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1230 2000-07-26 07:00:00 00BUCHAREST1644 Embassy Bucharest SECRET S E C R E T SECTION 01 OF 04 BUCHAREST 001644 SIPDIS STATE DEPARTMENT FOR EUR/NCE WSILKWORTH E.O. 12958: DECL: 07/25/2015 TAGS: PGOV, PREL, MOPS, MARR, EFIN, OVIP, RO, IZ, military cooperation, flood SUBJECT: ROMANIA REAFFIRMS STRONG CONTINUED SUPPORT FOR CONTINUED TROOP PRESENCE IN IRAQ DESPITE FINANCIAL CONSTRAINTS REF: A. SECSTATE 131524 B. BUCHAREST 1609 C. BAGHDAD 3010 Classified By: POLITICAL SECTION CHIEF ROBERT S. GILCHRIST FOR REASONS 1.4 A, B AND D 1. (S) Summary. President Traian Basescu told an interagency team led by Ambassador Richard Jones, Senior Advisor to the Secretary and Coordinator for Iraq Policy, July 21 that SIPDIS Romania is "unconditionally committed" to a continued troop presence in Iraq. Basescu highlighted the armed forces' financial burdens in light of recent massive domestic flood relief efforts and stated that additional USG financial support for defense reform might permit Romania to increase its contribution in Iraq. Though not a member of the Paris Club, Basescu confirmed that Romania has agreed to Paris Club terms and will forgive 80 percent of Iraq's debts, which total USD 2.6 billion. President Basescu also raised Romania's request to interview security detainee and Iraqi-American citizen Mohammed Munaf, who is a criminal suspect in Romania. Defense Minister Atanasiu reaffirmed the GOR's commitment in Iraq but provided insights into cost saving measures under consideration by the MOD, including possible reductions of overseas deployments in 2006. Senior MFA interlocutors also underscored the GOR's support for a continued GOR presence in Iraq, stressing the importance of a renewed UNSC mandate as well as an Iraqi government request for a Multinational Force (MNF) presence. End Summary. President Basescu: Unconditional Commitment to Iraq --------------------------------------------- ------ 2. (C) Ambassador Jones initiated the meeting with President Basescu, accompanied by State Counselor for National Security General Constantin Degeratu and State Counselor for International Relations Anca Ilinoiu, by expressing gratitude for Romania's steadfast commitment in Iraq. Ambassador Jones singled out Romania's contribution to UN force protection in Basra as particularly significant, given that an abiding international civilian presence in Iraq, such as the UN mission, remains a high priority and constitutes a bellwether for other international organizations of improved security conditions. 3. (C) Basescu stated that the GOR faces deep budgetary problems in the wake of recent severe flooding across Romania (Ref B). He characterized the flood-affected areas as covering a "small surface but having a huge impact," with bridges, railroads and villages destroyed and thousands rendered temporarily homeless. He noted that the GOR has incurred mammoth costs operating an "air bridge" between Bucharest and flood ravaged zones. Naturally, he continued, Romania's armed forces have played a key role in providing relief and organizing cleanup and repair. So far, the Romanian military has spent about USD 60 million and anticipates spending USD 100 million on flood related activities. Flood relief costs have placed tremendous pressures on the armed forces' budget. In addition to limits imposed by fiscal constraints, Basescu said that despite the absence of "signals from the population" opposing Romania's overseas deployments, some journalists could begin to ask "Why not use our troops here?" given the urgency of the flood crisis. 