BASIC INFORMATION

Full Country Name: Romania


Country Profile:

Area: 238,391 sq km
Population: 22.6m
Capital City: Bucharest (population: 2m)
People: Romanian (89.4%); Hungarian (7.1%); German (0.5%)
Languages: Romanian. English, French and German are widely spoken
Religion(s): Orthodox (86.8%); Roman Catholic (5%); Reformed (3.5%); Protestant (3.5%); Greek
Catholic, Unitarian and others (1.2%)
Currency: Leu, plural Lei
Major political parties: Government: PNL (National Liberal Party); UDMR (Democratic Union of Hungarians in Romania); Opposition: PD (Democratic Party); PSD (Social Democratic Party); PRM (Greater Romania Party); PC (Conservative Party); PLD (Liberal Democratic Party); PC (Conservative Party)
Government: Parliamentary Democracy
President: Traian Basescu
Prime Minister: Calin Popescu Tariceanu
Foreign Minister: Adrian Cioroianu

Membership of international groupings/ organisations: Organisation for Co-operation and Security in Europe (OSCE) (2001 Chairman-in-Office); United Nations (UN); International Monetary Fund (IMF); World Bank; International Finance Corporation (IFC); Multilateral Investment Guarantee Agency (MIGA); European Bank for Reconstruction and Development (EBRD); Bank for International Settlements (BIS); World Trade Organisation (WTO); Central European Free Trade Agreement (CEFTA); Council of Europe (CoE) (2005-06 Chairman); Stability Pact; North Atlantic Treaty Organisation (NATO) ; PfP; European Union (EU)

GEOGRAPHY

lies in SE Europe, bordered by , , , and as well as by the Black Sea. The Danube flows along the southern border and forms a delta where it flows into the Black Sea. has 3 historical regions: Wallachia to the South, to the North-East and Transylvania to the North-West. Several large rivers, such as the Mures and the Siret, rise in these mountains whose highest point is Mt Moldoveanu, 2544m above sea level. The climate is temperate with hot, dry summers, punctuated by thunderstorms and showers, and cold winters with frequent snowfall, especially in the high mountains.

General

After the 1989 revolution, embarked on a period of transition. joined NATO in 2004 and the EU on 1 January 2007. Although economically one of the poorest countries in the region Romania has many natural resources including oil and a large, though largely un-modernised, agricultural sector. The country is also attracting an increasingly amount of foreign investment and the economy has been growing on average around 5% per annum. Some 20% of the population are from national minority groups, including the Roma, Magyar (Hungarians), Germans, Slavs, Serbs and Jews.

HISTORY

Recent History

From 1946 to 1989 was ruled by the Communist Party, led after 1965 by Nicolae Ceausescu. Following a popular uprising in the western town of Timioara, which quickly spread to the rest of the country, the Ceausescu regime was overthrown and Ceausescu and his wife Elena were executed on 25th December 1989. In the aftermath of the revolution a committee known as the National Salvation Front (FSN) led by former communists Ion Illiescu and Petre Roman assumed charge of the country. Popular dissatisfaction with the new leadership who were seen by many as a continuation of the former regime led to demonstrations in 1990. A large, protracted protest in Bucharest was broken up by 10,000 miners leaving seven dead and several hundred injured. There still has not been a full explanation of why the miners took this action or on whose orders they acted.

1990 - 1996

The first post Ceausescu general election in May 1990 was won by the FSN and the first presidential election by Ion Iliescu. The FSN later became the Party for Social Democracy in Romania (PDSR) and won the general election in 1992. This government's performance was mixed. There was little progress in tackling corruption, reforming 's bureaucracy and introducing a market economy. However political pluralism and a vibrant free media did become entrenched.

1996 - 2000

In November 1996 Emil Constantinescu of the centre-right Democratic Convention (DC) won the presidential election and a coalition government of the DC, centre-left Union of Social Democrats and the Democratic Union of Hungarians in Romania (UDMR) formed a new government. This coalition managed with some difficulty to remain together until the elections of 2000, but failed to perform well on the economy or the fight against corruption.

