

Through this capital inflow, OTP Bank Romania aims to expand its network of branches, a process which is set to start in October, and release services on the retail market on the basis of a new IT system.

Following the growth by 30 million euros, the bank' share capital will reach some 50 million euros.

Last year, OTP Bank purchased ROBank for $47.5 million, announcing significant investments worth almost $100 million for the expansion of the activity from Romania.

The largest bank in Hungary, OTP Bank, is on the list of investors aiming to take over the Loan&Savings Bank, pitting against Groupe Societe Generale or Raiffeisen Bank.

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Swedish company Trelleborg announced its intention of investing between 3 to 5 million euros in Romania for the construction of a car parts plant in Dej (central Romania), daily Ziarul Financiar informs .

Sub-prefect of Cluj county Calin Platon stressed that negotiations with the representatives of the Swedish compay would be finalized on Thursday with the view to the start of works on the new plant. For the beginning, the Swedish company will build a 5,000-square-metre facility, which will at the end expand up to 25,000 square metres. The plant will be erected in the area of an industrial fleet and its construction is set to start this autumn, said Platon.

Dej town has lately become interesting for investors operating in the field of car industry, especially because prices for land in Cluj-Napoca town have significantly increased over the past two years. This month, ACE group, auto electrical parts manufacturer, has started the construction works on a new plant in Dej, with a total investment exceeding 1.5 million euros.

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The profit of many Romanian textile companies has decreased this year, but these are still optimistic, continuing to count on the European market, Capital weekly writes in its latest issue.

"The legislative changes, the decline of the euro, the higher price for utilities and the unfair competition triggered by the imports from China, Vietnam or Turkey wreaked havoc on the activity of many domestic textile companies." The service providers for textile industry apparently suffer as well because of this context, but the western markets are still interested in Romanian forward processing.

That is why the 2005 estimates of most textile service providers are optimistic, with 25-50% rise in turnovers. Freshtex Romania estimates it will post this year 24 million euros in turnover, versus 15.5 million last year. Forward processing will survive in Romania only in the case of companies specialized in luxury products or limited editions.

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State Assets Realisation Authority (AVAS) puts up for privatisation through negotiation based on final improved bids the shares held in companies from the Nitramonia platform, reads a release issued by AVAS.

The privatisation of Nitramonia companies complies with the provisions of the Emergency Ordinance no 88/1997, with subsequent changes and additions, with the provisions of Law no 137/2002, with subsequent changes and additions and with the Methodological Norms approved by the Emergency Decision no 577/2002.

Thus, AVAS puts up for sale 2,690,797 shares of Nitrofertilizer SA company dealing with the production of fertilizers and nitrous products, accounting for 79.05 percent of the share capital, worth 8,509,572.5 RON.

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Sanitary ware producer Ceram based in Roman (northeast of Bucharest), that also makes ceramic tiles for stoves, boosted production by 60 percent following a 6 million euro investment in a new production line for bathroom ware.

Roman Ceram decided to make this investment as a result of increased imports, but also in an effort to meet the domestic demand, company official Narcis Mititelu said.

This year, the company is making 800 tonnes of sanitary ware a month, up from 500 tonnes in 2004. Roman Ceram made 8.5 million euros in turnover last year, up 14 percent on 2003. Last year, the company produced 6,000 tonnes of sanitary ware and about 39,000 terracotta stoves. More than 70 percent of the company's output is exported to France, Italy, the Czech Republic, Hungary and the Middle East.

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Artrom Slatina Company exports approximately 80 percent of its output of non-soldered, carbon and alloy steel pipes. Among the most important foreign markets for Artrom products there are several European countries, such as Germany, Austria, Belgium, the Netherlands, Luxemburg, Sweden, Norway, Denmark and Great Britain, but also the United States, Canada and the United Arab Emirates.

In the recent years, the exports followed a significant upward trend - from 37.6 million euros worth in 2004 to about 35.8 million euros in H1 this year, the company's director general stressed. In H1 2005, as well, Artrom posted a gross profit equivalent to 2.4 million euros, at a turnover of approximately 53.7 million euros, following a pipe sales jump, and also due to a raised added value to the products. But profits derived from exploitation were diminished by financial losses of approximately 1.7 million euros as a consequence of dollar and euro unfavourable exchange fluctuations, Artrom's manager says.

Artrom Slatina was set up in 1984 and privatised in 1999, the main share package being taken over at that date by Staro, Austria. In 2001 it was sold to Sinara Handel GMbH from Koln, member of a Russian group TMK.

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Romanian Prime Minister Calin Popescu Tariceanu on Tuesday assured the foreign companies attending the meeting on business topics with the Government that the value-added tax would not go up in 2006.

"Our long-term decision is not to increase the VAT. This will also amount to 19 percent in 2006," the PM said. He added that the Government "wants to create an environment that should help companies boost their business to yield profits."

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The sales of Zeelandia Company that makes ingredients for the food industry grew by 45 percent in the first half-year up to 3 million euros, and the gross profit amounted to 115,000 euros, ACT Media News Agency reports.

The positive financial outcome mainly resulted from the rise in the domestic consumption by at least 20 percent, but also from the new products.

Zeelandia expects a turnover worth 77 million euros, this year, by 66 percent more than in 2004.

The company entered the Romanian market in 1998 and it currently owns a factory in Iasi, where it has invested over 250,000 euros this year, to expand the production facilities that put out 5,000 tons yearly.

About 2 percent of the production is exported to the Republic of Moldova, and most of the products go to the Bucharest-based partners.

Romania's capital city accounts for about 20 percent of Zeelandia's annual turnover.

The Romanian market of bakery ingredients amounts to 16-18 million euros, Zeelandia Romania general manager stressed.

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French company Wirquin Plastiques will invest about 2 million euros in a plant that produces plastic sanitary ware located in Bucharest's industrial area, ACT Media News Agency reports.

Following the completion of this Greenfield project, Wirquin estimates sales worth about 3 million euros in 2006, up 50 percent from last year.

Almost half of the production of plastic sanitary ware made in Romania goes abroad, mainly to Turkey, the Republic of Moldova, Slovenia, Bulgaria and Ukraine.

''Romania has become for us the main production and trading base for eastern European countries, ''said Wirquin Romania general manager Marc Huot.

Wirquin Plastiques entered the Romanian market in 1999, when it became the majority stakeholder of Urbis Sanitar Bucharest.

Among Wirquin Plastiques main customers are important European retailers such as Bricostore or Mr Bricolage, Bauhaus or Comafranc.

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ISLAMABAD: Romanian business delegation is visiting Pakistan from October 3 to 4 to hold meetings with officials of different ministries and trade bodies aiming at exploring the investment opportunities and enhancing the trade relations with two countries,' sources said here on Tuesday.

The delegation will hold meetings during its two-day visit with ministries of commerce, petroleum and natural resources, board of investment and trade bodies of twin cities.

Sources said that there is tremendous trade potential between Romania and Pakistan and there is much room for strengthening vital economic cooperation. Romania has expertise in refineries, petrochemical plants, metallurgical industry, hydro and thermal power stations, machine building industry, cement plants, machine tools, agriculture, glass factory, development of coal mines for power generation wood and furniture industry.

Romania and Pakistan have excellent co-operation in the fields of energy, oil refining, cement plants, air transport and transfer of technology. National Oil Refinery and Lubricants Refinery in Karachi were built with Romanian technology, which is a symbol of close co-operation between the two countries.

Cement factories in Kohat and Lasbela benefited from Romanian technology. Work on the two new cement plants Saadi I and II are in progress with Romanian technical assistance. Romanian Uzin Export Import Co. also assists the efforts of the private Pakistani company, Pakland, in expansion of Pakland II cement plant.

A tractor assembly line started to operate in the private sector in Pakistan, as result of the co-operation between GM Tractors, Karachi and Romanian Universal Tractor, Brasov. The Romanian air companies co-operated with Tabani Group to develop the private sector aviation in Pakistan. Private sector, he said needs to be explored.

Both countries have signed an agreement on avoidance of double taxation and an agreement between the Heavy Mechanical Complex, Taxila and the Industrial Engineering Company of Romania concerning the delivery of Romanian industrial equipments.

Romania can import from Pakistan not only leather items, textiles and animal products, but also cotton, rice and various raw materials. Among Romanian exports to Pakistan are electrical machinery, iron and steel, oil equipments, tractors, railway rolling stock.

He said there is great-untapped potential for increasing the volume of bilateral trade between Romania and Pakistan and much room for strengthening their economic co-operation.

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In response to the catastrophic floods that hit Romania during the summer 2005 the European Investment Bank (EIB) is considering to put in place in close co-ordination with the Romanian Administration an emergency programme in an amount of up to EUR 600 million for the financing of the necessary measures to repair and upgrade the damaged road and rail infrastructure of the country.

During the floods, which started in April/May 2005, infrastructure in some areas in Banat was affected. The July floods hit Oltenia, whereas Moldova was hit by floods in August. The floods in September affected infrastructure in some areas of Dobrogea. Romania has seen already six waves of floods this year. Lately, the events have started to affect the capital of Bucharest.

The envisaged EIB facility complements the various corresponding loans, namely EUR 240 million of the year 2000 and another EUR 300 million (covering damages of floods that occurred in years 2001 until 2004) due to be signed by the end of 2005 for flood damaged roads reconstruction as well as EUR 350 million scheduled for signature in 2006 for flood prevention measures. This combination of several facilities aims at addressing short-term reconstruction measures as well as medium term prevention schemes to avert the obviously increasing frequency of natural disasters occurring in the region and elsewhere.

The envisaged emergency facility will be broken down in two separate parts addressing the respective needs in roads reconstruction and rail rehabilitation. For both transport modes it will cover the necessary rehabilitation works of bridges, river beds, embankments and feeding roads.

The EIB and the Romanian authorities are already in advanced stages of negotiation. This facility is to be seen of forming part of the disaster relief measures of the European Union.

Mr. Wolfgang Roth, EIB Vice-President, stated: ?The EIB will support Romania in the reconstruction after the recent disastrous floods being without precedence within the recent decades. In this regard the Bank prepares long-term loans up to 30 years with a ten year-grace period. Under the current situation Romania needs long-term financing that should not be in contradiction to the strict IMF-criteria imposed on Romania recently.?

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The Associated Press

Romanian software maker GECAD Technologies launched the first commercial version of its AXIGEN mail server on Tuesday, the company said.

AXIGEN includes a message filtering system, Webmail with a folder tree structure, transparent encryption and a high capacity of mail storage, the company said.

"The first commercial version targets small companies, but also corporations that have Internet networks and want a fast, secure and flexible mail server," GECAD Technologies CEO Oana Bornaz said.

The mail server, which was available in a beta version and was tested for three months, will be presented at the Binary IT convention in Bucharest this week and at next month's Linux World Expo in London.

AXIGEN is available now only for Linux distributions, with the company expecting to release Windows, MAC OS and BSD versions before the end of the year.

The server is offered free of charge for companies with up to nine mail users. A business edition version is priced starting at US$195 (euro162) on AXIGEN's web site.

The server was developed by a team that also worked on the antivirus program RAV, after the RAV technology was sold to Microsoft in 2003, the company said.

Mail servers send messages between different users or servers, with clients connecting through applications such as Outlook, Eudora, Pegasus or browsers such as Internet Explorer or Mozilla.

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"The water accumulated in Tuzla locality will be evacuated through a second pipeline that will be installed for the evacuation of water into sea, so that Techirghiol Lake would not be affected", State Minister Gheorghe Pogea has stated.

He has presented the results of the yesterday's visit in Constanta County at the end of the meeting of the National Committee for Emergencies. Thus, three large companies will cooperate to install a 500 mm diameter pipeline at Tuzla in order to evacuate the accumulated water into sea. Three pumps of ANIF( National Agency of Land Improvements) have been brought into area too. " I have requested the three companies to have a working program that would allow them to achieve the connection between the lake and the evacuation area by the end of the next week. We want to lower rapidly the water level at Tuzla, so that the pumps start functioning as soon as possible. The protected area will not be affected", Minister Pogea has stated.

As for the situation of the persons who lost their dwellings, Minister Pogea has stated that they are lodged in one of the camps in the area.

At the request of Costinesti inhabitants whose houses have been destroyed, the City Hall benefiting of the Government support, along with the local authorities will assure the construction materials necessary to reconstruct the houses, Minister Pogea has further stated. At present, 50 of the 55 affected individuals are lodged at Amiral Villas, and 8-10 are lodged at their relatives. The authorities make efforts to evacuate the mud of the locality.

The Secretary of State in MAI( Ministry of Administration and Interior), Mr. Victor Paul Dobre has presented the actions performed by the authorities over the last 24 hours. The water evacuation actions have continued in Constanta and Ilfov counties. The situation is under control in Ialomita County and the alert status in this county might be dropped too, Secretary of State Dobre has stated. MAI intervention forces will be maintained in the area too.

The prefects will deliver tomorrow an evaluation of the situation of the flood affected persons and the lodging possibilities during winter time. Special attention will be paid to elderly, single women; families with children, in order to allow them spend the winter in civilized conditions. Mr. Dobre has further stated that they will be supplied with food and clothes. He has further showed that on the next week meeting, MAI will propose support measures for the flood affected population.

On the meeting of the committee for emergencies, there has been discussed the situation of Giulesti ? Sarbi district too where yesterday evening, there has been registered an increase of an accumulation level. Mr. Victor Paul Dobre has shown that a pump of ANIF is already used in the area, and another pump of Giurgiu County will arrive there today. " He has also added that " There are no problems related to Morii Lake and Dambovita".

On the meeting of the National Committee for Emergencies, there has been decided the construction of a pedestrian bridge at Maracineni that will function until the finalization of the bridge reconstruction works.

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The situation is under control and the population of Ialomita county does not run anymore the risk of being flooded as the flash flood passed, without producing damage to Slobozia locality, Prime Minister Calin Popescu ?Tariceanu has stated further to the meeting of the National Committee for Emergencies.

"The population in the area does not run the risk of being flooded. The good cooperation between the central and local authorities, the efficient rally and the preventive measures that have been taken so far have proved their efficiency", the Prime Minister has stated.

The Head of the Executive has decided the gradual withdrawal of the MApN gendarme and military troops from the Ialomita area as the critical moment has been overcome.

The Prime Minister has announced that he has requested the Ministry of Administration and Interior to communicate to the prefects of the flood affected counties that they have to start the damage evaluation immediately after the waters recede.

Prime Minister has also required the Ministry of Transportation, Constructions and Tourism to take the steps to purchase the construction materials necessary to reconstruct the flood affected houses.

"There is the established procedure. The purchase of the construction materials will be done correctly and transparently as until now, through auction. We want to be sure that the public funds are spent in the right way", the Head of the Executive has stated. Prime Minister has further stated that the Ministry of Transportation, Constructions and Tourism search solutions to lodge the persons whose destroyed dwellings cannot be reconstructed until winter. "There is the possibility of a rapid provisional solution, namely the use of prefabricated dwellings. We have discussed this solution with the World Bank representatives who have experience in this field. The problem consists in the fact that the persons lodged in such dwellings can remain there five years later too, or we want to help people reconstruct their houses", the Head of the Executive has stated.

Prime Minister has shown that there has been found the solution to reconstruct Costinesti beach. The reconstruction works will be coordinated by the Ministry of Environment by means of a draft law through which European funds can be accessed. There have been taken measures at Tuzla, Constanta County to evacuate the water from yards and dwellings. The works will be financed from governmental funds.

As for the infrastructure, Prime Minister has stated that the circulation has been restored on Pufesti railroad, situated between Costinesti and Eforie Sud. There has also been taken action to restore the situation in Bucov, although the flow of the river is still high, Prime Minister has further stated.

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BET-FI index reached a new historical maximum for the second time this month, setting a new record with the transactions on BSE (Bucharest Stock Exchange), worth of RON 46.8 mn.

?The investors are highly interested in the capital market in Romania, especially in the SIF.

Large stakes, of 700-800 shares, have been transacted on Monday.

SIF?s net assets are at acceptable levels.

There is still room for increase, in theory?, declared for Mediafax Valerian Ionescu, operations manager with CA IB Securities brokerage company.

He added that the SIF?s shares might increase after BCR?s privatization.

The five SIF own a 30.11% stake in BCR, a bank currently in the second stage of the privatization process.

The representative with CA IB Securities added that the decreasing interest for deposits also influenced the investors? orientation towards BSE and the increase in the demand.

The BET-FI index, which reflects the evolution of the five financial investments companies (SIF) increased by 1.96%, up to 35,193.13 points, while the advance as compared to the end of last year was of 103.5%.

The operations conducted with the shares in SIF summed up RON 31.5 mn, counting for approximately 70% in the liquidity on BSE.

SIF Oltenia was the most transacted issuer, with transfers summing up RON 11.4 mn. The quota increased by 2.7%, up to RON 1.3/share.

The most significant increase in the price was reported for SIF Moldova, by 3.9%, up to RON 1.62, while the total transactions reached RON 9.3.

Transactions worth RON 3.9 mn were reported for Banca Transilvania and the quota increased by 2%, up to RON 1.03/share.

BRD-Groupe Societe Generale recorded a smaller liquidity, of RON 1.5 mn.

The quota stopped at RON 13.2/share, uo by 0.8% as compared to the level posted at the end of the previous week.

The transactions conducted with the 33.9 mn shares in Rompetrol Rafinare reached RON 3.9 mn.

The quota was of 11.8 bani/share, up by 1.7%.

Petrom closed the session at 47.4 bani/share, down by 0.4% as compared to Friday, against a liquidity of RON 2 mn.

BET index, based on the evolution in the most liquid shares, increased by 1.03%, while the BET-C index, which reflects the overall evolution on BSE, increased by 0.81%.

The two indices increased by 44.75% and 35.91%, respectively, as compared to the end of 2004.

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Bucharest - 27 September 2005 - The biggest PC seller on the Romanian market, in Q2 2005, was K Tech UltraPro, with a market share of 11.7 percent, followed closely by Flamingo Computers with 11.6 percent, and the Davio brand of Altex that climbed in the third position, with 11.4 percent of the overall sales, ACT Media News Agency reports.


The former Q1 leader Romsoft - Computer Warehouse Ranked fourth (10.6 percent).
Only one western brand is present in the top 5, namely Hewlett-Packard (HP), with 9 percent.

Flamingo remains in the top position among the Romanian companies ranked according their receipts, with 9 percent of the total, followed by Romsoft (8.3 percent) and K Tech (8.2 percent), according to American Data Corp (IDC) report, Ziarul financiar daily reads.

Personal computer sales continued their upward trend in Romania, with an average rate in excess of 50 percent compared to Q2 2004.

The number of sold laptops on the same period doubled as against the similar period last year.

Per total, in this period, 122,650 PCs (desktops, laptops and small servers) were sold on the Romanian market, with 50.1 percent more than the similar period of last year.

This market receipts amounted at 77 million euros, with approximately 38.01 percent more as against Q2 2004. Laptops sales saw again the most spectacular increase: more than 104.3 percent in sales and a jump of 74.2 percent in receipts achieved on this segment.

Desktop sales jumped by 44 percent, and receipts on this segment were up 32.7 percent.

As for the servers, sales increase accounted for 21.5 percent as for the number of units. Private users' sector continue to be one of the local market engines, accounting for 53.4 percent in Q2 sales.

It is followed by small companies sector, with 33 percent, corporations accumulating only 4.2 percent of the overall sales.

Together, private users and small companies spent 83 percent of the amounts of money resulted from computer sales.
Source: reporter.gr

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ABU DHABI, 27 Sep, 05 (WAM) - Abdul Rahman G. Al Mutaiwee Director General of Dubai Chamber of Commerce and Industry (DCCI) received Costin Lianu, the Director General of Export Promotion in the Ministry of Economy and Commerce and Serban Tanase the Trade Commissioner and Acting Consul General.

The meeting discussed ways of enhancing and strengthening the relationship between two sides, the future potentials for linking and communicating between the business communities in Dubai and Romania. Tanase explained that Romania is participating with a national pavilion for the first time in GITEX 2005. Romania is participating in field of IT and Soft solutions. In addition Romania will participate in major exhibitions such as: Big Five, Index and the Air show, according to a press release.

Mr. Serban explained the Romanian plan to establish Romanian Business Center in Dubai Internet City.

Costin expressed the Romanian interest in strengthen the relation with Dubai and the UAE which is considered as business hub in the region. Romania is looking forward to participate in more event and activaties. Costin said" there is room for more to come to this market". He explained the Romanian interest in establishing a business council to develop the cooperation between the two sides and creating new opportunities for business communities.

From his side Al Mutaiwee explained the importance of business councils in developing the commercial relations and creating a platform for interaction between businessmen and companies.

He explained the procedure of establishing the business councils and its role in serving the business communities and increasing the volume of the bilateral trade.

Al Mutaiwee expressed the DCCI's readiness in receiving the trade missions and delegations from Romania which are looking for business opportunities in Dubai.

The statistics show that the total volume of the non-oil bilateral trade between Dubai and Romania reached last year 360 million Dirham (98 million US Dollars) comparing with 253 million dirham in 2000 (68 million US Dollars).

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Romania?s newly introduced flat tax has brought in more revenues and helped to reduce registered unemployment by teasing business out of the shadow economy, Finance Minister Ionut Popescu said recently.

Popescu told Reuters in an interview that fast growth and good revenues would allow the government to bring down the budget deficit to 0.7 percent of gross domestic product from 1.5 percent foreseen last year for 2005.

?From an original budget deficit target of 1.5 percent of GDP this year, we aim to adopt a budget revision which sets a 0.7 percent deficit,? Popescu said.

?This reflects higher budget revenues from introducing a flat tax in January and strengthening the law against tax evasion.? Romania?s centrist government introduced in January a 16 percent flat corporate and income tax, replacing an 18-40 income scale and a 25 percent tax on business in a bid to limit the gray economy and spur foreign investment.

The government is, however, under pressure from a visiting IMF mission reviewing its two-year standby accord to reduce the deficit even further, to about 0.5 percent of GDP, to prevent the booming economy from overheating.
The IMF has warned that the tax cuts would fan already buoyant domestic demand, threatening inflation and current account targets.

Popescu said this strategy had worked so far, additionally producing a spike in officially registered employment. ?The flat tax triggered a steep rise in employment. In the first quarter, the number of employees rose by 153,000, which is almost double from the same period a year ago,? he said. Government figures show the jobless rate hit a 13-year low of 5.5 percent in May.
Popescu and his deputy in charge of treasury operations, Dragos Neacsu, said that as part of Romania?s drive to attract foreign investment it would overhaul its debt management and improve liquidity of domestic bond offerings.

Neacsu said Romania, with a debt to GDP ratio of about 20 percent ? the lowest among new EU entrants and candidate countries ? offered limited opportunities to financial investors. In order to improve liquidity, the treasury will gradually replace the existing debt issues with fewer, benchmark issues which could be reopened in the future. Domestic bond issues would take priority over international offerings. Neascu said the government would have its debt management strategy ready by the fourth quarter when it also plans to set up a debt management agency.

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Romania is set to have an economic growth in the range of 4.5 - 5 percent in the upcoming years, ACT Media News Agency reports.

"We do not foresee an eight percent growth, as up to now, but the economic development pace is a very good one, compared to other countries in the region," director of CEEMEA Nenad Pacek said.

"Romania' s form looks better than ever.

Russia is the only one that has a faster growth rate than Romania" he said.

He also mentioned the importance of financial services for the population and the need for reforms in the banking sector.

It is important that Romania's National Bank involves itself in the development of protective banking products destined to the banking companies.

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In Romania, LG Electronics, one of the world's largest electronics manufacturers, producing a large range of consumer electronics and IT products sold in the first half year 2005 the same as throughout the entire 2004.

Sales manager Cristian Comanici said that in H1 2005, LG Electronics Romania posted 20 million euros in sales, and it seems the target of 45 million euros in sales for the whole year will be reached.

LG Romania will further focus on the premium class (products targeting people with high revenues), planning to become, until 2008, the main player on the relevant market with a 20 percent market share, according to president of the company Han Khyu. To this end, LG Electronics launched in Romania the side-by-side fridge freezers, firstly the ones with LCD Display Watch TV and on Tuesday it released a three-door model of fridge freezer. The luxury side-by-side fridge freezers account for 3 percent of the market and the LG share is of 51 percent, said Khyu.

The local branch of the South-Korean coma, LG Electronics Romania, was set up earlier last year. Previously, LG products were distributed by Romanel company. The main competitors of LG Electronics on the Romanian market are Electrolux, Bosch, Phillips, Samsung and Whirlpool.

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The Transylvania motorway linking Brasov and Bors and the completion of the Bucharest - Constanta motorway on Corridor IV will receive government funds in the next two years, Radio Romania station quoted Minister for Relations with Parliament Bogdan Olteanu as saying in Oradea (northwest of Bucharest) on Sunday.

Olteanu added that the infrastructure revamp is high on the list of Government priorities. "The amounts will be taken from the budget, there is a deal going on these days with Bechtel. The Transylvania motorway and the completion of the Bucharest - Constanta motorway will be assigned money in 2006 and 2007 at least," Bogdan Olteanu stressed.

He also said that negotiations are being conducted with Bechtel over the Brasov - Bors motorway, as amounts will be earmarked in line with the US builder's workflow. "Corridor IV (Nadlac - Constanta) cannot be appropriated money now, as there is no technical paperwork. If I am not mistaken, there are 12 corridors in Europe. The corridor to Constanta is a priority for the EU," the minister said in response to rumours over the possibility that the corridor may bypass Romania.

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SAPARD is about to take a new measure to grant some 41 million euros in non-repayable financing to improve the sanitary veterinary, phytosanitary and food quality control structures in Romania.

The investments in the sanitary-veterinary sector will mainly target expansion and modernization of the existing relevant buildings in some 16 Romanian counties, as well as providing the labs with the necessary equipment. As to the phytosanitary sector, the money will be used to provide a lab in the Mures County (central Romania) with the necessary equipment for "tracing the pesticide residues in the vegetal products".

Moreover, SAPARD is going to grant the necessary funds to implement an information and monitoring system of the data related to food safety and quality.

There will be a total of 18 public upgrade projects to be financed, while two IT networks will be put in place. The total eligible value of one project will stand between 50,000 and 2 million euros.

The Romanian National Sanitary-Veterinary Agency and Food Safety Authority have already begun to draw up the necessary technical documentation for the labs under their subordination. The projects are to be finalised by end-2006, and thus Romania will meet all its pledges assumed in the Agriculture chapter in terms of quality control.

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The real estate investments' profit went down to some 10 percent per year in the first half of 2005 as compared with the 12 percent level registered in the same period last year, said an analysis made by the Colliers company.

Romanian offices market is currently characterized by a lack of projects corresponding to the real estate investors' needs, says a specialized broker who stresses that the commercial spaces segment has registered lately only transactions with spaces for retail trade. Due to the insufficient offer, many potential investors turn to developing their own commercial centres or belonging to other companies, adds the specialist. Furthermore, the fact that some big-size projects have started to be developed on the residential market attracted both the big and the small investors on this segment.

Colliers' study also emphasizes that the decrease in the real estate investments' profit was noticed as early as end-2--4, simultaneously with an increase in prices on the market.

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Romania is set to have an economic growth in the range of 4.5 - 5 percent in the upcoming years, according to director of CEEMEA, Corporate Network, Economist Intelligence Unite, Nenad Pacek, who took part in a roundtable on business issues, organized in cooperation with the Government, initiated by "The Economist" review.

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Romanian-German trade exchange raised by 20 percent during the first part of the year, ACT Media News Agency reports.

Romanian-German trade exchange were worth 4,190 billion dollars for the first six months of the year, 20 percent up from 2004.

The main products exchanged were metallurgical, chemical, plastics, automobiles, but there are still opportunities to put to value in such domains as gas exploitation, telecommunications, agriculture, the representative of Chamber of Commerce and Industry of Bucharest Jose Iacobescu stated on the occasion of Romanian-German forum.

The strengthening of links in know-how transfer is really necessary as well as the use of business opportunities in the South-Eastern part of Romania where, according to Iacobescu, German investors are fewer in number.

"We have noticed that almost half of the import-export in Germany focus on countries non- EU member states, the German economy being interested to access south-eastern European countries," Jose Iacobescu mentioned, adding that they need the German precision in the domain of car manufacture.

At present, Romania has over 12,000 companies with German capital, with total invested capital over one billion dollars, the second country after Italy.

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BUCHAREST -(Dow Jones)- An International Monetary Fund team will visit Romania at the end of October to resume talks with the government on the country's frozen loan agreement, Finance Minister Sebastian Vladescu said late Monday.

"We agreed that a new IMF mission will come to Bucharest around Oct. 20," Vladescu told reporters in Washington DC. Vladescu and officials from the central bank have also discussed Romania's future economic program with IMF officials during the IMF/World Bank annual meeting in Washington this weekend.

Romania's $400 million standby loan agreement with the IMF was put on hold earlier this year amid disagreements over public spending.

Romania wants to join the E.U. in 2007, but the E.U. can delay accession until 2008 if the country doesn't meet the entry criteria. IMF agreements aren't a prerequisite for accession, but the E.U. takes them into account when it assesses the country's general reform progress.

Vladescu said the heavy floods of last week won't require additional spending. In July, the government said the budget deficit would increase to 0.98% of gross domestic product, from the 0.75% figure agreed with the IMF, citing reconstruction needs following heavy floods this year.

Spending required by the most recent floods would be contained within this deficit, Vladescu said.

Earlier this month, Vladescu said he would present the 2006 budget draft to parliament in October. The draft would be aimed at maintaining "macroeconomic balance," with a deficit of less than 1% of gross domestic product.

He said the government won't change main tax rates next year, maintaining the value-added tax rate at 19% and income and corporate tax at 16%. The rate of social security contributions will be cut by two percentage points to ease the fiscal burden for companies, Vladescu said.

Romania hopes to curb inflation to 7.5% this year, and to 5% in 2006 from 9.3% in 2004. The central bank has switched its monetary policy to inflation targeting this year and has set a range of +/-1 percentage point around the annual targets.

-By Cristi Cretzan; Dow Jones Newswires; (4021) 210-8197; cristi.cretzan@dowjones.com

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The strategy of maximizing the price in the privatization process of BCR and CEC represents an important element, but other criteria must be taken into consideration when evaluating the offers, according to the director of the development department within Dexia Bank Stephane Vermeire.

"It is necessary for the solidity of the competitor banks to analyze the business plan proposed, but also the engagements assumed in case of a takeover.

I do not know the proportion between price and other criteria," said Vermeire.

According to the selling conditions, the bidders on the first two positions in the pre-selection process will submit improved financial offers both for BCR and for CEC, in the purpose of maximizing the revenues obtained from selling the shares.

As far as BCR is concerned, the investors will take over either 50% plus a share, or 61.88% of the capital, while CEC privatization, held integrally by the state, requires the selling of a participation up to 75%, but not less than 50% plus a share.

In the competition for BCR privatization, nine foreign banks are competing, by one more than in CEC?s case.

The general director of Dexia Bank, Axel Miller, said that Romania is a strategic market for Dexia, an opportunity of expansion in Central and Eastern Europe.

The development manager sees as dangerous the selling of CEC to a bank that is not included in the category of the strong banks, in the case of a very attractive price offer.

If BCR is taken over, Dexia will maintain the profile of universal bank, the structure towards which it will head CEC?s activity.

Regarding CEC, he said that Dexia aims at maintaining the territorial network, the clients, the reputation and the solidity of the bank, but also the transforming of the segment of crediting-financing of the companies, the small and medium-size companies and the public sector.

According to Dexia officials, if the bank does not take over BCR or CEC, it will continue the activity started in Romania in the public finances domain.

The Belgium group invested in June EUR 70 mln in a euro-bonds? issuing launched by Capital?s City Hall.

On the other hand, Vermeire noticed a paradox-like situation in Romania, considering that there is an excess of liquidity in the banking system and at the same time, a huge need for investments in infrastructure.

Dexia reported a profit of EUR 982 mln for the first semester, falling by EUR 23 mln against the similar period of 2004, due to the diminishing by EUR 80 mln of the contribution to occasional factors.

In June, the total value of the assets reached EUR 483 bln.

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BUCHAREST (AP) - Romanian authorities scrambled to reinforce dams yesterday after a week of flooding which has claimed the lives of seven people and caused widespread damage. Record rainfall in southern and eastern Romania caused damage estimated at over US $1.8 billion (1.5 billion euros). Thousands of police and soldiers were dispatched to help local authorities reinforce dams in southern Romania, where swollen rivers are threatening several communities, including the city of Slobozia, about 100 kilometers (60 miles) east of Bucharest.

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Swedish company Ericsson, telecommunications equipment supplier inaugurated an assembly line for state-of-the-art telecommunications equipment at the Solectron plant based in Timisoara (northwestern Bucharest), ACT Media News Agency reports.

"The level of the Romanian IT&C industry has been confirmed by the inauguration in Timisoara of a production line for cutting-edge equipment, which can provide landline telephony operators with broadband Internet connection and a follow-up expansion to VOIP, Minister of Communications Zsolt Nagy said.

One prospective customer might be Romtelecom.

"By beginning the Engine Acces Ramp production in Timisoara, Ericsson expands its foothold on the Romanian market, the period of delivery to the local and regional customers being slashed.

This cooperation is a major achievement both for Ericsson and Romania, all the more so as these products will target both the local and the foreign markets," Ericsson Wireline vice-president Karl Thedeen said.

Solectron general manager Gianluca Testa said that the new line would create some 100 jobs, while Solectron now has some 3,000 employees on the payroll.

The next fiscal year ending on August 31, 2006 is likely to see a 10-15-percent increase in the turnover, Testa said.

He added that the plant has a portfolio of over 15 major telecommunications customers, and this launch will draw another 3-4 customers.

The Ministry of Finance data show that Solectron Romania posted 55 million euros in turnover and 22 million euros in net profit in 2004.

US company Solectron Corporation went into business in Romania in 1997 when it located the plant in Timisoara.

The company manufactures electronic equipment, landline and mobile telephony equipment, medical gauges, telephone exchange, subassemblies and end components.

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In 2006 the Air Force budget might be less than in 2005 ? Air Force Staff commander, general Gheorghe Catrina, declared on Friday on the Mihail Kogalniceanu aerodrome.

Under such circumstances, the Staff will trim costs accordingly, said the general, who did not specify how severe the cutback will be, but only pointed out that he will have the ?strength? to adjust the structure?s financial plans so that the existing military combat capabilities be not affected.

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Having obtained all the authorizations for its operating as a commercial bank, the Savings Bank ? CEC now challenges its competitors with credit instruments in domestic ?lei? for interests below the market average.

Counting on its massive liquidities, CEC will launch this Monday a mortgage credit and a credit for estate investments, for which it will charge a yearly interest of 9.75% that will remain fixed over the first three years of the contract.

?We have plenty of liquidity and our launching the new credit package on the same date when BNR?s norms that restrict credits in foreign currency come in effect is a mere coincidence,? said CEC president Eugen Radulescu. The institution?s offer also includes a credit for tourism, one for education and another one for medical needs, all for a floating yearly interest of 15%.

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Romania?s need for new residences could be met with mortgage and estate credits worth about 20 bn euros, but for this desiderate to become reality, the legislative framework must be set in place for drawing in funding from the bourse market ? declared Varujan Vosganian, chairman of the Upper House Budget & Finance Commission this week.

He added that the national deficit of one million new residences cannot be covered only by banking credits, because the banks alone ?do not have the capacity to refinance such a broad estate market.? Vosganian announced that the Upper House has this week started talks for the approval of a law package regulating the secondary estate credit market.

The five acts are: the Bill for the amendment and completion of Law no. 190/199 on mortgage credits; the Bill for the completion of Law no. 7/1996 on land registration and estate advertisement; the Bill on mortgage credit banks; the Bill on mortgage deeds; the Bill on claims securing.

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Seeking means to reduce the effects of the recent cen.bank norms that restrict credits in hard currency, the commercial banks might choose to transfer their credit portfolio abroad ? chairman of the Romanian Banking Institute and NBG senior country adviser Petru Rares declared this week.

?The commercial banks will be forced to reduce or even stop credits in hard currency. Apart from BCR and CEC, in whose portfolios such credits account for just a minor share, all the other banks must reach certain measures to counteract the effects of the restriction of credits in hard currency,? said Rares.