4. (C) Basescu explained that the armed forces face another "major problem" - delays in planned MOD modernization and reform this year and in 2004. "I am really disappointed that reform is not going fast enough, there are still too many conscripts," the President observed. (Note: The MOD's goal is an all-professional armed forces by 2007. End Note.) Basescu asked if it would be possible for the USG to increase support for defense reform. 5. (C) Basescu immediately added, however, "we will not put any condition on participation in Iraq and Afghanistan if support cannot be increased." He promised that Romania will "remain an ally until the end of the mission, we won't play politically." Romania will not put a "question mark" around its participation and "will not in any event diminish participation in Afghanistan and Iraq." Nonetheless, he continued, financial support could permit the GOR to consider increasing its contribution in Iraq. Basescu stated that, in any event, troop withdrawal by the end of 2006 is "optimistic" and "we are mentally prepared for the extension of our presence in Iraq." 6. (C) Ambassador Jones expressed appreciation for Basescu's realistic assessment of the need for a continued Multinational Force (MNF) presence beyond 2006. Both the Ambassador and team member Brigadier General Mark Kimmitt, US Army CENTCOM, discussed ongoing efforts to increase the quality of Iraqi security forces, such as embedding MNF teams in Iraqi units, with the ultimate goal of enabling the Iraqis to take over the fight against terrorists and insurgents. BG Kimmitt underscored that on-the-ground conditions rather than an artificial calendar must drive MNF force contributions. Basescu Proposes Possible Gendarme Training ------------------------------------------- 7. (C) Basescu stated he had spoken with the Romanian Interior Minister Vasile Blaga regarding possible additional contributions Romania could make to strengthen Iraqi institutions. He said that Romania "could send trainers to train the gendarmerie in Iraq." BG Kimmitt described the enduring need for a well-trained Iraqi gendarmerie and outlined possible training modalities. Basescu affirmed that although Romania is a small country with "limited resources" it will remain a "solid partner" and contribute in areas where it can, such as gendarme training. Debt Reduction Pledge --------------------- 8. (C) President Basescu stated that following a recent Paris Club agreement Romania has decided to reduce its Iraq debt (which totals USD 2.6 billion) by 80 percent. He noted that Romania is not a member of the Paris Club but voluntarily complied with its debt reduction Recommendation. Ambassador Jones expressed appreciation for Romania's decision to substantially forgive its Iraqi debt, observing that among the three prongs of international support for Iraq - military, political and economic - economic assistance has been the weakest prong. Ambassador Jones noted that Romania is a good example for other creditors, especially non-Paris Club members and nations like Romania that face financial constraints. Romanian Access to Security Detainee Munaf ------------------------------------------ 9. (S) Basescu raised the subject of Iraqi-American national Mohammed Munaf, now held as a security internee by Coalition Forces in Iraq under the authority of UNSCR 1546, asserting that Romanian "prosecutors need to have a discussion with him" because of his suspected involvement in the kidnapping of three Romanian journalists earlier this year. He stated that the GOR continues to seek the approval of American authorities to meet with Munaf for a "four hour discussion." He continued that the GOR believes Munaf can provide key information about the ongoing prosecution of alleged kidnapping mastermind, Syrian-Romanian businessman Omar Hayssam, whom Basescu asserted is suspected of providing "financial resources to terrorists." Basescu promised that the GOR would "respect all procedures" during the interview and would conduct the interview in any location