Romanian EU Setback

Romanian European Union membership is postponed after the country's economic shortcomings are exposed

Romanian EU Setback

Romanian European Union membership is postponed after the country's economic shortcomings are exposed

Tuesday, 6 September, 2005

Romanians face a general election this month that may do little to address the problems highlighted by the European Union, EU, in its assessment of Bucharest's case to join the economic bloc.

"Romania cannot be regarded as a functioning market economy and is not able to cope with competitive pressure and market forces within the European Union in the medium term," the annual report on candidate countries' progress toward meeting EU membership criteria said on November 8.

The report bluntly put Romania at the bottom of countries negotiating EU entry. The document criticized its fragile macro-economic environment, uncertain legal and institutional framework and uneven commitments to reforms as among the main obstacles to proper economic and social development.

It highlighted Romania's slow progress in reforms to its large farming sector and in improving living conditions for tens of thousands of abandoned children in state orphanages.

Few politicians or analysts here would argue with the conclusions of the report. There is wide agreement that the centrist coalition of Emil Constantinescu has failed to fulfil the reformist hopes that accompanied its election in 1996.

The CDR alliance of Christian Democrats, Social Democrats and Liberals, was widely seen at the time as severing links to the past. But now, on the eve of the November 26 general election, most people want the former communists to restore the social safety net and bring back a life which, though not materially rich by the standards of Western countries, was stable and secure.

The former communists have gained heavily, raising the possibility of a leftist government to replace the unpopular administration of Prime Minister Mugur Isarescu.

And the fear is that the left might not want to forge ahead with the economic and administrative reforms required to prepare Romania for EU membership.

"We cannot be expected to do in a few months what the present coalition government has failed to do in four years, or what has not been done over 10 years," former President Ion Iliescu, the election front-runner, said recently.

There are many reasons for the failure of the reformists to modernise the government and economy.

The CDR coalition has been dogged by disagreements and a failure to make compromises, delaying or preventing the approval of essential legislation. Just a handful of important laws have been passed: on education, property restitution and on communist-era police files.

Disagreements within the ruling coalition resulted in the dismissal of two premiers - Victor Ciorbea at the close of 1998 and Radu Vasile a year later.

The political deadlock has severely damaged Romania's macro-economic development. Saddled for years with an inefficient economy and antiquated industries, there is little sign of an upturn and Romanians need all the help they can get.

As the European Commission, EC, report shows, Romania is aware of the need for economic reform, but the economic infrastructure is not in place for any real progress to be made. Progress over privatisation has been slow and sporadic, and many enterprises are still awaiting restructuring.

The privatisation of the banking sector has been hazardous and is incomplete. Major structural reforms are still needed in the agricultural sector, where EC agricultural accords have still to be implemented.

The poor state of the economy and lack of reform has brought rising unemployment, high inflation and low wages. Public protests have increased in recent years as a result of dissatisfaction with the state of the economy.

The EC says Romania has scored poorly in reducing levels of corruption, demilitarising police and in raising its legislation on the status of foreigners and state borders to EU standards. The report highlighted continued high levels of discrimination against the two million strong Gypsy minority and called for a national strategy and adequate financial support to combat the problem.

Bucharest has set a target of 2007 for joining the bloc, a date widely regarded as ambitious. It is difficult to see how Romania can turn itself around in order to qualify for EU membership within the next decade.

But the EU expects the new Romanian government to achieve, in the first 100 days, clear and tangible progress in the reform process.

"The next few years, but especially the next few months are vital for Romania's membership chances," said Baroness Emma Nicholson, rapporteur on Romania at the European Parliament.

Marian Chiriac is a regular IWPR contributor

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