The central bank has recently published the new norms on credit disbursements, that will come in effect on September 26. Under the new regulations, a bank?s credit disbursements in foreign currency shall not exceed 300% of the institution?s own funds or initial capital (in the case of credit institutions).

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Minister of Finance Sebastian Vladescu announced plans to remove from the Tax Code, as of next year, all the provisions that might have instated a preferential regime for one or another category of tax-payers.

?You?ll see in the coming days what our plans for 2006 are. Some of the measures, like for instance the tax on the restaurant seat, might have been considered quite amusing under the past ruling line-ups. I know some businesspeople will be unhappy with them,? Vladescu declared this week.

The Minister mentioned some categories of tax-payers from whom more money will be squeezed out in order to counterbalance the decrease by two percentage points of the social security contribution.

Thus, the owners of public alimentation units ? restaurants might be obliged to pay a special yearly tax according to the location and their specific activity.
In the IT sector, the programmers will no longer get a wage tax exemption. This facility was introduced in 2001 to encourage the IT industry and addressed the holders of a bachelor?s degree in Automatics, Computer Science, Informatics, Cybernetics, Mathematics or Electronics, who collect a minimum yearly income of 10,000 US dollars from the creation of programs.

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Real estate investment funds represent an alternative to the banking loan programs for the development of estate projects, ACT Media News Agency reports.

The current trend both for banks and the experts from the estate sector is to direct their financing services towards the emerging middle-class.

?If so far, project developers were targeting the estate luxury sector, they now re-direct their attention towards urban residential assemblies, accessible to that category of persons with incomes slightly above the average and who most press for decent residences,? said real estate manager Razvan Iorgu.

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RomTelecom undergoes a restructuring phase including plans to invest more than ¤500m in next generation network so as to offer broadband services. An initial public offering will take place within 2006.

RomTelecom management presented the company?s restructuring progress.

Among main achievements, the CEO of RomTelecom mentioned:

a) the company?s improved productivity with connections/employee reaching 275 at end June 2005 vs. 160 at end June 2003

b) headcount reduction to 15,242 employees at end June 2005 vs. 26,704 at June 2003

c) a new billing system and the replacement of analogue connections.

Bulgarian Communications Minister commented that the government will sell its entire 46% stake in successive public offerings in Bucharest as well as in other markets.

Marfin analysts' state that RomTelecom?s restructuring progress has added value to OTE group and has been one of the main drivers of their most recent EPS upgrades.

RomTelecom accounts for 10.3% of their OTE sum of the parts valuation which returns a fair value of ¤17.7/share.

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Austrian investors made the most acquisitions on the Romanian capital market in August, the total amount reaching at 49.5 million new lei (RON), mainly in the financial mediating sector (29.47 million RON), ACT Media News Agency reports.

British investors rank second, with a volume of over 28.66 million RON, out of which 13.21 million RON in the field of hydro-carbonates extraction, USA investors are placed third, with a total acquisition volume of 23.87 million RON.

As for the share sales volume, investors from Slovenia rank first, with 49.84 million RON, the main amount (49.63 RON) in the financial mediation field, followed by the Austrian ones, with 43.01 million RON, mainly in the field of monetary mediation - 24.85 million RON - and USA investors, with 28.9 million RON.

Over the analysed period, the biggest buying volume on the capital market was registered in the field of financial mediation, with over 115.71 million RON, followed by monetary mediation, with over 47.56 million RON and hydro-carbonates extraction - with 39.54 million RON. Regarding the sales from foreign investors, the financial mediating sector ranks first, as well, 90.98 million RON, followed by monetary mediation, 44.74 million RON, hydro-carbonates extraction, with 33.59 million RON, IT products' trading with 4.07 million RON and crude processing products, with 2.9 million RON.

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Sibiu Financial and Commodity Exchange marked new record high in liquidity levels with closing some 15,347 futures and options contracts in five trading sessions, reports the ACT Media News Agency.

September 21 marked a peak with 4,388 contracts closed in one day.

The investors? interest for the market of derivatives is on the rise, as the number of open positions attained 56,744, with a noticeable trend of the investors? focus on medium-term investment plans.

This trend is particularly visible on the DERRC market, where the number of positions opened for December is by 48% higher than the same indicator in September.

The most liquid issuer was DERRC, with transfers amounting to the equivalent of over 70 million shares in one week.

The closing price for DERRC securities was 0.1158 lei for September and 0.1260 lei for the end of the year.

On the market of the Societies for Financial Investments, the purchasers collected high yields.

The initiators of long positions for SIF5 obtained yields of 29.41% and 34.70% on SIF5 support assets.

The quotation prices rose to 1.84 lei, respectively 1.9250 lei for the current maturity, respectively for December.

Oltchim shares appreciated by 7.78%, attaining 0.3975 lei.

For a locked margin of 40 lei/contract, DEOLT purchasers obtained a yield of 71.75%.

The most remarkable on the options market were call options for DETLV maturing in December, for a price of 1.08 lei and a premium of 60 lei/contract.

BNR?s recent intervention on the currency market also had effects on futures contracts.

The euro gained 2% against the national currency, topping 3.5 lei for both on-going maturities.

The euro is priced 3.5499 lei for the end of the current month and 3.55 lei for late December.

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Trade turnover between Bulgaria and Romania is likely to reach a billion US dollars this year, it emerged Monday.

The sum reached USD 488.5 million in the first half of the year, and usually trade intensifies in the last months of the year, the Bulgarian ambassador to Romania has said.

Atanas Stamov was cited as saying that the Romanian market was a very good opportunity for Bulgarian tradesmen, with its 22 million consumers and quality standards that resemble those in Bulgaria.

Last year, trade between the neighbour states was worth some USD 816 million, as compared to only 110 in 1998.

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Factoring may be a solution to the problem of Romanian exports that registered only a modest increase in the first half of the year due to the unfavourable exchange rate of the European currency, ACT Media News Agency reports.

The modest increase of Romanian exports, by only 15 percent in H1 2005, is a result of the euro depreciation by almost 12 percent, taking into account that the European market absorbs almost 70 percent of the total of Romanian produced goods.

Because the factoring market has seen a strong development in Europe, Romanian exporters can look at factoring as an option.

According to Factors Chain International (FCI) organization, Romania posted over the recent years significant factoring increases, the value of transactions amounting to 420 million euros in 2004.

However, this figure could be much bigger as these estimations were made solely for the Romanian banks members of FCI (BCR, BRD, UniCredit).

The main player in the factoring market is the Romanian Commercial Bank (BCR), with an export factoring volume of 36 million euros.

Experts maintained that H1 2005 meant a jump of 50 percent in the bank's factoring turnover. The Romanian Bank for Development (BRD), ranked second in Romania, announced, in its turn, positive results as far as the factoring is concerned.

BRD's representatives said that the completion of a factoring operation takes only 24 hours once the request is received.

But under the condition, that exporter's turnover is of minimum 100,000 euros. Besides financing services, the exporter also benefits of a risk covering in the case the invoice is not paid.

Similarly to all efficient products, factoring is not a cheap service.

The costs depend on the accessories attached to the basic product.

In case the client wants solely to obtain some liquidities, the commission is calculated according to LIBOR/EURIBOR value + 2 percent per year.

In order to cover the paying default risk a supplementary tax is added, of 1-2 percent.

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Greek operator Cosmote announced today plans for the relaunch of Romanian GSM operator Cosmorom, following Cosmote's acquisition of 70% of Cosmorom for Eur120 million (US$145.3 million). Cosmote is looking to push Cosmorom into becoming a key player in the Romanian market, through deployment of an advanced telecoms network and competitive pricing. Cosmote will also look to take advantage of links with fixed line operator Romtelecom, in which Cosmote parent company OTE holds a 54% stake, to concentrate on market differentiation. 

 Currently Cosmorom is the last placed operator in the Romanian market with 84,300 subscribers as of end-August; CDMA player Telemobil had 344,000 subscribers; MobiFon over 5.4 million subscribers and market leader Orange Romania had over six million GSM subscribers.

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Euro won 3.1 bani against the national currency, on the background of massive purchases, which the dealers justified through the banks position reorientation, probable capital outflows or a discrete intervention of the National Bank.

Euro opened the session Thursday with half a ban over the trading level at Wednesday closing, 3.5880 ? 3.5940 RON/EUR, and the first operations showed the trend of foreign currency purchase.

Thus, euro increased in stages, without interruptions, up to a level of RON3.52, when some banks sold foreign currency bringing it below the first quotations.

The second wave of foreign currency purchase brought euro over the level registered in the first part of the day and the quotations stopped to RON3.5600 ? 3.5700, at least after 13.00.

Subsequently, euro registered a balance between RON3.5450 ? 3.550.

Some dealers said that the evolution was caused by the outflow of speculative funds and the reorientation of the banks investments to the foreign currency investments.

On the other hand, some people placed BNR behind these movements, through discreet interventions.

National Bank announced the cut by 1 point of the money policy interest, from 8.5% to 7.5% and the drop of the interest rate paid at the deposit facility from 4% to 1%.

In August and at the beginning of September, the deposit facility was frequently used as a gate by the commercial banks, due to lack of investments for the liquidities in RON, and the current interest is rendering more attractive a deposit in foreign currency.

Some analysts contradicted the hypothesis on the withdrawals of foreign capitals, explaining that in the last period, the volatile flows have not counted very much on the interest differences but on the currency increase, trend which is most likely to continue.

The reference exchange rate announced by BNR was 3.5170 RON/EUR and 2.8796 RON/USD.

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The investors who bought Petrolexportimport Bucharest shares a month ago were rewarded with a stock exchange efficiency of 27.62 percent of the sum in euros that was placed, ACT Media News Agency reports

Referring to the stock exchange transactions that took place, 17.6 million Petrom shares changed their owner for the sum of about 2.4 million euros and the main buyer was a foreign investment fund that bought about 12 million titles.

The titles issued by Rompetrol Rafinare and SIF Oltenia had a high liquidity.

Transactions amounting to 1.8 million euros were conducted with the former companies and transfers over 1 million euros were carried out with SIF Oltenia together with the Romanian Development Bank and Transilvania Bank.

According to some local brokers, the Bucharest Stock exchange shows a sound growth, which generates a medium-term ascending trend.

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TE Wins First SDH Deployment in Romania

ZTE Corporation (Shenzhen: 000063, Hong Kong: 0763), China?s largest listed telecommunications manufacturer and leading wireless solutions provider, today announced it has won the contract to supply Euroweb International, a leading ISP in the Central Eastern European region, with SDH equipment for its optical network in Romania.

The deal will provide Euroweb with optical transmission equipment for each of its 14 nodes based in major Romanian cities including Oradea, Arad, Brasov and Buzau. ZTE?s enhanced STM-16 multiservice equipment ? the ZXMP S380 ? allows Euroweb to transport large amounts of voice and data traffic over its optical network.

The equipment will be in place by December 2005 and will offer facilities such as Synchronous Transfer Mode (STM-4/1), transmission links such as E3/E1 and Gigabit Ethernet services.

?It has always been our policy to provide cutting edge technology to our customers. This agreement with ZTE means our network is future-proofed and will can offer the next-generation of IP services to our customers in Romania.? remarked Mr. Laurentiu Stan, Euroweb?s General Director in Romania.

?Today, more so than ever before, businesses and individuals have come to rely on increasingly quick and reliable access to information which can only be catered for with fibre-optic technology,? said Mr. Li Chuanzhong, GM at ZTE Romania. ?We are very happy to be working with Euroweb to bring ZTE?s advanced technology to the people of Romania.?

Euroweb?s national data transmission network, which extends across approximately 2500 km of Romania, will assure the company?s future development by sustaining the increasing data volumes of Romania and securing an important transit segment for the Hungary-Romania-Bulgaria-Turkey route.

The ZXMP S380 can provide customers with across-the-board solutions that integrate TDM, Ethernet and ATM access in a unified platform, thus seamlessly evolving the existing voice oriented network to a multi-service network, with maximum return on investment, and cost effectiveness for service scalability and network evolution.

In March, ZTE won the contract to supply Cabletel, Bulgaria?s leading fixed-line operator, with the country?s first ever DWDM optical network. In 2002, ZTE?s SDH equipment was first deployed in Europe in a deal covering Poland?s nationwide optical network.

To date, ZTE?s optical transmission products, including SDH/MSTP (Multi-Service Transmission Platform) equipment, backbone DWDM equipment, and metro DWDM equipment, have been deployed in over 40 countries and regions overseas, establishing ZTE as a leading international optical transmission equipment provider.

About ZTE Corporation

ZTE Corporation is China's largest listed telecommunications manufacturer and wireless solutions provider, delivering telecommunications equipment, mobile terminals and services to both wireless and wireline operators and service providers throughout the world. Internationally, ZTE?s diversified products in areas such as WCDMA, CDMA, NGN, GSM, switching, access, and optical transmission have entered over 60 countries and regions.
ZTE is publicly listed on both the Shenzhen Stock Exchange and on the Main Board of The Stock Exchange in Hong Kong. ZTE recorded contract sales of over USD 4.1 billion in 2004; invests nearly 10% of its annual sales income into research and development; and has 25,000 employees, of which 70% have a bachelor or higher degree.

For more information on ZTE Corporation, visit www.zte.com.cn

About Euroweb International and Euroweb Romania

Euroweb Romania is the local subsidiary of Euroweb International Corp., the only NASDAQ listed telecommunications company operating in Romania. Euroweb?s offer for the Romanian market includes wholesale and retail Internet access, VPNs, domain registration services, hosting and collocation services, national and international data transport as well as next-generation telephony and video-telephony services. Euroweb Romania is N.A.I.S.P. founding member (the National Association of Internet Service Providers). Euroweb is ISO 9001:2000 certified by IQNet for its quality management system.
For more information please visit www.euroweb.ro

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Politics: 23 September 2005, Friday.

Greek Prime Minister Kostas Karamanlis called for the timely accession of Bulgaria and Romania to the European Union during his official visit to France.

Talking to the French newspaper "Le Figaro", Kostas Karamanlis expressed concerns over the possible delay of the entry of the two countries, pinned for January 1, 2007.

"These countries made a serious effort to fulfill their obligations under difficult conditions. Europe should not send a negative signal to these countries, whose stability depends on the choice that they made in favour of Europe."

In the words of Costas Caramanlis one of the principal assets of the European Union resides in the confidence granted to these countries.

"If it does not keep its word, it will lose this confidence."

"We declared that Romania and Bulgaria could adhere in 2007. We cannot tell them that we have difficulties and that it is necessary thus that they wait in the anteroom," said Kostas Karamanlis.

Replying to a question on the election results in Germany, the Greek prime minister the country will soon form a solid government to take "courageous decisions in particular on all the questions which concern our common destiny in Europe".

In his words the crisis earlier this year over the rejection of the EU's constitutional treaty does not mean a catastrophe for the European Union.

"We are passing through a period of reflection. It is not a catastrophe. Europe already knew this kind of crises many a time. I am not pessimistic. We have just taken two great steps ahead: monetary Union and the process of enlargement, which represents also a great political shock. It is now necessary to find a way of giving again a dash in this Europe because a union of 25 countries cannot be allowed to remain motionless. We are ready to work in this direction with France."

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CosmOTE will relaunch Cosmorom operations in Romania. OTE controls 88% of the company and plans to invest 450 millions euros in the next two years aiming to make it a profitable business in the next four years.

Marfin said that CosmOTE enters a challenging market with high growth prospects while the company?s successful track record of managing international assets (Albania, Bulgaria and FYROM) raises optimism and reduces execution risk.

Marfin stated that investments in Romania over the next 3-4 years are expected to amount to ¤400-450m, including the amount of ¤120m for the acquisition.

CosmOTE shares trade at a 2% and 4% discount to a selected European peer group, based on FY06e P/E and EV/EBITDA multiples, respectively.

In addition, Marfin analysts said that the dividend attractions of the shares should not be overlooked (expected dividend yield for FY05 of 4%).

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Romania will receive 6 billion euros in non-repayable structural funds from EU for the period of 2007-2009, ACT Media News Agency reports.

The money granted to Romania through structural funds (non-repayable financial aid) by the European Union over 2007-2009 will account for 4 percent of the GDP.

"We believe that, in the first years, namely 2007-2009, Romania may be extended 11 billion euros, of which 6 billion euros for the development of economic structural cohesion, and as regards the investments toward which these funds should be directed, the European Union is not in the position to decide the national priorities," European Commission Delegation member Jonathan Scheele said.

About 2.5-3 billion euros will be annually allotted for projects of structural development.

Funds will be earmarked for the economic development in the rural area.

According to Scheele, the period until accession is important for Romania's economy and the civil society should take advantage of the opportunities offered by the European Union.

"A sustainable development cannot be achieved at governmental level only, but active involvement is needed at all levels," stressed the European official.

He emphasized Romania needed a national development plan, spanning seven years, which would be the base for the ties with the EU.

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6% of GDP will be allocated for Romania?s modernization following EU accession, ACT Media News Agency reports.

Romania's priority is to adopt programs coming from EU.

According to the National Development Plan, the 6 priorities of Romania are the increase of economic competitiveness, developing and modernizing transport infrastructure, improving environment quality, increasing the occupation degree and social exclusion, developing rural economy with support for the farming sector and supporting the balanced development of all country regions.

Romania's orientation only to structural funds without an effort to comprise the full range of community programs will result in the inefficient use of structural programs.

Romanian officials said that the country should consider an institutional reconstruction of the public and central administration in an effort to increase the living standards and get closer to the EU average.

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The Ministry of Communications and Information Technology (MCTI) will announce the sale of the last two big companies that the state has to privatise, the Romanian Post and Radiocommunications National Company, ACT Media News Agency reports.

The announcement for the submission of letters of intent for the privatisation of the Radiocom Radiocommunications National Company, and the Romanian Post will be posted in the coming days.

As for PostTelecom operator, MCTI hired a Czech consultant to carry out a study on the possible privatisation or relaunching of this operator.

About RomTelecom, the offers already submitted are still under debate.

MCTI received 12 letters from banks interested to offer financial consultancy in the privatisation of RomTelecom.

The state will sell its share at RomTelecom through an initial public offer.

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Sept. 23 (Bloomberg) -- Romania was hit by intense rain that brought flooding in much of the southern part of country, left three people dead, inundated more than 2,000 homes and shut seven national highways in the past 24 hours, the government said.

Two people were also missing in the Black Sea resort town of Costinesti and 10 national railway lines were washed out in the flooding that affected 300 cities, towns and villages, the Interior Ministry said in an e-mailed note today. In the capital, Bucharest, rainfall in three days more than quadrupled the average monthly volume for September.

``As of this moment, we have 2,500 to 3,000 rescue workers on the ground,'' Anghel Andreescu, an Interior Ministry state secretary, said in a news conference today.

At least 73 people have died in flooding in Romania this year, with four of them as rain fell almost nonstop this week. On Aug. 25, Interior Minister Vasile Blaga said flooding in April, May, July and early August had caused more than 1.5 billion euros ($1.85 billion) in damage. The government said today it will provide a new damage estimate after the latest floods recede.

In July, the government said extra spending would widen the budget deficit to 1 percent of gross domestic product, beyond the target 0.74 percent target agreed upon with the International Monetary Fund.

Bucharest Rain

In Bucharest, 180 liters (47 gallons) of rain fell per square meter in the past 72 hours, more than quadruple the average rainfall for the entire month of September of 40 liters per square meter, the government said in an e-mailed note.

Some of the capital's streets were underwater and the string of lakes that bisect the city swelled, prompting authorities to line their banks with sandbags. The government said Bucharest residents are not in physical danger from floods. Rains were forecast to continue in Bucharest and much of southern Romania through the weekend.

Romanian television station Realitatea TV showed images of rural residents stranded on rooftops, rail lines twisted as floods washed out earth from underneath and Black Sea resort beaches littered with debris.

In an interview published in Bucharest daily Adevarul today, Transport Minister Gheorghe Dobre said the World Bank may lend Romania 1.15 billion euros over five years to repair damage to rails and roads from this year's floods.

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BUCHAREST, Sept. 22 (Xinhuanet) -- Floods caused by heavy rains hit Romania again on Thursday, leaving six people dead and two others missing, the Rompres news agency reported.

It is the sixth time that floods have hit the country this year. In the county of Constanta, hundreds of houses were inundated, of which 10 were completely torn down by the floods.

Paul Victor Dobre, an official from the Interior Ministry, saidThursday the floods also destroyed many bridges and roads in 14 ofthe 41 counties in the country.

Two counties in southern and southeastern Romania were the mostaffected region, where troops and police were put on ground alert to launch rescue operations when needed.

A series of floods have hit Romania since April, claiming 72 lives so far, and the damage is estimated at about 1.91 billion USdollars. Enditem

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Construction work started less than a year ago and already two new production facilities have been inaugurated in Brasov ? Romania.

One of the new facilities, a weaving plant, is expected by Autoliv to increase their annual capacity for seatbelt webbing for the European market by 20%. The second facility is expected by Autoliv to double its seat belt manufacturing capacity in Romania. Total capital expenditures for these two facilities amount to approximately $22 million.

The extension of the seatbelt manufacturing area amounts to 11,800 square meters (approx. 127,000 square feet), while the new webbing plant covers an area of 6,400 sqm. (approx. 69,000 sqf.). These expansions will create 700 new jobs in addition to the 500 job positions Autoliv already has in Romania

In addition, Autoliv is in the process of constructing a third new plant in Romania, as previously announced. This manu-facturing facility is located on the same site as the other Autoliv facilities in Romania. The third new plant will produce inflators for airbags and have a floor space of 10,000 sqm. after its completion in February 2006.

Autoliv Romania was established in 1997 with the initial purpose to serve local Romanian customers such as Dacia - a subsidiary of Renault - and Daewoo. However, the new company turned out to be an excellent manufacturing alternative for Autoliv companies in West European countries and became instrumental in Autoliv's strategy to move production to low cost countries. This strategy has enabled Autoliv to remain competitive, despite the pricing pressure in the automotive industry, and to increase its sales by nearly 50% since 2000, thereby creating 7,500 new jobs globally, an increase of 23%.

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Rompetrol rejected, on Wednesday, the allegations published in a daily against the CEO of the group Dinu Patriciu, according to which the Sirian businessman Omar Hayssam was the go-between in several meetings with Sudanese officials for the purchase of an oilfield in the African country.

Rompetrol mentions that the company delegation who visited Sudan in June 2001, visit proposed by the ambassador of this country to Bucharest, had a meeting with the Sirian businessman following the request of one of the Sudanese companies recommended by the Embassy of the respective country.

Haissam offered his support to negotiate some Romanian-Sudanese contracts, in spite of the overt distrust of the Rompetrol representatives, the official Rompetrol press release stated. Later, Hayssam participated on behalf of the Lufar Ltd company in the discussions in Khartoum with various companies and with the Minister for Energy in Sudan, again offering his support.

According to Rompetrol, the company representatives had an unpleasant discussion with Omar Hayssam on the last day of the visit, on which occasion they rejected any collaboration with Hayssam and the Lufar company in Sudan or in any other part of the Arab world.

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As many as 10 companies acting in energy have submitted letters of interest in taking part in the privatisation of Romanian grid Electrica Muntenia Sud, the ministry of economy and trade announced .

They are AES Corporation from the United States, CEZ from the Czech Republic, EnBW Energie AG from Germany, ENEL SpA from Italy, E.ON Energie AG from Germany, EVN AG from Austria, Gaz de France from France, Iberdrola from Spain, RWE Energy AG from Germany and Union Fenosa International from Spain.

Electrica Muntenia Sud distributes and supplies electricity to some 1.075 million customers in Bucharest and the nearby counties of Ilfov and Giurgiu. The company has a share capital of 191.309 million new lei and a turnover of 1.118 billion new lei.

The privatisation entails the sale of a 67.5 percent stake to an individual investor or a consortium by purchasing 50 percent of the shares and increasing the capital up to 67.5 percent.

The future majority shareholder will be free to offer the European Bank for Reconstruction and Development (EBRD) and the International Monetary Fund (IMF) the possibility to acquire up to 5 percent of the increased share capital of Electrica Muntenia Sud. The results of the pre-qualification stage will be announced on Oct. 3.

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In order to clarify some contradictory information published by the media in Romania, the Balkan Petroleum Ltd. Company announced in a press release that they still owned the majority of shares in RAFO Onesti Refinery. BkP admits that it is interested in selling the shares package owned at RAFO, but under certain conditions. This process presupposes finding a company with reliability to be accepted both by BkP and AVAS (Authority for State Assets Recovery).

In the case no investor is found to assume contract obligations, regarding the know-how and the necessary resources to ensure the refinery working, as well as the necessary capacity to comply with these obligations, BkP will remain RAFO owner in Romania.

Lately the media in Romania has spread news according to which RAFO Onesti would have been sold. BkP admits that they had negotiations with interested companies in taking over RAFO, negotiations to be finalised the moment all the obligations imposed by AVAS could be met. The company states that such a transaction could not have taken place without the agreement of the Romanian state, AVAS being the institution accountable for supervising the RAFO privatisation contract. In an official release, AVAS stated that any change of ownership over the RAFO refinery without the AVAS agreement would be legally void.

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The companies in the Ministry of Economy and Commerce functioning in the sector of oil and natural gas production and distribution registered ? between January 1 and July 31 2005 ? a level of investments worth 811,39 million RON, according to a press release of the ministry.

Financing was totally ensured from the companies own funds, on the basis of the annual investment programme drawn up and approved by MEC.

The companies included in the programme are SC Conpet SA, SNGN Romgaz SA, SC Distrigaz Nord, SC Distrigaz Sud, SN Transgaz SA and SC Oil Terminal SA, for each of them there were investment objectives, their value, as well financing source.

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Foreign currency non-governmental loans went up over July 2004-July 2005 by 90 percent, whereas the foreign currency consumer loans soared by 140 percent over the same period, Adrian Vasilescu adviser to the governor of the National Bank of Romania (BNR) on Wednesday said at a news conference on the market of consumer loan in Romania.

Mortgage loans have also increased during the same period, Vasilescu added. The BNR measures are particularly aimed at curbing consumer loan, said the central bank official, explaining that in Q1 2005 the current account deficit has significantly increased.

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The current account deficit of the balance of payments was 2.952 billion euros at July 31, up 56.4 percent as against the same period of the last year, the National Bank of Romania announced on Wednesday.

The medium and long-term external debt reached at the same date 2.208 billion euros, up 21.6 percent as against the end of 2004. The public and publicly guaranteed external debt stood at 1.141 billion euros and represented 51.7 percent of the medium and long-term external debt.

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The measure was taken following numerous cases of avian flu discovered in these areas. The Director of National Agency for Veterinary Health Gabriel Predoi declared to BBC that the measures taken by the Romanian authorities did not include import restrictions only.

Sibiu Stock Exchange (central Romania) has brought for the first time in its existence a daily rate of more than 3,000 contracts in the last week, ACT Media News Agency reports.

In August, a record number of over 46,000 contracts was generated, the evolution on the first 12 September trading sessions signal that a volume of around 75,000 contracts might be reached.

Three new contracts will be launched soon with intensely traded shares in Bucharest, namely BRK, SCD and STZ. The players on the market think that such a large-scale development may lead, till the end of the year, to a daily average of 5,000 contracts.

Teodor Ancuta, president of Sibiu Stock Exchange, said that they expect new strong players to enter the market and will see a six times larger volume compared to the one in 2004 and with 50 percent bigger than in 2002, when 300,000 contracts had been concluded.

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MEXICO CITY -(Dow Jones)- The Mexican Economy Ministry on Wednesday imposed final anti-dumping duties from 37% to 68% on imports of all types of carbon steel plates from Russia, Romania and Ukraine, after ending a 3-year-long investigation.

The ministry said that based on an investigation into imports of steel plates from the three countries during the period of January to October of 2002, compared to the same period of 2001, the government found that dumping did occur.

The government investigation found that the 227% increase in these steel imports during the period of investigation had surpassed the volume allowed according to international trade rules and caused a negative impact on the local steel industry.

"The imports of the product took place under conditions of discriminatory pricing, causing damage to the same national line of steel production," the ministry said in a statement, adding that local prices fell 2.4% and local production and domestic market sales both fell 8% as a result of the dumping.

The dumping margins were found to be in excess of 120.5% from Romania, 36.8% from Russia and 60.1% from Ukraine.

Anti-dumping duties were set at 36.8% for Russia, 60.1% for Ukraine and 67.6% for imports from Romania including those by Ispat Sidex SA, a unit which today belongs to the Mexican operations of Mittal Steel Co (MT) (36193.AE).

Imports from Russia, Romania and Ukraine accounted for 6%, 23% and 22% respectively of total Mexican imports at the time of the investigation, the ministry said.

It is not the first time Mexico imposed anti-dumping duties on imports of steel products from Russia and Ukraine. In 1999, a 20% duty was fixed on Russian imports of hot rolled steel, while duties on imports from Ukraine of the same product was set at 47%.

The duties take immediate effect and are expected to benefit Mexican steelmakers Altos Hornos de Mexico SA (AHMSA.MX), one of Mexico's largest steel makers and a producer of carbon steel plates for the local market.

-By Maja Wallengren, Dow Jones Newswires; 5255-5080-3452; maja.wallengren@dowjones.com

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BUCHAREST (AFP) - Several districts of Bucharest were under water, after 48 hours of torrential downpours across southern Romania, the city governor's office said.

The central thoroughfare of Tineretului was closed overnight as the depth of water on the ground reached 50 centimetres (20 inches).

Despite the best efforts of emergency teams, who spent the night pumping out water, Izvor subway station was also flooded, while many other main roads and underground walkways became impassable.

Residents in a dozen streets saw their electricity supply cut off as power lines had been damaged.

At an overnight emergency meeting, governor Mioara Mantale asked authorities in neighbouring regions to send pumps and other equipment which would help to drain the water more quickly.

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STOCKHOLM, Sweden, Sept. 22, 2005 (PRIMEZONE) -- After only eight months of construction work, Autoliv Romania -- a subsidiary of Autoliv Inc. (NYSE:ALV - News) and (SSE:ALIV) the worldwide leader in automotive safety -- inaugurated today two new production facilities on its premises in Brasov. One of the new facilities, a weaving plant, will increase Autoliv's annual capacity for seatbelt webbing for the European market by 20%. The second facility will double Autoliv's seat belt manufacturing capacity in Romania. Total capital expenditures for these two facilities amount to approximately $22 million.

The extension of the seatbelt manufacturing area amounts to 11,800 square meters (approx. 127,000 square feet), while the new webbing plant covers an area of 6,400 sqm. (approx. 69,000 sqf.). These expansions will create 700 new jobs in addition to the 500 job positions Autoliv already has in Romania

In addition, Autoliv is in the process of constructing a third new plant in Romania, as previously announced. This manu-facturing facility is located on the same site as the other Autoliv facilities in Romania. The third new plant will produce inflators for airbags and have a floor space of 10,000 sqm. after its completion in February 2006.

Autoliv Romania was established in 1997 with the initial purpose to serve local Romanian customers such as Dacia -- a subsidiary of Renault -- and Daewoo. However, the new company turned out to be an excellent manufacturing alternative for Autoliv companies in West European countries and became instrumental in Autoliv's strategy to move production to low cost countries. This strategy has enabled Autoliv to remain competitive, despite the pricing pressure in the automotive industry, and to increase its sales by nearly 50% since 2000, thereby creating 7,500 new jobs globally, an increase of 23%.

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Over half the 5,000 bakeries in Romania will be forced to close after EU accession, because they do not comply with EU standards, according to Aurel Popescu, president of the Romanian association of bakeries ROMPAN in remarks reported by the Romanian news digest.

The EU standards in the sector will take effect on 1 October 2006 in Romania, which is expected to join the Union on 1 January 2007.

According to Popescu, unfair black market competition and tax evasion have a negative effect on licensed producers who sell their output at five to six times lower prices than in EU, although production costs are equal to those in the Union.

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Certinvest will launch a mutual fund for real estate investments, earmarked for new small and medium-sized residential projects, said the company's manager, Eugen Voicu, "Dnevnik a.m." reports.

"The value of fund units will be EUR 1,000 while the recommended detaining period will be 1-2 years, meaning the period it takes to develop the project, the minimum detainment within the fund being EUR 10,000," Voicu explained.

The yields of the fund will be 5-6% per year in euro, and in lei they will reach 9-10%.

"The initial investments will have in view at least five residential real estate projects.

The fund will be able to get revenues from renting the properties it invests in", Voicu added.

He said that such a fund is an alternative to get a down payment for a mortgage credit.

According to Voicu, the real estate mutual funds are a way to get the down payment in order to contract a mortgage credit from the bank.

"In Hungary, for example, there is a law regulating the activity of these investment vehicles, which caused the market to boom", Voicu continued.

Certinvest is controlled by the Romanian-American Fund for Investments (FRAI). Certinvest administers four mutual funds - Capital, Tezaur, Intercapital and Orizont.

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UCM Resita (north-east from Bucharest) will have a bus plant due to open by the end of October, ACT Media News Agency reports.

UCM Resita will hold a 32% stake in the new bus plant.

Although, the contribution of the Machine Building Works in Resita was 1.5 million euros and a 3% stake, but at the request of the Russian partner, Romcar Russian Buses, the contribution of the Resita-based plant went up by 250,000 euros.

Then, the plant's managing board was established.

At the beginning, six models of buses, bound for the domestic market, are to be assembled in Resita, of which one will be completely made in Resita.

As many as 500 buses are estimated to be produced in Resita in 2006 and the number of employees at the end of next year is expected to reach 750.

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Hundreds of houses were flooded in 17 Romanian counties, leaving many families homeless Wednesday, after rain lashed southern and eastern parts of the country for a second day.

The worst affected region is the southern county of Dambovita, where 31 villages were flooded, and 368 farms and 895 hectares (2,212 acres) of crops submerged, the Interior Minister said.

The Romanian capital, Bucharest, was badly hit by rain, with several roads and 21 public buildings flooded. Some 165 schools were affected by the floods, the AP reports.

This is the sixth wave of flooding to hit Romania this year, and the first time the capital has been inundated.

The Black Sea ports of Constanta and Midia Navodari were closed Wednesday, after powerful storms hit the coast, causing strong winds and 7-meter (23-foot) high waves, said Monica Paraschiv, spokeswoman for Romanian Naval Authority.

A storm warning was sent out to all commercial and military in the region. Early Wednesday a small vessel hit an anchored ship with a cargo of more than 5,000 tons of wheat, causing a split in the hull.

Rain will continue for the next few days, forecasters say.

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The announcement regarding the clearing of Iraq?s debt to Romania ( worth 2.7 billion US dollars plus interests) came as a surprise, at mid-August.

Although Romania is not part of the Club of Paris, whose members decided in unanimity to clear 80 % of Iraq debts, she also took this decision, at mid-August. The reasons and methods of negotiations are not known. The only thing which is certain at present is Rompetrol Well Services participation in a bid in Iraq, as well as the purchase by Iraq of 100 tractors from UT Brasov, as revealed by the Iraqi ambassador to Bucharest, HotNews reports.

Thus, Rompetrol Well Services (former Petros SA), subsidiary of Rompetrol Group, is very close to becoming sub-contractor of a Turkish-American company on an oilfield in Iraqi Kurdishtan.

The result of the bidding will be known at the end of September. On Friday, September 2, the Iraqi ambassador to Bucharest stated, for Rompres, that « one week before, a Romanian company obtained the job specifications to activate a new oilfield ». As regards the clearing of 80% of the Iraqi debt the ambassador said that « as regards the remaining debt, Iraq will open its gates to Romanian companies to start again the Iraqi oil machine ».

The Rompetrol executives confirmed that the above-mentioned Romanian company was Rompetrol, namely Rompetrol Well Services.

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Romanian Authority for State Assets Recovery (AVAS) completed the necessary procedures to launch privatisation of the five companies resulted after Nitramonia Fagaras broke into separate parts.

The process is due to be started in the upcoming period, after obtaining the final approval from the environment authority. The environment authority has already expressed its basic agreement regarding launching privatisation of the five companies (Nitrofertilizers, Nitroexplosives, Nitrocontrol, Nitroservice and Nitrotrans) and AVAS is expecting the document by September 15.