designated by the USG, given that he is a security detainee. He added that, pursuant to Romanian law, his lawyer would "probably like to attend" the interview. In response to a direct query from Ambassador Jones, Basescu said that the interview did not need to take place in the Romanian Embassy as a previous diplomatic note had indicated. Ambassador Jones promised to help facilitate appropriate GOR access to Munaf. Regarding Munaf's final disposition, Ambassador Jones encouraged Romania to engage in a close dialogue with Iraq. Basescu replied that Romania already has an "extremely close" dialogue with Iraq on Munaf and other issues. Committed - But Cautious - Defense Ministry ------------------------------------------- 10. (C) In a separate meeting at the MOD, Defense Minister Teodor Atanasiu, accompanied by State Secretary for Euro-Atlantic Integration and Defense Policy Ion Mircea Plangu and CHOD General Eugen Badalan, began his comments by noting that the GOR has "the commitment to remain until the Iraqi armed forces can take over." Atanasiu asserted that costs related to the recent flooding compel Romania to consider either reducing its overseas deployments or seeking "cofinancing." Absent "substantial financing," Atanasiu continued, Romania "should consider reduction of its troops overseas by 300" in 2006. (Note: According to MOD statistics, about 1700 Romanian troops are currently deployed overseas, with more than 850 in Iraq and 540 in Afghanistan. End Note.) 11. (C) Atanasiu iterated that "we will maintain our forces in Iraq until the Iraqi forces can take over" but Romania must consider various options for its 2006 overseas deployments including "proportional reductions" or "equal reductions." In the latter alternative, Romania would withdraw a total of three companies (i.e. about one hundred troops in each company) from the Western Balkans, Afghanistan and Iraq. Atanasiu added that the GOR is currently weighing whether to withdraw its frigate from participation in Operation Active Endeavor in Mediterranean, with a decision likely this month or in August. Atanasiu and CHOD Badalan outlined several possible cost saving measures, including overseas deployment reductions, "delay in equipment modernization," and cancellation of exercises, before concluding that the MOD will consider a "mixture of options" for cost saving. Badalan interjected that the bottom line is that the MOD must seek a solution to save the 60 million dollars it has already spent on flood relief efforts. Atanasiu explained that the GOR also faces "budgetary concerns" related to anticipated EU accession in 2007, which limit excessive deficits. BG Kimmitt encouraged the MOD and MFA to consult closely with the U.S. before making any changes in Romania's force presence overseas. He emphasized that maintaining the force protection unit for the UN at Basra is and should remain a top priority. 12. (C) The CHOD added that the MOD needs to justify its activities in a post flood environment, which means telling the Romanian people either that money earmarked for overseas deployments comes from external sources (read: donors) or the MOD is reducing its overseas commitments. The Charge noted that the USG is exploring ways to assist with flood relief. The Centrality of a UN Mandate ------------------------------ 13. (SBU) Following a working lunch with MFA officials, MFA Director General for Global Affairs Stelian Stoian chaired an interagency working group that discussed the GOR's continued commitment to a troop presence in Iraq. Key GOR participants were MOD Director General Claudiu Degeratu, External Intelligence Service (SIE) Director General Silviu Predoiu, Internal Intelligence Service (SRI) Colonel Mihai Munteanu, MFA NATO Division Director Mirela Maghiar, and MFA Middle East Division Deputy Director Laura Mircea. 