Romania By Romanians at JMU Oana & Daniel 20 Feb 2004
Romania in Europe • Romania is a country in the Eastern part of Europe. Population 22.4 million • National Currency : LEU • To the East, it is bordered by the Black Sea. Its neighbors are: To the South: Bulgaria To the West: Serbia and Hungary To the North: Ukraine To the East: Moldova Romania spans a total surface of 237,500 square kms. (roughly 91,800 sq.miles). Picture it to be about the size of Oregon.
Some geography • Our country is blessed with all the major forms of landscape: The Carpathian Mountains (maximum height 2535 m, 8300 ft) cross the country from the north to the south-west. To the west of the Carpathians lies a large plateau. To the East and South there are extended low plains fit for agriculture. • The Danubeflows along the southern border with Bulgaria and into the Black sea forming a magnificent delta.
Romanian Ancient History • In the 7th and 6th Centuries B.C., the Greeks founded a number of colonies on the Black Sea shore: Histria, Tomis and Callatis (now the modern Constanta and Mangalia).Herodot was the first to mention the native inhabitants of the land: the Dacians. • Five centuries, the Dacians were united for the first time under the authority of a wise ruler called Burebista. He founded a capital city in the heights of the Carpathian Mountains. The new city - Sarmizegetusa - was well -organized and defended by powerful fortresses. • Meanwhile, the legendary richness of the country made it a temptation for the Roman Empire. During the two centuries of Roman Occupation, new roads and cities were built in Dacia. The official language was Latin, from which the present Romanian language was born. The Romans retreated from Dacia in 271 A.D.
TRANSILVANYA Region ruled by leaders obeying the authority of the Hungarian King. German colonization of Transylvania began in 1141 A.D Germans build great cities such as Sighisoara, Sibiu, Brasov, developed strong guilds and boosted trade. WALLACHIA Wallachia's history is entirely centered on its resisting the Turkish occupation. Wallachia was never fully conquered, despite the enormous military power of the Turks. MOLDOVA The Eastern kingdom, Moldavia had to fight not only against the Turks, but also the cruel Tatars Polish and Hungarians Romanian Medieval History Moldova Transilvanya Wallachia
Modern History • The revolution of 1848 proclaimed the idea of one single nation. • In 1862 The United Principalities of Moldavia and Wallachia became Romania and Bucharest was proclaimed capital. • In 1918 the national Assemblies Transylvania (December 1st), decided to unite with Romania. • In 1922 King Ferdinand was crowned monarch of the New Greater Romania • Romania joined Germany in attacking the Soviet Union in 1941. • In August 1944 king Michael put Romania on the Allied side.
From Communism to Democracy The Soviet Army kept the country under control and a communist regime quickly came into power. By 1947 the king was forced to abdicate. In 1948 Romania was proclaimed People’s Republic People's revolt of December 1989 closes the historical gap Romania lived in for 45 years and opens a new page in Romania's contemporary history
Economy - Overview: Currency Romanian LEU Romania began the transition from Communism in 1989 with a largely obsolete industrial base and a pattern of output unsuited to the country's needs. • The country emerged in 2000 from a punishing three-year recession thanks to strong demand in EU export markets. Despite the global slowdown in 2001-02, strong domestic activity in construction, agriculture, and consumption have kept growth above 4%. • An IMF Standby Agreement, signed in 2001, has been accompanied by slow but palpable gains in privatization, deficit reduction, and the curbing of inflation. • GDP: purchasing power parity - $166 billion • GDP - real growth rate: 4.5% • GDP - per capita: purchasing power parity - $7,400 • GDP - composition by sector:agriculture: 15% industry: 35% services: 50% 2002 data
Industries:textiles and footwear, light machinery and auto assembly, mining, timber, construction materials, metallurgy, chemicals, food processing, petroleum refining Industrial production growth rate: 6% Agriculture - products:wheat, corn, barley, sugar beets, sunflower seed, potatoes, grapes; eggs, sheep Exports: $13.7 billion f.o.b. Exports - commodities:textiles and footwear, metals and metal products, machinery and equipment, minerals and fuels Exports - partners: 63.8% to EU Member States Italy 24.9%, Germany 15.6%, France 8.1%, Imports: $16.7 billion f.o.b. Imports - commodities:machinery and equipment 23%, fuels and minerals 12%, chemicals 9%, and textile 19% Imports - partners:Italy 19.9%, Germany 15.2%, Russia 7.6%, France Debt - external: $13.7 billion Economy - overview:
Inflation • The projected inflation rate for 2003 was 15%, and it was achieved. • National Bank of Romania tries to keep the exchange rates and inflation within acceptable limits. • When there is a high demand on the market for a hard currency, NBR intervenes by selling that currency from the state monetary reserves
Industries in Romania • Automotive • Electrical Equipment and Appliances • Electronics • Machinery and Industrial Equipment
DACIA PITESTI • Pitesti Motor-Car plant was build in a record time of just a year and a half. As of July 1, 1968 the production of Dacia begun under Renault license. • The first model was a copy of Renault 8.