?For the five companies which cumulate the productive activity within the platform, the special administrator AVAS made all the steps in maintaining the supply of utilities, vital for the safety of the plant and of the community in Fagaras,? reads the AVAS release. AVAS holds a 79.052 percent stake in each of the five companies. Nitramonia was privatised in 2003, when the S&T Oil Equipment and Machinery LTD, owned by American businessman of Romanian-origin Valerian Simirica bought from the state 79 percent of the companies shares.

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The State Assets Realization Authority (AVAS) puts up for privatisation the company SIAT of Bucharest. The privatisation announcement by negotiation on bid basis is to be published in the press on Friday, according to a press release issued by AVAS on lastThursday.

The stake for sale (154,744 shares) accounts for 50.7 percent of the share capital of SIAT, whose only activity is research and development in physical and natural sciences.

Only bidders that can offer proof of meeting the following criteria in a cumulative way can take part in the negotiation: non-existence of penal punishments for committing crimes referring to fraudulent management, abuse of confidence, forgery, cheating, embezzlement, perjury, giving or taking bribe or other violations stipulated in Law No 11/1991 on combating non-loyal competition, with the subsequent changes and completions, as an eliminatory criterion; experience in research and development in physical and natural sciences, CAEN code 7310; financial creditworthiness and capability to take over a new business.

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Piraeus Bank reported over the first eight months of the year a 3.2 million euro net profit, representing twice the figures posted over the same period of the last year.

The bank forecasts an asset increase up to 510 million euro by the end of the year, after it crossed the 400-milion euro threshold in August 2004.

"Piraeus Group has aggressive investment plans for Romania and the Balkan area. Our development plans target 50 units in 2005 or 70 units in 2007. Romania represents a huge market and the banking field will develop the market. In a few years, only 5 or 7 main banks will dominate the market and we intend to be one of them."

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The milling and bakery company Loulis Romania reported over the first semester of 2005 a 22.4 million euro turnover and a 400,000 euro net profit.

"We had a lower profit because of the restructuring costs that followed the merger of Moara Loulis with Mopan Targu Mures in this period," Loulis President Nikolaos Voudouris said. He said he expects better financial results by the end of the year, forecasting a 45 million euro final turnover.

The company sales moved up 1.5 percent in this period, the company officials said. Present on the Romanian market since 1999, the Greek Group Loulis also has branches in Bulgaria and Albania, its shareholders being Loulis International Foods Enterprises Ltd. and Global Finance Investment Fund.

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The Romanian branch of Schering Plough US medicine-maker expects its sales to increase by 30 percent, annually, the Ziarul Financiar daily writes on Friday.

The Romanian economy's growth pace over the last years makes the medicine market more and more attractive to the foreigners, Schering Plough's regional manager for Central and Eastern Europe, Marc Princen says. The US medicine maker reported sales worth 32.5 million euros in the previous fiscal year, on the Romanian medicine market, selling medicines both for the individual and collective use and in hospitals.

Medicine sales dropped by 9 percent in Romania, during the second quarter of 2005, to about 300 million euros, reads the daily quoting Cegedim Pharma and Hospital Report's data. Schering Plough's portfolio for the Central and Eastern European market lists 25 products. "We are interested in the region because of its fast economic growth pace, which offers the prerequisites for a similar development of the pharmaceuticals market," Schering Plough official stressed.

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Dacia is the first Renault factory to obtain ISO 14001 in the latest version ? 2004, a press release of Automobile Dacia works informs.

They obtained the certification because the environment management system is according to ISO 14001 standards, following the audit made in June 2005 by the independent institute Societe Generale de Surveillance.

 This certification recognizes the performance level reached by Dacia in the field of environment policy. Built according to Renault model, the Environment Management System at Dacia has in view the permanent reduction of the impact factory activities have on the environment. At Dacia works level investments associated to the treatment of used waters, soil, air and waste amount to 9.6 million euros.

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BitDefender is the best-selling Romanian IT product in the world, reads weekly Saptamana financiara. Currently BitDefender is directly sold in 42 countries and its products are available in 18 languages, of which 5 have been added over the past six months.

Data security division of Softwin company, BitDefender, has reported a 2.5 percent growth after the first six months of this year and announced it outstripped forecasts of sales for H1 by 33 percent. On the European markets, BitDefender's appreciation in rising: in France, BitDefender reached a market share worth 30 percent, according to a GfK survey conducted over the January to May period.

Moreover, ON May BitDefender& Professional Plus ranked first in term of sales of sold boxes (exclusively game category), outstripping the leader of the market.

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Brokers in the futures market, namely stock and forex contracts traded in the Sibiu Futures Exchange, expect a spectacular rise in the contract volume in 2006.

The reason, both the increasing interest investors show in such products, and companies? need to shift focus as far as their financial assets are concerned, as a means of hedging exchange rate risks.

Positive outlooks are particularly justified, as this year the Sibiu Exchange reported a spectacular development, as against the low liquidity registered o'ver the past years. In fact, this August saw the best results in the Exchange's history, with over 46,000 contracts amounting to round 16.3 million euros. In contrast, in 2004 the derivative market was little under 20 million euros.

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Romania will contribute 2.4 billion euros to the EU budget in the first three years, state minister for the coordination of economic activities Gheorghe Pogea told a news conference on Tuesday.

The minister added that the flat tax introduction has brought out 169,000 jobs into the open, which has led to higher revenue in the state coffers. He stressed that the infrastructure and similar projects ready to run with financial support from European funds have to be a topic of national and European interest and cause development and economic effects. Last but not least, their development will go hand in hand with higher transparency.

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The operations conducted on BSE (Bucharest Stock Exchange) kept an upward trend on Tuesday, both in what concerns the level of the prices and the liquidity level of RON 41.4 mn, reaching a new record.

?Considering the market?s evolution, it seems that there are still important buyers.

The stock exchange?s upward trend following the announcement of the improvement in the rating granted to Romania by S&P and Japan Credit Rating might be a clue for the entrance of foreign funds in the Romanian capital market,? declared Alin Brendea, operations manager with prime Transaction brokerage company.

He said that the small fluctuations in the quotas were beneficial for the market and that they revealed the fact that there were both powerful sellers and buyers for the shares that post high liquidity.

The most significant operations were conducted with shares in Rompetrol Rafinare and Petrom oil companies ? 35.5% in the overall transactions on BSE.

Petrom posted a liquidity of RON 8.4 mn, while its quota increased by 1.1%, to 47.8 bani.

Rompetrol Rafinare closed the session at the level recorded on Monday, of 11.5 bani/share, against a total value of transactions of RON 6.3 mn.

Shares in BRD-Groupe Societe Generale recorded the most significant increase among the liquid companies ? by 2.4%, up to RON 13/share.

The transactions reached RON 5.6 mn.

The operations with the shares in Banca Transilvania reached RON 3.4 mn, while the quota increased by 1.5%, up to 99.5 bani/share.

The value of the transactions with the shares in the five financial investment companies reached RON 13 mn, and the BET-FI index increased by 1.25%.

The highest values were reported for SIF Oltenia ? RON 5 mn and SIF Moldova ? RON 3.3. SIF Banat and SIF Transilvania posted increases over the average as well, of 1.9% and 1.8%, respectively.

The BET-C index -which emphasizes the overall trend on the market, increased by 1.32%, while the BET index -based on the most liquid companies, increased by 1.43%.

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Greek Global Finance company is about to launch an investment fund with a capital of 300 million euros that will target the Romanian entrepreneurs interested in extending their own operations abroad, ACT Media News Agency reports.

The fund is earmarked for this objective due to low presence of the Romanian companies in the Central and Eastern European region, compared to companies in Hungary, the Czech Republic, Russia or Bulgaria.

At the moment, there are only few Romanian companies pursuing an international expansion policy - Rompetrol (oil), Flamingo (IT) and, more recently, Petrom (oil).

Moreover, Mobexpert (furniture) and Altex (retail) announced such plans for the upcoming period.

Stefan Bucataru, Global Finance Country manager for Romania, said that the new fund is expected to last 10 years, this financial investor being interested both in getting minority participations and majority packages in the targeted companies.

Among the investors in this fund, set up by Global Finance, are Harbour West Partners investment fund, Goldman Sachs Investment Bank, UBS- Brinson, Adam Street Partners investment fund, Abu Dhabi Investments Authority, Standard Life insurance company, the European Bank for Reconstruction and Development (BERD) or International Finance Corporation (World Bank's investment division). Global Finance investment strategy targets big growing potential sectors on the emerging markets and a large industries range, from pharmaceuticals and retail to telecommunications and financial services.

Global Finance has been one of the most active financial investors in Romania over the current year, with several transactions underway through the investments funds it manages. The company, set up in 1991, in Greece, has invested throughout the years in Romanian companies such as Sicomed (medicines), Chipita Romania (household appliances), Orange (mobile phones), Delta Romania (ice-cream), Loulis (baking products), Neoset (furniture), Germanos (retail chain for GSM equipment), Romcolor (plastic products adhesives) and Axxon Romania (trade).

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Following Renault?s investment in Dacia, which has rapidly deprived competitors in Eastern Europe of market share with its budget Logan saloon, Ford is reportedly planning an investment of up to ¤500m in an assembly plant of its own in Romania.

It could either be a new plant, or Ford might consider taking over an existing Daewoo Motors site near the town of Craiova, reports Vehicle News.

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The Fiscal Strategy for 2006 will bring modifications to most taxes in order to achieve growth of the economic development and a more solid fiscal environment, for the development of the middle class, the Minister of Public Finance Sebastian Vladescu said, ACT Media News Agency reports.

New measures will be introduced in the area of VAT, such as the implementation in the national legislation of the European directive regarding the rules in the supply of gas and electricity, the change in those articles referring to customs legislation in order to be in line with the provisions of the Customs Code draft. Specific provisions will be introduced in 2006 for the switch from the current threshold of exemption worth RON 200,000 to the threshold of exemption worth 35,000 euros negotiated with the European Union since the accession date, as well as regulations specific to the creation of an information database necessary for the calculation of own resources of VAT for the contribution which Romania has to pay to the European Union after accession, Vladescu said.

In the sector of excises, the minister said that the measures aim to continue the process of adjusting the legislation to the European directives, to increase excises when it comes to the main groups of products subject to this regime (alcohol, tobacco, energy and electricity products), due to come into force July 1, 2006 according to commitments included in the accession document stipulated by the negotiations with the European Union.

Taxes will be differentiated depending on the core activity and the area where this activity unfolds.

A measure stipulating the confiscation and destruction of installations for alcohol production, for those producing it illegally, and also the measure regarding the government's ability of issuing decisions for the setting up of special measures with the aim of preventing smuggling and tax dodging regarding the products subject to excises are to be introduced. Some fiscal facilities included in special normative acts which do not comply with EU principles will be eliminated such as:

Special regime for the activity of international maritime transport and facilities for farm cooperation, according to 2006 strategy of the ministry of public finance.

On the other hand, minister Vladescu pledged that in 2006 Romania would have a fiscal programme in the long run, ranging between three to five years.

He stressed that the fiscal strategy of the ministry of public finance for the 2007-2009 will follow Romania's new posture as a EU member state and will allow the fulfillment of commitments and at the same time the absorption of European funds.

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A fresh wave of flooding Tuesday hit Bulgaria and Romania and an 85-year-old Bulgarian woman was killed as her house was swept away.

Four Bulgarian municipalities were declared in a state of crisis amid intensive floods that have affected the regions of Sofia, Plovdiv, Stara Zagora and Sliven, said the country's Civil Defense agency.

In the worst-hit district of Kaloyanovo in central Bulgaria, an 85-year-old woman drowned as her house was torn down by a heavy flood late Monday, the agency said.

The flood cut off electricity in hundreds of households across the country and many roads are impassable due to flooding or landslides.

In Romania, 16 counties in the south and east were put on flood alert after heavy rain which began late Monday had submerged many houses and roads in the capital city of Bucharest.

It is the sixth time that floods have hit Romania this year, claiming a totol of 66 lives.

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Romanian tour operators and hotel managers called on the government Tuesday to reduce taxes and help provide better services, warning that the number of tourists has fallen by 10 percent this year.
 
About 1.2 million Romanians vacationed at the Black Sea, 10 percent less than last year. Because of a strengthening of the currency, it was more expensive for foreigners to take vacations in Romania, said Lucia Morariu, head of the National Agency for Tourism.
 
Morariu said the government was not encouraging tourism, with hotel owners and other tourism operators in the resort of Mamaia having to pay 27 taxes to the state and local authorities. (AP)

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Bucharest, Romania and Villach, Austria - September 20, 2005. On the 1st of April 2005, Infineon Technologies announced having established its new subsidiary in Romania: Infineon Technologies Romania SRL. Ever since, the construction of the Bucharest Research Centre has moved fast.

The new Research Centre specialises in the development of power semiconductors with analogical and digital functions (Power-Mixed-Signal) for applications in the automotive industry and others. Thus, Infineon is trying to meet the increasing demand for performing semiconductors in these industries. Power semiconductors regulate the energy supply of various electricity consumers, such as the electric window lifting system in a car door. The new Research Centre, the subsidiary of Infineon Technologies Austria AG, strengthens the Alliance of Research Centres in the Automotive and Industrial Electronics, which currently has offices in Villach and Graz (Austria), Munich (Germany) and Padua (Italy).

The management of Infineon Technologies Romania has been taken over by Mr. Thomas Simonis, a German citizen, who is the company?s Managing Director. Mr. Thomas Simonis is an electronics engineer, has been working in the field since 1989 and joined Infineon in 1998. In the past two years, he has successfully managed the software development centre in Bangalore/India. ?I am glad to have the opportunity to establish and manage this Research Centre from Romania, a country where Infineon has not been represented so far. Our plans are being received with a lot of interest and enjoy the support of the authorities. Living and working in a country I used to know very little until now is a personal experience which expands my cultural horizon. My main objectives are to motivate the people to work in research and development, to position Infineon as an attractive company in the Romanian business environment and contribute to the company?s success together with the new team?, Thomas Simonis summarized his commitment as Managing Director of Infineon Technologies Romania.

Since its establishment in the spring of 2005, Infineon has managed to attract around 30 engineers. Most of them follow training courses in the research centres from Villach and Munich in order to acquire specific knowledge related to the development of semiconductors. Through an ?intercultural training? specifically created by Infineon, the Romanian   engineers will be trained in the next six to twelve months with regard to both their technical tasks and the company?s culture.

The offices of the Bucharest Research Centres comply with the requirements of a specific development environment. On an area of about 2,200 square meters, Infineon Technologies is building offices, research laboratories and measurement technique laboratories.

Infineon also focuses on the establishment of tight connections with the Polytechnic University of Bucharest, the first steps in the development of common master programmes being already taken. The goal of such programmes is to complete the university curricula with subject matters that will see a high demand for research and development activities in the area of semiconductors in the near or medium future.

The selection of Romania as a location for the new research and development centre is based on the special conditions identified here and the high expectations of Infineon Technologies. Dr. Reinhard Ploss, Group Vice President and General Manager of the Automotive, Industrial and Multimarket Division of Infineon Technologies AG and CEO of Infineon Technologies Austria AG declares: ?The existing education largely meets our expectations from highly qualified research engineers. Public institutions are strongly oriented towards the High - Tech field, which lays the foundations for favourable economic conditions that have become indispensable for a company to affirm itself on the global market at acceptable costs. It is now necessary that these factors, which have determined our choice of the location for our investment, to prove their value in practice as well. In this latter case, there is an expansion potential for the Bucharest Research Centre?.
About Infineon

Infineon Technologies AG, Munich, Germany, offers semiconductor and system solutions for automotive, industrial and multimarket sectors, for applications in communication, as well as memory products. With a global presence, Infineon operates through its subsidiaries in the US from San Jose, CA, in the Asia-Pacific region from Singapore and in Japan from Tokyo. In fiscal year 2004 (ending September), the company achieved sales of Euro 7.19 billion with about 35,600 employees worldwide. Infineon is listed on the DAX index of the Frankfurt Stock Exchange and on the New York Stock Exchange (ticker symbol: IFX). Further information is available at http://www.infineon.com.

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BCR Securities and BCR will launch a bonds issue in three series owned by Alba Iulia city, worth RON 24.5 mn with 20-year maturity, said the bank's CEO Dan Bunea.

According to Bunea, this is the most substantial compulsory loan at the municipal level, also having the highest maturity.

BCR Securities will mediate the issue, and BCR will be the sales group.

The value of the first series of bonds is RON 8 mn, and the period for developing the public offer is September 20 ? September 26.

Each bond will have a face value of RON 100.

Subsequently, two other series will be launched in 2006.

The interest rate varies, being recalculated in semesters.

For the first period, the level of the interest is 9.5% per year.

"Nationwide, BCR is the most important financial partner of the local communities in the process of economic-social development.

The arguments are in the sustained policy on financing strategic clientele segments of the bank ? SME, corporations, population and local councils - by crediting or on the capital market- and also in supporting some important projects in the social-cultural domain," said a BCR official.

The funds resulted from the issue will be used to finance 13 investment projects which aim at the expansion of the sewerage and water network, rehabilitating some streets, education institutions and dwellings, and also making an agro-food market.

"We are already at the third issue and thanks to the good management of previous issues and payments according to calendar, we managed to obtain a very good offer both in terms of maturity, and cost," said Mircea Hava, mayor of Alba Iulia.

The 20 years structure ensures the functioning of the principle of equity in local administration.

"Those who benefit from an investment have to also support its costs," he said.

Moreover, the town?s citizens are being offered the possibility to invest in these bonds, to obtain gain, by this investment financing the development of their community", Hava added.

BCR is the market leader in municipal bonds, with a total of mediated issues of over RON 80 mn.

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Intesa Bank, one of the international institutions registered in the race for the acquisition of the majority stake of the Romanian Commercial Bank (BCR), intends to maintain the latter?s profile of a universal bank, its objective being to consolidate the strong points of BCR. Intesa?s objective is to consolidate BCR's strong points and to proceed to a transfer of knowledge and expertise in order to develop a wide range of products typical of a model of universal bank. "The main business partners of BCR will be the same which Intesa serves on its domestic market: Population, business of any dimension, companies, financial institutions, municipal and local authorities, governmental agencies,? declared Giovanni Boccolini, chairman International Division for Branches, Intesa Bank. The acquisition of BCR, the last large sized bank in the region that has not been privatised yet, is perfectly correlated with the selective acquisition strategy of Intesa Bank in Central and East Europe. ?The decision to invest in Romania is also based on the fact that Intesa has identified here numerous development opportunities," Giovanni Boccolini stated. "The local economy is developing rapidly and, furthermore, Romania is on a firm path of accession to the European Union,? he added. Boccolini calls BCR the best alternative for Intesa's development strategy in the region, where the Italian bank had a selective policy. ?Investing in BCR, Intesa wants to build a powerful bank, able to continue the operations for the national economy of Romania and for the neighbouring countries. With over 340 branches, a strong brand acknowledged around the whole country, and a significant market share, BCR represents for Intesa a perfect opportunity to consolidate its position in this region,? he emphasised. Intesa Bank was established through the merger of three Italian banks: Banco Ambrosiano Veneto, Cariplo and Banca Commerciale Italiana. Intesa's portfolio in Central and East Europe includes the Central European International Bank (the fourth bank in Hungary), Vseobecna Uverova Banka (the second bank in Slovakia), Privredna Banka Zagreb (the second bank in Croatia), and Delta Bank, the second bank in Serbia and Montenegro. Intesa Bank offers a wide range of services and products for the seven million retail clients, one million corporate clients in Italy, and the 3.5 million clients outside Italy. The bank is based on a network of over 3,600 branches in all the regions of Italy, and 750 branches abroad. Other competitors in the race for the takeover of BCR are Fortis, Banco Comercial Portugues, Deutsche Bank AG, Erste Bank AG, Dexia, KBC, the National Bank of Greece, and BNP Paribas. At the request of the banks which participate in the privatisation, the deadline for filing the final engaging bids for the takeover of the majority stake of BCR has been postponed until October 17, 2005, because of the large volume of data which has to be covered during the evaluation period. source

National Institute Statistics of Romania released the foreign trade of Romania for July, 2005.

In July 2005, exports FOB amounted to ¤ 1993.5 million (by 8.2 percent more than in July 2004), representing the highest monthly value registered since 1990 up to now. Exports FOB accounted for ¤ 12522.3 million during 1.I-31.VII 2005, by 15.2 percent more than during 1.I-31.VII 2004. In the structure of exports by goods, six sections of goods hold 76.7 percent of total exports.

Export highlights:
- Clothing articles made of fabrics, knitted or crocheted, textile materials reached 2469 million ¤.

- Footwear and similar products touched 776.4 million ¤.

Import Highlights:
- Clothing articles made of fabrics, knitted or crocheted, textile materials reached 1969.5 million ¤.

- Chemicals and similar products touched 1329.3 million ¤.

For more details click here :

By customs regimes according to customs legislation, out of total imports during 1.I-31.VII
2005, 74.6 percent represent final imports and 24.6 percent temporary imports of goods of outward processing.

Commercial deficit FOB/CIF during 1.I-31.VII 2005 amounted to ¤ 4974.5 million and in July 2005 it was ¤ 765.8 million. In prices FOB/FOB, deficit was ¤ 3627.6 million during 1.I- 31.VII 2005 and ¤ 553.4 million in July 2005.

According to the data provided by the National Bank of Romania, exchange rate of national currency at the end of July 2005 was RON 3.5237 in relation to the EURO (-11.2 percent as against the end of 2004) and RON 2.9164 in relation to the USD (+0.3 percent as against the end of 2004).

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Imports of American whisky in H1 2005 stood at 1.4 million dollars as against 920,000 dollars last year, ACT Media News Agency reports.

The relevant market has developed over the past five years, considering that in 2000 whisky imports amounted to 520,000 dollars, which means a 2.5 percent rise.

The Regional Agricultural Attache Brian Goggin within the US Embassy in Romania, said that the increase in sales and consumption confirm the quality of products which the American companies promote in Romania, although prices do not suit everybody's pocket.

Referring to some Romanian traditional beverages, such as palinka (local firewater), Goggin said domestic manufacturers could, through an efficient management and investments, enter the international market, including the American one.

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Bucharest, 20 September 2005 - The insurance market rose 40 percent to 644 million euros in the first half of 2005 and is expected to reach 1.1-1.2 billion euros by year-end, ACT Media news agency reports.

The one-billion-euro market forecast last year will certainly be exceeded," president of the Insurance Supervision Commission Nicolae Crisan said.
The general underwritten gross premiums grew 38 percent to 506 million euros, while life insurance surged 53 percent to 136 million euros.

The Insurance Supervision Commission data showed that 25 companies yielded profits in the first half, while 16 company sustained losses.

Overall earnings rose up 73 percent to 245 million euros, while overall losses stood at 91 million euros. By mid-2005, the most lucrative insurers were Allianz-Tiriac, BCR Asigurari, Asiban and ING Asigurari, while the big losers were Unita, Agras, Aviva and Interamerican.

It is stated that the results produced by insurers by mid-2005 heavily relied on higher borrowings, car sales boost and flat tax introduction, which led to bigger disposable income.
Source: reporter.gr

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Bucharest - 20 September 2005 - Romania exported garments and accessories of over 1.345 billion euros representing 12.8% of total exports in the first 6 months of the year, ACT Media News Agency reports.


Exports of garments and knitwear represented 435.9 million euros, holding a share of 4.1% of total exports.
FOB exports made in the first semester of 2005 amounted to 10.53 billion euros, on the rise by 16.6% against the level registered in the same period of 2004.

The highest share of exports continues to be held by garments and textiles (19.5%), the group of products ? machines and mechanical devices, electric equipment, sound and image recording equipment (17.1%), metallurgical products (16.6%), mineral products (crude, oil products, ore, coal, cement, salt) (9.9%), transport means and material (7.4%), footwear and similar products (6.1%).

Exports of iron and steel recorded 1.069 billion euros (10.2% of total exports) and those of products made of iron and steel 378 million euros (3.6%).

Exports of oil products ? gasoline, diesel oil, oils- represented 9.6% of total exports in the same period.

The first commercial partners for exports were Italy (2-.6% of total exports), Germany (14.1%), Turkey (8.1%), France (7.5%), Great Britain (5.7%), Hungary (4%), USA (3.6%), Austria (3.15), Holland (2.8%), Spain and Bulgaria (2.3 and 2.2%).

Romania?s imports for transport means have grown by 46.5% Bucharest, 6 Sep /Rompres/ - Romania?s imports of transport means registered significant rises in the first semester, exceeding by 46.5% the level recorded in the similar period of 2004.

This evolution was determined mainly by the increase of car, tractor, bicycle imports which amounted to 1.366 billion euros, that is 9.3% of total imports.

CIF imports (including transport and insurance) made in the first semester of 2005 amounted to 14.739 billion euros, on the rise by 22.9% against the similar period of 2004.

The largest share in the structure of imports is held by the group of products mechanical machines and devices, electric equipment, recording equipment (22.2%), followed by mineral products (ore, crude, oil products, coal, cement,salt) (15.3%), garments and textile materials (11.4%), transport means (10.1%), metallurgical products (8.9%).

In the hierarchy of partner countries for imports, Italy ranks first (16.5% of total imports), followed by Germany (13.8%), Russian Federation (7.9%), France (7%), Turkey (4.8%), Austria (3.7%), China (3.6%), Hungary (3.2%), Kazakhstan (3.2%), Poland (3.1%), Great Britain and USA (2.8% each).
Source: reporter.gr

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CONSTANTA, Romania (AP) -- Romania tourist operators and hotel managers Tuesday called on the government to reduce taxes and help provide better services, warning that that the number of tourists fell by 10 percent this year.

"Beaches are not maintained, the water is dirty, there are stray dogs, walking sales merchants and bad service," said Lucia Morariu, head of the National Agency for Tourism.

Some 1.2 million Romanians vacationed at the Black Sea, 10 percent less than last year, Due to a strengthening of the currency, Morariu noted that it was more expensive for foreigners to take vacations in Romania.

This year some 100,000 foreigners took vacations on the Black Sea coast, about the same as last year. Morariu said that the government was not encouraging tourism, with hotel owners and other tourism operators in the top resort of Mamaia having to pay 27 taxes to the state and local authorities.

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A group of Romanian entrepreneurs is expected to arrive in the country to attend the two-day event, focusing on establishing trade and economic ties between the two countries and other issues. Azeri and Romanian businessmen are due to sign a protocol on cooperation in conclusion of the event, according to the Confederation of Azerbaijani Entrepreneurs.

The visit is likely to take place October 6-8. Its precise date is being determined at the talks currently underway between the two countries? relevant government agencies.

Prior to the forum, there more events will be held in Baku with participation of foreign businessmen. The Azeri capital will host an Azerbaijan-Germany forum on September 26-27, Azerbaijan-Finland forum on September 29-30 and an Azerbaijan-Latvia business forum on October 3-4.

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Minister of Agriculture Gheorghe Flutur announced yesterday that the Ministry of Agriculture could intervene in the market, as of 2006, in order to regulate the prices of certain basic products in cases of crises or overproduction. Flutur said that the Ministry will have a budget to settle certain ?anomalies? connected with the basic products, such instruments having to be used to ?calm the market down? in certain cases.

?Whether it is a crisis, or overproduction, we can intervene to calm the market down,? Flutur said. He explained that if a crisis is recorded in connection with a certain product, the Ministry will stimulate import, and if there is overproduction, it will be possible to buy certain quantities from the domestic market. Flutur gave the example of the current situation of potatoes, in which case the production is smaller than predicted, and the Ministry has intervened subsidising the seed potato?s in order to help the producers with the new crop of 2006.

In another view, Agriculture Minister indicated that there are some types of mafia groups that want Romania to import wheat even though in 2005 more than enough has been harvested. ?Romania has at this moment, almost 5 million tones of wheat suitable for bakeries, in the context of a 4 million tones demand. Certain mafia groups are putting pressure, through the media as well, on us to give way to orders abroad? said Flutur. The Minister added he knows who these people are, calling them ?the great exploiters of Insula Mare a Brailei (land comprised between Borcea and Dunarea Veche branches of the Danube), and barons from several counties?.

Even if the rains and floods of this summer spread fears that the wheat harvest will be insufficient for bakery purposes, it seems that Romania has an over production of 1 million tones of wheat, to which 1.2 million tones from last year?s reserve add up. Immediate consequence was a drop in the price, currently standing at ROL 2 - 3,000 per kilo.

Flutur advised the small producers to keep their wheat in warehouses for six months until the prices stabilise, adding that for this period warehousing will be subsidised. ?Warehousing agricultural products is a problem in Romania. We will start granting the first credits so that agricultural producers can set up their own silos and warehouses, and break the monopoly of those that quickly laid their hands on the country?s silos? said the Minister.

In view of the EU accession Flutur said his Ministry will encourage family farms, because 38 per cent of the population is still involved in agriculture, and these farms can cooperate to form large crops. Additionally, on September 22, the Ministry will launch together with the World Bank, a project meant to improve the competitiveness of farmers and other producers of agricultural products.

Agricultural research could receive ROL 500 bln

Agricultural research could be put back on its feet, after the 15 years of lack of support. The Agriculture Ministry decided to offer ROL 500 bln to the research institutes in 2006, trying to make up to a sector to which no funds have actually been allocated this year. The World Bank will also offer support through a EUR 32 M program. ?Our intentions are to separate the research sector from the development sector, to identify the units that need to be protected and the areas they will be holding after land will be given back to former owners? said Flavius Lazin, state secretary with the Ministry. He added that some units will be transformed in commercial firms and will be auctioned, on condition that the buyers do not change the activity profile for a determined period. In Romania there are currently 71 research and development units administrating 59,000 hectares. Debts registered total ROL 1,300 bln.
by Ioan Alexandru
Source: Mediafax via Nine O?Clock

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The Romanian Minister of Economy Ioan Codrut Seres and his Bulgarian counterpart Rumen Ovcharov met on Thursday in Sofia to discuss the energy projects of the two countries ? informs Bulgarian news agency BNN, quoted by Rompres.

The subjects tackled by the two officials included the future of the nuclear power plant in Belene, the construction of the Nabucco gas pipeline and sundry issues related to the South-East European energy market.

The two Ministers also discussed opportunities to coordinate the activities of the two countries as far as the fulfillment of the EU accession criteria is concerned. A joint initiative of gas suppliers OMV (Austria), MOL (Hungary), Transgaz (Romania), Bulgargaz (Bulgaria) and Botas (Turkey), the Nabucco project consists of the construction of a gas pipeline that will link Iran and the Caspian Sea region to Central Europe.

A feasibility study financed by the European Union was recently published in Brussels, giving the environmental authorization to the 4.6 bn euro project. Therefore, the final decision for the start of the construction works will be reached by 2007; the project is due for completion in 2011.

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Minister of Agriculture, Forestry and Rural Development Gheorghe Flutur on Friday said in Craiova (west of Bucharest) at a meeting with the Dolj county mayors that mafia-like groups are piling up pressure, in the media as well, for wheat imports, despite Romanian wheat being in oversupply.

"Romania now has nearly five million tonnes of wheat for bread-making, given that only four million tonnes are required for domestic output. Certain mafia-like groups and vested interests are putting pressure, in the media as well, for orders for wheat to be placed abroad.

I also know who they are - the big guns in the Insula Mare a Brailei area and tycoons from several counties, who got their hands on 60-70 percent of the wheat subsidies for these counties via their companies. Romania has plenty of wheat, including 1.2 million tonnes carried over from last year's reserve and does not need any imports. There will be no wheat imports this year," Gheorghe Flutur said.

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14:52 - 19 September 2005 - Two German companies are interested in the assets of Fortus SA plant in Iasi (north-eastern Romania), ACT Media News Agency.

The company's general manager Vasile Plugaru said that Nordex plans to build in Iasi a factory for wind power stations, and Gildemeister company is interested in foundry.

The main problem in the discussions are the debts of Fortus, exceeding at present 150 million RON, of which 130 million RON only to the state consolidated budget.

Investment intentions of the German companies may cover all the existing assets of Fortus, which means that at least one part of the existing workforce may be kept.

Thus, Nordex wants to buy most of the production facilities and land in order to build a factory for wind power stations.

The German company also owns in China a factory of high capacity turbines and examines the possibility to open new production facilities in India and the United States.

The officials of Gildemeister are interested in the foundry section as they want to produce counterweights for cranes.

Both investments, however, are conditioned by the payment of the company's debts, the only legal solution and in line with the EU norms being the company's liquidation.

After the General Assembly of Shareholders approved to be extended a loan worth 2 million RON in order to set up the working capital, Fortrus managers hold talks with banking institutions to be granted this money.

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Interbrew Romania beer producer recorded 9.8 percent increase in volume in the first half-year compared to the same period of 2004, despite the meagre 0.6 percent expansion of the beer market, ACT Media News Agency reports.

Interbrew Romania maintained its prevailing position as a premium beer for the first half of the year, thanks to its Stella Artois and Beck's brands and it successfully developed with respect to PET bottled beer, i.e. Bergenbier and Noroc brands.

The company gained 7 percent of this particular segment reaching a 15.7 percent share, almost double the one in the first six months of 2004.

"We scored good results in the first half-year with all our brands, but the most significant success was scored by Bergenbier both by volume and recognition, this brand being the best known alcoholic beverage in Romania at present," Interbrew Romania managing director Mihai Albu said.

The company, which is a local branch of multinational concern InBev, is one of the most active beer makers in the Romanian market where it ranks second with a market share of 21.7 percent in the first six months of 2005.

At end-2004, Interbrew Romania made 103 million euros in turnover, its production being 2.2 million hectolitres, while it made investments worth more than 145 million euros.

Interbrew has been operating in Romania for 11 years.

Source: ACT Media News Agency and reporter.gr

Romania?s imports of energy resources will be 39 percent of the total of energy resources in 2008, according to National Prognosis Commission estimates.

Energy resources import is estimated to be growing as compared to 2004 with a plus of 6.7 million tons of conventional coal, an increase of the value in the total of main energy resources from 32.8 percent in 2004, to 36.6 percent in 2005 and 39 percent in 2008, following the increased demand for oil and natural gas due to the acceleration of industrial activity and the requirements of the European Union regarding the increase of minimum stocks, as well as a consequence of domestic resources depletion.

In 2008, it is estimated a level of main resources stocks (coal, natural gas, oil) and derivatives (oil products, coks, other fuels) of almost 8 million tons conventional coal (10 percent of the total of energy resources), with an increase of 2.1 percentage as compared to 2004.

At the same time, the level of energy independence will be diminished at 64.8 percent in 2008 by 5.3 percent under the value of 2004. Thus, in 2008, Romania will import 4.8 million tcc coal and coks, 24.4 tcc hydrocarbons and 0.4 million tcc electrical energy.

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he total requirement of natural gas in Romania will be, in 2008, 31 percent larger than the one registered last year, the gross gas consumption to be 19.452 billion cubic metres, according to the data provided by the National Prognosis Commission.

The domestic gas production will be, in 2008, of 12.8 billion cubic metres. For 2005, a gas production of 13.24 billion cubic metres is estimated, which will decrease by 1.1 percent for next year, to 12.99 billion cubic metres.

Gas imports will decrease, according to CNP estimates, by 1.6 percent, worth 5.01 billion cubic metres, but it will increase during the next three years. Thus, in 2006, imports will be worth 5.013 billion mc ( plus 0.8 percent) in 2007 ? 5.16 billion mc ( plus 1.6 percent) and in 2006 ? 5.652 billion mc. ( plus 7.9 percent).

 Among the main natural gas consumers we could mention industry, whose consumption will decrease from 13.5 billion cubic metres in 2004 to 13.378 billion cubic metres in 2005, 12.736 billion in 2006, 12.662 mc in 2007.

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A delegation of members of the European Parliament led by Spanish deputy Juan Bernat is in Romania, due to a complaint coming from Rafinorul trade union belonging to RAFO Onesti.

The complaint addressed to the European Parliament states that the Refinery in Onesti was not treated ? as the other oil processors in Romania?, which led to the threat of bankruptcy for RAFO and the redundancy of almost 2,000 employees.?

After the visit to RAFO, the Spanish deputy took part in a press conference on the oil market in Romania, where he mentioned a possible delay in the accession to the European Union, due to, what he called ? the interference between Government and economic life?.

Juan Bernat did not specify how he reached this conclusion and he did not offer any details. ? We want and support a complete integration of Romania to the EU, but there is the chance that Romania could join the EU in 2012, at the same time as Croatia.