14. (C) MFA State Secretary for Global Affairs Teodor Baconschi, the de facto number two Foreign Ministry official, joined the interagency meeting in progress and reaffirmed the GOR's commitment to a continued presence in Iraq as expressed earlier in the day by President Basescu's "message." He underscored that the GOR supports the "extension of the mandate" authorizing the presence of the MNF, as provided by United Nations Security Council Resolution 1546. MFA DG Stoian stressed that a new UN mandate should be "comprehensive, so that the MNF can defend itself and the people, covering all possibilities." Stoian also asked whether the Iraqi government "is ready to request officially that the UN authorize a military presence in Iraq post-elections?" Ambassador Jones observed that Iraq recognizes that a continued MNF presence there is essential and the USG will engage in "close consultations" with the Iraqis. (Note: UNSC 1546, Articles 9 and 10, provide that the "presence of the MNF is at the request of the incoming Interim Government of Iraq and that the MNF will have the authority "to take all necessary measures to contribute to the maintenance of security and stability in Iraq." Senior GOR leaders strongly seek a continued UN mandate and explicit Iraqi government request for an MNF presence. Additionally, they recognize the importance of robust ROE for MNF participants. End Note.) Engaging Reluctant Europeans ---------------------------- 15. (C) Baconschi asked about the possible impact on USG relations with "new" European states that have "announced their intention to withdraw," opining that Romania and Poland are the United States' "strongest" Eastern European allies in Iraq. BG Kimmitt noted that the coalition remains solid; with the exception of Spain, no other nation in the 62-member coalition has formally announced that it is concluding its activities in Iraq, although some states have reduced or modified their contribution or already carried out their pledged contribution. He continued that the leadership of Romania and Poland has been significant in maintaining the coalition's solidarity. Ambassador Jones pointed out that after nearly two and one half years the coalition remains alive and well. 16. (C) DG Stoian stressed that the GOR, an EU aspirant, now participates in the EU working group addressing the development of an EU common foreign policy. The GOR is working to "generate support" from EU countries for engagement in Iraq and "EU reluctance is not as strong as it was one year ago." Stoian cited the possible engagement of gendarme units in training Iraqi forces as one example of how the U.S. "can count on Romania to try to get more Europeans involved." Baconschi underscored these remarks by promising that the GOR will remain "proactive in the EU and seek a new climate among member states." UN Force Protection ------------------- 17. (C) During the interagency meeting, Ambassador Jones highlighted the importance of Romania's contributions to UN force protection, noting that a successful UN presence encourages the presence of other international organization. DG Stoian praised UN "experience and expertise" in preparing for Iraqi elections and observed that the UN presence boosts the electoral process' credibility. Stoian also solicited the team's views about NATO's role in Iraq. BG Kimmitt responded that NATO provides "value added" in Iraq and that the MNF and NATO complement each other's activities. 