The new DACIA SUPER NOVA has a Renault engine and gearbox. • BUCHAREST, July 2 (1999) - Romania takes another step to embellishing a patchy privatization record when France's Renault returns acquire a stake in carmaker Dacia. • Renault begun a multi-million investment in its Romanian brand, Dacia. • Nova is the first car designed in Pitesti by Romanian experts. • Renault is planning to invest 565 million euros by the end of 2005 in order to produce 500,000 vehicles a year for export.
technical level equal with the western technical level equal with the western technical level equal with the western DAEWOO ROMANIA • In November 1994, Daewoo established the production facilities in Romania. The factory that produced the “OLCIT” model was bought and upgraded to the western technical level. Daewoo became the most important foreign investor of the country. • DAEWOO AUTOMOBILE ROMANIA S.A. witch now has a yearly production capacity of 100,000 units, produces both for the Romanian market and for the export to nearby countries.
ARO – OFF ROAD Different versions of ARO powered by: • Andoria (Turbo Diesel ) • Toyota (Turbo Diesel ) • Renault Megane (Turbo Diesel ) • Toyota ( Gasoline )Price range: 8,000 – 14,000 USD
Roman Brasov – Truck Division • These vehicles are all wheel drive (6x6 formula) and are created for transport in areas difficult to access.
ROCAR • The export activity started in 1968, with great success. • Today, ROCAR has modern equipment and assembly lines, with business partners in countries like: Russia, Hungary, Bulgaria, Columbia, Ecuador, Uruguay, Cuba, Chile. • This bus is currently used in the surface transportation in the main cities of Romania including the capital, Bucharest.
Romania's leading manufacturer of refrigeration appliances ARCTIC 2000 Fridge-freezer • General features: • Appliance made of refrigerator and freezer • Automatic defrosting of the cooling compartment • Area for ice cubes tray of the freezer • Rounded (Soft) design, inside and outside • Different colors available • Manufactured according to the European standards in force (performance, electric safety) and observing the provisions of the CE Regulations concerning the energy efficiency and the electromagnetic compatibility.
TURBOMECANICA builds Rolls-Royce Viper Mk 632-41M turbojet. • The Soko J-22 Orao/Avioane IAR-93 is a joint Yugoslav/Romanian design for a single seat close support , ground attack and tactical reconnaissance aircraft. It has a secondary role as an interceptor. • The power plant for these aircraft is based on the Rolls Royce Viper 632 non-afterburning turbojet ofr Viper with afterburner. 3
EU Enlargement • After successfully growing from 6 to 15 members, the European Union is now preparing for its biggest enlargement ever in terms of scope and diversity. • 13 countries have applied to become new members: • 10 of these countries - Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Slovak Republic, and Slovenia are set to join on 1st May 2004. They are currently known by the term "acceding countries". • Bulgaria and Romania hope to do so by 2007, while Turkey is not currently negotiating its membership.
The Monetary Union • 12 Member States of the European Union are participating in the common currency. They are:Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, The Netherlands, Austria, Portugal, Finland. • Denmark, Sweden and the United Kingdom are members of the European Union but are not currently participating in the single currency.
EU 'Copenhagen Criteria' • In order to join the European Union, the acceding countries need to fulfill the economic and political conditions known as the 'Copenhagen criteria', according to which a prospective member must: • be a stable democracy, respecting human rights, the rule of law, and the protection of minorities; • have a functioning market economy; • adopt the common rules, standards and policies that make up the body of EU law. • The EU assists these countries in taking on EU laws, and provides a range of financial assistance to improve their infrastructure and economy.