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In the near future, Romania will witness a spectacular increase of Initial Public Offers for Stock Sale, although they are now in a still incipient stage - reads a survey by consultancy and audit services provider KPMG.

According to the document, the companies? higher interest for getting listed on the capital market is mainly the effect of the upcoming EU accession; Romanian companies will automatically need more financial resources to face European competition.

?It is cheaper to ensure the growth of the company by raising funding from the capital market, rather than resorting to a bank,? says KPMG Romania senior partner Victor Kevehazi. Although bourse listing is a lengthy and highly soliciting process, KPMG considers the advantages are worth it: not only that the company raises funds, but it has better chances to get funding by supplementary stock or bond issues.

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According to a WB report entitled ?Doing Business in 2006. Creating jobs,? Romania ranks 8th out of 155 states classified by their pace of reform.

The document analyses the easiness of starting up a business, the level of taxes and dues and labor legislation, noting that Romania has made considerable progress in facilitating the start of a new business, the raising of credits, tax payment and setting contracts into effect.

Conversely, our country stands near the end of the list as regards the level of taxes and labor legislation. Serbia and Montenegro is on top, not only with the fastest pace of reform, but with substantial progress in 8 out of the 10 analyzed areas, with an acknowledged boost of the companies and labor market.

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On September 22, Minister of Finance Sebastian Vladescu will be in Washington on the occasion of the IMF Autumn Reunion. Government sources said that IMF and Romanian government representatives will meet to discuss the draft budget for 2006 and the tax strategy over the coming two or three years.

Despite divergences over Fund?s recommendation for the VAT increase and although the budget indicators did not keep within the established limits, the Romanian officials want to maintain the stand-by agreement with the IMF.

In summer this year the government submitted the IMF the letter of intent for the re-assessment of the second stage of the agreement, but the Fund no longer tackled the document, after the budget deficit widened to 1% further to the floods this summer and because of instability on the political scene.

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The Tax and Tax Procedure Codes will definitely undergo amendments - Minister of Public Finance Sebastian Vladescu told a press conference on Tuesday evening.

The high official also announced plans to ?stir up grey economy? because it is a major source of tax dodging and an unhealthy business environment. The FinMin will tightly monitor the SMSEs, which ? said Vladescu ? get away too often without paying VAT.

As a supplementary measure for the prevention of tax dodging, the Ministry will also reduce the number of fiscal warehouses.

The Minister of Finance warned that the new measures to be set in place just mark the beginning of a never ending battle, because ? he admitted ? the dodgers have far more resources than the State, that allow them to shun or break the law.

The Minister also wants to seriously ?shake? the Ministry of Public Finance, including ANAF and the Financial Guard, so as to bring them in line with EU standards, as institutions that will belong to the EU as of January 1, 2007. (...)

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(...)"We must direct our resources to the 4th European corridor, but we will not cancel this contract. We will arrange it properly and pursue with the project, depending on the financial resources," the President told the reporters accompanying him on a visit to the United States. (...)

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The National Bank of Greece (NBG) strives to strengthen its position in Romania as it wants to become a regional player in South Eastern Europe, said NBG's CEO Takis Arapoglou, ACT Media News Agency reports.

NBG owns the third-largest bank in Bulgaria, the biggest one in FYR Macedonia and important ones in Serbia-Montenegro and Albania.

Plans are that the assets on the big markets like the United States and Canada to be sold and capital redeployed in Eastern Europe.

The Romanian market is "under-banked", has great growth potential and has a predictable evolution, Arapoglou said.

NBG plans to strengthen its position in Romania by acquiring new branches and launching new products, said Andreas Maragkoudakis, the General Manager of the Banca Romaneasca (BR) taken over by NBG two years ago. NBG aims to become a regional player, which involves the Group's plan to put aside the Romanian brand, in favour of the Greek one.

Currently, NBG works towards gaining market share in Romania, said Maragkoudakis, adding that June statistics showed the Banca Romaneasca as the bank with the fastest growing market share in Romania. The focus is now on the BCR and CEC privatisation race, which NBG officials are confident they cannot lose.

The Greek bank focuses on doubling the number of branches in the region on an annual base, considering imposing NBG as a regional brand.

Target markets are Eastern Europe, excluding the new members of EU, as well as Ukraine and Russia.

The reasons are that it is easier to gain market share here and to grow at the rapid pace of these economies, Arapoglou stressed.

NBG is a private bank, the Greek state having sold its last 7 percent stake in November 2004.

The structure of shareholders includes state and private pensions funds, adding up to 35 percent, 33 percent foreign investors, and 30 percent Greek families, with each individual shareholder not owning more than 3 percent of the Bank's shares.

Source: ACT Media News Agency and reporter.gr

Vincon Vrancea, the fourth biggest player in the Romanian market of choice wines, has tripled its profits in the first six months of this year earning 760,000 euros (2.8 million lei), as compared to the results of the same period last year, ACT Media News Agency reports.

The increase in profit is linked to the 23 percent increase in the turnover, which topped 10.5 million euros (38.5 million lei) in the first six months.

The sales of the above-mentioned company grew much especially in the first quarter, when they came up to 7.6 million euros (29.1 million lei), the motive power of this increase being the choice wines under Beciul Domnesc brand, for which promotion Vincon has invested over 300,000 euros.

Vincon is the leader in the table wine market, where it also registered an increase in sales in the first quarter, mainly thanks to the growth in the sale of plastic bottled wines.

The alcoholic drinks division of Vincon, which boasts such brands as Triumf, a medium-quality brandy, and Milcov, a popular brandy, also registered an important growth.

The best-known brands of Vincon are Comoara Pivnitei (collection wines), Beciul Domnesc (Premium quality), currently the flagship of the company, and Vita Romaneasca (mainstream or medium-quality), Proles Pontica, Cabernet Auslese and Galbena de Odobesti.

Last year, Vincon sales amounted to about 20.5 million euros, up by 30 percent on 2003, and estimates for this year indicate sales higher by 20 percent on average.

Former football player Gica Popescu, currently a FIFA impresario, who holds a 76.033 percent stake, controls Vincon in Focasni (eastern Romania).

The main minority shareholder is Gelu Mihai Stanciu, with more than 6 percent of the shares.

The Vincon shares are listed with RASDAQ online exchange.

The stock exchange capitalization of the company stands at 5.16 million euros.

Source: ACT Media News Agency and reporter.gr

BUCHAREST, Sept 16 (Reuters) - Romania unveiled a set of measures on Friday to root out black market trading and produce faster results in its fight against widespread corruption, the main hurdle to its European Union entry bid.

Delays in crucial reforms, mainly in the judiciary and the fight against graft and organised crime, may prompt Brussels to delay the entry of Romania and its Balkan neighbour Bulgaria by one year to 2008. "We've been effective at passing bills but we were inefficient so far in applying them," Prime Minister Calin Tariceanu told reporters after a cabinet meeting.

'Today, we discussed concrete actions which should curb corruption substantially." Diplomats said Brussels had warned Romania in recent months that 'enlargement fatigue' had made the EU less forgiving of shortcomings than in the past, and that Romania faced a tough task convincing the bloc it deserved to join.

Tariceanu, who won elections last year on a tough anti-graft ticket, said the measures included tightening requirements for setting up warehouses selling alcohol and oil products, which would reduce their number and make them easier to supervise.

The cabinet will also draft new rules soon for licensing casinos and gambling halls, which Tariceanu said had flourished alarmingly in recent years, and set out stricter rules for private security agencies. Gambling, often linked by the local media with illegal activities, forms part of the services sector in official Romanian statistics.

It is one of the few thriving sectors in a country where the average monthly wage is the equivalent of just $240 -- among eastern Europe's lowest. Tariceanu also said the government agreed to expand its honesty tests from policemen to custom officers, the national real estate watchdog and other state authorities.

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ONEONTA ? Hartwick College Professor Thomas Sears will conduct research on taxation systems of Bulgaria and Romania during a sabbatical this fall.

Sears, professor of accounting and management, also was awarded a research grant by the college trustees for the project, according to a media release.

"Bulgaria and Romania are both growing economies that face challenges with business development," said Sears in a prepared statement. "However, the right taxation system could help both countries increase their pace of business development."

The United States has had more 200 years to develop a its progressive system of taxation,while the republics of the former Soviet Union have

had 15 or fewer years to develop systems.

"An option for both of these developing countries is a proposed flat income tax of 15 percent," Sears said. "Ireland recently adopted a lower personal income tax through a flat tax, and it has stimulated higher growth."

Sears? project will consider the simplicity and fairness systems, views on personal income tax, levels of compliance and any underground or shadow economies that can deter business development.

Sears has previous experience in researching and assisting business development in former communist countries. In 1991, with Hartwick professors Laurence Malone and Douglas Mayer, the trio taught entrepreneurship to women in East Germany. Sears, the 2005 Margaret B. Bunn Award for Excellence in Teaching, joined Hartwick in 1978. HE lives in Otego.

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 Connex High School Scholarships: a new Connex for the Future initiative

/noticias.info/ Connex is announcing today the launch of "Connex High School Scholarships Program" a new initiative in the area of education, as part of the company's community support program "Connex for the Future".

Through the new program, developed in partnership with World Vision Romania, Connex will be supporting 150 students from rural areas to continue their education in high schools.

"Connex is proud to launch an initiative aimed at helping skilled students who come from an underprivileged environment make a better future through education. Forty percent of our customers chose education as best area to support in the community. This is why we commited to carrying out a program that can really make a difference for our community by helping those that might not otherwise have the opportunity", said Marian Velicu, Vice President Regulatory Strategy and Public Affairs at Connex.

"Thanks to Connex's support, we are able to implement a new national program to the benefit of young students. Our organization has ten years experience in developing social projects especially in the rural areas of the country. We believe that "Connex High School Scholarships' will give all these children a chance to reach their full potential and to develop future successful careers", said Cristian Bucurescu, Deputy Director World Vision Romania.

The program will be developed over the next several years to benefit 150 general school graduates from 5 counties: Bacau, Cluj, Dolj, Iasi and Valcea. The selected children had taken the highschool admission tests and shown good potential and motivation for continuing their education while lacking material possibilities.

In the last couple of months, World Vision Romania drafted individual development plans for each student. In addition, the NGO will be monitoring students' school performance and will help them develop their skills in areas where they demonstrate potential. Children will also benefit from psychological support to better integrate in high school and city environment.

Connex will ensure all the associated costs of the program including hostels, meals, transportation, school materials, and medical assistance. The estimated total commitment to this program is over 600,000 EUR.

Connex for the Future is a program designed to deliver on Connex's commitment to its community. Based on feedback from its subscribers Connex delivers a variety of programs in support of community needs. The first project of "Connex for the future" was the restoration of the Sibiu City Hall Tower, as announced in March 30, 2005. It was followed by "Clean Seaside", a cleaning project carried out this summer in all major Romanian Black Sea resorts. These programs follow on from the charitable activities carried out by the Connex Foundation in the last 7 years.

Connex is the first video mobile telephony network in Romania and had 5,250,621 customers, as of June 30, 2005. Connex is a trademark of MobiFon S.A., a subsidiary of Vodafone Group Plc. Vodafone is the world's largest mobile community with equity interests in 27 countries and Partner Networks in a further 14 countries. Providing a full range of mobile telecommunications services, including voice and data communications, Vodafone currently serves 165 million proportionate customers worldwide.

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Agricover, a farming company and food maker of Buzau (east) took over Comcereal Company based in Arges County (south), in a transaction worth about 3.4 million euros, the Ziarul financiar writes .

Through taking over Comcereal Arges, Agricover aims at extending its activity to southern Romania, Agricover official says, adding that the company will mainly focus on collecting and storing sunflower seeds to be delivered to the oil mill in Buzau. Comcereal's activity target is to store and trade grains, operating 17 reception bases and silos, all situated in southern Romania, more exactly in counties such as Arges, Olt, and Teleorman.

The silos and warehouses' full storage capacity is about 240,000 tons, the daily reads. Agricover Buzau, part of ICB Group, belongs to two Iranian investors, whose activity goal is to trade and supply services of cereals storing, providing seeds, growing crops and making and trading vegetal oils. The Buzau-based company owns reception bases and silos in five south-eastern counties and before taking over Comcereal Arges its storage capacity amounted to 480,000 tonns, the same source says.

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Romvac veterinary medicines producer plans to invest approximately 8 million euros in obtaining the GMP (Good Manufacturing Practice) Certificate through the introduction of new technologies at its working points in Bucharest and in Prahova county, at Ceptura.

"The upgrading of production technology and control and processing procedures, at the same time with modernization and development of our production base needs massive investments, taking into account that, following Romania's integration into the European Union, solely the companies using a European standard technology are set to resist on the local market", Romvac representative highlighted.

In the recent two years, Romvac invested more than 15 million euros in order to get GMP certification so that, at present, through its distribution chain, it sells more than 610 veterinary and phytosanitary products.

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Under a bill on insolvency adopted by the government this week, the establishment of shorter procedural terms and removal of certain stages will simplify the judicial reorganization and insolvency procedures.

The procedure is applicable to traders with the statute of natural persons, family associations, trading societies that do not own assets and/or accountancy records, trading societies the seat of which is no longer in use or does no longer match the one entered in the Trade Registrar.

The parties? summons and notification procedure is simplified and will essentially depend on the Insolvency Procedures Bulletin. The courts will have specialized insolvency departments and the role of the syndic judge will be re-defined, by the annulment of his active role in any commercial decision.

The syndic judge will be left only the responsibilities strictly related to the settlement of the litigations. The new act confers enhanced competences on the creditors assembly and on the creditors committee.

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The State Treasury?s goal on the medium term is to strike a balance in the structure of the public debt, so that foreign and domestic loans account for equal shares ? Secretary of State with the Ministry of Finance Dragos Neacsu told the press.

 ?About three quarters of the public debt are currently financed from international markets, whereas the domestic market accounts for just a quarter thereof. Striking the balance will take some time,? said Neacsu.
?The Ministry of Finance is currently preparing a strategy for Romania?s indebtedness on the medium term, a document that might be completed in the fourth quarter of the year. In September the Ministry of Finance will present the government a memorandum on this subject,? said the quoted official, who added that after the memorandum is approved, the legal framework would be established for the setting up of the Debt Management Agency, with WB, IMF and PHARE consultancy.

Dragos Neacsu said that another goal of the State Treasury is to extend the average term of indebtedness, both for foreign and domestic credits. At mid-year the average maturity of the loans was of 3.4 ? 3.5 years, double as to 2004, whereas the average interest had halved down. Neacsu mentioned that Romania would request the IMF to okay the spending of privatization-yielded incomes for the financing of reform projects of the infrastructure and the pensions system.

?These funds could be a cheap and risk-free source for the financing of structural reforms. So far, in conformity with the agreements signed with the IMF, the incomes from privatization have been spent exclusively for the financing of the public debt, but having recourse to such sources makes no sense, given Romania?s rather low public debt of just 20% of the GDP,? said Neacsu.

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Integrated steel companies which fail to become profitable until 2009 or meet the obligations stipulated by the National strategy for reorganisation of the steel sector and by plans designed to turn companies lucrative will be closed down.

This was the main conclusion of the talks, which were held at the Ministry of European Integration (MIE) headquarters, about the contents of 2nd Monitoring Report on the reorganisation of the iron and steel sector, which is to be submitted to the European Commission until mid-September, reads a release of the European Integration Ministry.

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The markets of alcohol, fuels and construction are sectors with a high degree of fiscal evasion, Finance Minister Sebastian Vladescu said, ACT Media News Agency reports.

The Finance Ministry intends to widen the scope of taxable activities, increase the taxes on luxury products and carry out activities in terms of fiscal evasion for increasing the budget revenues.

The finance minister stated that he intends to educate Romanians to ask for invoices or receipts when they buy a product and call the toll free number to report corruption cases.

"I have to admit that without the support of police and prosecution office I will not to be able to do anything," added the minister.

Regarding the size of fiscal evasion in the above fields, the unregistered alcohol markets amount to some 300 million euro per year, and the fuels to 600 million dollars.

The fiscal evasion in construction amounts to 70% in northern Bucharest alone.

Some 30,127 buildings were erected in the last year in Romania, of which 23,936 were built by individuals.

Source: ACT Media News Agency and reporter.gr

Oracle Energy Corp. announces that the TSX Venture Exchange has approved the property purchase agreement dated July 5, 2005, as amended Aug. 17, 2005, between Oracle Energy Corp. and Carpathian Energy Companie Petroliera SRL pursuant to which the company may acquire up to a 20-per-cent interest in six oil and gas claims located in Romania known as the Bordei Verde Vest field and the Nadlac, Catrunesti, Cozieni, E. Ciumeghiu and N. Ciumeghiu concessions. The $500,000 (U.S.) purchase price will be satisfied by the payment of $166,667 ($60,000 (U.S.) paid) and the issuance of 2,751,177 shares in three equal stages on or before 180 days from exchange acceptance. A finders fee is payable on this transaction.

As part of the approval process Oracle engaged Chapman Petroleum Engineering Ltd ("Chapman"), a Calgary based petroleum engineering and consulting firm to complete an independent reserve and economic evaluation report on the Company's targeted oil and gas properties in Romania.

The Chapman report evaluates three of the six concessions in which historic data is sufficient to support an assignment of reserves. These concessions are: Cozieni, Nadlac and Bordei Verde West. The other three concessions were reviewed and may still have potential, but the data were not sufficient to support an assignment of reserves at this time.

Bordei Verde West
This field was discovered in 1972 and is situated 40 kilometers southwest of the city of Braila. It consisted of 25 wells that were crude oil producers, and seven wells that produced natural gas. In this field it is intended to re-establish production through the drilling of up to 14 new wells, some on existing locations, and other step out wells to develop extensions to the pool.

Nadlac
This field is close to the Hungarian border, between Arad and Szeged. The reservoir was discovered in 1978, and has been fairly closely delineated by ten wells, of which three were actually placed on production. These three were initially oil wells, but the adjacent gas cap eventually caused excessive gas production at the expense of the oil rate. One well was later re-completed into the gas cap. All of the remaining reserves in the Nadlac field have been assigned to the gas cap portion of the pool. The initial pool development involves re-entering two wells and drilling four additional new wells for rich gas production.

Cozieni
The Cozieni field is located approximately ten kilometers east of Bucharest. It was discovered in 1968, and two wells were completed for production. The Cozieni gas field comprises a series of stacked, shallow sandstones, ranging in depth from approximately 450 meters to 850 meters. Local production practice favoured sequential rather than commingled production of different intervals. The development plan for the Cozieni field is to re-enter the two original wells and re-complete them in by-passed intervals.

Product Prices
Crude oil prices utilized in the Chapman evaluation are forecasted to average US$36 per barrel in 2005, which reflects $6 U.S. per barrel less than West Texas Intermediate crude (WTI).

Thereafter, the oil price continues to follow the Chapman forecast for WTI, less US$6 per barrel, to account for transportation, quality and local market conditions. Natural gas prices are forecasted to average US$3.25 per MCF in 2005, escalating to US$3.90, US$4.49, US$4.93 and US$5.00 in successive years.

Fiscal Regime
Royalties payable to the Romanian government for the expected production rates are a maximum of 5%. Development expenditures in excess of US$1,000,000 will earn the joint venture a five-year tax holiday. Following this exempt period, a 16% corporate tax is levied on the future profits from the development project.

Capital Expenditures
The investments required to undertake re-development of the fields are predominately drilling and re-entry costs. Most of the infrastructure required for oil and gas production is already in place from the previous development in the area. Accordingly, capital cost estimates in Bordei Verde West are limited to US$265,000 per well drilled, completed and equipped. New wells in the deep Nadlac field are estimated to cost US$900,000 each. Re-entries in Nadlac field are projected to cost US$200,000 per well, and US$100,000 per well in Cozieni. These costs are expected to be sufficient to also cover downstream expenses for short flow-line tie-ins, metering, etc.

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Bucharest. The reporter working for the Romanian television Pro TV, George Buhnici was acquitted yesterday in Ruse district court.

He was charged with possession and use of special surveillance means at the border checkpoint on the Danube Bridge in 2004, the Bucharest newspaper Ziua, reads today. The Ruse District Court enacted that Buhnici is innocent on all charges, Ziua informs, citing Mediafax. In a 15- day term the Prosecution can appeal the decision made by the Court.

The Pro TV reporter was arrested on December 16th at the Danube Bridge border checkpoint, for using a camera hidden in his eyeglasses and a microphone to film corrupted customs officers, the newspaper adds.

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MUMBAI: India?s largest tractor manufacturer Mahindra & Mahindra (M&M) is understood to have pulled out from submitting a financial bid for the Romania-based Universal Tractors owing to changes in the bidding process initiated by AVAS, the privatisation department of Romania. The bid was to be submitted on Thursday.

According to sources, some changes have been carried out within the bidding process, forcing M&M to pull out. ?We have to take a re-look at the content of the bid,? sources added. The technical bid was submitted a month ago and the due diligence exercise was completed. Incidentally, the bidding process was scheduled for September 9, which was postponed to September 15.

Universal Tractors? flagship brand ?Universal? enjoys market share in countries of the former Eastern Bloc, Iran, Egypt and Pakistan. The Romanian tractor major has a 15,000-unit per year facility in Brasov with an additional capacity of 18,000 engines annually. Last year, it produced 5,000 tractors and posted a turnover of Rs 250 crore.

M&M bid for the tractor company, which the Rumanian government put up for sale again after Italy?s Landini decided against buying the company. M&M is competing with MYO-O, a closely-held Romanian maker of agricultural machinery. The agency carrying out the sale, AVAS, has not announced a date for awarding the sale. The government will select the buyer of its 80% stake after direct negotiations with the bidders, AVAS said.

This will not be M&M?s first attempt to acquire a tractor company in Europe. The company in ?03, submitted a bid for Finland-based Valtra but had lost out to tractor major AGCO. M&M has been on a quest to emerge as a leader in the global tractor market. Recently, the company formed a joint venture ? Mahindra (China) Tractor ? in China in which it has an 80% stake, the balance being held by Jiangling Motor Group. The joint venture has a production capacity of 12,000 tractors per annum.

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Press Release - International Finance Corporation

Bucharest ? The International Finance Corporation, the private sector arm of the World Bank Group, today promoted the development of Romania?s capital markets by subscribing to $20 million of subordinated convertible bonds issued by Banca Transilvania.

The bonds mark a new and important instrument for the Romanian banking sector. For the first time a locally owned bank has raised subordinated capital through a public offer. The convertibility option gives the bondholders the right to exchange their bonds into common shares using a predefined formula.

Jyrki Koskelo, IFC's director for Global Financial Markets said, ?We are pleased to support Banca Transilvania in issuing the first instrument of its kind in Romania. It strengthens the bank?s capital base and paves the way for other Romanian banks to use this type of transaction to tap into public markets for subordinated capital. The bond furthers the creation of deeper and broader capital markets in Romania.?

Robert Rekkers, Banca Transilvania's director general, said, ?IFC is a trusted partner of Banca Transilvania. We are glad that we were able to make Romania?s first issue of foreign-currency subordinated convertible bonds with the support of IFC?s financial structuring expertise."

Ana Maria Mihaescu, IFC?s chief of mission in Romania, said, ?The development and structuring of this instrument is a good example of what partnership and innovation can achieve in emerging market countries. We are happy with the result, both in terms of the instrument?s solid and transparent structure and its impact on the development of Romanian regulatory base.?

Banca Transilvania offered $25 million of subordinated convertible bonds to allow its existing shareholders to exercise the preemption right between September 2 and 8, 2005. IFC purchased $20 million as a lead investor for the second tranche, which was offered to a broader public.

The subscription documents were filed today by Hayhurst Robinson, IFC?s legal advisers, in Cluj-Napoca at the headquarters of BT Securities, the lead manager for the bond issue.

Banca Transilvania is the core of the Banca Transilvania Financial Group. In its 11 years of activity, it has become a nationwide financial institution, with more than 150 business units and more than 2,400 employees. Its market share has increased steadily, making Banca Transilvania one of Romania?s top 10 banks. In acknowledgement of its excellent results, in 2004 Banca Transilvania was named ?Bank of the Year? by Piata Financiara magazine.

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(Rewrites with details throughout)

By Radek Narovec

PRAGUE, Sept 15 (Reuters) - Drug maker Zentiva has agreed the bulk of a $200 million takeover of Romania's biggest generic drugs firm, Sicomed, giving the Czech company a presence in another fast-growing market in the region.

Zentiva, whose shares rose 7 percent on Thursday's news, gains a foothold in a country of around 22 million people due to enter the EU in 2007. The Czech Republic, already an EU member, has around 10 million people.

Zentiva, controlled by private-equity fund Warburg Pincus, agreed to buy a 51 percent stake in Sicomed for $102 million through the acquisition of its majority owner, closely-held Venoma Holdings, and will seek to buy out other shareholders.

"The acquisition enhances our leadership position in the central and eastern Europe pharmaceutical market and provides us with an even stronger platform for organic growth and from which to pursue further acquisition opportunities," Zentiva said.

It offered $0.4797 per Sicomed share, a 37 percent premium over the average market price for the last month. Zentiva said its offer values Sicomed at 9.9 times core profit (EBITDA).

Chief Financial Officer Petr Sulc said the company was close to acquiring 20 percent from two Sicomed shareholders on top of the 51 percent stake.

The only two remaining owners of large stakes are investment firms SIF Muntenia and SIF Oltenia.

The Czech acquirer, already active in Slovakia, Russia, Poland and the Baltic countries, expects to achieve annual cost synergies of up to $6 million.

SURGING SHARES

Zentiva shares were up 6.9 percent by 1230 GMT at 1,057 crowns after hitting a new all-time high of 1,065 crowns earlier in the day.

Sicomed's shares soared over 20 percent in the last month before they were suspended from trading this week. They will resume trading on Friday.

Analysts also said the deal was positive for Zentiva because the company had not been using enough debt.

"The deal looks a little bit expensive when you look straight at it but when you subtract (Sicomed's) $50 million in a real estate portfolio then it does not look expensive," said Wood & Company analyst Bram Buring.

Zentiva plans to sell the real estate.

Zentiva's Sulc said the company had agreed with a consortium of banks to take a 3 billion crown ($125 million) 3-year loan for the acquisition with initial interest below 3 percent.

It already has an additional 1 billion crowns in available debt and the rest would be financed with cash.

Merrill Lynch advised Zentiva and ABN AMRO Venoma on the transaction, which Zentiva hopes to complete at the end of this year.

Sicomed holds a 5 percent share on the fast-growing Romanian market in terms of value of sold products and a 25 percent share in terms of volumes.

It posted earnings before interest, tax, depreciation and amortisation of 28.9 million leu ($10.5 million) in the first half on sales of 104.5 million leu, or around 18 percent of Zentiva's sales in the period.

"Zentiva's performance in the first half did not have the dynamics the market would like and this deal brings a new growth story to its stock," BH Securities analyst Petr Hlinomaz said.

Sicomed is targeting net profit of 34.1 million lei in 2005 compared with last year's 19.5 million lei.

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The number of unemployed was 489,300 at the end of July 2005, by 73,300 less than in July 2004, reveal the data from the National Institute for Statistics, ACT Media News Agency reports.

Women accounted for 41.9% of the total registered number of unemployed.

By the same date, the rate of unemployment was 5.5% of the total civilian population, just as a month before.

In July 2004, the unemployment rate had been 6.3%.

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BUCHAREST (MarketWatch) -- Ten foreign utilities have expressed formal interest in participating in the privatization of Romanian state-owned power supplier Electrica Muntenia Sud SA, the economy ministry said in a statement Thursday.

They are: AES Corp. (AES) of the U.S.; Germany's Energie Baden-Wuerttemberg AG (EBK.XE), E.On Energie AG (EON) and RWE Energy AG (RWE.XE); Italy's Enel SpA (EN); Iberdrola SA (IBE.MC) and Union Fenosa International (UNF.MC) of Spain; Gaz de France (1020848.FR); Austria's EVN AG (EVNV.VI); and the Czech Republic's CEZ a.s. (BAACEZ.PR).

The government is offering a 50% stake in Electrica Muntenia, which supplies electricity to the capital, Bucharest. The new owner will be required to make an additional investment to increase its share capital to 67.5%.

The Romanian government will create a shortlist of investors suitable to participate in the privatization by Oct. 3. It expects the sale to be completed by early 2006.

The sale of Electrica Muntenia is part of Romania's plan to upgrade its energy sector ahead of the country's planned accession to the European Union in 2007. 

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PRAGUE, Sept 15 (Xinhuanet) -- The Czech Senate on Thursday approved Bulgaria and Romania's bid for joining the European Unionin 2007.
Bulgaria and Romania are the countries that undoubtedly belongto Europe, said Senate Chairman Premysl Sobotka.

The two countries' entry to the bloc is in the Czech Republic'sinterest, said Foreign Minister Cyril Svoboda.

The Bulgarian and Romanian ambassadors to the Czech Republic watched the Senate debate in the session room.

According to the accession treaty, Bulgaria and Romania will join the 25-member bloc on Jan. 1, 2007, but this date can be postponed by a year if the countries did not meet the EU commitments.

In June, Slovakia, as the first EU state, approved the EU accession treaties with Romania and Bulgaria.

Although the EU leaders have been haggling over the budget andhow to rescue the EU constitution, they have agreed that these issues will not stop Romania and Bulgaria from joining the bloc in2007.

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The aluminum producer ALRO in Slatina (southern Romania) took over the alumina producing company ALUM in Tulcea (eastern Romania),with the total value of the transaction reaching 9$ mln, ACT Media news agency reports.

The ALUM Tulcea takeover is part of the strategy of vertical integration applied by Marco Industries, the owner of the aluminum producer.

Initially, the group included an aluminum producer, ALRO Slatina, a company producing materials derived from aluminum, ALPROM, and now it buys ALUM, the raw material supplier. "The ALRO-ALUM transaction was carried out in keeping with the regulations of the capital market and considered the market value of the alumina producer, it was even higher than it," said Marian Nastase, vice-president of the ALRO Board of Directors.

"The higher price paid for ALUM will make the minority shareholders interests be better protected," Nastase added.

The development strategy applied by Marco Industries to ALRO Slatina will also extend to ALUM Tulcea.

Thus, ALRO already fulfils all obligations referring to the protection of the environment, established by the European Union.

The investments made by the company in the environment programmes amounted to over 70 million dollars and ALRO poisonous gas emission is under the limits accepted by the European Union. The same holds for ALPROM, whose emissions are under the limits imposed by the EU.

In the last three years, they invested 145 million dollars in ALRO, especially in modernizing the production lines and in environment protection.

In 2005, the technological investments will go up to 25 million dollars.

The aluminium output grew with every passing year.

They estimate 260,000 tonnes a year in 2006.

ALRO turnover was about 500 million dollars in 2004.

ALRO gross operational revenues reached 401 million euros and the operational profit was 41.9 million euros.

The net profit was 31.5 million euros.

ALRO is a joint stock company, listed with the Bucharest Stock Exchange.

The main markets where the aluminum produced by ALRO is sold are the European Union (Italy, Greece, Germany, France, Great Britain, Hungary, etc), Turkey, and the Balkan countries.

ALRO also exports to the USA, Israel, South Korea and Saudi Arabia. ALRO has the ISO 9001 certification for quality management.

Its products observe the quality standards for primary aluminum of the London Metals Exchange.

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With Romania getting a new image boost, as Standard & Poor's upgraded the country rating to an investment grade, SigmaBleyzer that has already been successful in Ukraine, established its fourth SigmaBleyzer Southeast European Fund IV (SBF IV), according to Bucharest Business Week reports. The fund is aimed at attracting businesses in Romania, Ukraine and Bulgaria.


According to Michael Bleyzer, president of the group, the fund to date has secured 51 million Euro.

"Our target is to reach a capitalization of 200 million Euro. Should we find good business potential, the investors might even put in 250 - 300 million Euro," he said.

Radu Bugica, SigmaBleyzer manager for Romania said that investments would focus on IT and telecommunication, retail and distribution, food and consumer goods, as well as pharmaceutical and health.

"We are mainly considering projects of five to 40 million Euro, but there might be cases when we approve smaller investments," Bugica said.

The first transaction in Romania is expected by the end of the year, or by the first quarter of 2006.

"Romanian companies must compete to attract investors," Bleyzer added.

"We are currently looking at more than 170 companies for potential investments and we will pick the most attractive ones."

Established in 1993, SigmaBleyzer created its first fund three years later, with investors coming from Western Europe and the United States.

The group has gained experience by operating three funds in Ukraine.

SigmaBleyzer has invested 100 million Euro in the Ukrainian funds, the value of which it claims to have doubled in the meantime.

"Romania, along with Bulgaria and Ukraine, represent a unique opportunity for three-dimensional expansion," Bugica said.

The imminent EU integration is another factor weighing in Romania's favor.

"Investment funds have the role of purchasing companies and helping them grow and adapt to market conditions, then selling them to strategic investors," said Bleyzer.

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17:24 - 15 September 2005 - Sweet manufacturer Onix International Comimpex from Bucharest plans to spend about 1 million euros this year for the promotion of its products on the markets of Russia and Ukraine, ACT Media news agency reports.


"These are two of the most important outlets in Eastern Europe, and the tight competition between sweet makers nationwide prompted us to go these outlets," said Mihai Avasiloaiei, the company's sales manager. Onix's products are currently circulated in Bulgaria, Hungary, the Czech Republic, Slovakia and Poland. The company's representatives estimate to gain about 5.5 million euros in turnover this year, accounting for a 35 percent increase over last year.

The company's financial indicators registered a similar growth over 2003 and 2004.

The growth of the past 2 years may be explained through the continuous presence nationwide and also at international level through the emergence on the main East-European markets, Avasiloaiei said.

The output of the Bucharest-based company raised from 4 tons/day in 1997 to 50 tonnes per day now.

Currently, the company has 136 types of products, with investments worth over 5 million euros.

Onix products are available in the main supermarkets from Romania and from South-Eastern Europe, such as Metro, Makro, Carrefour, Auchan, Lider, Tesco or CBA from the Czech Republic, Slovakia or Hungary, and at domestic level Cora, Bila, XXL, Gima, Mega Image and recently opened Penny Market and Kaufland.

The company's main shareholder is an Iranian businessman Rahim Adhary.

Source: ACT Media News Agency and reporter.gr

Minister of Environment and Water Management Sulfina Barbu and Osman Pepe, her Turkish counterpart, on Wednesday, 14 September, signed a cooperation protocol on environment protection between the Romanian and the Turkish Governments, the Ministry of Environment and Water Management (MMGA) said in a release.

This protocol stipulates that, in order to apply the environment protection priorities, steps should be taken for the development of bilateral and international cooperation.

The joint projects set out in the document target Romania's experience in the EU entry field, as well as the development and implementation of joint projects on Black Sea environment monitoring and Black Sea coast management.

Emphasis is laid on the adoption of a common policy that should cut water pollutants, manage fishing in the Black Sea, in accordance with the EU requirements. The Constanta-based National Institute for Marine Research and Development will collaborate with the counterpart body in Turkey.

Turkish Environment Minister Osman Pepe said that Romania has successfully traveled along the path to the EU entry in terms of environment protection and water management, describing Romania's experience as a real asset. The Turkish minister will soon take steps to get Turkey in line with the EU requirements.

The Romanian and Turkish senior officials highlighted the fact that both countries are signatories in the same Black Sea protection agreement, which has meant very good cooperation, in the vein of the political and economic relations between the two countries.

Sulfina Barbu said that Turkey is a partner Romania wants to cooperate with in the areas of environment protection and water management and emphasis is laid on the mutual support for the achievement of common goals and exchange of experience in the natural heritage protection activities.
Source: Rompres

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Low-cost airline SkyEurope has been granted traffic rights to launch services to Bucharest and Sofia, the company announced at its web site.

SkyEurope Airlines, Central Europe's largest low-cost low-fare airline, announced its entry on the Bulgarian and Romanian aviation markets September 14, after obtaining traffic rights from Bulgarian and Romanian authorities.

SkyEurope Airlines was established in 2001, and pioneered low-cost aviation in Central Europe by becoming the first low-cost airline to open bases in Slovakia, Hungary and Poland.

To further build on its first mover advantage, SkyEurope is now expanding eastwards, with the first low-fare flights between Bratislava, conveniently located only 50 km away from Vienna, and the Bulgarian and Romanian capitals.