18. (C) Comment. The GOR has demonstrated steady progress on its defense modernization efforts notwithstanding Basescu's expressed concerns about the slow pace of reforms. According to a close presidential advisor, Basescu raised the topic in order to suggest a possible source of USG funding support that would, ultimately, allow the GOR to continue, possibly even increase, its impressive troop commitment in Iraq. The Romanians' worries about funding sources in the wake of this summer's flooding are well founded. Over the past several weeks, Romania has faced its most serious humanitarian crisis since the fall of communism in 1989. Humanitarian concerns aside, the financial impact has been devastating, not just in the MOD but throughout the GOR, which is cash strapped at the best of times. Against this backdrop, overseas deployments could "backfire" against the GOR as ordinary Romanians question the presence of Romanian troops overseas when their manpower, know how and equipment are needed to clean up and reconstruct in the wake of the flooding. Under these circumstances, Romania's unequivocal promise to maintain troops in Iraq, its pledge to forgive the lion's share of its Iraq debt and its willingness to help train Iraqi gendarmes even if additional funding support is not available, demonstrate the depth of its engagement to building democracy and fighting terrorism in Iraq. End Comment. 19. (U) Amembassy Bucharest's reporting telegrams are available on the Bucharest SIPRNet website: www.state.sgov.gov/p/eur/bucharest 20. (U) Ambassador Jones cleared this cable. TAPLIN
2052 2001-10-11 14:38:00 01VATICAN5288 Embassy Vatican CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 03 VATICAN 005288 SIPDIS DEPT FOR EUR/WE (MENNUTI) FROM EMBASSY VATICAN MESSAGE NO. 170/01 E.O. 12958: DECL: 10/9/11 TAGS: PREL, AM, KZ, TU, RO, UP, BO, BU, VT SUBJECT: POPE'S VISIT TO ARMENIA AND KAZAKHSTAN: VATICAN'S GEOPOLITICAL/RELIGIOUS MANEUVERING CLASSIFIED BY AMBASSADOR R. JAMES NICHOLSON FOR REASONS 1.5 (A) AND (D). 1.(C) SUMMARY: VATICAN OFFICIALS AND OBSERVERS DESCRIBE CONFIDENTIAL PAGE 02 VATICA 05288 01 OF 03 111456Z POPE JOHN PAUL II'S SEPTEMBER 22-27 TRIP TO KAZAKHSTAN AND ARMENIA AS SUCCESSFUL. THE VATICAN HAD THREE OBJECTIVES FOR THIS TRIP: 1) CONTINUE THE PRESSURE ON THE RUSSIAN ORTHODOX CHURCH TO ALLOW A VISIT TO MOSCOW; 2) BOLSTER THE "MODERATE ISLAMIC" GOVERNMENT IN KAZAKHSTAN AND HOLD IT UP AS AN EXAMPLE; 3) INCREMENTALLY MOVE FORWARD THE DIALOG BETWEEN THE ROMAN CATHOLIC CHURCH AND THE ARMENIAN APOSTOLIC CHURCH WHICH THE POPE HOPES WILL LEAD TO REUNIFICATION. END SUMMARY 2.(C) EMBASSY OFFICERS MET WITH SEVERAL VATICAN OFFICIALS AND OTHER DIPLOMATIC OBSERVERS IN WAKE OF POPE JOHN PAUL II'S VISIT TO KAZAKHSTAN AND ARMENIA SEPTEMBER 22-27. VATICAN DIRECTOR FOR RUSSIA AND THE FORMER STATES OF THE SOVIET UNION, ARCHBISHOP TRICARICO TOLD DCM THAT THE VISIT WAS AN IMPORTANT STEP IN FURTHER ISOLATING RUSSIAN ORTHODOX PATRIARCH ALEXI AND MAINTAINING PRESSURE TO PERMIT A VISIT TO MOSCOW IN THE RELATIVELY NEAR FUTURE. TRICARICO SAID THAT WITH THE VISIT TO KAZAKHSTAN, THE ANNOUNCED 2002 VISIT TO BULGARIA, AND PROBABLE VISIT TO BELARUS, THE POPE WILL HAVE "SURROUNDED" ALEXI. MORE IMPORTANTLY, THE POPE WILL HAVE SHOWN ALEXI THAT RUSSIAN ORTHODOX CLAIMS OF TERRITORIAL-CANONICAL PREROGATIVES ARE MEANINGLESS IN THE MODERN WORLD. IRONICALLY, ON OCTOBER 2, RUSSIAN EMBASSY TO THE VATICAN DCM, DMITRI SHTODIN SECONDED THIS VIEW TO DCM. SHTODIN SAID THAT HIS GOVERNMENT WAS PUTTING "PRESSURE" ON ALEXI TO INVITE THE POPE TO MOSCOW. HE NOTED THE RELATIVELY MODERATE STATEMENTS OF THE RUSSIAN ORTHODOX'S CHURCH "MINISTER FOR FOREIGN RELATIONS" KYRIL CONCERNING THE POPE VISIT TO KAZAKHSTAN AS AN INDICATION THAT THE GOVERNMENT IS HAVING AN INFLUENCE. (NOTE: THE RUSSIAN ORTHODOX CHURCH DID CONFIDENTIAL PAGE 03 VATICA 05288 01 OF 03 111456Z NOT COMPLAIN ABOUT THE POPE'S VISIT TO ARMENIA AS THE ARMENIAN APOSTOLIC CHURCH IS NOT IN COMMUNION WITH THE ORTHODOX CHURCH AND MOSCOW HAS NEVER CONSIDERED ARMENIA AS BEING IN ITS CANONICAL TERRITORY). TRICARICO SAID THE POPE DID NOT RAISE NAGORO/KARABACH WHILE IN YERAVAN. HOWEVER, WHEN DCM POSED THE SAME QUESTION TO RUSSIAN DCM SHTODIN THE REPLY WAS THAT HE HAD SEEN A REPORTING CABLE WHICH STATED THE ISSUE WAS DISCUSSED WITH THE ARMENIAN PRESIDENT. 