2000 – 2004

Disappointment with the Constantinescu government led to the return of Ion Illiescu as Presdient in 2000 who appointed Adrian Nastase as PDSR Prime Minister. The PDSR later changed its name to the PSD (Social Democrat Party). Elected on a platform of economic reform and integration with the west, became a NATO member in 2004 and laid the foundations for Integration into to the EU in 2007. The formation of a PD (Democrats) - PNL (Liberals) opposition coalition and emergence of the charismatic Democratic Party leader Traian Basescu who won the June 2004 local election to become mayor of Bucharest did however present voters with a real alternative to the PSD who were still considered by many to be a continuation of the pre 1989 regime. The PSD lost both the Presidential and General election elections in Nov-Dec 2004.

Longer Historical Perspective

Dacia, a region roughly approximating to present-day , was incorporated into the Roman Empire in AD 107. Although the Roman presence lasted only until AD 271 Romanians continue to trace their national and linguistic birth back to this period. The Romans were driven out by advancing Goths whose arrival, as well as those of later invaders, drew a veil over Romanian history until about the 13th Century. After this date 's three main regions, Transylvania, and Wallachia followed different paths of development until 1918.

Transylvania was variously under Hungarian, Ottoman or Habsburg rule until its incorporation into the Kingdom of Romania after the First World War. Wallachia and were feudal tributary states of the Ottoman Empire for most of their recorded history, but they produced some leaders who effectively opposed Ottoman rule, most famously, Stephen the Great in the 15th Century and Michael the Brave in the 16th Century.

Wallachia and emerged from Ottoman rule in the 19th Century and achieved independence as the unified Kingdom of Romania in 1881. gained significant territories in the post-war peace settlement, including reunification with Transylvania in 1918. It began WWII as in alliance with the axis powers , but later switched sides. In 1944 Soviet forces entered and put pressure on King Michael to accept the appointment of a communist-led government. In 1947 the King was forced to abdicate and left for London. Stalin also annexed Bessarabia, ceding a part to the , but creating a Republic of Moldova from rest and Transnistria.

POLITICS

A four Party government coalition of Liberals (major partner), Democrats (major partner), Conservatives (minor partner) and Hungarian Minority (minor partner) was formed following the November 2004 general election. In December 2006 the Conservatives’ departure from the coalition left a minority government. The subsequent breakdown in relations between the Liberals and Democrats led Liberal Prime Minister Tariceanu to seek a confidence vote in a “super minority” Liberal/Hungarian Minority government which he won on 3 April 2007. The Democrats went into opposition. The next general election is due by December 2008. There has been support from various political sources ever since the 2004 poll for an early election which it is thought would bring Parliamentary Party strength into line with public support. But there is incentive for the main governing party (Liberals) or most of the opposition parties to bring about an early election in which they would probably lose heavily.

In April 2007 Parliament voted in favour of an opposition motion to suspend President Basescu from office because of alleged abuse of his constitutional powers. The speaker of the Senate became interim Head of State and in accordance with the constitution a referendum was called to seek the people’s endorsement of Parliament’s decision. Of the 44% of registered electors who turned out for the referendum on 19 May 74% voted for Basescu’s return to power. In his victory speech Basescu made a renewed call for early elections. He also promised to work for electoral reform to increase MPs’ accountability to their constituents and for a lustration law that could be used to remove former senior officials of the Ceausescu regime from their current public offices.

Elections

Local, presidential and parliamentary elections all took place in 2004. The next round of elections is unlikely to be before 2008, unless the president is able to call for fresh parliamentary elections in the hope of strengthening the government's currently fragile position.

HUMAN RIGHTS

has ratified the major human rights instruments, including the revised European Social Charter but the following issues remain concerns:

CHILDREN

Conditions in children’s institutions are slowly improving and the number of children in care fell to 30,500 in December 2004 with a further 50,000 in foster homes. The Romanian government introduced new laws on adoption and child protection on 1 January 2005. The new regulations have tightened up procedures and the government has set up a Romanian office for adoptions.

ROMA

There is no evidence of systematic, officially sanctioned discrimination against Roma. But, despite anti-discrimination legislation, Roma are still routinely discriminated against individually, particularly in employment, justice, education, and social services.