"We look forward to bring low fares to Bulgarian and Romanian travellers, as well as to position Bucharest and Sofia on the map of trendy tourism destinations," Christian Mandl, SkyEurope's Chief Executive, said.

Flights to and from Sofia and Bucharest will begin on December 9 and 12, respectively, with fares starting from as low as EUR 25 one-way excluding taxes.

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SOFIA (bnn)- Bulgaria?s Minister of Economy and Energetics Rumen Ovcharov met Wednesday the Romanian Economy and Trade Minister Ioan-Codrut Seres.

They discussed the future Belene nuclear power plant project, the building of the Nabucco gas pipeline, and various common problems of the energy market in Southeastern Europe. The two Ministers also talked over the opportunities for coordinating the actions of Bulgaria and Romania in regard to the fulfillment of the European Commission criteria. The Romanian Minister invited Ovcharov to visit Bucharest by the end of the year.
Nabucco is a project for a gas pipeline linking Iran and the Caspian region with Central Europe. The project is a joint initiative of gas distributors Transgas of Romania, Bulgargas of Bulgaria, Botas of Turkey, OMV of Austria and MOL of Hungary. The prospect of an oil pipeline parallel to the Bosporus is meant to avert a possible environmental disaster as oil is now shipped by tankers through the busy straight posing a permanent risk of wrecks and spills.  /bnn/

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Romania said it will trim its budget deficit caps for this year and 2006 to rein in its ballooning current account gap, but analysts said the move was unlikely to prevent its further deepening.

Finance Minister Ionut Popescu said the European Union candidate would cut its 2005 budget deficit to 0.7-0.75 percent of gross domestic product (GDP), after reaching a deal with the IMF on its two-year standby accord.

?Romania would need tight budgets as long as there is a concern related to its higher current account deficit,? Popescu told reporters. He said the budget review was likely to be approved by the Cabinet.

Romania, which had a budget gap of 1.2 percent of GDP last year originally foresaw a shortfall of 1.5 percent for 2005. But the IMF warned it needs a tighter budget to counter possible revenue shortfall following sweeping tax cuts in January.

Popescu said the government wanted to bring the deficit below 0.5 percent of GDP next year as state subsidies were poised to decrease, mainly in the inefficient mining sector which is undergoing IMF-prescribed restructuring. ?Around 7,000 miners will be laid off by the end of 2005 so next year there will be less subsidies,? Popescu said. 

Fonte: Reuters
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NH Hoteles is opening its first hotel in Romania, the NH Bucharest . By doing so, the hotel chain continues expanding into Eastern Europe, after opening its first hotel in Hungary two years ago. The NH Bucharest is the first of the two hotels the chain has planned to open in Romania. The second one, the NH Timisoara, will be opening at the end of this month. The new hotel is operating under a management contract and has 78 rooms. This is the first step into a country with great growth potential. After entering Romania, NH Hoteles will now be present in 19 countries, as it has also recently opened its first hotel in the United Kingdom.

The hotel has just been built in a privileged location only 10 minutes from the airport, next to the Piata Unirii in the centre of Bucharest, just a few metres from the city`s new Courts and the Popurulul House, the second largest building in the world (after the Pentagon).

The NH Bucharest has two small, fully equipped rooms for business meetings that can hold up to 40 people. It also has a fitness centre with a gymnasium and solarium. The hotel also has a restaurant for up to 50 people and a lobby bar.

The hotel`s facilities provide all the comfort that is a standard feature of NH Hoteles, combining business with relaxation, such as the buffet breakfast, facilities for the handicapped, satellite and cable television, Internet connection, "Agua de la Tierra" bath kit, air conditioning and a la carte pillows. Moreover, at this hotel guests will be able to enjoy the new NH style, with an elegant, avant-garde decoration, that combines dark wood, natural fabrics in neutral colours, spotted with brighter colours, vinyl papers and stucco, which make guests feel at home, in a simple, intimate style.

The NH Bucharest offers international cuisine with simple dishes such as sandwiches and pasta, but where there is a wide selection of local dishes such as Bulgareasca salad, soups such as the Ciorba de Legume or Vacuta, and other more elaborate, typically Romanian dishes such as Tocanhita cu Mamaliguta (Romanian veal served with corn and cream).

Rania Deimezi - Thursday, September 15, 2005

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BUCHAREST, Romania--(BUSINESS WIRE)--Sept. 15, 2005--Cisco Systems (Nasdaq:CSCO) today announced that Astral Telecom, Romania's largest electronic communication services provider, has completed the deployment of the Cisco BTS 10200 Call Control Softswitch solution in its national network.
The new softswitch solution will allow Astral to better manage network resources, support high customer demand and deliver enhanced voice services for Astral's Triplay broadband voice, video and data services. Since launching its cable voice over Internet Protocol (VoIP) services in 2003, Astral has expanded its VoIP services at the national level and is signing up hundreds of new subscribers every week.

The Astral cable IP network uses Cisco technology extensively in the aggregation layers as well as PSTN and universal gateways to interconnect with national and international telephone networks. "Voice is an important component of our offering and the carrier-grade capability of the Cisco softswitch solution has helped to establish Astral as one of the main challengers to the incumbent operator in Romania," said Dinu Malacopol, CEO, Internet, Data & Telephony of Astral Telecom. "We aim to have the most competitive offerings in terms of pricing and state of the art service quality and Cisco provided a solution that met our needs for cost effectiveness and advanced features."

Business and residential customers of Astral's VoIP service benefit from free minutes for mobile, national and international calls, control of caller identity display and online traffic reports. The Astral Triplay service package also includes high-speed broadband Internet access, analog and digital cable, as well as telephony services.

"Our customer's success is the best demonstration of the quality of Cisco's solutions," said Bogdan Constantinescu, General Manager, Cisco Systems Romania & Republic of Moldova. "Cisco has worked closely with Astral Telecom over the past few years to create services that will help the company gain market share in the de-regulated telecommunication services market in Romania. The popularity of Astral's VoIP service is a clear measurement of the achievements of our collaboration."

About Astral Telecom

Astral Telecom S.A. is one of the Romanian leading integrated electronic communication services providers focused on delivering state of the art communication solutions.

Astral Telecom began its operations back in 1993 and positioned itself as a local cable television operator with headquarters in one of the most important historical and cultural centres of Transylvania -- Cluj Napoca.

Astral Telecom had developed and successfully expanded its services on a national level, and by the beginning of 2004, grew into a national communication services provider with a strong presence in over 800,000 dwelling units. The company's cable operations are available at a national level in over 170 locations; at the same time the Internet services are available in over 100 of the most important Romanian locations.

Astral signed interconnection agreements with landline operator Romtelecom and with both GSM 900 services providers, Connex and Orange, and with RDS and Zapp.

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The National Bank of Greece has submitted letters of intent to buy both CEC (Savings and Loans Bank) and BCR (Romanian Commercial Bank), recently put up for privatisation by the Romanian state, ACT Media news agency reports.


The National Bank of Greece (NBR) entered the Romanian banking market in 2003 by taking over the majority stake in Banca Romaneasca (that is a 97.14 percent of the shares).

After the takeover, the Greek bank managers reached the conclusion the acquired brand was not sufficiently strong, so they decided to provide Banca Romaneasca with its own brand.

Also, NBR decided to extend its network of branches over the next years.

The bank currently numbers 27 branches, but announced it would have 47 branches by the end of the year and 80 by 2007.

According to the general manager of the bank, Andreas Maragkoudakis, the bank recorded a basic activity profit rate of 214 percent, as the bank "placed its resources in high performance loans, adequately guaranteed."

In the first half of 2005, Banca Romaneasca posted a net profit of approximately 3.4 million euros and a turnover of some 50.8 million euros.

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The District Court of Russe will hear Thursday at a second instance the case against George Buhnici, the Romanian journalist who was tried for illegal possession and use of special surveillance devices (SSD).

George Buhnici, a Romanian investigative journalist from commercial PRO TV, was seized last November in the Bulgaria-Romania border area at Russe, while secretly shooting a video on alleged under-the-counter deals in the trade zone. He was found using a microphone and a camera hidden in his eyeglasses that is prohibited under Bulgarian legislation as illegal use of special surveillance devices.

Buhnici pleaded not guilty defending his journalistic right to freedom of speech and search of information, but the Bulgarian court sentenced him to pay a fine of BGN 1,000.

After rescinding the sentence against George Buhnici in the middle of April, the District Court of Russe brought a second charge against him. The Bulgarian lawyer of the reporter Milena Dyakova said he is once again charged over the same reasons.

The case was referred back to the Regional Prosecutor's Office.

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Romanian dye producer Policolor has estimated a 25 percent increase in turnover for 2005, to 65 million euros, from its activities in Romania and Bulgaria, according to Ivan Sokolov, the general manager of the company, Business Review writes in its most recent issue.

"In the first half of the year we sold 12 million euros more than the previous year, the most dynamic sectors being industrial and auto", Sokolov added.

The level of investments made by Policolor in Romania reached 300,000 euros for the launch of new brands and development of the plant in Bucharest, but other investments in a new production line will be made until the end of this year, according to Sokolov.

Besides the production unit in Romania, Policolor also owns Bulgarian company Orgachim that produces industrial and decorative dyes. "In the car paint segment we have a market share of 80 percent while in the auto industry field it is 50 percent, by our own estimations", Sokolov said.

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One of Romania?s leading independent television stations has selected AP?s ENPS as their news production system of choice in a full-scale overhaul of their newsgathering operation.

Antena 1, based in Bucharest, will install 50 workstations in the first year, rising to at least 70 units in five years. It is the fourth installation for ENPS in the Balkan region.

Antena 1?s modernization includes extension of the building offices accomodating larger and newly built news studios and adding new video editing capability, CGs, MCR and playout servers. It is scheduled to launch next month (May 2005).

?We looked at the evidence and came to the conclusion that ENPS is essential if we are to reach our target of increasing our news production broadcasts threefold from 4 to 12 hours daily on both Antena 1 and our new channel, Antena 3,? said Mr Sorin Oancea, Vice President of the company and chief of news operations.

Owned primarily by father and daughter team, the Voiculescus, Antena 1 brings together 28 regional licenses into a national network with comprehensive coverage. A separate channel, Antena 3, also due to launch by May 2005, will provide harder news stories around the clock and supply sister Channel, Antena 1 with content. Antena 1 will provide softer news and information.

The contract with ENPS was signed by Camelia Voiculescu, President and Sorin Oancea, Vice President and Eric Bowman, Director of International Business Development at ENPS.

?ENPS is designed to invigorate and streamline Antena 1?s news production workflow, facilitate news gathering from the regions and provide maximum flexibility as the channel expands and as they invest in new broadcast technology. We are delighted to be a mainstay of their growth and expansion?, said Eric Bowman.

Designed by and for broadcast journalists, ENPS operates in all types of demanding news production environments, with powerful, easy-to-use features including scripting, rundowns, planning, contacts, messaging, archiving, third-party device control, news wire management, remote access capabilities, and the industry's only fully-integrated search engine. Using the MOS protocol, ENPS supports integration of news production products developed by more than 30 companies.

AP provides production technology for many of the world's largest and most demanding broadcasters, and the ENPS system is now used by more than 40,000 reporters, writers, editors and producers in more than 500 newsrooms in 48 countries.

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?A pack of cigarettes in Bulgaria costs EUR 2, while the average price of the same pack of cigarettes costs about EUR 1 here?, Romanian Minister of Public Finance Sebastian Vladescu said yesterday, cited by Adevarul newspaper.

Vladescu pointed out that next year the excise value on tobacco products in Romania will increase and cigarette prices will respectively rise. ?We are trying to figure out the most optimal way to increase prices of cigarettes and at the same time to decrease contraband?.

FOCUS News Agency reminds:
Last week Romanian President Traian Basescu called for increase of cigarette prices in the country. ?If we need money for healthcare, lets look at the excises on the products that cause diseases?, Basescu stated and proposed that cigarette prices in Romania reach the values of those in the EU in 2009, which is a year earlier than the contractual grace period. Basescu proposed that the means from the increased excise go straight for healthcare expenses.

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Romania has considerably improved the business environment, said World Bank officials, according to ACT Media news agency reports.

Romania has registered important changes about the business environment in 2004, according to the World Bank's report.

The countries registering important changes in the support granted to the business environment last year include Romania, Serbia and Montenegro, Slovakia and Latvia, the report shows.

Some countries from the former Soviet bloc, like Lithuania and Estonia, were placed even before Germany and Switzerland, taking as criteria opening to new investment.

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British tobacco manufacturer Gallaher announced its sales in the Romanian cigarette market grew by 12.6 percent in the first half-year, ACT Media news agency reports.

The increase was due to the good results registered by Ronson and St. George cigarette brands, according to ACT Media reports.

Gallaher began manufacturing in Romania in a production facility located in the former cigarette factory of another tobacco producer, Papastratos.

The Romanian factory now works at full capacity, registering "volumes that have grown gradually over the last period," the company's officials said. This year, Gallaher Austria Tabak - the Romanian Branch has announced investments worth 4 million euros, meant to expand the company's market share to some 3-4 percent up from one percent by end-2005.

Gallaher brands in the local market include cigarettes St. George, LD, Ronson, Stateline and Memphis. The Romanian cigarette market is worth about one billion euros annually, being mainly covered by the companies British American Tobacco, Japan Tobacco International and Philip Morris, which account for more than 90 percent of the market by value.

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Banks, supermarkets and pharmacy chains' raging expansion causes an unbalanced demand and offer on the commercial property market with rents jumping in the first half of the year by 20 to 45 percent, according to the respective areas, ACT Media news agency reports.

In the absence of a satisfactory offer, both in quantity and quality, the demand for commercial spaces has been and will continue to stay at a very high level in the upcoming period, ACT Media reports. On the segment of the most central zones placed around Magheru Boulevard or Calea Victoriei in Bucharest, the rents followed a more marked upward trend in H1.

For the first time, according to sources, commercial spaces with surfaces of 150 square meters were rented at a price of 130 euros per sq m per month, a price previously set for smaller units. Banks, insurance companies, pharmacy chains and, more recently, supermarkets and household appliances stores are mainly responsible for this price increase, real estate market representatives believe. "This increase with more than 20 percent of commercial spaces rents is determined by the offer and demand," Eurisko's Director of the Department for commercial spaces, Luiza Moraru, said.

Demand comes mainly from the banks and pharmacy chains although, in 2005, is has been slightly tempered compared to 2004.

Lately, household appliances and clothes retail chains contributed to a boost in demand on this market, Moraru added. At the same time, the real estate market players predict that, due to the absence of street commercial spaces and those in the suburbs - that have been already entirely rented - and the commercial projects of mall-type - rented long before their opening - the tendency of commercial property rents increases is going to continue in the upcoming period.

They estimate that the level of commercial spaces' rents could go up by at least 10 percent in the second half of the year.

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PRAGUE, Sept 13 (Reuters) - Czech generic drug maker Zentiva has placed a preliminary $200 million bid for the leading Romanian generic drug company Sicomed, the Czech firm said on Tuesday.

Zentiva said in a statement the purchase would be done through an acquisition of a private-equity vehicle Venoma Holdings, a 51 percent owner of the Romanian drug firm, followed by a takeover bid for the rest of Sicomed's shares.

Zentiva could also buy the whole of Sicomed directly, it added.

The offer values Sicomed at $200 million or $0.48 per share and the talks are expected to continue until Sept. 16.

"There can be no assurance that a final agreement can be reached," Zentiva said.

Sicomed posted a 66 percent year-on-year rise in net profit in the first six months of this year to 16.7 million Romanian leu ($5.88 million). Sales grew 15 percent to 99.5 million leu, according to Sicomed's web site.

Zentiva has been looking for foreign acquisitions that would offset slow domestic growth. It has said it would finance any purchase through a mixture of cash and debt.

Zentiva is controlled by private-equity firm Warburg Pincus.

Venoma's officials were not immediately available for comment on the takeover offer.

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Romania must implement European Union veterinary and food safety rules faster if it wants to enter the bloc in 2007, EU Health Commissioner Markos Kyprianou said on Tuesday.

Romania and neighbouring Bulgaria, both hoping to join the bloc in 2007, are both under pressure from the EU, mainly for failing to fight endemic corruption and crime.

The EU has repeatedly warned the Balkan state in recent weeks it must tackle key reforms before a crucial European Commission monitoring report in October or face the risk of a one-year delay in its accession. "My presence here is to alert, to ring a bell of alarm that time is running out but also to encourage Romanian authorities to continue the effort," Kyprianou told journalists after his two-day visit to Bucharest.

"Every day, every week counts." He said Brussels was happy with the progress Romania had made in bringing its rules on animal health and food safety into line with EU legislation, but said implementing them would be much more difficult for the ex-communist state.

The Commission's report, due out on Oct. 25, will evaluate their progress, but EU diplomats say a decision on when they will join will probably be made next spring. Kyprianou said the hardest health challenge for Romania will be the fight against swine fever, which has killed hundreds of pigs this year.

The lack of food testing facilities is also a problem, and many meat processors will probably be unable to meet EU standards, he said. EU countries have had several outbreaks of highly contagious animal diseases in recent years such as bird flu, foot-and-mouth disease and Classical Swine fever, leading to widespread slaughter of livestock.

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Almost half of the adult population of Romania does not read newspapers and almost a third does not listen to radio, ACT Media news agency reports.

Almost half of the adult population of Romania ? 40% - does not read newspapers, 31% does not listen to radio, while only 5% does not watch TV, according to a recent INSOMAR survey.

The Romanians say that 28% choose the PROTV channel to find out about domestic and international news, 21% choose Antena 1 and 17 % Realitatea TV.

Next come OTV 2% and Prima TV.

As for their favourite news bulletin, ProTV News is chosen by 27%, Jurnal ?Romania 1 ? 24%, Observator ? Antena 1 ? 23%, Jurnal ? Realitatea TV ? 15 % and Focus ?Prima TV ? 2%.

Radio Romania Actualitati is considered, according to the survey by 37% of Romanians, the radio station they get most information about daily domestic and international news, second being Europe FM with 20%.

The same survey states that 17% of the interviewees consider "Libertatea" the daily they prefer to take their information from, Jurnalul National ? 15%, Evenimentul Zilei ? 11%, Romania Libera ?6%.

The survey was commissioned by FSLI Petrom, based on questionnaire at the interviewees? residence, on a number of 1,383 people, representative for Romania?s population aged over 18.

The interviews were made in 56 urban localities and 55 rural localities, maximum error being +/- 2.6%, probability 95%.

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Chicago, IL ?September 13, 2005 ? NAVTEQ, a leading global provider of digital maps for vehicle navigation and location-based solutions, has added a new country to its Eastern European database. Beginning in the third quarter of 2005, digital map data of Romania will be available to direct customers for the first time*.

Included in the map data release is detailed road network information for Romania?s capital, Bucharest and coverage of the main roadways linking 15 cities with a population of 25,000 or more.

The addition of Romania to NAVTEQ?s Eastern European coverage makes navigable travel between neighbouring countries Bulgaria and Hungary possible. This means navigation devices can now navigate across more borders: For instance from Germany via Austria and Hungary to Romania.

NAVTEQ now covers more than 11,400 kilometres of roads in Romania including Points of Interest (POI?s) such as restaurants, hotels and banks for 60 of the country?s towns and cities including: Arad, Bucharest, Brasov, Cluj-Napoca, Constanta, Craiova, Focsani, Galati, Iasi, Timisoara, Targu Mures, Oradea, Pitesti, Satu Mare and Sibiu. The database contains over 1,500 points of interest (POI) in 40 categories such as service stations, restaurants and train stations. Famous tourist attractions like the Transylvanian Bran Castle, legendary home of Bram Stoker?s Dracula, are also included in the Romanian map data.

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16:34 - 13 September 2005 - Starbuck's, the world's most famous coffee shop chain, plans to expand in the Romanian market, ACT Media news agency reports.


Starbucks' strategy is also focused on international markets, where it intends to open 150 Starbucks coffee shops and 350 under license. ''The opening of the shop in Bucharest is scheduled for end-2006,'' said sources close to the Greek group Marinopoulos, a company which in 2002 signed with Starbucks a contract for extending the network to some European markets. Starbucks going to Romania via the Greeks seems logical since the Greek group brought to the country some of its best-known brands: Sephora, Beauty Shop, Marks&Spencer.

According to sources, there is the possibility of opening 10 coffee shops per year in Romania.

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By ANDREW SCOTT

Daniel Oprea says the most exciting thing about his business right now is that people are spending more than they did during past recessions. As a result, his clients can afford the creativity his company offers in its tile designs instead of settling for basic plans.

The 37-year-old entrepreneur recently stood in one of the rooms of a local mansion while a team of craftsmen meticulously laid mosaic tiles on a bathroom floor.

"Customers used to say leave out this or that because they had tight budgets," Oprea said. Now, things have dramatically changed. He recently completed a $180,000 job ?Äì?Äì his most expensive project ?Äì?Äì in a 14,000-square-foot home. The customer didn't mind the price at all.

The surge in the real estate market is causing a rise in Oprea's work. The Bethel resident says he's so busy he wishes he could free up his time in order to expand the business.

Oprea co-owns The Tile Shop Inc., a tile supply and installation business with showrooms located in Ridgefield and Newtown.

The two shops display a vast selection of tiles and designs for customers and contractors to choose from. Oprea installs tiles primarily for residential customers in Fairfield County and Westchester County, N.Y. His wife, Rachel, who once hand painted original scenery on ceramic tiles, runs the Ridgefield showroom.

Oprea said the hot real estate market mixed with clients' peaking interest in accentuating their homes with tile has meant a 20 percent spike in revenues each year. He did not disclose revenue figures.

What has brought the 12-year-old business with eight employees success is that it doesn't subcontract out work to tile installers. Instead, after customers select the tiles and designs for their homes, installation is performed by Oprea and his crew.

"Here you have the owner of the company doing installation. It's a big plus for us. When customers ask who will do the installation? I tell them, 'I do it myself,'" he said.

The personal touch offered by the business allows customers to ask questions about the installation while it is being performed and problems can be dealt with immediately.

Among the items the company offers are glass, frost-proof tiles and heated tiles which prevent customers from touching cold floors with their feet.

The work itself is not glamorous. Oprea's craftsmen sometimes work in tight confined spaces filling joints and cavities between ceramic tiles with grout. Rooms can be poorly ventilated, fumes from adhesives strong and dust a nuisance. But the workmen take it in stride donning masks to complete the job.

Oprea has come a long way. The Romanian-born entrepreneur came to the United States in 1991. While staying with a friend in Norwalk, he worked in a Westport deli and made friends with several customers.

"I realized that working in a deli was not what I wanted to do." He asked the deli customers if there was any work they wanted him to do and, as a result, landed an apprenticeship in a tile shop nearby. After two years, he learned the trade, applied for political asylum and was approved.

Oprea's passion for the trade continued to grow. He wanted desperately to own a tile-installation business. Then one day while he and a friend drove through Ridgefield, he saw a huge sign.

It read "Grand Opening. Tile Shop." Though thinking he lost his opportunity to own his own shop, Oprea decided to visit the shop anyway.

It was owned by a brother and sister team who immediately embraced Oprea, recognizing his skill in the industry. Oprea, later married the sister, Rachel

The tile industry, then as it is now, is extremely competitive, Rachel pointed out. "There are tile shops opening every year. It has become very popular in this neck of the woods," she said.

But word-of-mouth has kept customers coming.

"We hardly do any advertising," Oprea said.

"What tile suppliers have told us is that they've been experiencing about a 10 percent increase in product consumption,"said Michael Maiuri, president of the Tile Contactors Association of America, Kansas City, Mo.

An industry expert said ceramic tiles are becoming the fastest-growing floor covering in the Unites States today compared to wood, carpet and rubber.

With the growth, Oprea has his eyes set on expanding the business by opening a showroom in Southport, Stratford or Brewster, N.Y.

As he left the bathroom his crew had finished working on in the local mansion, he examined the tiles to make sure they were evenly placed.

"This joint is a little bit too high," he said kneeling to make adjustments to a single tile. With prices as much as $40 per tile, he wanted to make sure it was just right.

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10:33 - 13 September 2005 - South-Korean Korea Development Bank (KDB) issued letters of credit in the value of 400 million dollars in order to ensure the capital inflows necessary to cover the contract concluded between Daewoo Mangalia Heavy Industries Shipyard (south-eastern Romania) and Hamburg South, ACT Media news agency reports.


The guarantees issued by KBD, also one of Mangalia Shipyard shareholders, cover 80 percent of the total value of the contract for the construction of 6 port-container ships ordered by the German ship owner Hamburg South.

According to ACT Media sources, the amount guaranteed by the bank practically represents 80 percent from the down payment made by the German client.

The remainder of 20 percent will be cashed when the ships are delivered.

Romanian shipyard representatives recently announced the signature of two contracts for port-containers, amounting at 800 million dollars, with the German NSB/Gebab/Conti and, respectively, Hamburg South ship owners.

Romania's naval industry, the source highlighted, started last year a strong revival trend on the background of increased demand from ship owners worldwide.

They are forced to replace their fleets following the introduction of new regulations, more restrictive.

The share capital of Daewoo Mangalia Heavy Industries S.A., set up in 1997, is divided between the Ministry of Economy and Trade accounting for 49 percent of the stock - through 2 Mai Shipyard - and the South-Korean Daewoo Shipbuilding & Marine Engineering Co. holding the rest.

Source: ACT Media News Agency and Reporter.gr

After almost doubling in 2003, the Romanian market for enterprise application software (EAS) expanded by only 25.9 per cent in license and maintenance revenue to ¤28.8m in 2004, according to a report from market advisory firm IDC. This dramatic deceleration stemmed from a drop in the unusually high number of large projects from last year. Despite the slowdown, the Romanian economy is strong; there is still considerable room for growth, and EAS revenue in Romania is expected to rise by 24 per cent this year and by 20 per cent in 2006.

SAP, SIVECO, and Oracle dominated the Romanian EAS market in 2004. While SAP took first place in terms of L&M revenue by a relatively safe margin, second-ranked SIVECO struggled to stay less than a point ahead of Oracle. Together, these three vendors accounted for just over 60 per cent of the market last year.

Representing more than 57 per cent of L&M revenue, enterprise resource management (ERM) was again the largest functional area in the Romanian EAS market last year. In fact, the financial application sub-segment accounted for a greater share of revenue than the second-largest functional area, supply chain management (SCM) at 17.2 per cent. Operations and manufacturing applications (OMA) was the third-largest functional area.

Fuelled by the completion of privatisation deals and the takeover of Petrom by OMV, utilities invested more in EAS in Romania in 2004 than any other single vertical sector. The thriving retail sector came second as new hypermarkets opened and already successful stores implemented inventory and supply chain controls to better manage growing turnover. Telecoms and broadcasting was third and discrete manufacturing a very close fourth. Together these four verticals accounted for nearly 66 per cent of L&M revenue in the country last year.

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FRANKFURT (AFP) - The Chinese "dragon" is coming to Europe, one of the new affordable cars made in China by manufacturers who honed their skills working for western car makers. Now the wheels have turned but analysts see no immediate threat from this new Asian competitor.

Far from the usual auto show-stoppers like the luxury Mercedes sedan or Porsche sportcar, three Chinese car makers are set to be the alternative stars of the 2005 Frankfurt Auto Show, which officially opens Tuesday.

The Chinese line-up includes Geely with five models, featuring a sportscar dubbed CD for "China Dragon".

Importer Landwind is unveiling a four-wheel drive vehicle by Jiangling, a joint venture with Ford in China, and Brilliance, a Chinese venture with BMW, is showcasing its sedan Zhonghua, which should be on sale in Germany by the end of the year starting at 18,000 euros (21,000 dollars).

The three Chinese companies are "the second cut," unlike the big manufacturers such as Shanghai Automotive Industry Corp (SAIC), noted Ferdinand Dudenhoeffer of the Center for Automotive Research (CAR).

But this third wave of Asian car makers is just getting revved up.

A German journalist in Automobile News Europe drove home a warning to western automakers not to "underestimate" the Chinese competition as they did in the past with the Japanese and the Koreans.

Many European consumers need "cars to simply go from point A to point B. That's exactly what the Chinese cars arriving in Europe offer," Jens Dralle wrote in an recent article.

The demand in Europe for inexpensive cars has grown as buying power has declined, evidenced by the success of the Logan made by Renault's Dacia division in Romania, which sells for about 8,000 euros.

Still, automobiles "made in China" will have to prove their worth before making a breakthrough in the European market.

"We do not buy a car like a shirt or a plastic toy, even if the price is much cheaper. Switching to Chinese products with unknown brands and uncertain quality is not something that's going to happen tomorrow," said Remi Cornubert, director of the Paris bureau of Mercer Management Consulting.

China's entry into the auto market "is real, but it is not going to immediately become a massive phenomenon in Europe," Cornubert said.

He pointed out that it took Korean car makers Hyundai and Daewoo "a dozen years to make attractive cars with acceptable quality."

Dudenhoeffer does not see "any threat in the short term due to problems with quality and design which are not that exciting," he said. He expects the Chinese to have about 1.5 percent of the European market in 2010.

Chinese car makers have the support of the government in Beijing, as China's ambition is to overtake Germany as the world's third largest automobile producer, after the United States and Japan.

"The Chinese car makers are coming but it will be difficult for them to find a place as quickly as Hyundai did in the past," the president of Japan's Mitsubishi, Osamu Masuko, told journalists.

"Not only because the technologies never stop improving but also because the political climate will not be strongly in its favor," he added, alluding to the recent battle between the EU and China over textile imports.

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SEOUL, Sept 13 Asia Pulse - South Koreans consumed an average of 4.5 liters of distilled liquor such as whisky and the country's most popular alcoholic beverage soju in 2002, ranking fourth after Russia, Latvia and Romania, a report showed Tuesday.

The report, authored by professor Chang Keun-ho of Hongik University in Seoul, also estimated the social cost for such alcohol consumption at 4.9 trillion won (US$4.77 billion) in 2003, or 0.65 per cent of the gross domestic product in Asia's fourth-largest economy.

More and more South Koreans, women in particular, are drinking alcoholic beverages, the report showed. More than half of all South Koreans, about 64.3 per cent, drank an alcoholic beverage in 2003, a drastic increase from 48.3 per cent in 1986.

Female drinkers accounted for 49 per cent of total in 2003, compared with 20.6 per cent in 1986, the report showed.

The report also said that the portion of those who consume more than one bottle of soju and four bottles of beer in one session, classified as "heavy drinkers," has increased sharply as well. One in five South Korean adults showed signs of addiction to alcohol.

According to the report, the social cost of alcohol consumption, from traffic accidents caused by drunk driving to suicides, domestic violence and others, was estimated at 4.9 trillion won.

In 2003, 1,100 people were killed and 55,200 wounded in 31,200 traffic accidents caused by drunk driving. The traffic accident cases in 2003 account for 13 per cent of total, the report showed.

The report showed the average South Korean 21 years old or older, or those who are entitled to drink, drank 68 bottles of soju and 248 500-milliliter-bottles of beer in 2003.

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Some two tons of dead fish were washed up Tuesday on a popular Romanian tourist beach, local authorities said.

Authorities were clearing away the fish, which included plaice and chub, the AP says.

Simion Nicolaev, Director of the Grigore Antipa National Institute for Marine Research, said that seaweed had proliferated in the Black Sea, sucking oxygen out of the water and killing the fish.

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The United States will grant a supplementary financial aid, amounting to 1,5 millions USD, to Romania for the reconstruction of the areas affected by this year floods. On today's meeting at Victoria Palace, the US Embassy Charge d?Affaires Mr. Mark Taplin, has presented the USA aid offer to Prime Minister Calin Popescu-Tariceanu

This aid is granted with the aim of reconstructing the houses in the damaged areas. Moreover, the funds will be used for the rehabilitation of schools, medical units and other floods affected social establishments.

The financial aid will be administered by the United States Agency for International Development (USAID). The Agency will collaborate with organizations such as Cooperative Housing Foundation (CHF), Habitat for Humanity, International Organization of Christian Charities (IOCC) and Romanian Orthodox Church with an aim of reconstructing the destroyed houses and to provide shelters for the floods victims before the beginning of the cold season. USA have granted so far a financial aid amounting to 3,5 millions USD for the Romanian floods' victims.

Prime Minister Tariceanu has thanked the American official for the supplementary financial aid, appreciating the offer as being a very generous one. "This aid represents a further proof that the United States understand our need to reconstruct as soon as possible the damaged areas," Prime Minister has stated.

In turn, Mr. Mark Taplin has conveyed thanks on behalf of USA for the aid that the Romanian Government offered in the aim of limiting the effects produced by Hurricane Katrina, namely for the offer to send a team of seven forensic doctors in the USA southern affected areas, as well as for the way the Romanian authorities have collaborated with the American ones in this respect.

"This aid represents the expression of the solidarity that we feel with the victims of the hurricane Katrina and with the efforts of the American administration towards supporting the affected population," Premier Tariceanu has added.

In addition, Prime Minister Calin Popescu-Tariceanu has expressed his compassion for the families of the victims of September 11, 2001 terrorist attempts.

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Fitch Ratings, the international rating agency, has affirmed Romania-based Banca Comerciala Romana's ("BCR") ratings at Long-term 'BB+', Short-term 'B', Support '3' and Individual 'C/D'. The Outlook on the Long-term rating is Stable.


BCR's Long-term, Short-term and Support ratings reflect the potential support it can expect to receive from the Romanian state in case of need, reflecting its large domestic franchise.

The Individual rating reflects BCR's strong domestic franchise, continued, albeit pressured, profitability and sound capitalisation.

It also represents the restructuring BCR has gone through in association with its shareholders EBRD and IFC, which has improved the risk management framework.

However, it also takes into account the difficult operating environment and increased credit risk from a fast-growing loan portfolio.

"BCR is by far the largest bank in Romania and this franchise positions it well to benefit from the expected growth in the banking system," said Tim Beck of Fitch's Financial Institutions group.

"However, profitability has come under pressure both from lower nominal interest rates and increasing competition within the Romanian banking market, where banks are increasingly completing their restructuring projects.

This process is likely to continue," he added.

The Romanian state is planning to sell a majority stake of BCR to a foreign strategic investor.

The successful bidder should be identified by November 2005 and the transaction is scheduled for completion by Q106.

Depending on the successful bidder, and the propensity indicated to provide support to BCR, this may lead to positive rating action for BCR's Long-term, Short-term and Support ratings.

BCR accounts for approximately 30% of all assets in the banking system. In June 2004, EBRD and IFC each purchased 12.5% plus 1 share of the bank from the state.

The state's ownership was reduced to 36.88%, with employees owning 8% and the remaining 30.12% owned by five private Romanian investment companies.

The Romanian state can redeem the shares sold to EBRD and IFC in order to obtain a majority participation that could then be sold to a strategic investor.

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Several pharmacy chains announced ambitious expansion plans and a true battle has started in order to take hold of as large as possible market quotas, ACT Media news agency reports.


Hermes Pharma Company plans to extend its presence into the territory by opening approximately 130 pharmacies till next year-end, starting from the 54 units in 2004.

With more than 120 pharmacies, A&D Pharma Group is focused on sales increase by 80 percent compared to the previous year, when it reached some 50 million euros.

The company intends to further expand its chain to around 180 pharmacies till year-end.

In addition, Help Net Co. have unveiled similar expansion plans, to reach up to 90 units this year and a sales objective 30 million euro worth, double compared to the level recorded last year.

ACT Media news agency reports that the Group that includes Sensiblu is negotiating the acquisition of pharmacies owned by a competitor, Europharm Holding.

At the same time, Eurofarmacia, part of the Lithuanian VP Market Group, gave up its expansion plans on the Romanian market, closing down its already operational pharmacies. Last year, retail sales of pharmaceuticals amounted at 684.7 million euros, with 30.4 percent more as against 2003, while sales through hospitals stood at 275.9 million euros, according to data provided by Cegedim - Pharma & Hospital Report. Medicines bought on the basis of medical prescriptions represented 535.6 million euros in the retail chain, up 34.7 percent and those without prescription brought revenues of 149.1 million euros, up 17 percent. Out of more than 4,500 pharmacies all over the country, less than 20 percent are grouped under the same brand, the remainder being independent.

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Romania has to step up the implementation of legislation on food safety and sanitary veterinary sector, declared the European Integration Ministry at a recent meeting, ACT Media news agency reports.