3.(C) VATICAN DEPUTY FOREIGN MINISTER MIGLIORE (SEPTEL), TOLD POLOFF AND DCM THAT THE VATICAN IS CONVINCED THAT THE RUSSIAN ORTHODOX ARE FEELING THE PRESSURE, AND THAT A TRIP TO MOSCOW IS NO LONGER AN UNREACHABLE GOAL. DCM ALSO MET WITH FATHER GIOVANNI MATERA, THE RECTOR OF THE BASILICA OF SAINT NICOLAS IN BARI, ON OCTOBER 8. ALTHOUGH A ROMAN CATHOLIC CHURCH, BARI AND THE CHURCH ARE THE CENTER OF RUSSIAN ORTHODOX CHURCH'S OFFICIAL REPRESENTATION TO ITALY (HAVING REJECTED ROME BECAUSE OF THE POPE'S PRESENCE). FATHER GIOVANNI SAID THAT THERE WILL BE A CATHOLIC/ORTHODOX MEETING HOSTED BY THE BASILICA ON NOVEMBER 25 WHICH METROPOLITAN KYRIL IS EXPECTED TO ATTEND; THE QUESTION OF THE POPE'S VISIT TO MOSCOW IS ON THE AGENDA. 4.(C) COMMENT: IN ADDITION TO FURTHER ISOLATING PATRIARCH ALEXI, THE VISIT TO KAZAKHSTAN WAS DESIGNED TO EXTOL RELIGIOUS TOLERANCE IN A PROMINENTLY MUSLIM COUNTRY. KAZAKHSTAN IS THE FIRST MUSLIM COUNTRY WHICH HAS CONCLUDED A CONCORDAT (EG. A TREATY REGULATING RIGHTS AND OBLIGATIONS OF THE CATHOLIC CHURCH) WITH THE VATICAN. THE VISIT TO KAZAKHSTAN IS PART OF THE VATICAN'S AGENDA FOR THE POPE TO CONFIDENTIAL PAGE 04 VATICA 05288 01 OF 03 111456Z VISIT MODERATE ISLAMIC COUNTRIES TO BOLSTER THEIR POPULARITY IN THE FACE OF ISLAMIC EXTREMISM. 5.(C) COMMENT CONT'D: THE MAIN THRUST OF THE VISIT TO ARMENIA WAS TO FURTHER THE PROCESS OF DIALOG BETWEEN THE ROMAN CATHOLIC CHURCH AND THE APOSTOLIC CATHOLIC CHURCH. A SIDE BENEFIT WAS THE FACT THAT ARMENIA, BEING ANOTHER FORMER SOVIET REPUBLIC, WAS AN ADDITIONAL BLATANT REMINDER OF THE MOSCOW PATRIARCH'S OBSTINACY. THEOLOGICALLY, THE ROMAN CHURCH AND THE ARMENIAN CHURCH HAVE MADE GREAT STRIDES IN ELIMINATING THEIR DIFFERENCES. THE REMAINING PROBLEMS INCLUDE THE ROLE OF THE POPE, AS WELL AS THE ARMENIAN CHURCH'S COMMUNION WITH THE COPTIC CHURCH WHICH WANTS TO GO MUCH MORE SLOWLY ON ANY DISCUSSIONS ON REUNIFICATION WITH CONFIDENTIAL > 2001VATICA05288 - Classification: CONFIDENTIAL
2248 2001-11-30 13:04:00 01VATICAN6195 Embassy Vatican CONFIDENTIAL C O N F I D E N T I A L VATICAN 006195 SIPDIS DEPT FOR EUR/WE (DEBORAH MENNUTI); S (CRAIG KELLY) FROM EMBASSY VATICAN/MESSAGE NO. 214/01 E.O. 12958:DECL:11/29/11 TAGS: PREL, RM, RO, IS, VT SUBJECT: VATICAN PUSHING FORWARD ON THE MIDDLE EAST CLASSIFIED BY AMBASSADOR NICHOLSON FOR REASONS 1.5 (A) AND (D) . CONFIDENTIAL PAGE 02 VATICA 06195 301326Z 1. (C) THE VATICAN ANNOUNCED ON NOVEMBER 28 THAT IT HAS INVITED THE LEADERS OF THE DIFFERENT CHRISTIAN COMMUNITIES IN THE HOLY LAND TO A MEETING ON DECEMBER 13. THE VATICAN PRESS ANNOUNCEMENT CATEGORIZES THE MEETING AS PURELY "PASTORAL" IN NATURE. 2. (C) DCM SPOKE WITH HIS ISRAELI COUNTERPART NOVEMBER 29. ISRAELI DCM SAID THAT HIS EMBASSY HAS DISCOVERED THAT THE MEETING IS BEING ORGANIZED BY THE VATICAN FOREIGN MINISTRY, AND NOT ONE OF THE VATICAN COUNCILS (I.E. MINISTRIES) WHICH WOULD NORMALLY BE INVOLVED IN RELIGIOUS/PASTORAL AFFAIRS. IN ADDITION, THE ISRAELIS BELIEVE THAT THE ANNOUNCEMENT OF THE MEETING WAS MEANT TO COINCIDE WITH A DOCUMENT ISSUED BY THE CHRISTIAN LEADERS IN ISRAEL AND THE TERRITORIES CONDEMNING THE CONSTRUCTION OF THE NAZARETH MOSQUE. 3. (C) COMMENT: THE TIMING OF THIS MEETING, COUPLED WITH THE VATICAN'S REQUEST FOR A MEETING WITH SECRETARY POWELL IS A STRONG INDICATION THAT THE VATICAN IS PREPARED TO BEGIN ACTIVELY PUSHING WHAT IT CONSIDERS ITS INTERESTS IN THE MEPP. IT IS LIKELY THAT IT SEES AN OPENING CREATED BY THE WAR ON TERRORISM TO PRESSURE THE ISRAELIS ON THE ISSUE OF INTERNATIONAL GUARANTEES FOR THE RELIGIOUS SHRINES. IT IS ALSO POSSIBLE THAT THAT FOREIGN MINISTER WILL RAISE THE ISSUE OF THE NAZARETH MOSQUE WHEN HE MEETS THE SECRETARY ON DECEMBER 4. NICHOLSON CONFIDENTIAL > 2001VATICA06195 - Classification: CONFIDENTIAL