MENTALLY HANDICAPPED

The October 2005 European Commission’s Comprehensive Monitoring Report on Romania country report drew attention to concerns over care in homes for disabled adults, psychiatric clinics and homes for mentally ill and disabled. The EU will continue to monitor the situation in the run up to ’s planned EU integration.

PEOPLE TRAFFICKING

The international community is also working with the Romanians on the problem of as a source and transit country for people trafficking.

ECONOMY

Basic Economic Facts

GDP: US$ 57bn (2004: US$ 65bn).
GDP per capita: US$ 2,618, (2004: US$ 2,985)
Purchasing Power Parity (PPP): US$7,000 approx
GDP Growth: 7.8% (estimate) for 2006
Inflation: 14.1% (2004: 9%)
Unemployment: 7.2% (2004: 7.5%)
Major Industries: food and beverages, energy, metallurgy, crude oil processing, chemicals, light machinery and textiles.
Exports: US$ 17.7bn (2004: US$ 20.9bn)
Imports: US$ 22.2bn (2004: US$ 26.7bn)
Major trading partners: Exports (2002) - EU 67.1% of which 24.9%, 15.6%, 7.6% and 5.8%. Imports (2002) - EU 58.4% of which Italy 20.7%, Germany 14.9%, Russian Federation 7.2% and France 6.4%.
Trade Balance: US$4.5bn deficit
Current Account: 5.8% of GDP deficit (2004: 5.25%)
Fiscal Balance: -2.4% of GDP (2004: -2.1%)
Foreign Direct Investments: US$1.5bn (2004: US$ 2.1bn: includes privatisation receipts)
External Debts: US$ 19.7bn
Central Bank (NBR) Reserves: EUR 7.76bn (June 2004); 4.2 months import cover.
Exchange rate (end 2003): 1 EUR = 41,117 lei; 1 USD = 32,595 lei; 1 GBP = 58,058 lei.

Further information about Romania's economy can be found at: UK Trade & Investment Country Profile: Romania.

Economic Developments

Following the collapse of communist rule in 1989, has been in period of economic transition to a market economy. Compared to its central and eastern European neighbours, this process has not been smooth or particularly well-managed, and has included two periods of economic recession and financial scandals during the 1990s. GDP per capita remains around 1989 levels (although purchasing power parity is around $7,000). Since 2000 there has more progress. An extensive programme of economic reforms have included privatisation of large numbers of state-owned enterprises and restructuring of ’s energy, mining and industrial sector.

The Romanian Government has been pursuing a broad economic reform programme since 2000, largely in line with IMF requirements for fiscal restraint and economic restructuring, particularly in the energy sector. In 2004, the European Commission gave 'functioning market economy' status. The economy has been growing at an average annual rate of 5% since 2000. There has been rising demand for Romanian exports of steel, cars, and light machinery. Unemployment is low at around 6%. And inflation is on a downward trend at around 8%.

Agriculture remains a weakness. Representing over 10% of GDP and of a subsistence nature, the sector remains in serious need of reform and, despite being largely in private hands, is characterised by low productivity and small land-holdings. Private sector activity has been held back by long-standing restitution claims. But many are now reaching court and the Government is complying with court decisions; under the communist period all private property, and most land, were taken over by the state: the amended constitution has enshrined the right to private property.

Looking ahead the continued challenges for the Romanian economy will be to improve the business climate for investment, strengthen economic competitiveness, bringing down the current account and trade deficits (both linked to rising consumer expenditure), and maintaining the downward pressure on inflation.

INTERNATIONAL RELATIONS

European Union

EU accession has been a key foreign and domestic policy objective for . The requirements of EU membership (the Copenhagen Criteria and the Acquis) led to extensive political and economic reforms, not least in key areas such as judicial reform and rule of law, treatment of minorities, child protection and competition policy.

'S RELATIONS WITH NEIGHBOURS

Relations between and have improved signficantly. The governments of and held their second annual joint session in 2006. The main objective is convergence of Hungarian and Romanian National Development Plans. In particular they are keen to increase co-operation aimed at improving their absorption capacity of EU funds and to ensure development in line with EU standards. The two countries are also working closely on policies to promote the welfare of ethnic Romanians living in and ethnic Magyar (Hungarians) in .