Solutions to consolidate the administrative capacity of the institutions involved were sought within the discussions.

Moreover, the process of registering animals, the measures that Romania is taking to prevent the spreading of the bird flu and the vaccination policy against swine pest.

In order to ensure an optimal institutional cooperation in the food safety, the institutions involved will adopt the relevant legislation by end-2005.

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Inflation ran at 0.1 percent in August 2005, while the average monthly inflation rate in the first eight months stood at 0.6 percent, as against 0.7 percent in the same period last year, show data released by the National Statistics Institute (INS), ACT Media news agency reports.

Prices rose 5.2 percent on December 2004 and 8.9 percent on August 2004.

In August 2005, non-food products grew 0.3 percent on the previous month.

Service prices hiked by 9.6 percent, non-food products by 11.7 percent and foodstuffs by 5.6 percent on August 2004.

According to the INS data, August 2005 saw considerable price rises in foods such as poultry - three percent, tinned and fresh vegetables - 1.9 percent, citrus fruit - 1.7 percent, etc.

The same period saw price cuts in fresh fruit - 12.8 percent, potatoes -2.7 percent, milk - 0.2 percent, flour - 0.2 percent and maize flour - 0.3 percent.

The prices of books, papers and magazines grew by 2.3 percent, fuels by 0.6 percent, tobacco and cigarettes by 0.4 percent.

On the contrary, the prices of cars and car parts fell by 0.3 percent, watches, audio-video equipment, sporting goods by 0.2 percent and washing machines by 0.1 percent.

As far as services are concerned, the price of buss passes rose by 4.5 percent, for in-town routes by 2 percent and for out-of-town routes by 1.3 percent.

Airfares dropped by 1.7 percent, while telephone tariffs dipped by 2.4 percent in the same period.

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by Ana-Maria Gavrila and Carol Dan

More cars have flooded into the streets in the past seven months, as total sales went up almost 60 per cent to a volume of around 75,000 cars, compared to the same period in 2004, data relesed by APIA showed.
"The growth is the result of leu appreciation, which resulted in price reduction, as well as due to the introduction of the flat tax, more attractive bank offers for individuals and the introduction of the scrapping bonus for old cars," Marius Carp, general manager of APIA, told BBW.

Car companies are all gaining from the shopping frenzy, most of them reporting good results and drawing bullish perspectives. "For 2006, we expect the market to stabilize at this year's level. If by the end of 2005 total sales might go up to 260,000 cars, next year the figure will be slightly higher," Carp added.

Clients' preferences have changed little from the previous year, with the top ten best sold brands remaining basically the same. Dacia is by far the front-runner, with more than 60,000 cars sold between January and July, which reflects a 46.7 per cent market share. The sales of light commercial vehicles add another per cent to the percentage.

Data provided by Dacia for the first eight months of the year show the company has sold almost 76,000 cars on the local market, with Logan still the flagship of its portfolio (more than 57,000). On the international market, Dacia sold almost 25,000 cars.

The local main competitor brand is Renault, with around 12,500 cars sold in the first seven months, up 119 per cent growth compared to the same period of 2004.

Despite a drop in sales, Daewoo is still a leading brand, ranking third in the hierarchy, with a total market share of 9.6 per cent.

The next most popular brands on the Romanian market include Skoda, VW, Peugeot, Ford, Fiat, Seat, Opel, Citroen, Hyundai and Chevrolet.

To read the full comprehensive story and more on this sector, please see the print edition of BBW, the national newspaper of Romania. Contact Adela Beciu at adela.beciu@bbw.ro for subscription details.

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 Plus Discount company, member of the German group Tengelmann is to open at mid-November its first 15 shops on the Romanian market, of which three will be located in Bucharest, reports ACT Media news agency.


The company's general manager Uwe Klostermann said that they'll open other 15 units over the next six months, as they plan to reach 120 shops in Romania within the next four years.

The shops included by the first stage are located in towns with over 30,000 inhabitants such as Bucharest (three units), Bistrita, Deva, Targoviste, Sibiu (two units), Orastie, Gherla, Navodari and Ramnicu Valcea.

The value of the investment programme allocated for the Romanian market by Plus Discount until the end of 2006 amounts to 200 million euros.

A shop covers 5,000 square metres, of which 1,200 accounts for the selling space and 300 square metres are allotted for storages and annexes.

Each shop needs, on average, a 1.5-million-euro investment - only for construction and fittings, without taking goods into account.

Tengelmann's main competitors in Romania will be, according to Klostermann, the Penny Market network, operated by Rewe group, miniMax Discout, Billa, but also the units of another German company getting ready to enter Romanian market - Kaufland.

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With the summer season just finished and property owners in overdeveloped seaside resorts such as those in France, Italy, Spain and Portugal looking eastward for better bargains, BBW takes a look what pre-EU Romania offers would-be buyers along the Black Sea coast.
by Ingrid Paun

LIMANU - With what he estimates to be around 5,000 tourists a day this summer, Mayor Nicolae Urdea, is pleased that his Black Sea region - which includes the sandy resorts of Vama Veche and 2 Mai - remains a premier vacation spot.
But he's not a man to be satisfied easily.

While tourism is an economic staple for many of his constituents, it is still only a six-week season, so Urdea wants to make a number of changes to enhance quality of life there all-year, and for the long-term. Pending projects include a modern 20-kilometer sewage treatment system for which an application has been made to the EU's ISPA program, better water supply for more remote areas and additional tourism attractions such as improved recreational fishing facilities and a scenic three-kilometer walk connecting the main beaches costing around one million Euro.

"Romania is about to join the European Union and it is important that small rural areas like this one are granted facilities to help improve the lifestyle of its people and maximize its natural attributes for domestic and foreign visitors," said Urdea, 49, who was born in Sighisoara but has lived in 2 Mai for 23 years, with five of those as Mayor. "We welcome real estate investors with creative plans but they should complement the natural ambiance and beauty of the area. In this way, everyone does well."

With prices for land and houses already high and rising fast along nearby Bulgaria's coast, a few kilometers away, it is expected property developers will be knocking on Urdea's door soon.
Tourism

Vama Veche and 2 Mai are well-known to most Romanians, providing as they do a more open and refreshing vacation landscape than the dense, high-rise hotel-filled resorts such as Neptune, Saturn and Mamaia farther along the coast.
Located at the end of Romania's Black Sea on the Bulgarian border, the two resorts feature some of the best virgin beaches along the entire coastline, with designated nudist areas, around 300 bed & breakfast places offering rooms, and a scattering of 20 or so small restaurants and cafes with a wide range of foods from roasted meats to bouillebasse to pancake desserts. Summer tourism revenues - including room rentals - each year are estimated to be between 800,000 Euro and one million, officials say.

The village of 2 Mai has a population of around 3,000 people and tourism there tends to be family-based with children eager for the beach a hundred meters away from the main road. Rental of rooms is a welcome financial bonus for the locals.
Vama Veche is known as a 'boheme paradise' where the wide soft-sand beach is partially filled with scores of tents. 'Golden Oldies' and live concerts keep young men and women dancing on the sands or inside the ten or so rendevous that line the rickety road to the beach. One simple, adorned straw-roofed, wall-less, wooden-benched bar known as Stuf rings up generous profits by attracting an all-day-all-night-be-seen-on-the-beach crowd. Others include Respira, Bibi's, Mitocanu and La Felinare.

With so many people visiting in the summer months, Vama Veche has attracted many top international companies to promote their products. On one weekend, Nestle hostesses were offering samples of ice-teas and other products while not far away, Interbrew was sponsoring an annual film festival. Stufstock is an annual multiple music event, sponsored by Ursus, Carpatcement, Sec de Murfatlar and Coca Cola.

To read the full comprehensive story and more on this sector, please see the print edition of BBW, the national newspaper of Romania. Contact Adela Beciu at adela.beciu@bbw.ro for subscription details.

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Starting January 1, 2006, there will be a 16 per cent tax on income from interest, from transactions on the capital market and on transactions on the real estate market, which will add up to a number of other smaller new taxes. BBW readers give their view on the impact of these new taxes:

Septimiu Postelnicu, managing director, HVB Leasing Romania
"From the economic and investments' point of view, it's good to have fiscal stability for at least two or three years. If not, it's impossible to financially plan for a company. Any move decision makers make has an echo all over the economic environment, including investments. I know they have a difficult job, but inconsistency will always be a disturbance issue."

Laura Damian, chief human technical specialist for Ernst and Young:
"Ernst and Young would encourage the Government to create a ceiling on social security contributions. We believe that initially a decrease in social security contributions will lead to a decrease in salary costs for corporations. This will in turn make Romanian investments climb."

Cristian Ionescu, the managing director for Coface Intercredit:
"I think the additional taxes on real estate transactions will force real estate investors to conduct their business legally, which may cause many small developers to close down. This may result in higher prices for apartments initially, but in the long run it will positively impact the real estate business."

To read the full comprehensive story and more on this sector, please see the print edition of BBW, the national newspaper of Romania. Contact Adela Beciu at adela.beciu@bbw.ro for subscription details.

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VANCOUVER, Sept. 12 /PRNewswire-FirstCall/ -- Falcon Oil & Gas Ltd. (TSXV: FO) announced today the preliminary results of its first Romanian coalbed methane well and provided an update of its deep gas project in Hungary.

Romania

Falcon's Lupeni South-1 well in the Jiu Valley Coal Bed Methane Concession in Romania has reached the primary target of Coal Seam #3. There were numerous gas shows in Seam #3 and also in the secondary targets in Seam #13 and Seam #14. The gross thickness of Seam #3 is approximately 21 meters, over an interval from 309 to 330 meters.

The core analyses and preliminary desorption measurements in the field indicate the potential presence of coalbed methane in multiple horizons but give no indication at this time of the potential gas production rates or recoverable reserves to be expected.

Based on the gas shows and core information, Falcon and the other working interest owner in the prospect, Pannonian International, Ltd., a wholly-owned subsidiary of Galaxy Energy Corporation, have determined to enlarge the cored section to run casing to total depth and to commence completion and testing operations.

Falcon has earned a 75% working interest in the 21,538-acre Jiu Valley coalbed methane concession, while Pannonian retains a 25% working interest.

"We are pleased with the initial results from our first well in Romania," stated Marc A. Bruner, President, CEO and Chairman of Falcon. "The drilling of this well confirms our geological model, which was derived from our research into the Romanian coal mining records. The three main coal seams were encountered at the depths and thicknesses that were predicted by our geologists. We also have some initial field measurements of the gas content of the Romanian coals that are encouraging.

"The next step for us is to enlarge the hole to run production casing. We have engaged Schlumberger's top team of coalbed methane experts in Pittsburgh to design and supervise the hydraulic fracture stimulations. While the subsequent completion and testing operations will ultimately determine the potential of this particular well, we believe we're off to a great start in Romania."

Hungary

Falcon has conducted and interpreted a 3D seismic survey over a 16 square kilometre portion of the Tisza Licence area. In addition, it has purchased and reprocessed an additional set of 3D seismic data covering the southern portion of the Tisza License. Based on the new seismic data, Falcon has finalized the first three drilling locations in Hungary. Falcon will drill a deep well on the Mako License at the Mako 5 location and two intermediate depth wells-the Szekkutas well on the Mako License, and the Pusztaszer well on the Tisza License.

Marc A. Bruner commented, "The 3D seismic data has greatly increased our understanding of the geology in this massive basin. By collecting and interpreting the 3D data over the summer, we have come up with multiple drilling locations, three of which will be drilled in our fall program. We have a large inventory of premium casing and two drilling rigs under contract, so we're ready to start drilling. Our operations group plans to start building the first of the surface locations for these wells within a week, with the goal of having both rigs moved in and working in October. These are exciting times for Falcon."

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17:19 - 12 September 2005  - AES corporation has announced its intention to participate in the privatisation of Electrica Muntenia Sud, during the meetings which took place in Bucharest with government members.

The corporation's president and executive director, Paul Hanrahan, said that AES intends to participate in other similar opportunities in the distribution, supply and production of electric energy in Romania.

AES corporation, based in Virginia, USA, owns and conducts businesses in the field of electric energy generation and distribution in 27 countries, on five continents, with a turnover of USD 9.5 bln. in 2004.

?Having a well developed regulatory system and a strong energy market, Romania is exactly the kind of market that AES would like to invest into,? Hanrahan stated.

?Also, considering the significant expertise acquired by AES in the production and supply of electric energy worldwide, we believe that we are the right company to supply electricity to Romanians, safely and affordably," Hanrahan added.

He also said that AES intends - as a first step for its entrance into the Romanian market - to participate in the privatisation process of Electrica Muntenia Sud, thus expanding its presence into the region."

AES has already been active in the region in Hungary, the Czech Republic, the Ukraine and Bulgaria.

?AES Corporation will submit the Intention Letter regarding the privatisation of Electrica Muntenia Sud until September 15, 2005,? according to Kristen Panerali, representative of AES in Romania.

Electrica has informed about its intention to privatise 67 per cent of Electrica Muntenia Sud and has announced the participation procedures for this process.

The deadline for the submission of the Intention Letter is September 15, 2005, and the transaction is expected to complete early 2006.

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15:22 - 12 September 2005  - KD Investments Romania, member of Slovenian financial group KD Group, will launch, by mid October, a new mutual fund, KD Optimus, with investments mainly oriented to instruments with fixed revenues.

"The new fund, operational starting October, will have a diversified profile, 80% of investments being in instruments with fixed revenues - bonds, state bonds and banking deposits ? and the rest, in shares listed at the Stock Exchange?, announced the group?s CEO, Matja¸ Gantar.

By end-year, the funds attracted by KD Optimus will settle around a value of 500,000 euro, forecasts Ion Mincu R?dulescu, the general manager with KD Investments Romania.

"According to the need we notice on the market, we will also create other funds.

For the next five years, we proposed to diversify the portfolio of financial services enabling our clients about 30 mutual funds", added Gantar.

KD Investments Romania administers the mutual fund KD Maximus, launched in July 2004.

According to the company?s officials, the value of the assets exceeds 1mn euro, and the yield of the investment in the first six months of the year increases of 12.82%.

The company?s plans forecast extending the capital market by establishing ? at the beginning of next year ? securities companies - KD Capital Management.

The target of this brokerage institution will be the clients with incomes over the average.

KD Group develops operations in Slovenia, Slovakia, Serbia and Montenegro, Croatia, Bulgaria, Bosnia and Herzegovina, Luxemburg, Romania and holds main participations in many companies of financial services (insurance, brokerage on the capital market, consultancy).

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12:32 - 12 September 2005  - The CEC privatisation commission pre-selected all the eight banks interested in the take-over of the Romanian lending institution, following the withdrawal of Rabobank from this race.

The privatisation commission received, on August 31, letters of interest from nine banks: Banca Monte dei Paschi di Siena S.p.A; EFG Eurobank; National Bank of Greece; OTP Bank; Raiffeisen Zentralbank Oesterreich Aktiengesellschaft in consortium with Raiffeisen International Bank - Holding AG; Societe Generale; Dexia; Erste Bank and Rabobank.

The pre-selection of the investors for being introduced into the bank?s database relied on three criteria, which were a capital in excess of EUR 1.5 bln., investment rating granted by an acknowledged institution and fitting within the category of banking financial institutions having an international reputation.

During the next stage, the banks will analyse CEC financial situations, distributed in four databases.

The access will take place in two rounds each with a duration of two weeks, starting with September 19.

After the submission of non committing preliminary offers, expected for the end of October, the banks will take one week to evaluate CEC financial situations.

The privatisation commission estimates that the final committing offers will be submitted at the end of November.

In keeping with the strategy, the banks which qualified in the first two positions according to the points accumulated would participate in the last stage, which requires a final improved committing offer.

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Austrian Wiener Stadtische group ranks first on insurances market in Romania throughout the companies it controls, with the volume of the subscribed premiums summing up EUR 130.7 mn at the end of H1 ? a result that is superior to the one announced by Allianz-Tiriac Asigurari, namely of EUR 110.5 mn.

The companies in Omniasig group subscribed RON 325.6 mn from general and life insurance policies, while Unita registered premiums of RON 145.8 mn (on both market segments) and Agras posted revenues of RON 20.7 mn (from general insurance policies).

Another important competitor, Asirom company, posted revenues from subscribed premiums worth RON 344.32 mn (some EUR 98.4 mn) at the end of June.

According to the annual report of CSA (Insurances Supervisory Commission), Allianz-Tiriac Asigurari ranked first in the top of the domestic insurers, with a 21.04% market share on the overall market of general and life insurances (direct contracts).

Asirom ? 14.98%, ING Asigurari de Viata ? 8.92% and Omniasig SA ? 8.69%, followed Allianz-Tiriac Asigurari.

"H1 data indicate that Wiener Stadtische is sole leader on insurance market. Our target is to place first at the end of 2005 as well as in 2006, and to stay there many years from now on", said on Thursday, within a press conference, the general manager and president of Unita Bucure?ti Managing Board, one of the companies controlled by Wiener Stadtische Group.

Currently, Wiener Stadtische directly controls Unita (99.99%) and Omniasig SA (72.8%) companies, and indirectly is included in Agras shareholding structure where Unita holds 74.45%, Omniasig-AGI, Omniasig-Asirag, Omniasig Addenda and Omniasig Asigur?ri de Via?? (Life Insurnaces).

In a short period, Omniasig SA will merge through absorption, after finalizing a legal litigation concerning an insurance policy with Omniasig-AGI ?i Omniasig-Asirag, where the company holds 50% and 62.39% of the share capital.

Wiener Stadtische entered the Romanian market in 2001, when it took over Unita, the next move being acquiring Agras company, specialized in agricultural insurances, in 2002.

At the beginning of May 2005, the Austrian group acquired a stake of 68.87% of Omniasig SA?s shares for EUR 64 mn, from TBIH Financial Services NV (Holland).

Its participation in Omniasig SA increased up to 72.8% after the almost complete takeover of the stake owned by Constantin Toma, chairman of the company?s Administrative Board, as well as of stakes controlled by other shareholders.

Constantin Toma owned about 6% of the company?s shares.

"Presently, my share of Omniasig SA?s share capital is under 1%. As for the price, I do not wish to give any details", Toma, who will remain care general manager and company president, stated.

He added that the 49.97% stake of Omniasig Asigur?ri de Via?? shares, owned by Omniasig SA, was sold to TBIH Financial Services for EUR 3.5 mn. Previously, Omniasig owned 95.95% of the capital.

The transaction is part of the accord signed in May between Wiener Stadtische and TBIH Financial.

Present at the press conference, Christian Brandstetter, member in the Managing Board of Wiener Stadtische, said that Romania?s market has a very high potential for development, which involves numerous opportunities for increasing the business of the Austrian group.

"In Romania, the premium cashes amount to USD48 per capita, against the average of USD 279 in the Central and Eastern Europe countries or USD 2,160 in Austria. Therefore, the potential is there, and the national economy growth, the good training of the personnel and the consolidation perspectives for the economic and political environment after Romania?s adhesion to the European Union make us confident in the positive evolution of our businesses", said Brandstetter.

He added that no merger would take place between the companies controlled by Wiener Stadtische, the group?s strategy aiming at a multi-branding approach of the domestic market, a situation also existent in Austria and in other European states. In addition, added Brandstetter, Wiener Stadtische would not buy any other Romanian insurance company.

According to the strategy of the groups, all the insurance activities in the agricultural domain will go in the custody of Agras company, while the portfolio of Unita life insurances will be controlled by Omniasig Asigur?ri de Via??.

"Moreover, Wiener Stadtische does not eye any public offer of action for any of the companies. On the other hand, Agras will remain listed on Bucharest Stock Exchange", Brandstetter said.

According to him, Wiener Stadtische investment in Omniasig will be recovered in 7-10 years.

Wiener Stadtische is one of the most important players on the insurance market in central and Eastern Europe. The group is present in 15 states, including Austria.

In the first six months, the group reported a consolidated volume of the first EUR 2.44 bn, increasing by 18.9%, while the consolidated gross profit reached EUR 125.3 mn, by nearly 80% above the level registered in June 2004.

The financial data do not include the results obtained by the companies taken over in 2005 in Czech Republic, Poland, Romania, Croatia and Ukraine.

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The European Parliament has backed a German MEP's idea to create a tourist trail stretching almost 7,000 km from the Arctic to the Black Sea, to reach Bulgaria and Romania.

The assembly believes a restoration of the barbed wire fences to present the old Iron Curtain border can attract a new generation of tourists.

German Green MEP Michael Cramer wants the "green ribbon" to commemorate Europe's division and peaceful reunification.

Many ex-communist states in Eastern Europe now belong to the EU, with Bulgaria and Romania on the threshold of the bloc of 25.

The initiative has been partially reproduced in Berlin, and a trail for cyclists running the length of the route of the Berlin Wall is almost complete. Now Mr Cramer would like to see the idea applied further afield - from the Finnish-Russian border, through the Baltic states of Estonia, Latvia and Lithuania, then via Poland and central Europe to Slovenia.

Ultimately it would also extend through Bulgaria and Romania on the Black Sea.

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U.S. distillers unveiled a wide selection of American whiskies on Friday, mixing cocktails and preparing spirit-spiked dishes targeting a growing consumer market in this former communist country.

"(Bourbons) taste awful good and it's different to what is already on the market such as cognac, vodka and gin. It has a unique style," said Chris Morris, master distiller of Louisville, Kentucky-based Brown-Forman, which produces Jack Daniel's Tennessee Whiskey and Southern Comfort Liqueur.

Morris took guests, hoteliers, restaurant owners and drinks distributors thought a one-hour tasting of various whiskies, explaining the history and process of the drink. Later, guests were shown how to mix bourbon-based cocktails, and cook dishes such as shrimp flambeed in bourbon.

Whiskey exports from the United States to Romania grew from about 500,000 containers under 4 liters (4.23 quarts) in 2000, to some 2.7 million last year. So far, there has been a 55 percent growth since last year. Romania's economy grew some 8.1 percent in 2004.

"You just have to look at all the cranes sprouting in Bucharest, to see that it is ripe for sophisticated tastes in beverage products," said Frank Coleman, senior vice president of the distilled sprits council of the United States.

Coleman said the U.S. distilled spirits industry, which is partly located in areas hit by Katrina, had been affected by the hurricane.

"Katrina has affected all U.S. companies who have operations in those areas ... It wasn't anything particular to the distilled spirits industry."

He said that distilled spirits companies including Jim Beam and Pernod Ricard had donated about US$1 million (euro805,000) to help relief efforts.

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TEHRAN, Sept. 9 (MNA) ? The grounds for expansion of economic ties are there between Iran and Romania, and the two parts should pay more attention to this issue, Mircea Boncu, advisor to Romanian Embassy in Tehran for trade affairs said on Friday.

Addressing the industrialists in a visit paid to Great Industrial Exhibition held in Arak, capital of Markazi (Central) Province, he said that the numerous capabilities of production in this province and Romania have created golden opportunity for enhancing the bilateral ties between the two countries.

He also referred to the great industrial exhibition to be held in Romania, and said, ?The industrialists and businessmen of Markazi Province can introduce the potentialities of their province by participating in this exhibition.?

The industrialists of Markazi Province, on their part, called for enhancing relations with their Romanian counterparts.

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Romanian Deputy PM, Gheorghe Pogea met with IMF representatives in Romania to discuss the main problems of the country's economy, namely the C/A deficit, inflation and the state's budget revenues, the Romanian official said.

Pogea said that this year, the C/A deficit will not exceed 8% of GDP, and might even stand at 7.75-7.8% of GDP.

Pogea also said that inflation cannot be controlled, unless the BNR's measures are supported by economic policies.

Moreover, the Romanian official claimed that the issue of the state's budget revenues is a real problem, given Romania's EU hopes.

"Romania must have additional revenues of at least 1.3% of GDP in order to be able to absorb EU funds", the Deputy PM said.

Feasible solutions must be found in order to rise the amount of revenues, he added.

Furthermore, he said that the VAT increase is not absolutely necessary.

As for the IMF official, he said that a solution could be to reconsider some of the budget expenditures.

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The partial calculation made by the Romanian Ministry of Administration and Interior show that the damages caused by the floods in the country amount to more than Lei 52 billion (about EUR 1.5 billion), Romanian News Agency XPRIMM News reported.

For 2005 the losses of the floods in Romania amount to 2% of the prognosticated Gross Domestic Product (GDP) of the country.

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About 20% of public transport employees in the Romanian capital will be laid off and about 2,300 people will be relieved off duty by the end of next year, according to a reorganization project, voted by the General Council of the Bucharest Municipality on Thursday, Mediafax reported.

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JCR has upgraded the ratings on foreign currency long-term senior debts and local currency long-term senior debts of the issuer from BB+ and BBB- to BBB-/Stable and BBB/Stable, respectively.

The upgrading reflects the stronger probability that Romania will join the EU in January 2007 following the signature of the Accession Treaty on April 25, 2005, the expectation that the government will continue to push ahead with reforms, inspired by a strong political will with the backing of popular support, and the country's improving fiscal balance and public debts supported by positive developments in the economy.

On the other hand, the ratings are constrained by the country's external weakness as exemplified, in particular, by the high level of current account deficit, the low per-capita GDP (in terms of purchasing power parity) that stands at 31.7% of the average for the EU25, and the need for the country to make further improvement on qualitative factors, such as "justice reform" and "acceleration of competition," which are the requirements it must achieve before its EU accession.

The rating outlook is stable, as JCR sees that the direction of the country's integration with the EU is immutable, though there may be some delay in the process of justice reform as the Constitutional Court ruled the government's "justice reform package" as "unconstitutional."

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Austrian outdoor media company Epa Holding has bought the two Romanian outdoor media companies Euromedia and Beta Cons in a deal worth 20 mln euro, Epa Holdings' CEO, Heinrich Schuster, announced.

Euromedia and Beta Cons expect a combined turnover of 12.5 mln euro for 2005 and hold 60 percent of the market together.

As part of the Epa Holding, the two Romanian companies will work separately in line with Epa's quality strategy, Schuster said.

Euromedia reported a turnover of 10 mln euro in 2004.

Beta Cons reported a 1.6 mln euro turnover for 2004.

Euromedia is the largest outdoor media company in Romania with activities in over 60 cities across the country, national roads and tourist resorts.

Since 1999, Beta Cons manages backlit and citylight billboards in Bucharest.

Epa Holdings holds 40 per cent of the outdoor media market in Austria and it is present in Bulgaria, Croatia, Macedonia, Poland, Slovakia, Serbia and Montenegro, Slovenia, the Czech Republic and Hungary.


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Mittal Steel Company N.V. (NYSE and Euronext Amsterdam: MT), today announces that it has acquired a majority stake in Romportmet, a port facility located in Galati, Romania.

Mittal Steel has increased its shareholding in Romportmet to 89% through the acquisition of approximately 20 million shares from the Broadhurst Fund, the current majority shareholders at a total cost of $ 47 million.

Mittal Steel Galati is already one of Romportmet's major customers and the company previously owned an 11% stake in the port.

Commenting, Mittal Steel Galati CEO, Mr. KAP Singh said:

'As part of our continuous efforts to manage cost effectiveness of all our Romanian production facilities, we have decided to integrate Romportmet into our asset portfolio. This will allow us to have better control on shipping and handling services for our products. In addition to the cost saving implications, the acquisition will increase reliability and ensure an improved delivery service for our customers.'

The transaction is subject to the approval of the Competition Council and other relevant Romanian bodies.

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Romania, Volume 100
08.09.2005

The debate on how to ease an overstretched budget and adapt tax policies has been dominating the Romanian parliament in recent days. In particular, arguments over what to do about social security contributions and value-added tax (VAT), along with the grander pros and cons of the government's radical flat tax policy, have been grabbing business headlines.

Eventually, the government decided to keep VAT at 19%, retain its 16% flat tax and reduce social security contributions by an amount yet to be determined.

"We decided not to increase VAT to let the economy breathe and grow stronger," Prime Minister Calin Popescu-Tariceanu told parliament on September 5, "but I want to make it clear that should the measures fail, we would increase the tax."

Meanwhile, newly installed Minister of Public Finance Sebastian Vladescu was discussing social security contributions. Businesses have been complaining that these are currently too high, encouraging the growth of micro-businesses which exploit legal loopholes to dodge payment.

Currently, social insurance contributions are 32.5% of gross wages for companies and 17% for employees.

Vladescu therefore announced that there would be a reduction in contributions for employers in 2006. President Traian Basescu then also expressed his support for such a move, which would support the primary goal of increasing government revenues. "I am convinced the secondary goal will be achieved - the decrease of social insurance contributions," he said.

Romania has never been so obsessed with taxes as it is today. This trend was set by the 16% flat tax which was adopted by the new government back in January 2005 - a policy that angered the International Monetary Fund (IMF), which feared budgetary revenues would decrease.

This fear was then borne out as lower taxes in the first half of 2005 brought in reduced revenues for the government. Now the need to increase these revenues in 2006 is a real concern, with two options being bandied about in Bucharest presently. First, there is a possible move towards increasing taxation, or second, an overall enlarging of the tax base by including more taxpayers in budgetary collection.

One view is that the way to go is to reduce social security contributions - thus encouraging businesses to register workers and enlarging the tax base.

The size of the unregistered economy and its draining effect on government resources was highlighted by Popesu-Tariceanu in early September, when he said that "A normal health system cannot be functional with 20m beneficiaries and only one-quarter of [them] contributors."

Yet it has not been a smooth road trying to get all parties to agree on what to do. One party in particular which was quick to judge these measures was coalition government member, the Democratic Party (PD). The PD announced that it would not back a move to enlarge the tax base, and then suddenly backed down by agreeing it was necessary to bring in a "fair collection system".

Health Minister Eugen Nicolaescu stated that as pensioners, farmers and socially assisted persons are the main categories to be affected by such measures, this would finally put an end to discrimination within health insurance. Nicolaescu also said that by taking such steps the health budget would increase by RON1.1bn-1.3bn (305m-361m euros).

Despite further opposition towards the proposed steps, National Liberal Party (PNL) Vice-President Dan Radu Rusanu said that it was "certain" that there would be a reduction in social contributions in 2006 - and highly likely too that there would be an increase in VAT to 22%.

However, PD Executive Chairman Adriean Videanu warned that with a larger number of taxes being collected, there could be an increase in the unregistered economy.

"Such a measure may lead to the taxed money becoming part of the unregistered economy and this may trigger adverse macro-economic and inflationary outcomes," he told reporters.

Higher VAT is also of great concern to those sectors operating in highly competitive markets, such as tourism. The fear in this sector was that a VAT hike up to 22% would inevitably push up consumer prices and therefore drive tourist revenues away, as holiday makers looked for a better deal elsewhere.

To try and allay these fears, Vice Prime-Minister George Copos responded early September that VAT in tourism would remain at 9% for accommodation and breakfast.

Meanwhile, behind the current tussle there is an ongoing debate too about the efficacy of the government's flat tax policy. Many have suggested that the flat tax has done little to inspire growth and stimulate the economy.

A recent report from the National Institute of Statistics stated that while the period January-June 2004 saw 6.6% GDP growth on the same period of 2003, the first quarter of 2005 saw only 4.9% growth. This has led to annual forecasts of 5.5-6% for the whole of 2005.

The report showed that services were the main growth area during the first quarter of this year, showing a 6.9% boost, whereas industry and construction came in below average at 3.6% and 3.9% growth respectively. Meanwhile, agricultural production was down, 7.1% lower than at the end of June 2004.

One reason for this was undoubtedly the bad weather conditions and flooding which affected the country's crops this summer.

While the debate ended with little changed, except a commitment to reduce social security, steps do need to be taken quickly to lighten the load of overstretched finances, as the IMF will not take kindly to further widening of the budget and current account deficits. Meanwhile, as a meeting of the Romanian Association of Business People (AOAR) concluded on September 7, perhaps more effective collection of taxes is really the key to stimulating better fiscal performance.

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Rompetrol Group, the second biggest player on the Romanian oil market, opened in Timisoara the first petrol station in a series of 36 such shops to be developed in 2005 nationwide. The project is part of an 18-month business expansion programme worth $40 million.

The new stations will bear the name of Rompetrol and will include shops, restaurants and Internet cafes.

Rompetrol Group, run by businessman Dinu Patriciu, has reported an H 1 2005 business turnover in excess of $1 billion, up 67 percent from H 1 2004.

The group also recorded a net profit of $81 million, compared with losses of $12 million in H 1 2004.

Rompetrol is one of the main players on the segment of petrol stations, where Petrom is currently the leader.

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The privatization of the national natural gas producer Romgaz will not be finalized this year, the deadline being the end of 2006, Minister of Economy and Trade, Ioan Codrut Seres said during a seminar dedicated to the natural gas market in Romania.

"The privatization will begin in the second half of 2006 or even later," Seres said.

The Minister said that the company will be privatized with a strategic investor or using the capital market.

Seres said the privatization of Romgaz should not include the storage services, as they will be further administrated by the state at the same time as the establishment of a new company.

As for Distrigaz Nord and Distrigaz Sud gas operators, Seres explained that their new owners, Ruhr Gas and Gaz de France, pledged to cut some 15 percent of the distribution prices in the first regulation period (2005-2007).

"For this reason they will have to invest all their social capital, 182 million euros and 128 million euros respectively, in upgrading the distribution network," the Minister added.

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Lukoil's fuel distribution network will expand by about 60-70 gas stations by the end of 2006.

Lukoil's regional structure currently needs to increase and improve the supply of fuel from Romania towards other countries in the area, the company's manager stressed.

Lukoil started supplying fuel in Romania in 2001 via 19 gas stations and, at present, it posts sales worth about $90 million a month, he said.

Next year, depending on the market prices but also on Romania's capability to stand the price rise, the monthly average sales are expected to reach 130 million dollars, Lukoil's manager added.

The new gas stations will add to the 9 storage facilities and the 300 filling stations that Lukoil Romania currently owns.

Lukoil also announced investments in the revamp of the Petrotel Refinery bought in 1998, according to the Euro 3 and Euro 4 specifications, and for the Euro 5 production.

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Romania's Premier Says Foreign Investment Up 15 Percent in First Half of 2005

BUCHAREST, Romania (AP) -- Romania's direct foreign investment has increased by 15 percent in the first half of this year to euro1.48 billion (US$1.85 billion), Prime Minister Calin Popescu Tariceanu said Tuesday.

Tariceanu, who was launching Romania's new export strategy, urged authorities to do more to assist investors and local businesses to help the country be more competitive on foreign markets.

The premier praised the progress made by French car maker in Romania with the launching of its popular new model, the Logan.

"I'd like to see more investors like Renault in Romania, serious and ambitious investors who respect their commitments," he said, adding that Renault was now building a new euro215 (US$269) factory in Pitesti.

Outlining the new strategy for exports, Tariceanu said that Romanian companies should try to reorient their exports in the European Union toward more sophisticated products. He also urged Romanian businessmen to expand their operations in the southeast European region and former Soviet states.

He warned that tax evasion remained at high levels in Romania, distorting the business environment and urged authorities to improve tax collection, especially of the value-added tax.

"Unless Romania solves this fundamental problem, the economy will not grow strongly, we won't have real competition and we won't have an attractive business climate."

Also Tuesday, President Traian Basescu urged the government to raise taxes on alcohol and cigarettes, with the extra money going to help the country's struggling health system.

"The suppliers of disease should pay more for the health system," he said. Basescu, an avid smoker, said he would consider giving up the habit if the tobacco taxes are raised.

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It's all about perspective, according to adman Peter Georgescu. The consumer's perspective, that is.

Georgescu's first job after he got out of grad school was in the research department of advertising agency Young & Rubicam.

It was, he said, the best thing that could've happened to him. The surveys and research he conducted taught him "to respect the consumer point of view," he said in a recent interview with IBD. "I learned that all business problems could be solved from the customer's perspective, and that's how my mental wiring was created. That's the difference between people like (me) and people who approach problems from a marketing point of view."

That difference in outlook was in large measure responsible for his rise up the corporate hierarchy from research department trainee to Young & Rubicam's president and chairman. He took the company public in 1997. In the three years before he retired in 2000, revenue increased threefold, profit ninefold and price per share from $25 to $84. Georgescu, 66, is also the author of "The Source of Success: Five Enduring Principles at the Heart of Real Leadership."

