What the newspapers say: December 18, 2009

Moldova will remove the barbed wire fence at the Romanian border, some Romanian press read. Elsewhere in the news, The Romanian Government might force state staff into unpaid holidays for a number of days every month in 2010. Last but not least, Romania’s energy future shows Russian signs.

Moldova will remove the barbed wire fence at the Romanian border. According to Romania Libera, Moldavian PM Vlad Filat declared that it was shameful to have a fence between Moldova and a friendly state in the 21st century, „when the European borders need to be transparent and the people need to travel freely”. The Moldovan PM is heading a pro-Occidental coalition, which wants to see Moldova joining the EU as soon as possible.

A new commandment of border forces has been given the duty to remove the barbed-wire fence. The Alliance for European Integration militates for a better relation with Romania, as opposed to the ex-governance led by the Communist Party from 2000 until recently. Under the Communist Party, Moldova’s relationships with Romania got tense, the Communist Party being in favour of a close relationship with Russia.

The Romanian Government might force state staff into unpaid holidays for a number of days every month in 2010, Gandul informs. Romania needs to cut three billion euros from public spending, namely 2.5% of the GDP, to meet the IMF targets, namely a 5.9% budget deficit. The only spending cuts in 2009 were enforced towards the end of the year.

According to economic councillor designated by PM Emil Boc, Andreea Paul (Vass), the money could be saved „either by enforcing the pensions’ law, the unique income scheme and by restructuring agency, or through sending state staff into an unpaid holiday for several days every month”.

It is official that the state budget for salaries is 0.3% lower in 2010, that is a 380 million euros minus, while investments will drop 0.2% of the GDP, namely by 253 million euros. An alternative to these measures would be to push some spending for the following years, with an increasing public debt and maybe affecting the schedule for joining the euro zone, a Macroanalitica financial expert explains. Romania’s public debt will amount to 29.9% of the GDP in the end of the year.

Romania could run into problems even if it respects the above mentioned measures, economic analyst Ilie Serbanescu explains. „The risks do not derivate from the adjustment or lack of public spending adjustment, but from the evolution of the foreign companies’ exposure in Romania, and this cannot be controlled. Romania can do everything by the book and still run into foreign payments difficulties , for example if mother branches of foreign companies in our country reduce their exposure by 10%, namely six billion euros”, Serbansecu claims. A Reuters analysis predicts a difficult 2010 for investors.

Russian signs for Romania, Evenimentul Zilei reads. Celebrating 30 years since Russian energy giant Gazprom started to deliver on the local market, its chief said that he considered developing the energy pact with Romania and that there were „all the necessary pre-conditions to continue the cooperation”, speaking about a „constructive dialogue” and „competitive prices”.

„In the field of energy, nothing is a coincidence. Gazprom has a strong position, but it doesn’t mean it doesn’t need partners. Romania is well positioned, mainly as an EU member, which means it can represent a transport agent for Russian gas towards Europe”, Aurelian Dochia, energy analyst, says.

„Romania represents an important market for Gazprom. The European Union and Romania, as an EU state, are open to all companies outside the EU delivering energy resources to the European consumers. But all these companies must respect the economic principles of the free market, without any political involvement in setting prices”, Romania ex-energy attaché in Brussels Razvan Nicolescu said.

Romania, involved with Nabucco, never had a clear position on its Russian competitor South Stream, but suggested to be supportive. Recently, the Romanian Economy minister Adriean Videanu declared that the most feasible version of the South Stream pipeline would pass through Romania.