3399 2002-07-29 14:50:00 02VATICAN3717 Embassy Vatican UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS VATICAN 003717 SIPDIS SENSITIVE DEPT. FOR EUR/WE (MENNUTI), EUR/NCE, DRL/IRF E.O. 12958: N/A TAGS: PREL, PGOV, PL, RO, LO, BU, EZ, VT SUBJECT: HOLY SEE SIGNS ACCORD WITH CZECH REPUBLIC 1. (SBU) THE HOLY SEE SIGNED A JURIDICAL ACCORD WITH THE CZECH REPUBLIC JULY 25 REGULATING THE STATUS OF THE CATHOLIC CHURCH. THE AGREEMENT, REACHED AFTER THREE YEARS OF OCCASIONALLY DIFFICULT NEGOTIATIONS, GUARANTEES THE CATHOLIC CHURCH FREEDOM TO CONDUCT ITS ACTIVITIES, IN UNCLASSIFIED PAGE 02 VATICA 03717 291456Z PARTICULAR WORSHIP, GOVERNMENT OF ITS JURISDICTIONS, AND EDUCATION. IT ALSO RECOGNIZES THE CIVIL EFFECTS OF A CHURCH MARRIAGE. THE CZECH GOVERNMENT GUARANTEES THE CHURCH THE RIGHT TO OFFER PASTORAL CARE IN HOSPITALS, SOCIAL CARE CENTERS AND PRISONS. CATHOLIC SCHOOLS WILL HAVE THE SAME STATUS AS STATE INSTITUTIONS WITH COMMENSURATE RIGHTS AND DUTIES. THE AGREEMENT DID NOT ADDRESS THE ISSUE OF THE RESTITUTION OF CHURCH PROPERTY EXPROPRIATED BY THE FORMERLY COMMUNIST GOVERNMENT BEYOND HORTATORY LANGUAGE COMMITTING TO A RESOLUTION AT THE EARLIEST POSSIBLE DATE. 2. (SBU) THE CZECH REPUBLIC IS ONE OF THE LAST EUROPEAN COUNTRIES TO ENTER INTO SUCH A JURIDICAL AGREEMENT WITH THE HOLY SEE. ACCORDING TO MONSIGNOR MICHAEL BANACH, DESK OFFICER RESPONSIBLE FOR THE CZECH REPUBLIC, THE NEGOTIATIONS HAD BEEN DIFFICULT, AND THE HOLY SEE ULTIMATELY ACCEPTED LESS BINDING AND MORE NEUTRAL LANGUAGE THAN THEY HAD SOUGHT IN SOME AREAS IN ORDER TO ACHIEVE A TEXT ACCEPTABLE TO THE CABINET THAT WOULD HAVE A CHANCE OF SECURING PARLIAMENTARY APPROVAL. BECAUSE OF ANTI-CLERICAL SENTIMENTS THAT STILL PREVAIL IN THE CZECH REPUBLIC, THE HOLY SEE IS NOT CERTAIN HOW DIFFICULT PARLIAMENTARY APPROVAL IS LIKELY TO BE. 3. (SBU) BANACH SAID THE HOLY SEE WAS PARTICULARLY PLEASED WITH THE OFFICIAL RECOGNITION OF CATHOLIC MARRIAGES AND THE RECOGNITION OF CATHOLIC EDUCATION ON A PAR WITH THE STATE EDUCATION SYSTEM. HE NOTED THAT THE CATHOLIC SCHOOL SYSTEM THE CZECH REPUBLIC HAD REMAINED RELATIVELY STRONG, EVEN DURING THE COMMUNIST ERA. UNCLASSIFIED PAGE 03 VATICA 03717 291456Z 4. (U) COMMENT: THE HOLY SEE HAS CONCLUDED SIMILAR AGREEMENTS OR BROADER CONCORDATS WITH MOST COUNTRIES IN CENTRAL AND EASTERN EUROPE AS PART OF ITS EFFORTS TO STRENGTHEN THE JURIDICAL FOUNDATION OF ITS PRESENCE THROUGHOUT THE REGION. POLAND, WITH A COMPLETE CONCORDAT IS THE FURTHEST ALONG, AND HUNGARY AND THE SLOVAK REPUBLIC WITH A SERIES OF AGREEMENTS ARE ALSO FAR ADVANCED. THE CZECH REPUBLIC AGREEMENT HAD BEEN THE MOST DIFFICULT TO CONCLUDE WITHIN THE REGION. THE HOLY SEE REGARDS AGREEMENTS WITH PREDOMINANTLY ORTHODOX ROMANIA AS UNLIKELY IN THE NEAR FUTURE, WHILE AGREEMENTS WITH BULGARIA ARE SEEN AS POSSIBLE BUT NOT IMMINENT. HARDT UNCLASSIFIED > 2002VATICA03717 - Classification: UNCLASSIFIED
4042 2002-10-22 09:57:00 02VATICAN5138 Embassy Vatican UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS SECTION 01 OF 02 VATICAN 005138 SIPDIS SENSITIVE DEPT. FOR EUR/WE (MENNUTI), EUR/NCE, E.O. 12958: N/A TAGS: PREL, SOCI, RO, SOCI, RO, VT, VTPREL SUBJECT: THE POPE AND THE ROMANIAN PATRIARCH: REINFORCING BRIDGES TO ORTHODOX EUROPE ------- SUMMARY ------- UNCLASSIFIED PAGE 02 VATICA 05138 01 OF 02 221043Z 1. (U) IN THE VATICAN, WHERE GESTURES AND SYMBOLS CARRY WEIGHT, POPE JOHN PAUL II PULLED OUT ALL THE STOPS DURING ROMANIAN ORTHODOX PATRIARCH TEOCTIST'S OCTOBER 7-13 VISIT TO VATICAN CITY AND THE CITY OF ROME. IN A SERIES OF EVENTS CULMINATING IN A SPECIAL MASS IN ST. PETER'S, THE PATRIARCH WAS ACCORDED THE HIGHEST OF HONORS PEPPERED WITH WARM FRATERNAL EMBRACES. THE VISIT WAS REMARKABLY SIMILAR IN POMP AND PROTOCOL TO A PAPAL VISIT ABROAD, AND WAS INTENDED TO RECIPROCATE THE WARM