Romania—Still a long way to go

The words "European Union" seem to have an almost magic effect on residents of the Romanian capital Bucharest. Their mere mention will immediately bring forth gushes of praise, expectation and cautious hope.

"It’s a fantastic idea. Everyone wants it."

"It would mean so much for us"

"We’ve started enacting a lot of political and economic reforms, hopefully that will be enough to let us in."

"I think EU membership would give us chances like we’ve never had before. Besides, we’re Europeans."

Geographically that may be true, but Brussels still thinks Romania has an enormous amount of restructuring to do before it allows the country of 22.5 million to join up.

Romania sits at the very bottom of the current list of 12 EU hopefuls, most of them eastern European, former communist countries. While ten of those might well become EU members in the "big-bang" expansion planned for 2004, bottom-of-the-class Romania and Bulgaria won’t make that date. 2007 is more realistic, say observers.

A recent EU accession progress report gave Romania a failing grade: "Romania cannot be regarded as a functioning market economy and is not able to cope with competitive pressure and market forces within the union in the medium term."

Still under the Shadow of its Past

Romania has taken longer than its neighbors to shake off its communist past.

Despite a December 1989 uprising that deposed the brutal dictator Nicolae Ceausescu and his equally severe wife Elena, former communists have dominated politics for all but four of the past 13 years.

Its unfavorable legacy and political opposition has meant that the country has been slow to make reforms the EU wants to see. Progress in privatizing its large state-owned industries and banking system has only been gradual. 40% of companies are still owned by the state.

While Romania is the second most populous country after Poland, it is also the poorest. The average monthly income is around € 111 ($ 100). The official rate of unemployment may only be 10%, but those who have work have watched their standard of living sink by 60% since 1989. The savings of millions were wiped out along the way by runaway inflation with rates of upwards of 63%.

Current president Ion Iliescu served as Romania’s president after the bloody demise of Ceausescu (1990-1996) He was elected again in December 2000.

He is called a "neo-communist" by his opponents and has not moved reforms such as privatization forward fast enough for the tastes of many. But he insists he has a "strong attachment to the market economy." He says he wants Romania to join the EU, but adds it should do so "with dignity."

A Culture of Corruption

Analysts concur that corruption is one of Romania’s primary stumbling blocks. The EU has called it a "serious and largely unresolved problem."

A Bucharest-based journalist for the Financial Times newspaper has reported that corruption in Romania is alleged to be even more extensive that that in Russia. The country’s labyrinthine bureaucracy and ambiguous legislation encourages individual interpretation of the law and a wide-spread acceptance of bribery as a legitimate way of maneuvering the system.

Corruption has kept away foreign investors and badly needed capital, which has crippled the economic development of the country over the past decade.

Armenia Hiller, German ambassador to Romania, told DW: "It is imperative that the problem of corruption be solved if Romania expects to survive economically."

Social Concerns

The EU is still deeply worried by the human rights situation in the country, particularly high levels of discrimination against the Roma and the treatment of institutionalized children.

After the fall of communism, Romania gained international notoriety for its numerous orphanages where children were kept in often horrific conditions. The EU called for the closure of these state-run institutions in accession talks in 2000. The situation has improved, but there are still some 30,000 children living in state orphanages.

Another EU concern is Romania’s treatment of its Roma minority. According to official numbers, some 400,000 Roma live in Romania, and the EU has said Bucharest must improve social and economic conditions for this population.

Political Instability

Romanian politics shoulders much of the blame of the years of stagnation the country has experienced. The years since 1989 have largely been marked by a failure to create a consensus on how to implement economic reform.

The political parties are fragmented and marked by deep internal divisions that result in constant political realignments

The Party of Social Democracy in Romania (PSDR) is the current governing party. It is largely made up of former communists although its policies have moved towards the social-democratic center under the direction of prime minister Adrian Nastase.

Although the PSDR has expressed its commitment to joining the EU, the party depends on the support of the unions and it finds it difficult to impose reforms that anger its base.

Signs of Hope

After years of stagnation, there are indications that Romania has begun to move forward, albeit slowly.

After a three year recession, the economy grew slightly in 2000. The following year saw a jump in private consumption and investment when the country’s real GDP grew by more than 5%. In Poland growth in 2001 was only 1.1%.

Exports have increased and rate of privatization has accelerated although inflation remains high. New laws offer tax incentives to foreign investors and exchange rates have remained fairly constant over the last two years.

Still, there is much to be done. The agricultural sector is in shambles, the educational system is close to collapse and the private sector is still moribund.

According to Stelian Tanase, a political analyst and well-known Romanian intellectual, perhaps his country needs to tackle not only its economic problems, but its victim mentality as well--one cultivated by 42 years of communist rule and relative isolation. One that has left Romania unsure of where it stands and where it’s going.

"We like to see ourselves as victims, as the pariahs of Europe," he said. "Maybe it’s a kind of an alibi in order not to do anything, to wait for others to come and help. Or maybe we just need more time than the others to get up to speed."