He put all those principles to work when the agency was competing for the Sears account in 1994. At the time, Sears was reeling and its management was looking for ways to increase its apparel business. Sears was and remains one of the nation's largest advertisers. Georgescu understood that to make the money that the Sears account would generate, you had to spend money. All told, Young & Rubicam spent about $2 million preparing its presentation.

"You have to be willing to spend the money, have the confidence that you'll get all the right information and that you'll be able to solve the problem better than anyone else," Georgescu said.

Know Your Subject

One of the first things he did was underwrite research. "Creativity in business is not a random event. You have to study your subject," he said. "We became students of that business. Before going to the creative new solution, before you get to the new, you have to understand the now."

Some of the agency's researchers spent a week shadowing Sears' customers. The results were surprising: 84% of the retailer's customers were women. Women even bought power tools.

What to do with the information? Georgescu encouraged creative answers. "No idea was too ridiculous or stupid to voice," he said. "No one was allowed to pull rank."

Eventually a staffer came up with a tag line, "the softer side of Sears." Typically, an agency will go into a presentation armed with fall-back positions in case the client doesn't like the primary idea.

But Georgescu went with just this one big idea. "If you believe in something, if you believe that this is going to drive the business, increase purchases of Sears apparel, than go with it," he recalled saying. "We all said, 'Guys, this is it.'"

Georgescu had confidence in his idea -- and confidence that Sears executives would recognize its merits. "You have to have faith in the wisdom of your customers as well," he said.

That faith was rewarded. Sears hired Young & Rubicam, which is still the company's advertising agency of record.

To provide any service well, Georgescu said, you should "know your client's business as well as you know your own." To learn more about KFC, for example, he spent three days serving chicken before he pitched the account.

That may be unusual, but so is his life. Georgescu was born in Bucharest, Romania. His father, an oil company executive, was on a business trip when a shift in Romania's political winds left him and Peter's mother stranded in the U.S.

Just 9 years old at the time, Peter, a brother and their grandparents were sent to a Romanian labor camp. They were all finally permitted to emigrate in 1954, reuniting in the U.S. thanks to pressure from the U.S. government.

Act With Integrity

Since then, he said, he's become "an American culturally. (Americans) say 'I don't care what the problem is, I just want a solution.'

"One's ability to provide solutions also gives one permission to unmask problems, to eradicate the denial of reality. Many businesses are good at playing denial roles. They tell themselves things will get better; good times are just around the corner."

Giving clients news they don't want to hear is a matter of integrity with him. Warner-Lambert asked Young & Rubicam to handle the introduction of a new line of Arthur Ashe sunglasses -- a brand extension to some of the other toiletries and confections sold in drugstores. It was a great opportunity for the agency: do a good job and most likely pick up other Warner-Lambert business.

But after researching the market, Georgescu realized the program would be a costly failure -- and told that to Warner-Lambert.

Similarly, the agency resigned all business dealings with Walt Disney Co. The company's attitude was "Disney must win and you must lose," Georgescu said, and he wouldn't accept that.

"If your organization has limited resources, you can't do everything well. You have to choose who you want to work with," he said. "Some people say, 'I'll take any business that comes my way.' Others only do business with companies whose values they share. You do great work for them. They respect you; you respect them. Otherwise you have friction, and it's not worth it. You don't want to have a client denigrating employees; you don't want to put your people in harm's way."

Challenged To Grow

It isn't that Georgescu dislikes demanding clients -- on the contrary, they can pose challenges that force a business to grow. "Some of our most essential and rewarding innovations were driven by demanding clients," he said.

He cites his dealings with Colgate.

"They were a very tough client, but always fair," Georgescu said. "They said, 'You operate in close to 80 countries. We don't want 80 different solutions. We want global solutions where that's desirable. When we succeed in one market, let's take that idea and apply it elsewhere.'"

Until Colgate pushed the company, Georgescu said, "the level of cooperation geographically (between divisions) wasn't what it should be. Colgate, more than any other client, forced us to be a global agency."

Leadership isn't a popularity contest, he notes.

"You can't live your life trying to get everybody to love you," he said. "You have to do what you think is right. If you know that you're doing your best, that should be enough. Don't wait for people to pat you on your back and say what a good boy you are."

Georgescu acknowledges that over the course of his career, he made numerous mistakes. Each one was valuable, he says.

"Every leader has to make dozens and dozens of decisions every day, and in business you're lucky if you bat .500," he said. "You can't be afraid to make mistakes.

"You can't dwell on your mistakes, but you have to learn from them and not make them again. A colleague once said to me, 'There's not a lot to be learned from the second kick of the mule.'"

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ustrian leader Wolf Thiess has added a partner to its recentlylaunched Bucharest arm by taking a corporate and M&A lawyer from Squire Sanders & Dempsey. US-qualified Bryan Jardine was Squire Sanders? representative in Romania, where it operates through an alliance with local firm Voicu & Filipescu.

Jardine joined the Ohio-based firm in 2001 from Washington DC practice Arent Fox Kinter Plotkin & Kahn.

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Suitcases of all sizes inundated the front hall of a Leawood home on Aug. 24. Dozens of volunteers crowded the spacious kitchen and spilled into adjacent rooms. A stack of delivery pizzas arrived as Doug Hagen, RN, MD, anesthesiologist, and director of missions for Medical Missions Foundation (MMF), took the floor.
He reminded everyone that stickers and small pieces of candy were acceptable "gifts" for the children they would meet; they should not drink the tap water; and only unmarked, unripped American bills would be acceptable for money exchange. Hagen also told them to bring locks for their bags and accept any opportunity to visit homes of the local people.
"And we are ambassadors for MMF and Kansas City so keep your professional decorum about you," he said.
The volunteers had gathered to pack and plan for an upcoming trip to Botosani, Romania. Since 1993, the Leawood-based Medical Missions Foundation, a nondenominational, nonprofit organization, has aided indigent people who live in developing and economically depressed countries throughout the world.
Volunteers provide reconstructive surgery and rehabilitation for children with birth defects. They foster ongoing medical care by teaching local health care providers, and providing donations of supplies and equipment to the areas they serve. During 2004 alone, MMF volunteers assisted 1,027 patients and performed 149 surgeries. Cerner Corporation's First Hand Foundation is a co-sponsor of this trip.
Dallas Rowan, RN, and an OR nurse at St. Joseph Medical Center, has traveled to China, the Philippines, Guatemala, Mexico, Cuba and Bolivia with the organization, and this will be her fourth visit to Romania. She is also vice president of clinical engineering and materials management for the Medical Missions Foundation.
"A friend told me about MMF, and I went to China the first time," Rowan said. "The biggest difference in nursing care is that, here, we have so much more equipment and 'activities.' American nurses are very assertive, and that's more of an asset than a liability. In Cuba they didn't know what to make of us."
Vonnie Kane, RN, works in labor and delivery at Shawnee Mission Medical Center. She has made six previous trips with the Medical Missions Foundation, including two to Romania.
"I'm widowed and I'd always wanted to do a medical mission," Kane said. "My first mission was to Mexico. I usually do pre-op or recovery or I circulate.
"(These mission trips have taken) my blinders off, and I've brought back an increased objectivity in dealing with people. I get more out of this than I give."
MMF volunteers hail from almost every city in the metropolitan area. They pay their own way, and many take uncompensated leaves of absence or use vacation time for the privilege of participating. Because of their generosity, all money raised by the foundation can be used to purchase items that have not been donated or cannot be transported.
Each volunteer for this trip will travel with two suitcases - one for personal items and the other packed with up to 70 pounds of medical equipment and supplies. Their packing lists include two pairs of jeans, comfortable walking shoes, rain jackets, flashlights, 50 tubes of antibacterial ointment, 50 bottles of children's vitamins and 30 bottles of ibuprofen.
Most mission participants will begin their arduous journey on Sept. 9, with flights to Chicago, Amsterdam and Bucharest, followed by an 11-hour train trip and a brief bus ride to rural Botosani. They will spend the next four to five days providing medical assistance and training, before they begin their return trip.
"This is my seventh trip to Romania," Hagen said. "I went, for the first time, five years ago. It has been the most rewarding experience of my professional career."

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Aero-Astro Professor Bob Twiggs goes through the nuts and bolts of building a tiny satellite for visiting Romanian engineering and physics students. From Bucharest, they will take what they have learned and will build the first satellite ever to be made in Romania, scheduled for launch in 2007. It was a cram course: Elements of Twigg's normal 10-week program corkscrewed into just five days. Almost too much information, said the students, who asked their country's space agency for permission to come to the United States to meet with Twiggs.

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?The agreement for Romania?s EU accession envisages Romania to become an EU member stated on January 1, 2007. I absolutely back this aim?, German Chancellor Gerhard Schroeder stated in an interview for today?s edition of Jurnalul National .

Asked to comment on the words of the coordinator for the Stability Pact for Southeastern Europe Erhard Busek that there are other countries that are better prepared for EU membership than Bulgaria and Romania, Schroeder answered that he believes that by 2007 both the countries will have ?done their homework and will be ready for accession?.

Schroeder has added that during his election campaign he is trying to show that the reforms in the spheres of labor, social policy, healthcare and pension insurance, which he has inaugurated, have already brought results and that Germany needs a reliable policy in a foreign and European aspect, which includes the application of pre-accession agreements.

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Defense Commission members of Parliament approved of a Military Service bill, Romanian newspaper Libertatea reads today.

The new bill makes provisions for the nature of military service. It reads that military service will become voluntary from January 1st 2007. The last regular recruitment will enter the Army in 2006.

Men with shorter military service term, who have graduates from university, enter in October and the rest enter in June. This draft bill will be announced for discussion next week in the Chamber of Deputies.

National Defense Minister Teodor Atanasiu declared that depending on the need, between 5,000 and 10,000 volunteers will be hired in the beginning. Volunteers can be both male and female. Draft bill also reads that in case of war, military service will become mandatory for men only, newspaper adds.

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IAR Ghimbav, a company that specializes in the construction and maintenance of helicopters, announced H1'05 results, according to which earnings reached 1.9m euro, twice higher than in the same period last year.

Sales reached 13.1m euro, up 45 percent compared to the same period of 2004.

IAR's CEO, Ion Dumitrescu said the total value of the company's ongoing contracts stands at 240m USD, with deliveries set for the 2005-2009 period.

The most important contract is the one concluded with the United Arab Emirates' army for the upgrade of dozens of Puma helicopters from Romania. The contract is worth 90m USD.

IAR Ghimbav holds a 49 percent stake in Eurocopter Romania, a joint company running on Romanian-French capital, set up in 2002, together with Eurocopter SAS, which controls a 51 percent stake.

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Romanian tyre maker Danubiana (located near Bucharest) has succeeded in surpassing the loss recorded in mid-2004 by posting a modest profit of 64,000 RON (one euro is traded for some 3.5 RON) in H1 2005, ACT media news agency reports.

The company's expenditures and revenues are by 38% smaller than on June 30, 2004.

In H1 2005 investments worth 924,000 RON were commissioned.

The investments consisted in new types of tyre moulds.

The company's main shareholder is Tofan Group International, which owns 83.47% of Danubiana's capital of 45.9 million RON. The rest of the shares is owned by the State Assets Realization.

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BUCHAREST, Romania -- Alexandru Paleologu, a leading Romanian intellectual, senator and diplomat, died Thursday after a long illness. He was 86.

Paleologu died at home, friends and state news agency Rompres said Friday. He was awarded a top prize for diplomatic excellency by President Traian Basescu the previous day.

Paleologu served briefly as Romania's ambassador to France after the fall of communism in 1989, but resigned after falling out with then-President Ion Iliescu over his belief that Iliescu had not distanced himself sufficiently from the communist system. He served as a senator in the Liberal Party from 1992 to 2004.

Paleologu was a founding member of the Civic Alliance, one of thefirst groups to press for democracy after 1989.

Early in his political career Paleologu spent five years in a communist prison for plotting against the state, and was released in the 1964 general amnesty for political prisoners.

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BUCHAREST, Romania -- The main opposition Social Democratic Party (PSD) said on Sunday (4 September) it plans to initiate formation of a joint political platform among all leftist and centre-left parties in the country to provide an alternative to the current ruling coalition. PSD president Mircea Geoana says consultations would begin shortly. (Nine o'clock - 05/09/05)

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(AGI) - Reggio Emilia, Italy, Sept 5 - They entered supermarkets at night and via an alteration of the EPOS systems on the cash tills managed to copy thousands of credit cards and cash cards details, which were then cloned and used abroad.

The multi-million euro fraud was carried out by a Romanian group, which has been identified and uncovered by carabinieri in Reggio Emilia, who acted on the orders of Captain Passafiume in coordination with Reggio's deputy prosecutor, Maria Rita Pantani. Details of the operation and arrests will be given in the morning. (AGI).


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LONDON (Standard & Poor's) Sept. 6, 2005

Standard & Poor's Ratings Services said today it raised its long- and short-term foreign currency sovereign credit ratings on the Republic of Romania to 'BBB-' and 'A-3', from 'BB+' and 'B', respectively, on improving government indebtedness indicators. At the same time, the long-term local currency rating on Romania was raised to 'BBB' from 'BBB-', and the 'A-3' short-term local currency rating was affirmed. The outlook is stable.

Romania is the twelfth sovereign currently rated by Standard & Poor's that has made the transition to investment grade from speculative grade. The full analysis on the Republic of Romania will be published later today on RatingsDirect, Standard & Poor's Web-based credit analysis system. The report will also be posted on Standard & Poor's public website, www.standardandpoors.com (select Credit Ratings, then select Sovereigns from the left-hand menu, then find under Credit Reports).

"The upgrade stems from the improvement in general government fiscal indicators that has occurred on the back of buoyant domestic demand," said Standard & Poor's credit analyst Moritz Kraemer. "GDP looks set to grow at almost 6% in 2005, with domestic demand expanding almost twice as rapidly."

As a result, the general government deficit will reach 1.3% of GDP, despite a comprehensive tax cut associated with the introduction of the 16% flat tax in 2005, and additional spending pressures related to the floods affecting part of the country this summer. General government debt will drop to less than 20% of GDP in 2005, well below the 'BBB' median. Sustained fiscal
consolidation and parastatal budget control will lead to a stabilizing general government debt ratio. By the end of the current decade, this ratio will inch up to a moderate 22% of GDP, as GDP growth will ease toward a more sustainable 5.0% and EU-accession related spending pressures will make themselves felt.

The ratings on Romania remain constrained by institutional weaknesses, significant external imbalances, low levels of economic prosperity, and a large, albeit declining, loss-making parastatal sector.

"Romania's external imbalances are offset by its EU membership prospects, which would make the growth- and investment-enhancing economic modernization process irreversible," said Mr. Kraemer. "Furthermore, we expect that the government will take the necessary action to reduce the large current account deficit, which could reach 9% of GDP in 2005."

In this context, a prudent approach to public finances and the careful management of capital inflows and the ongoing domestic credit boom will be vital. Failure over the medium-term to effectively mitigate the vulnerabilities caused by the persistent external imbalances could bring the ratings under renewed downward pressure. A delay to EU membership to 2008 is
now more likely than entry in 2007, but would not in itself put any downward pressure on the ratings on Romania.

Further improvements of the rating would hinge on policy predictability, sustainable continued real convergence with higher-rated peers, and tangible success in reducing Romania's governance problems.

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UK financial magazine The Banker, member of Financial Times press group, has granted the Bank of The Year Award 2005 to Romanian commercial bank Banca Comerciala Romana (BCR).

Some 510 banks from more than 138 countries registered for The Banker 2005 Awards competiton.

BCR received the award for its continuous growth trend over the past years.

Indeed, BCR's net profit rose from 43.26 mln euro in 1999 to 128.98 mln euro in 2004. BCR holds 25 percent of the market for corporate loans and 30 percent of the market for loans for individual clients in the country.

In terms of bank deposits from individual clients, BCR holds 32 percent of the market.

In addition, the award reflects the high performance of BCR group members BCR Asigurari, BCR Leasing, BCR Asset Management and BCR Securities.

Note that this is the fourth time that BCR receives The Banker Bank of the Year award.

BCR ranked 332nd in The Banker's top 1,000 commercial banks in the world last year, up 40 positions from 2003.

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Nine important banks, out of which six are already present on the local market, have filed their letters of intent for the privatization of the Savings Bank ? CEC by the deadline fixed on Wednesday, August 31, "ACT Media News Agency" reports.

According to a press officer of the Ministry of Finance, the nine contenders are as follows:

Italy?s Banca Monte dei Paschi di Siena SpA (assets worth over 132 bn euros; controls 3.5% of Alpha Bank Romania; assisted by attorneys-at-law Tuca & partners); the French-Belgian Dexia Bank (assets worth about 431 bn euros, specialized in retail and financing of municipalities; assisted by attorneys-at-law Popovici & Partners); the Hellenic EFG Eurobank (assets worth 31.3 bn euros; controls almost 63% of Bancpost);

Austria?s Erste Bank (assets worth about 148 bn euros; assisted by attorneys-at-law Cameron McKenna); the National Bank of Greece (the largest Greek bank with assets worth over 55 bn euros; it also controls the Romanian Bank); Hungary?s OTP Bank (the largest Hungarian bank with assets worth 18.9 bn euros; acquired RoBank a year ago), the Dutch Rabobank (assets worth 475 bn euros); the consortium made up of Raiffeisen Zentralbank Oesterreich Aktiengesellschaft and Raiffeisen International Bank Holding AG (already present in Romania through Raiffeisen Bank Romania); the French Société Générale (assets worth over 600 bn euros; owner of BRD Romania).

The FinMin?s consultant in the privatization process, the American bank JP Morgan, will send the Confidentiality Agreement to the investors that meet the pre-selection criteria. According to the schedule announced by the Commission in charge of CEC?s privatization, the shortlisted investors will be announced by September 9.

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ROYAL PALM BEACH ? Point to Calarasi, Romania, on a map.

Anyone? Anyone?

Well, then, introductions are in order. Because once everything is official, residents of Royal Palm Beach, Calarasi will be your sister city!

The idea was initiated by a Calarasi resident here visiting his son Cristian David, who has lived in Bella Terra for three years. Cristian fled to the United States in 1991.

"Romania was hopeless, at least in my opinion,"

David said.

But his father, Aurel David, 69, still lives there.

"He thought of having an exchange of people and ideas between the two places," Cristian David said of his dad.

Calarasi is still trying to bounce back after decades of communist rule, David said. Apparently, that takes a while.

"If you live 50 years under someone who tells you what to do all the time, it's kind of hard," David said. "They've just started to move things more visibly toward another way of life."

Cristian David said he watched as his father marveled at the new, sprawling developments ? with houses of warm, contrasting colors and equally tidy lawns.

"There's good and bad in development in my opinion," Cristian David said. "But to him, it's all good. He saw the developed land and said 'Wow.' "

So, a few months back, Aurel and Cristian David went to the village council and asked that Royal Palm Beach become a sister city with Calarasi. The village council said sure, why not?

Councilwoman Carmela Starace, who sits on the international board for both the Florida League of Cities and the National League of Cities, agreed Calarasi was an unusual choice. Romania is, after all, also the home of the mythical vampire Dracula and his Transylvanian castle.

Starace recalled that Aurel David said, with his son interpreting, that Calarasi was looking for "a cultural exchange."

Plus, Starace said, "they could use some of our expertise in engineering and infrastructure."

"We have to look at the global economics of things to come, especially with all this outsourcing," Starace said. "Even in my little city, if the businesses thrive, its good for residents. We have to start thinking globally."

And the relationship isn't always one-sided, said Ami Nieberger-Miller, a spokeswoman with Sister Cities International.

Nieberger-Miller said when Amesbury, Mass., ? a town of about 14,000 ? became sister cities with Esabalu, Kenya, most folks thought 'that's interesting.' But the relationship between the two villages really thrived.

Health care workers from both countries have taken turns visiting one another. Amesbury officials held public lectures and slide shows about Kenya. And people in both countries became somewhat knowledgeable about a land they previously knew nothing about.

"There are lots of ways these relations benefit," Nieberger-Miller said. "It's not fair to say it's lopsided. How do you put a dollar figure on people better understanding the world?"

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By Radu Timofte

CONSTANTA, Romania, Sept 3 (Reuters) - Juventus striker Adrian Mutu fired Romania to a 2-0 win over the Czech Republic on Saturday to revive their hopes of reaching next year's World Cup finals.

Defeat was a major blow to the Czech Republic's chances of automatic qualification from Group One.

"We played a great match," Romania coach Victor Piturca told reporters. "It was one of our best performances for years but also a painful reminder of the points we have lost in earlier qualifiers."

The Netherlands have 25 points from nine matches, three ahead of second-placed Romania who have played two games more and face Finland away in their final game next month. The Czechs have 21 from nine matches.

Mutu, who scored twice against Andorra last month, netted his first in the 26th minute from Razvan Rat's cross. The former Chelsea striker added a second 20 minutes into the second half.

Romania's 37-year-old midfielder Dorinel Munteanu won his 126th cap to overtake Gheorghe Hagi's national record while Piturca opted for an experimental frontline of Razvan Cocis of Sheriff Tiraspol and Sportul Studentesc's Ionut Mazilu supporting Mutu.

Jan Koller hit the post for the away side in the second half and the lacklustre Czechs, who had scored 14 goals in their last two qualifiers, spurned other good chances.

"Our chances of automatic qualification are seriously compromised now," said Czech coach Karel Bruckner.

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.LONDON FGN32

STOCKHOLM, Sweden -- Grumbling European motorists watched gas-pump dials spin to extraordinary levels Friday as prices soared this week after Hurricane Katrina crippled fuel supplies in the United States.

The price of a liter of gas climbed above 1.40 euros ($1.73 per liter or $6.70 per gallon) in Germany and hit a record high in Switzerland. Spaniards were paying 1.07 euros per liter ($5.08 per gallon) on Friday, up nearly 7 percent since last week.

"Look at that! Eight liters -- 106 kronor ($14.20)," said freelance journalist Inger Ortenblad at a Stockholm gas station shaking her head in disbelief as the numbers swirled. "This is amazing."

Returning the nozzle, she affectionately patted the black sedan she had borrowed from a friend. "Good car," she said. "Fuel efficient."

The Geneva-based International Road Transport Union, which represents the industry, is pressing the EU to set limits on national fuel taxes, which it says exacerbate the price spikes.

In Sweden, where taxes account for 60 percent of the gas price, some motorists called for a price cap.

"This is a disaster," said Claes Brulenius as he filled up his black Volvo station wagon. "In this situation, you really have to introduce a maximum price for fuel."

He recalled driving through part of the United States -- including New Orleans -- earlier this year, and was surprised to hear Americans complain about having to pay more than $2 per gallon.

"People would say, 'I guess you Europeans aren't used to such high gas prices,'" he said. "I thought they were kidding."

Even before Hurricane Katrina plowed through the Gulf Coast, oil producers and refiners had been struggling to meet rising demand around the globe, particularly in the U.S. and China.

In the U.S., stations in some states ran out of gas Thursday as they were overrun by panicked motorists looking to top off their tanks as prices soared past $3 per gallon and reports of shortages spread.

In Germany, gas-station operators Total, Aral and Shell raised prices 12 euro cents (15 US cents) per liter in the span of 24 hours from Wednesday to Thursday.

"I don't remember it ever being so high," said Jan Meyer, a 33-year-old architect filling up his Volkswagen sedan in Berlin.

In Switzerland, the liter price rose 10 centimes (8 U.S. cents) Friday to a record 1.76 Swiss francs ($1.42). "The gasoline price is exploding," the Zurich-based tabloid Blick said.

Still, the Swiss pay considerably less for gas than their neighbors in France, said 24-year-old Keat Charles, a Frenchman who sells panini sandwiches in Geneva.

"In France, gasoline is becoming just too expensive and you also earn less, so I come here to Switzerland to buy cheaper gasoline and profit from the higher Swiss wages," he said.

Michael Brighten, of Dunmow, 40 miles northeast of London, said most people in Britain "now accept that petrol prices will rise above 1 pound ($1.83) per liter. But it's just something you have to live with. I'm not going to let it change my lifestyle in any way."

Previous surges in oil and fuel prices have led to widespread protests and blockades by truckers in countries, including Britain and France.

There was no panic in Europe, but plenty of moaning at the pumps, with some drivers considering alternative modes of transportation.

"With these prices I will start biking to work instead of driving," said Rikke Michelsen, 39, in Copenhagen, Denmark.

"It's really getting pricey, I may have to cut down on my driving," said 25-year-old Racheed Ali, reflecting on the price tag of 11.14 kroner ($1.85) per liter in Denmark.

Taxi drivers complained that soaring fuel prices threatened their business.

"We can't raise our prices because we would lose our customers," said Virgil Aldea, a 56-year-old taxi driver in the northwest Romanian city of Cluj. "Our prices have stayed the same, but the gas has doubled in price. If we starve to death, who will care?"

A liter of unleaded fuel costs about 1 euro ($1.20) in Romania -- significantly lower than in western Europe.

"We the taxi drivers are the ones who lose out," said 60-year-old Giuseppe Maiolo, outside St. Peter's Basilica in Rome. "Our prices have remained the same despite Katrina."

Italy's productivity minister, Claudio Scajola, said the government was looking into lowering taxes on gas so that consumers aren't hit so hard by rising prices, although he cautioned that the savings would be small and not felt immediately.

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An earthquake measuring 4.1 on the Richter scale was registered in eastern Romania at 5:24 pm local time, AP reported. The quake was centered in the region of Vrancha, 175 km north of Bucharest.

There are no reports of casualties or material damages.

Earlier, RIA Novosti reported that an earthquake measuring 3 on the Richter scale was registered in Moldovan capital Kishinev at 5:24 pm local time.

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By Marius Zaharia

BUCHAREST (Reuters) - Described as a skewered potato and brain on a stick, Romania's monument to the heroes of its 1989 anti-communist revolution was unveiled on Monday amid widespread doubt over its artistic merit.

The $2 million (1.1 million pound), 25-metre (82-foot) high marble and copper sculpture was attracting controversy long before President Traian Basescu opened it, praising the 1,058 people killed in the uprising that overthrew Stalinist dictator Nicolae Ceausescu.

"Allow me to express my deep respect for those who gave us freedom," Basescu said. "As someone who respects them, I can only bow to them and welcome a monument that honours them."

In front of the building where Ceausescu made his last speech before being whisked away by helicopter to his execution, the marble spike pokes through an egg-shaped metal mesh.

The Romanian media has labelled it the "spiked potato", "brain on a stick", "olive on a toothpick", even "the penetration monument".

Art critics have slammed the work as a mistake, both in its own right and as part of its surrounding area -- the historic Revolution Square where many buildings are still pockmarked by the 1989 street battles that ended four decades of communism.

"The monument is badly placed and was only chosen because the sculptor was a friend of the authorities," architecture professor Florin Machedon told the weekly Saptamana Financiara.

The creator was picked during the rule of the ex-communist PSD party, which was ousted in November elections. Even the former culture minister said he had opposed it at the time.

"It's revolting," art critic Neagu Djuvara told the newspaper. "It should have been something simple, with only the names of the dead written on it."

The sculptor of the monument, officially named "Resurrection Memorial - Eternal Glory to the Heroes of Romania's 1989 Revolution", defended it as an important addition to the Bucharest landscape.

"If you look on the streets of Bucharest, people are looking down. I wanted to raise their eyes a bit," he told Reuters. "The pyramid is a symbol of victory and the crown represents the souls of the heroes in heaven."

Most ordinary Romanians passing by the monument said they failed to see the symbolism.

"This contraption is worthless for Romanian people because nobody can see what it really represents. One thing is clear: it's too big and too ugly," said locksmith Victor Iacobescu, 54.

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Cristache Tatulea, the mayor of the Romanian village of Tichilesti, has a simple test to show visitors how times have changed in his fiefdom: he offers them his hand. "Ah good, you are one of the ones who will shake it," he says, a smile lighting his tanned face. "In the old days, nobody would do that at all."

Tichilesti is Europe's last leper colony. Throughout its 80-year history, no locals would go within miles of the cluster of whitewashed buildings, hidden in a densely forested valley, for fear of catching the flesh-wasting disease.

Now, however, decades of near-total isolation and extreme poverty are drawing to an end, largely thanks to a British diplomat who aims to bring the lepers back into society.

Jonathan Scheele, the European Union's ambassador to Bucharest, read about the lepers on the internet and immediately did what no Romanian official had ever done - went to see the colony for himself.

"When my Romanian driver found out we were going there, he refused to drive any further and I had to walk through the forest without him," Mr Scheele recalled.

"The colony was not what you would expect - it was very calm and peaceful. It was remarkable to talk to people who had spent their entire lives in this compound. They came as teenagers and now they are old. Some married here, have had healthy children - who have grown up and gone to live outside the colony - and have entered old age without ever leaving.

"Yet they have made the best of their lives, building houses and making gardens on the hillside.

"I spoke to one who had been there since 1949 and never left. That really brought it home to me, because they had been there since I was born." The colony, 140 miles north-east of Bucharest, was founded in 1928 when 200 lepers were relocated from another colony run by monks.

At that time the condition, caused by a bacillus which attacks the skin and nerves leaving limbs and eyes severely disfigured, was still seen by Europeans as a "divine punishment".

Romanian lepers suffered even more under the Communist dictator Nicolae Ceausescu, who regarded the illness as an affliction of the decadent West.

Victims were evicted from their homes, had their possessions burnt and were forbidden to use notes or coins in case they passed on the infection.

Tichilesti was removed from official maps and many locals still claim to be unaware of its existence.

Today only 23 mostly elderly residents are left, of whom the oldest is 92. Some live in long pavilions, resembling monastic cells, while others, including Mr Tatulea, have built their own houses.

There are two churches, one Orthodox, one Baptist, and a farm on which the colony grows corn. Mr Tatulea, 73, also has his own vineyard.

His sister-in-law, Ioana Miscov, lost her fingers and feet, and has to tend her neat house and garden by crawling on her hands and knees.

"I've been here since 1941, but I couldn't live just in a room and sit on a bench all day," she said. "I keep myself busy with the flowers and the vegetables."

After the fall of the Iron Curtain quarantine continued until 1993, when residents were finally allowed to leave. With no money or homes, however, and fearful of the reaction of outsiders, most stayed where they were.

Now more than £70,000 has been allocated to refurbish the crumbling leper colony and supply satellite television and radios to link residents to the outside world.

The EU has also funded an information campaign about leprosy. Contrary to popular opinion, it is not highly contagious: infection occurs only after prolonged exposure to droplets from the nose or mouth.

Since the 1980s leprosy has been curable, although it remains a problem in parts of the developing world.

The EU also wants local Romanians to become accustomed to living alongside the lepers. An old people's home has just opened next to the colony and the pensioners - who were not informed in advance about their new neighbours - say they have got used to it.

"We were scared of getting the illness, but we now know that you can't catch it and are not worried," said Aurelia Dan, 67.

Local residents insist that had Mr Scheele not defied the taboos by visiting the colony nothing would have changed.

"No Romanian politicians ever visited us in the decades we were here. They probably do not even know we exist, and certainly don't care," said Mr Tatulea. "But Mr Scheele, he cares. He drank wine with me in my home, and we talked about life and all sorts of things. I will never forget it."

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Most of the Austrians oppose Bulgaria and Romania's entry into the European Union (EU), APA news agency reports.

There is only a small percent of the Austrians backing the entry of the Balkan countries into the Union on January 1, 2007.

A study of Eurobarometer shows that some 21% of the Austrians back the entry of Bulgaria, whereas its neighbour Romania enjoys the support of some 17%.

Romania and Bulgaria are both hoping to join the Block in 2007, although the two Balkan countries lost precious time in political squabbles over the last month.

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Bucharest. The most remarkable aspect of the informal meeting was the way, in which all the participants emphasized that the date of accession of Bulgaria and Romania is January 1st, 2007, Romanian Foreign Minister Mihai-Razvan Ungureanu said after he returned from the informal meeting of EU Foreign Ministers in Newport, Wales, Mediafax reported.

Ungureanu added that the European politics and the British government back up the EU entry of the two countries on January 1st, 2007.

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By Katalin Tóth

The wild wild East

Our neighbor to the east, Ro­ma­nia, has been overlooked for decades by Hungarian companies as a serious destination for investment, owing mainly to the destructive legacy of the one-time Ceausescu regime, and ? despite much obvious potential ? hitherto weak economic growth.

But things are changing, and changing rapidly. The region?s third largest country is growing at a remarkable rate, and the previously unthinkable idea of Romania becoming an EU member is now an imminent reality.

Romania?s GDP rocketed by 8.3% in 2004, and is expected to grow by 5.5% this year. Inflation has finally come down to single digits, and is predicted to fall to 7% in 2005. With few exceptions, every sector of the economy is booming ? especially construction, retail and services.

Tapping into this vast and largely unexploited market is, however, no cakewalk. The sheer scale of possible returns means that small Hungarian firms will often go up against multinationals when seeking a foothold on the Romanian market. Nonetheless, SMEs are making headway in niche markets such as IT, while Hungarian powerhouses like OTP Bank are gaining a presence in what most analysts agree will be the most dynamically growing market in the CEE over the next five years.

Romania is a rapidly growing market promising higher returns than most developed markets, with quickly growing demand and a still relatively inexpensive workforce and services. However, as entrepreneurs and consultants speaking to the BBJ stressed last week, investors should also take into consideration factors such as cultural differences, lack of skilled management and lax fiscal discipline, which necessitate a special approach to this market of some 22 million people.

GDP in Romania grew by 8.3% in 2004, and is expected to increase by 5.5% this year. As the economy is growing much faster than in most European countries, while inflation is expected to decline to 7% in 2005, almost every sector of the economy is booming, especially the construction industry, and the retail and services sectors.

Speaking at a conference hosted this year in Budapest by economic news portal portfolio.hu, Marc Cannizzo, partner at Romanian corporate finance consultancy Osprey Partners, noted that average wages in Romania have grown in real terms to the equivalent of about ¤180 per month, household purchasing power is on the rise, and consumer finance products ? including mortgages ? are increasingly available.

?There is a vast, mostly untapped market in Romania,? observed Attila Fazakas, CEO and owner of PS Index s.r.l., which operates Romanian household appliances store chain Profi Center. ?Besides strong demand, investors in Romania can expect a quick return on their investment of two to five years, while ? in my experience ? it is between four and seven years in Hungary, for example.?

The high profit margin in Romania is due to lower costs, especially wages, Fazakas noted. From this, he added, it follows that almost all services are much cheaper than those in Hungary or elsewhere in Europe.

?For example, the cost of maintaining a fleet of cars is 60%?70% of the equivalent cost in Hungary, and half of that in Western Europe,? he said.

Low wages, however, often also translate into lower productivity, especially in counties of Romania outside the heavily ethnic Hungarian-populated region of Transylvania, Fazakas warned.

?At my company, I introduced a performance-related remuneration system, but sometimes it seems impossible to motivate employees above a certain level,? he said. ?When I asked one of my dealers in [the region of] Moldavia why his performance was lower than that of dealers in another county, and [pointed out] that if he worked more he could make more money, he answered that he was satisfied and didn?t need more money.?

Another factor hindering Romanian investments is the shortage of skilled and experienced management, Cannizzo said. Fazakas agreed, saying that traditional state-owned universities don?t produce enough professionals, while students of numerous private universities are poorly prepared for their future jobs.

Making it pay

All do not share this dim view of doing business with Hungary?s neighbor, however. The managers of one Hungarian training firm that recently opened a Romanian affiliate related entirely different experiences.

?We had several worries and preconceptions about working with people from a different cultural environment, but the people we interviewed, and later employed, were very educated, experienced, and familiar with the European management style,? said Attila Kriaszter, communications director of Develor Rt. ?Romanian workers are eager to learn anything that comes from the EU. It came as a very pleasant surprise for us.?

Some major Hungarian firms with investments in Romania have already contacted Develor, and the training firm plans to organize training programs for SMEs too, Kriaszter added.

Besides cultural differences, the most serious problem for Romanian firms, and for potential investors from abroad, is under-capitalization and a lack of fiscal discipline at these firms, explained Ferenc Gábor, a consultant at Osprey Partners.

Fazakas pointed to problems with payment discipline.

?It?s a common thing that customers don?t pay or are very late with payments, partly because many don?t have operating capital, or have financial problems, while others are just not in a hurry to pay because being late with payments is cheap financing for them,? Fazakas said. He added that some big companies abuse their strong positions by paying late to smaller suppliers, and foreign investors in Romania must thus be tough negotiators.