EU-ROMANIA RELATIONS • Romania is the first country of Central and Eastern Europe to have official relations with the European Community: An agreement including Romania in the community’s Generalized System of Preferences in 1974 and an Agreement on Industrial Products in 1980 are signed. • Romania’s diplomatic relations with the European Union date from 1990. • Following Romania’s return to democracy, a Trade and Co-operation Agreement is signed 1991. The Europe Agreement enters into force on February 1, 1995, trade provisions having entered into force in 1993 through an "Interim Agreement". • Romania submits its application for EU membership on June 22, 1995.
EU-ROMANIA RELATIONS • In July 1997, the Commission publishes an "Opinion on Romania’s Application for Membership of the European Union".In the following year, a Regular Report on Romania’s Progress Towards Accession" is produced. • In its second "Regular Report"on Romania published in October 1999, the Commission recommends starting the accession negotiations with Romania conditional, among others, on the improvement of the situation of children in institutional care and the drafting of a medium-term economic strategy. • Following the European Council’s decision in December 1999’s Helsinki summit, EU accession negotiations are started with Romania on February 15, 2000
EU-ROMANIA RELATIONS • At the end of 2001, accession negotiations on nine (Company law , Fisheries, Statistics, SMEs,Science and research,Education and training, Consumers and health protection, External relations and CFSP ) of the 31 acquis chapters are already provisionally closed; negotiations on eightof them are being processed • Thus, presently Romania has 30 chapters opened out of which 19 were provisionally closed. • Romania’s aim is to gain EU membership in 2007.
Anticipated Gains for Romania When Entering EU • Pre-accession funds • Foreign investment • Free circulation of goods, labor, capital • Economic stability • Political security
Pre-accession Aid From 2000 onwards, the EU’s pre-accession aid to Romania is provided by three main instruments: • the Phare Programme, providing funding for institution-building and investment in support of EU accession preparations; • ISPA (the pre-accession instrument providing investments in transport and environmental infrastructure) - €208-270 million for the period 2000-2006; and • SAPARD (the financial instrument supporting agriculture and rural development) - €153 million for the period 2000 – 2006. The total volume of pre-accession assistance available to Romania is substantial (at least €630 million per year in total from the three instruments). This represents a very important financial resource for Romania, equal to around 6% of the annual consolidated Romanian national budget revenues, and up to 25% of investment expenditure under the national budget.
EU 66..03% US 8.12%
Free Circulation of Goods, Labor, Capital • Free circulation of goods: • Romanian producers will have access on standardized EU markets at competitive prices – no customs, cheaper labor • Free circulation of labor: • Romanian labor force outflow can produce income inflow back home • Free circulation of capital: • Increased business opportunities for private parties
Economic Stability • Romania will have to meet the Maastricht Criteria which will lead to stability through: • interest rates & price stability (limits inflation), • public budget deficit (3% of GDP), • national debt (60% of GDP), • exchange rates (fluctuation limits guided EMS) • Romania will enjoy the same statute as the older European democracies
Political Security • Romania will be officially a part of “The Great European Family”, a statute that will ensure national border security. • The current EU political system is proven to work (even if it is in a continuous process of adjustment).
Drawbacks - Not too many for Romania • Forced economic specialization • Agriculture specialization in specific products/areas (eg. Poland) • Loss of national entity • Some argue that the EU represents a dilution of the individual country's national characteristics. • Replacement of national currency with EURO. • Romanian economy will have to comply with new higher quality standards of production, meaning high re-industrialization cost.
What If ?! • Joining EU – An irreversible process • The approximation of national legislation with the acquis communautaire is also a prerequisite for the advance in accession negotiations. • The approximation is an irreversible process and practically means that Romania gives up its legislation to adopt another one and the institutions that come with it. • The adoption of EU’s standards in industry, agriculture even statistics • No other choice
How the Average Romanian Will Be Affected? • Higher standard of living • Romania will have to comply to higher EU norms, regulating healthcare, education, etc • More opportunities abroad: • Employment • Travel – tourists inflow and outflow will increase • Access to larger range of products on the Romanian market for the average consumer
Questions ? Thank You.