Gábor cited an example of a mid-sized Transylvanian manufacturer, whose biggest customer did not pay for a long period, as it did not believe its smaller business partner would dare suspend their contract and stop shipping goods until regular payment resumed. When the supplier did move to suspend the contract, payments from the customer became more regular, the Osprey consultant said.

Gábor added that there is a blacklist available to commercial banks and companies, so that investors can avoid lending to insolvent clients. The Romanian Finance Ministry also publishes the latest balance sheets of companies on the internet.

While late payments can already be enough to destabilize a company, tax and other legislation also present potential risk factors.

The pace of development is very fast in Romania, and the legal system often fails to keep up, according to Fazakas. Tax laws are especially sensitive, he said, because many provisions of Romanian tax law are open to several interpretations, while the taxpayer cannot ask for a legal interpretation from the tax authority, as in Hungary or other EU countries.

?One time we sent a letter about a tax issue to the Romanian tax authority, explaining our interpretation of a provision and asking for theirs,? Fazakas recalled. ?In the answer, the clerk just repeated the text of the law, and avoided taking a stance on the issue.?

Tax incentives

In Romania, investment incentives are equal for both domestic and foreign investors, and are available for significant investments or for investors in special economic zones, according to Róbert Heinczinger, tax partner at Ernst & Young Advisory Kft.

Investments that exceed $1 million are exempt from customs duties on new equipment. Local authorities may also grant an exemption or reduction of land tax for land related to the investment for the period of execution, up to a maximum of three years from the beginning of the works. Investors may also benefit from national grants for research and development, regional aid, and subsidies for SMEs, training, restructuring, large investment projects and environmental protection.

Employment subsidies up to 70% of the minimum monthly gross salary are available for hiring unemployed persons, recent graduates, individuals over 45 years old, and members of other special or disadvantaged categories.

Grants from the Environment Fund, which are managed by the Romanian Environment Ministry, are available for projects promoting clean technologies, eco-labeling and other environment-friendly technologies.

Industrial, scientific and technological parks are exempt from building tax and land tax, while investments in construction or internal infrastructure development in industrial parks are given a one-off allowance of 20% of the investment value, granted as a reduction of the taxable base for profit tax, until Dec. 31, 2006.

Tax advisors also pointed out that investors in free-trade zones can benefit from a tax exemption until June 30, 2007, if, by July 1, 2002, they carried out investments amounting to a minimum of $1 million in depreciable tangible assets. This exemption does not apply, however, if more than 25% of the investment was sold within one year. Operations within the free-trade zone are VAT-exempt.

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India?s largest tractor manufacturer Mahindra & Mahindra (M&M) is submitting a financial bid on September 9 for Romanian-based Universal Tractors. The technical bid was submitted a month ago and the due diligence exercise has been completed, company officials said.

Confirming the development, Anjanikumar Choudhari, head, farm equipment sector of M&M, said that the acquisition, if it went through, would give M&M a foothold in the Eastern European and West Asian tractor markets.

Universal Tractors? flagship brand ?Universal? enjoys market share in countries of the former Eastern Bloc, Iran, Egypt and Pakistan. The Romanian tractor major has a 15,000-unit per year facility in Brasov with an additional capacity of 18,000 engines annually. Last year, it produced 5,000 tractors and posted a turnover of Rs 250 crore.

M&M bid for the tractor company which the Rumanian government put up for sale again after Italy?s Landini decided against buying the company.

Mahindra is competing with MYO-O, a closely-held Romanian maker of agricultural machinery. The agency carrying out the sale, AVAS, has not announced a date for awarding the sale. The government will select the buyer of its 80% stake following direct negotiations with the bidders, AVAS said.
Italy-based Landini, which is controlled by the Morra family and has plants in Europe, North America and South Africa, didn?t follow through on its September ?03 agreement to buy Tractorul, Universal Tractors? main supplier, AVAS said.

Sources indicate that since M&M does not have a facility in Europe Universal Tractors could also be used as a low cost supply base to the CIS and Western Europe too, with Romania set to become a member of the European Union in ?07. The Romanian asset would therefore tie in neatly with M&M?s global plans. The company has already added fresh capacity for 60 hp at an additional assembly plant in Georgia, USA, to act as a buffer to its Houston assembly line and ramp up sales in Canada

This will not be M&M?s first attempt to acquire a tractor company in Europe. The company had, in ?03, submitted a bid for Finland-based Valtra but had lost out to tractor major AGCO. M&M has been on a quest to emerge as a leader in the global tractor market. Recently, the company formed a joint venture ?Mahindra (China) Tractor Co ? in China in which it has an 80% stake, the balance being held by Jiangling Motor Co Group. The joint venture has a production capacity of 12,000 tractors per annum.

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In the past few years, OTP Bank Rt, Hungary?s largest retail bank by far, has seen its path to further expansion increasingly lie within the surrounding region.

Owing mainly to increased competition at home, the bank has acquired retail operations in Slovakia, Croatia and Bulgaria ? and, with the 2004 acquisition of RoBank SA, Romania. Stated future targets include Serbia and Ukraine, but in spite of recent comments on the rising cost of Romanian banks, OTP clearly sees Hungary?s eastern neighbor as a growth center.

The bank?s growth into Romania was given further impetus last week, when OTP confirmed that it is one of the bidders for the purchase of Casa de Economii si Consemnatiuni (CEC), the country?s fourth largest bank.

The Romanian state called a tender on Aug. 10 for the sale of not less than 50% plus one share, but no more than a 75% holding in CEC. The established deadline for submitting bids was Aug. 31.

As of Dec. 31, 2004, CEC had IFRS-based total assets of ¤1.31 billion and shareholders? equity of ¤149 million. With its 5.6% market share based on total assets, CEC is Romania?s fourth largest bank, having posted a net profit of ¤17 million in 2004. CEC serves approximately two million clients via a network of 1,407 branches, the largest in Romania.

OTP declared earlier that, besides organic growth, it is considering the possibility of development via acquisition in Romania. If successful, the acquisition of CEC would dwarf OTP?s current exposure in the country.

OTP completed the $47.5 million purchase of RoBank last July. The move, hailed by regional banking analysts, was its first venture into Romania.

RoBank, renamed OTP Bank Romania SA in 2005, was a small bank with just 16 branches nationwide. OTP announced it would invest up to $100 million in the next three to five years to expand the branch network. As a first step in the process, OTP raised RoBank?s capital by ¤10 million, while OTP President-CEO Sándor Csányi stated that the bank would step up branch openings, with 50 branches to be opened by year?s end and an eventual target of 200.

Csányi said OTP will expand RoBank regardless of further acquisition targets in either Romania or any other neighboring country.

?[RoBank] is a small bank with total assets of ¤95 million, but it?s a foot in the door in a market that has very strong growth ahead of it,? said Zoltán Pártl, an analyst at K&H Equities Rt at the time of the acquisition. Pártl said the move represented the first step in OTP?s stated aim of winning control of 5%?10% of the Romanian banking sector, adding that the sector?s underdeveloped state justified RoBank as a good investment.

Grzegorz Zawada, CEE banking analyst at Erste Bank AG, described OTP?s strategy as unique in the region.

?Cross-border initiatives are usually driven by strategic investors. OTP has none,? he noted. ?It?s management-led, and is aimed at continuing to deliver high-profit growth to shareholders.?

Indeed, according to OTP?s vision for the next four years, delivered in a July presentation by Deputy CEO Zoltán Spéder, the group is ?building a regional franchise through acquisition.? Spéder stated that, compared to Hungary, banking penetration is lower in Bulgaria and Romania; in Slovakia and Croatia, on the other hand, total assets of the banking system compared to GDP are significantly higher than in Hungary.

Although OTP expects its most dynamic growth in Romania, the bank nevertheless does not expect bank penetration in that country to reach the current level in Hungary before 2009.

The decision to attempt further expansion through the acquisition of CEC is in line with the bank?s four-year strategy. At the same time, Spéder echoed Csányi only a month ago in saying that Romanian banks have become too expensive, stating that the sale of savings bank CEC is the only major opportunity for OTP to expand further in Romania.

Spéder declared that OTP would not bid for the biggest Romanian bank, Banca Comerciala Romana (BCR), in this year?s upcoming tender, explaining that to acquire BCR would require OTP to ?put too much capital into one asset.?

?The prices of small and medium-sized banks in Romania have got so high that they don?t reflect any fair growth potential. Even future growth is overpriced,? Spéder told Reuters in a recent interview. ?Csányi has already warned that banks in Romania have appreciated markedly in the past 12 months in terms of price to earnings and price to book value.?

Central Europe?s biggest bank by market capitalization, OTP is one of nine bidders the Romanian Finance Ministry named as having submitted a formal bid for CEC. The others include Austria?s Erste Bank AG and Raiffeisen Zentralbank Österreich AG; Banca Monte dei Paschi di Siena SpA, Italy?s fifth largest bank; Belgium?s Dexia SA; Rabobank Nederland NV; and Greece?s EFG Eurobank.

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The international reserves of Romania (foreign currencies plus gold) stood at the end of August at 17.62 billion euros, up 1.5 billion euros as against the previous month, the National Bank of Romania (BNR) informs.

At the end of August, reserves in foreign currency stood at 16.432 billion euros. The increase of 1.579 billion euros registered in August represents inflows worth of 2.090 billion euros, as purchases from the currency market, inflows from privatisations, revenues derived from the administration of the international reserve, modification of the minimal reserves in foreign currencies at commercial banks, foreign currency transfers to the state reserve and others.

Outflows totalised 510.6 million euros and represented payment of instalments and interests for the direct public external debt, guaranteed by the Ministry of Public Finance, modification of minimal reserves in foreign currencies at commercial banks, payment of shares, bank commissions and others.

The gold reserve stood at 105 tonnes, its value advancing to 1.196 billion euros on the background of higher international prices. By the end of 2005, the failing due payments for the public external debt, guaranteed by the Ministry of Public Finance, sums 676 million euros.

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Central bank governor Mugur Isarescu declared this week that the exchange rate of the domestic ?leu? depends not only on the financial inflows which press indeed for the currency?s appreciation, but also on economic developments.

?Of course that the central bank wants a strong convertible leu, but at the same time we want the domestic currency to stay in the proper place. The leu has now rather a financial than a commercial character but despite that, the exchange rate cannot be uncoupled from gains in productivity, the commercial deficit or the current account deficit,? said Isarescu.

The analysts expect the ?leu? to further appreciate because it would be impossible for BNR to completely purchase the amounts in foreign currency that enter the market and alsosterilize the excess of lei.

Last week the Londoner organization IDEA Global said it was expecting the exchange rate to attain 28,000 lei per euro in 2006, but governor Isarescu rejects such a prediction: ?How realistic can such an forecast made by a Londoner analyst be? To a central bank expert, the opinion that the ?leu? will steadily follow just one trend is a sign of irrational exuberance and a sign of a market anomaly. What would the role of the National Bank still be, if I were to validate the belief of the market?? the central bank governor asks rhetorically.

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The Ministry of Transports, Constructions and Tourism has suspended the bidding procedures for the insurance of Tarom?s aircraft fleet over the interval 2005 ? 2006 until the contestation filed two weeks ago by Astra Insurance is settled.

Astra acquired the technical documentation but did not submit an offer. On the other hand, the Ministry?s decision is contested by Omniasig, the only company that submitted an offer. The representatives of insurers Astra and Ardaf assert that the technical requirements are drafted in such a manner as to disqualify any other bidder but Omniasig, which has been constantly awarded the contract in 2003 ? 2004 and in 2004 ? 2005.

Astra sales executive Radu Mustatea says that one of the participation requirements was for the bidder to present confirmation letters from the broker of a leading underwriter rated at least AA+. The only re-insurer that meets this requirement is AIG, which collaborates with Omniasig. ?We are waiting to see what the authorities decide. If the rating is lowered we will do our best to meet the criteria and submit an offer,? says Mustatea.

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The merger agreement between Bank Austria Creditanstalt (BA-CA) and Tiriac Bank, inked in June this year, became effective on Wednesday, August 31.

According to the agreement, BA-CA holds 50% plus one share of Tiriac Bank, whereas the entities controlled by business tycoon Ion Tiriac hold 50% minus one share of HVB Bank Romania. This structure was accomplished by sales and stock exchange.

Minor Tiriac Bank shareholders will automatically become shareholders with the new bank. The two financial institutions exchanged some of their managerial staff, with a view to smoothing the merger process and for a better integration of the two entities.

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Romania's mid-2005 estimated Gross Domestic Product (GDP) stood at 110.263 billion RON in current prices, by 4.9 percent higher in real terms, as compared to the same period last year, the National Statistics Institute's data say.

The growth was considerably brought about by the increase in the activity and subsequently of the gross VAT on services (plus 6.9 percent), building (plus 3.9 percent) and industry (plus 3.6 percent), expected to contribute 84.1 percent to the GDP. Due to the bad weather conditions and the spring floods, by mid-2005 the agriculture, the forestry and the fisheries accounting for 4.2 percent of the GDP dropped by 7.1 pc. as compared to the same time span in 2004.

The current account deficit grew in H1, 2005 as against the previous year, due to the rise in the imports of goods and services (plus 17.1 percent) vs the exports (5.9 percent), which impinged on the GDP trend.

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US authorities have informed the Romanian Foreign Ministry (MAE) that there are no Romanian nationals recorded among Katrina hurricane's death toll in the states of Louisiana and Mississippi, a MAE release informs.

Romania's Embassy in Washington is permanently in touch with the US authorities in the afflicted states to check whether any Romanian citizens are reported among the victims, and the situation in Louisiana, especially in New Orleans, is unceasingly monitored both by the authorities and NGOs that provide emergency care, the Foreign Ministry release says.

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The value of lease contracts concluded in Romania in the first six months of the year stood at over 1 billion euro, while for the whole year their value is expected to exceed 2 billion euro, Chairman of the Association of Romanian Lease Companies (ASLR), Cornel Coca Constantinescu said.

The total value of lease contracts reached 1.09 billion euro in the first half of 2005, up over 30% from the same period last year, data released by the ASLR showed.

Some of the important players on the Romanian lease market, such as Porsche Leasing, BCR Leasing and Motoractive, announced that they have upwardly adjusted their estimates of the 2005 contract volume.

The Romanian lease market was estimated at 1.4-1.5 million euro (representing the value of the purchased goods) or 1.8-1.9 billion euro (including the value of the lease contracts, which comprises costs related to the lease, VAT excluded, plus the price of the leased goods, fees excluded).

In 2005, automobiles made up the bulk of the goods acquired under a lease contract, just like last year.

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BUCHAREST, Romania (AP) -- Prime Minister Calin Popescu Tariceanu said Monday that his government won't raise the value-added tax next year and will reduce payroll taxes.

The government has been considering raising the VAT tax from the current level of 19 percent to 22 percent to reduce rapidly rising demand which threatens to increase inflation.

Tariceanu said that after discussing the matter with his Liberal Party, "we concluded that there is no need to raise the VAT tax." He added that the flat income tax for individuals and corporations would also remain unchanged at 16 percent.

"We want to respect our promises on reducing the payroll taxes," Tariceanu said in a news conference with his Finance Minister Sebastian Vladescu.

Vladescu said the size of the payroll tax cuts would be decided later, and vowed to work toward a balance budget for 2006.

"We will try to keep the macroeconomic balance, and avoid international criticism for unsustainable expenses," he said.

Romania's economy is expected to grow by over 5 percent this year. The country wants to cut inflation from 9.3 percent last year to about 7.5 percent.

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Comvex, a Romanian Black Sea port operator, announced that its first-half net profit tripled year-on-year to 98.55 billion old lei, as turnover rose by 62%.

Comvex's turnover reached 300.5 billion old lei, due to improved management and a rise in the quantity of bulk cargo handled in the first half of the year, the company said.

Comvex can handle over 18 million tonnes of bulk cargo, used by metallurgical and power industries in central Europe.

It did not provide data about the cargo volume in the first half of 2005.

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BUCHAREST -(Dow Jones)- Romania will focus on better collection rather than higher taxes to boost revenues of its cash-strapped budget next year, the country's new finance minister said Monday.

For 2006, "the value-added tax will stay at 19%, the flat tax at 16%, and social security tax will be reduced by a percentage that will be decided within weeks," Sebastian Vladescu told reporters in Bucharest.

Vladescu's statements end more than two months of rows within the ruling coalition about raising VAT by three percentage points to boost budget revenues in 2006.

The measure had been agreed with the International Monetary Fund in June, but government backtracked on it following widespread protests from population and business people.

Higher VAT would have helped the government make up for lost revenues after the introduction of a flat 16% individual and corporate tax Jan. 1, but would have increased inflation by 1.5 percentage point to 6.5% in 2006.

At present, Romania's $400 million standby loan agreement with the IMF has been put on hold due to political uncertainty and the economic effects of recent heavy floods.

However, Vladescu, who took his job at the end of August following a government reshuffle, said he is optimistic about Romania's relations with international lenders.

"I'm sure that our partnership with international organizations will continue based on the balanced budget we are building (for 2006)," he said.

IMF approval of Romania's economic program is important, because Romania hopes to join the European Union in 2007, together with neighboring Bulgaria. The European Commission has said admittance could be delayed until 2008 if the countries don't meet entry criteria.

-By Cristi Cretzan; Dow Jones Newswires;

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Politics: 5 September 2005, Monday.

Bulgaria and Romania will join the European Union (EU) once they fulfil all the requirements, German opposition leader Angela Merkel was cited as saying said during the TV debate with Chancellor Gerhard Schroeder.

Radio France International reported that Merkel has clearly stated that the two member candidates must meet all EU requirements before joining the Block.

Merkel and Schroeder also clashed over Turkey's bid to join the EU.

Merkel repeated her position that Turkey should be offered a "privileged partnership" with the EU, rather than full membership and that talks due to begin next month should focus on that. "It would be irresponsible to make the suggestion now that the country will become a full member only to say one day that we can't implement that after national referendums in some European countries," she said.

Schroeder argues that Merkel "doesn't understand the geo- strategic importance of Turkey" in the region. "If we succeed to binding Turkey lastingly into western society, to combine non- fundamentalist Islam with western values, than we gain security in Germany and Europe."

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AMSTERDAM, Sept 5 (Reuters) - Dutch financial cooperative Rabobank reported a 12 percent rise in interim profit on Monday and ruled itself out of buying Romanian bank Casa de Economii si Consemnatiuni (CEC), saying it was eyeing other markets.

"Our focus is on Poland and Turkey and possibly another country in Eastern Europe at this time but not in Romania," Rabobank [RABN.UL] Chairman Bert Heemskerk told a news conference.

Last week, Rabobank was listed by the Romanian government as one of nine banks that had expressed an interest in the country's fourth-largest bank, which analysts say could fetch as much as $650 million.

Rabobank, one of the Netherlands' leading retail banks with a focus on food and agricultural banking, has a strategy of obtaining banking stakes in emerging markets and Heemskerk said he expected to announce the purchase of another 25 percent stake in a Chinese cooperative bank within two months.

The Dutch bank and the World Bank's private investment arm, the International Finance Corporation, is already close to buying a 25 percent stake in the Chinese Hangzhou Rural Credit Cooperative Union in the east of the country.

Heemskerk said Rabobank would pay between 15 million and 20 million euros for each stake. Over time, he said Rabobank would spend over 100 million euros in China, whose sprawling network of rural credit cooperatives is seen as one of the weakest links in a financial system awash with at least $200 billion in bad debt.

Rabobank's net profit rose to 941 million euros ($1.18 billion) over the first half of the year as strong fee income and solid investment revenue from its insurance operation made up for a lacklustre 2 percent increase in lending income.

Heemskerk said he expected a limited increase in revenue over the rest of the year as tough competition in the domestic mortgage market, a flat yield curve and low interest rates meant that profit margins on loans were shrinking.

Nonetheless, he expected to maintain at least 12 percent net profit growth for the full year because Rabobank intended to keep total costs at the same level as 2004.

"Even if the revenues do not increase as fast because of tight interest margins, we have stabilised costs and we hope to achieve at least 12 percent profit growth for the year as a whole."

Heemskerk said despite stiff competition in the mortgage market, Rabobank, with assets of about 510 billion euros, would cut prices to remain market leader.

Its overall group revenues rose 5 percent to 5.1 billion euros and costs fell 1 percent to 3.41 billion euros.

Unlike Rabobank's listed rivals ABN AMRO and ING , which benefited from a sharp drop in loan loss provisions, the cooperative group saw its provisions for bad and doubtful loans rise 45 percent to 249 million euros.

Rabobank said its loan loss provisions in the first half of 2004 were very low and its rate in 2005 was still below the long-term average.

Heemskerk said he expected to announce an acquisition, possibly in the retail financial market, later this year.

He declined to give any further details but did not rule out that the purchase could be made in the lucrative U.S. market, where Rabobank aims to be a top agricultural bank.

Last year, Farm Credit Services of America called off a deal for Rabobank to buy it for $750 million.

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BUCHAREST (Romania), September 1 (SeeNews) - Romanian company CHIR, which operates Bucharest-based hotels Intercontinental and Lido, cut its loss to 40.88 billion old lei (1.16 million euro/$1.44 million) in the first half of the year, from 57.4 billion in the same period of 2004, as revenue edged up while costs fell.

CHIR turnover grew to 175.8 billion old lei, from 171.4 billion in the first half of 2004, the company said in its half-year report sent to the over-the-counter market RASDAQ, where it is listed.

Total revenue rose 1.7% to 176.8 billion old lei, while total costs fell 5.9% to 217.6 billion.

CHIR said its financial results were hit by low occupancy rate, high maintenance costs and aggressive competition from new hotels. The company's stock gained 1.9% on Wednesday to close at 0.07 new lei.

CHIR operates the four-star Lido and the five-star Intercontinental, a franchise of the international hotel chain Intercontinental.

The increased frequency of terrorist attacks throughout the world has hit the global tourism industry in the past years, the company said. CHIR offers some 80% of its services to foreign travel agencies.

NOTE: Romania slashed four zeroes off its legal tender on July 1, redenominating its currency to reflect slowing inflation and prepare the country for the future adoption of the euro. The country hopes to join the European Union on January 1, 2007.

sourceBUCHAREST (Romania), September 1 (SeeNews) - Romanian company CHIR, which operates Bucharest-based hotels Intercontinental and Lido, cut its loss to 40.88 billion old lei (1.16 million euro/$1.44 million) in the first half of the year, from 57.4 billion in the same period of 2004, as revenue edged up while costs fell.

CHIR turnover grew to 175.8 billion old lei, from 171.4 billion in the first half of 2004, the company said in its half-year report sent to the over-the-counter market RASDAQ, where it is listed.

Total revenue rose 1.7% to 176.8 billion old lei, while total costs fell 5.9% to 217.6 billion.

CHIR said its financial results were hit by low occupancy rate, high maintenance costs and aggressive competition from new hotels. The company's stock gained 1.9% on Wednesday to close at 0.07 new lei.

CHIR operates the four-star Lido and the five-star Intercontinental, a franchise of the international hotel chain Intercontinental.

The increased frequency of terrorist attacks throughout the world has hit the global tourism industry in the past years, the company said. CHIR offers some 80% of its services to foreign travel agencies.

NOTE: Romania slashed four zeroes off its legal tender on July 1, redenominating its currency to reflect slowing inflation and prepare the country for the future adoption of the euro. The country hopes to join the European Union on January 1, 2007.

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Operating from it's creative base in Timisoara Romania with offices in the UK. A new independent company Blue Gecko Entertainment has formed.

BGE has evolved out of Level7 software and taken it's original online multiplayer games and enhanced the entire gaming experience.

BGE has a vision to become the strategy game provider of choice. To provide a wide range of strategy and board games.

Games can now be accessed via a new gaming client this can be downloaded for free from our new website www.bluegecko.ro

The popular Web Space Alliance game has had an exciting upgrade and become Galactica.

Galactica takes the old WSA and goes further, improved graphics and functionality including waypoints for fleet orders, new planet types and research methods.

There are 2 versions of Galactica available; a Sim version has improved economy and the Arcade version is for more fighting, closer to the original WSA.

Go to the website and click 'play now' to download the game client and start playing.

Chess – the classic game can be played from the client portal too.

Our Wizards & Warlocks game is being upgraded now to go onto the client platform over the next few weeks . It will be re-launched as Genesis.
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12:45 - 01 September 2005 - The total value of foreign direct investment into the Romanian economy closed in on the 1.5-billion-euro figure, growing 15 percent as compared with the same period last year, a release of the Central Bank (BNR) informs.


According to BNR in the first six months of 2004 foreign direct investments amounted to 1.29 billion euros. Taking into account June alone, the value of FDI rose by almost 30 percent, totalling 531 million euros. BNR data reveal that the ending balance for the analysed period is a positive figure of 536 million euros. For the same period in 2004 portfolio investments showed a negative ending balance of 117 million euros. Subscribed capital in the first half of this year grew 35 percent, to 890 million euros.

According to data provided by the National Office of the Trade Registry (ONRC) the value of social capital foreign companies had, was of 658.3 million euros. The ONRC calculates FDI considering the subscribed social capital at foreign companies and joint ventures. In June this year the value of subscribed capital was of 194.3 million euros, 7.6 times greater than last year when a value of 25.4 million euros was registered.

The top five of investors sees the Netherlands in pole position, followed by Austria, France and Germany. US ranks only fifth while Italy comes in sixth though in June alone 235 of the 1,035 newly set-up firms were Italian. The Romanian Agency for Foreign Investment (ARIS) announced that this year's target is a FDI level of 3.2 - 3.8 billion euros. How high the FDI level will go depends however on the pace of privatisation in the second half of the year and on the activity of the Authority for state Assets Valuation. In 2004 FDI amounted to 4.1 billion euros.

Source: ACT Media News Agency

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Romania Postpones Deadline for Bids in Sale of State-Owned Romanian Commercial Bank BUCHAREST, Romania (AP) -- The Romanian government has agreed to postpone a deadline for bids in the sale of the country's largest bank until Oct. 17, officials said Thursday.

The government privatization agency said that shortlisted potential buyers had asked for more time to complete their assessment of the Romanian Commercial Bank, known locally as BCR. The initial deadline was Sept. 19.

"We have accepted investors' request because it's clearly justified, reflecting on one hand BCR's market value, and on the other, their firm interest to take over the bank," said Gabriel Zbircea, who heads the privatization agency.

There are nine foreign banks bidding: Germany's Deutsche Bank AG, BNP Paribas SA, National Bank of Greece SA, Banco Comercial Portugues SA, Belgian-Dutch financial services company Fortis NV, Belgian bank KBC Group NV, Erste Bank AG, Dexia SA and Banca Intesa SpA.

BCR is Romania's largest bank, managing assets worth some euro7 billion (US$8.54 billion), or 26 percent of the assets held by the country's banking system. Last year, the bank reported a net profit of euro161 million (US$196 million) under International Financial Reporting Standards.

The government will select two bidders for final negotiations.

BCR is the last commercial bank to be privatized in Romania, which wants to have a completely private banking system before joining the European Union in 2007 or 2008.

The government is also selling the country's savings bank, CEC.

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Romanian oil equipment maker, Upetrom 1 Mai reported a loss of 40.5 billion old lei in the first half of the year, compared to a net profit of 1.5 billion old lei in the same period last year, in spite of a rise in turnover.

Upetrom 1 Mai reported a 7.25% year-on-year rise in turnover, to 462.3 billion old lei.

The company's total debt reached 662.8 billion old lei at the end of June, with bank loans accounting for 31.8% of the total.

Upetrom 1 Mai is located in Ploiesti, southern Romania.

It employs over 2,900 people.

Romanian-based oil drilling company Aquafor International is its majority shareholder.

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Greek Telecoms Operator Reports Second-Quarter Profit More Than Doubles on Lower Tax Rate ATHENS, Greece (AP) -- Greece's largest telecoms operator, OTE, said Wednesday its second-quarter net profit more than doubled because of a lower tax rate and a sharp increase in earnings at its Romanian unit.

However, OTE's domestic fixed-line business revenues fell, extending a three-year trend. Sales have been hit by subscribers switching to mobile phones.

"Greek fixed-line operations showed some resilience in the quarter, and we seem to have put a halt to the continuing growth in operating expenses, but the overall performance remains weak," OTE Chief Executive Panagis Vourloumis said in a statement.

OTE is restructuring and cutting jobs as part of efforts to lower the fixed-line division's costs.

The company's net profit rose to euro119.1 million (US$145.1 million) in the second quarter from euro45 million (US$54.8 million) in the same period a year earlier. Revenues climbed to euro1.36 billion (US$1.6 billion) from euro1.3 billion (US$1.6 billion) on year.

In the second quarter, earnings were buoyed by euro20 million (US$24.4 million) income from investments as well no longer having to bear costs the company incurred last year when sponsored the Olympic Games. The tax rate also fell to 30 percent from 48 percent in 2004.

At an operational level, OTE's Romanian business, RomTelecom, posted a surge in net profit to euro57.6 million (US$70.2 million) from euro9.3 million (US$11.3 million) a year earlier.

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OTP Bank has submitted its Letter of Intent to acquire a majority stake in Romania's Casa de Economii si Consemnatiuni (CEC), the bank said in a statement on Wedneday. Romania has recieved Letters of Intent from nine potential bidders, but none of them were named.

The Romanian state called on 10 August a tender for the sale of not less than a 50%-plus-one-share stake but no more than a 75% holding in CEC. The deadline for submitting Letters of Intent was set to 31 August.

The Finance Ministry will set a list of pre-qualified investors based on the Letters of Intent submitted.

OTP declared earlier that it was also considering the possibilities of development via acquisition in Romania beside organic growth.


?The submission of the above Letter of Intent does not create any financial or other kind of obligation on the largest Hungarian bank. OTP Bank is convinced that CEC's privatisation will be a correct and transparent process, in line with international standards applied in the European Union," OTP said in a statement.

As of 31 December, 2004, CEC had IFRS-based total assets of EUR 1.31 billion and shareholders' equity of EUR 149 million. With its market share of 5.6% based on total assets, CEC is Romania's fourth largest bank, which posted a net profit of EUR 17 million in 2004. CEC serves around 2 million clients via 1,407 units.

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BRUSSELS (AFX) - Financial services group Dexia said it has sent a letter of intent to the Romanian government, confirming its interest in acquiring Romania's largest savings bank Casa de Economii si Consemnatiuni CEC.

Company spokeswoman Ulrike Pommee said: 'Yesterday, we deposited a letter of intent. We are still interested in the bank.'

Other European banks, including Rabo, Erste and Hungarian bank OTP, are also expected to submit letters of intent.

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Only 30 percent as many Romanians travel by plane as in other countries. Three low-cost airlines are currently splitting the Romanian market: Blue Air from Bucharest, Carpatair of Timisoara, and the Italian My Air.
By Roxana Mihul

EU accession is expected to lift this market, as many other low-cost carriers will want to exploit its potential. From September, Baneasa Bucharest International Airport (BBIA) will be the only hub used by these companies in the capital.

Blue Air is the latest low-cost airline to enter the market. Operating from December 2004, it is 100 percent Romanian, owned by local businessman Nelu Iordache. The airline flies to and from Bucharest, Barcelona, Istanbul, Maastricht, Lyon, Madrid, Milan and Rome. It has a fleet of two leased aircraft from an international company, Boeing 737s, with a capacity of 144 each. More than 500 Romanian and international travel agencies have signed contracts with the company to sell tickets.

?We have invested a lot in our marketing strategy. With pre-opening publicity and marketing since we?ve been operational, we?ve put in about EUR 350,000 ? 400,000 so far,? Gheorghe Racaru, general manager of Blue Air, told Business Review. Racaru has more than 30 years? experience in the field of Romanian aviation, including nine as the general manager of national air carrier Tarom.

Blue Air has recently opened presentation and sales offices in Plaza Romania, the Unirii area and BBIA. The most recent, in Plaza Romania, required an initial investment of about EUR 5,000. These offices were initially intended to be presentation points, but many tickets have also been sold at the locations. One or two more are set to be opened shortly.

The airline, like any other low-cost carrier, sells tickets mainly over the Internet, by e-commerce. Low-cost airlines use this system to cut down on overheads and undercut their traditional rivals.

Ticket prices start at EUR 19 plus taxes and go up to EUR 280 plus taxes for a return trip. Italy, with daily flights to Rome and three per week to Milan, is the most popular destination, followed by Spain. ?The majority of our clients are individuals who previously traveled by other means of transport, or did not travel at all because they couldn?t afford to,? said Racaru.

The airline started to offer internal flights, but had to give them up because the flight schedule overlapped with the international one. It is considering introducing two smaller planes of 50 seats, to operate internal and regional flights to destinations such as Kiev, Chisinau and Belgrade.

?External flights are much more profitable, but the internal market has a great deal of potential due to business travel in Romania, which represents more than 90 percent of Tarom?s internal flight passengers. The state of the roads and trains are another reason why this area could grow,? said the GM.

Turning to the issue of price, he added, ?The difference between our tariffs and those of the regular carriers comes from the logistics of the airline.? Costs are also reduced through the booking or sales system.

?The price difference between the services offered on board is not big, but the real reduction comes from the logistics you need in order to provide such services as hot meals. The low tariffs we offer do not influence safety in any way. Smaller firms are more strictly supervised by the authorities regarding safety and maintenance measures. An airline?s reputation depends on its flight safety,? Racaru added.

With upcoming EU accession, the Romanian market is facing an unpredictable future. ?Competition will appear when the bilateral agreements between Romania and European countries disappear and the ?open sky? policy is applied, after Romania?s accession. I?m sure that at that point many low-cost carriers will invade Romania to exploit the potential of the market,? said the GM.

The barriers that regulate air traffic will disappear with EU membership, when a new kind of global agreement is applied. Trafficking rights will no longer be required and the only remaining concerns will be the agreements between the airlines and airports. EU membership brings higher standards of living, artificially or not, with wage hikes of 30 to 40 percent expected. An average family will be able to put some of the extra cash towards a plane ticket, said Racaru.

Media sources have reported that two other low-cost airlines will enter the Romanian market this year. Meridiana is an Italian company that will operate flights from Bucharest to Florence and Verona. Also touted to start up activities here is Wizz Air, which currently operates in Poland, Hungary and Great Britain.

Racaru stressed that the reports were only rumors and added that he thought the moves would be possible after 2007. ?The aviation business is extremely expensive and requires a long-term investment, with more than a year or a year and a half to pay it off. We are also lacking in aviation specialists with the necessary courage to do this or to give good advice to someone tempted to start such a business,? he said. ?In the Romanian business environment very few people get involved in businesses with such increased risks as aviation. They prefer IT, insurance or the service industry.?

Currently Blue Air has a market share of around five percent, according to its own estimates, and expects to increase the figure to seven percent by September. ?We expect to have around EUR 18 million in turnover for 2005, with an EUR 11 million turnover for H1. We are not in profit yet ? from the operational and logistical point of view we need more than a year to reach that point. Aviation is costly ? to borrow a plane you need a security deposit which decreases in inverse proportion to the number of planes you have. Being a new company on the market about $2 million is blocked in the warehouse rental and maintenance of the planes,? said Racaru. Blue Air has started to make an operational profit in the last few months, but the overall investment has not yet been recovered.

In the future the airline intends to consolidate the destinations where it currently operates through laying on more frequent flights. The next step is to start up new routes, destinations with increased marketing potential, and afterwards to consolidate them. Any new destination requires a long-term investment, because a flight to a single place becomes profitable and covers the initial investment after at least six to seven months, depending on the marketing possibilities.

?We are not excluding a collaboration with other companies as long as both sides have something to gain from it. We are not ruling out a merger or even a takeover by another company, provided that the owner is willing to take on the necessary risks to maintain the name of the company and the 100 percent Romanian capital,? said the GM.

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The European corridor IV won?t go round Romania, as its alternative, Budapest - Nis ? Sofia ? Istanbul, is already functional since 1997, according to Jonathan Scheele, the head of the European Commission Delegation in Bucharest.

The European corridor IV goes through Nadlac - Arad - Deva - Orastie - Sebes - Sibiu ? Ramnicu Valcea - Pitesti - Bucharest - Fetesti ? Constanta.

The Transport Ministry and the European Commission signed four ISPA financing contracts of a total value of more than EUR 62 million, for the modernization of the national road Drobeta Turnu Severin - Lugoj, which will be part of the European Corridor IV.

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