RECEPTION THE POPE RECEIVED IN ROMANIA IN 1999. WHILE THE POPE AND THE PATRIARCH ARE GOOD FRIENDS, THE HEARTY WELCOME TEOCTIST RECEIVED IS A CLEAR SIGN TO THE REST OF EUROPE'S ORTHODOX COMMUNITY THAT THE HOLY SEE INTENDS TO CONTINUE ITS VIGOROUS PURSUIT OF CLOSER RELIGIOUS AND GEOPOLITICAL TIES TO ORTHODOX EUROPE IN ORDER TO FURTHER POPE JOHN PAUL II'S LONG-HELD VISION OF EUROPE EXTENDING FROM THE ATLANTIC TO THE URAL MOUNTAINS. END SUMMARY. -------------------------- ROLLING OUT THE RED CARPET -------------------------- 2. (U) PATRIARCH TEOCTIST'S "UNOFFICIAL" INTRODUCTION TO VATICAN CITY STATE BY THE POPE OCCURRED BEFORE AN AUDIENCE OF SOME 250,000 PILGRIMS ATTENDING THE CANONIZATION OF THE FOUNDER OF OPUS DEI. THE HOLY SEE USED THE OCCASION TO HONOR TEOCTIST'S STATUS AS A NATIONAL ORTHODOX LEADER -- THROUGHOUT HIS VISIT HE WAS SEATED ON THE SAME LEVEL AS THE POPE IN AN IDENTICAL CHAIR. PATRIARCH TEOCTIST'S SCHEDULE INCLUDED VISITS TO ROME'S MAJOR BASILICAS. IN EACH HE WAS UNCLASSIFIED PAGE 03 VATICA 05138 01 OF 02 221043Z ACCORDED THE HIGHEST OF HONORS. THE PATRIARCH ALSO VISITED THE SANT'EGIDIO COMMUNITY WHERE HE SPOKE OF CONSTRUCTING A CHRISTIAN EUROPE AND ON THE PERSECUTION SUFFERED BY ORTHODOX CHRISTIANS AT THE HANDS OF THE COMMUNISTS. PATRIARCH TEOCTIST WAS GIVEN THE PULPIT DURING A MASS IN ST. PETER'S BASILICA THAT MARKED THE CONCLUSION OF HIS VISIT. IN HIS SERMON, HE URGED CHRISTIANS TO FILL THE VOID LEFT IN THE EUROPEAN PSYCHE BY SECULARIZATION AND EXPRESSED HIS GRATITUDE TO THE SANT'EGIDIO COMMUNITY FOR ITS INTERNATIONAL EFFORTS TO PROMOTE DIALOGUE BETWEEN THE WORLD'S PEOPLES. --------------------------------------------- ---- OVERCOMING DIFFERENCES: PROPERTY AND PROSELYTISM --------------------------------------------- ---- 3. (U) IN A COMMON DECLARATION ISSUED OCTOBER 12, POPE JOHN PAUL AND PATRIARCH TEOCTIST CALLED FOR CLOSER RELIGIOUS TIES AND URGED ROMANIA'S CHRISTIANS TO SETTLE THEIR DISPUTES AMICABLY. (COMMENT: CATHOLICS IN ROMANIA ARE SEEKING RESTITUTION OF PROPERTIES CONFISCATED DURING THE COMMUNIST ERA AND HANDED OVER TO ORTHODOX CHRISTIANS. END COMMENT). ALSO AT ISSUE ARE CONVERSIONS TO CATHOLICISM AMONG NON- BELIEVERS WITH AN ORTHODOX HERITAGE. THE ORTHODOX CHURCH CONSIDERS SUCH NON-BELIEVERS TO BE THEIR NATURAL CONSTITUENCY, WHILE THE CATHOLIC CHURCH VIEWS THEM AS OPEN TO CONVERSION. THE ORTHODOX CHURCH IN ROMANIA, AS IN RUSSIA, HAS MAJOR CONCERNS ABOUT LOSING CONSTITUENTS TO CATHOLICISM THROUGH SUCH "CONFESSIONAL COMPETITION." THE TWO LEADERS EFFECTIVELY SIDE-STEPPED THIS ISSUE BY CALLING FOR COOPERATION RATHER THAN COMPETITION IN THEIR RESPECTIVE MISSIONARY WORK AMONG NON-CHRISTIANS. THE POPE, HOWEVER, UNCLASSIFIED PAGE 04 VATICA 05138 01 OF 02 221043Z INSISTED THAT THE CATHOLIC CHURCH SEEKS TO SUPPORT THE MISSION OF THE ORTHODOX CHURCH, WHILE BEING ABLE TO CARRY OUT ITS OWN PASTORAL TASK FOR ITS FAITHFUL "AND FOR THOSE WHO TURN FREELY TO HER." --------------------------------------------- ---- COMMON CONCERNS: EU ENLARGEMENT AND EVANGELICALS --------------------------------------------- ---- 4. (U) THE LEADERS WERE IN FULL AGREEMENT ON THE NEED TO ENSURE THAT EUROPEAN UNION EXPANSION, WITH ITS SECULAR ORIENTATION, IS COMPLEMENTED BY RELIGIOUS VALUES AND INCREASING RELIGIOUS UNITY. TO THIS END, THE POPE AND THE PATRIARCH AGREED TO WORK TOGETHER TO GET THEIR ISSUES ON THE EU'S AGENDA. THESE INCLUDE THE SANCTITY OF LIFE, THE DIGNITY AND FUNDAMENTAL RIGHTS OF THE HUMAN PERSON, JUSTICE AND SOLIDARITY, PEACE AND RECONCILIATION, THE IMPORTANCE OF THE FAMILY, AND PROTECTION OF THE ENVIRONMENT. 5. (SBU) BOTH LEADERS EXPRESSED CONCERN OVER WHAT THEY REGARD AS THE ENCROACHMENT OF "NEW RELIGIOUS MOVEMENTS AND UNCLASSIFIED UNCLASSIFIED PTQ1657 PAGE 01 VATICA 05138 02 OF 02 221043Z ACTION EUR-00 INFO LOG-00 NP-00 AID-00 CIAE-00 DODE-00 DOEE-00 SRPP-00 DS-00 ED-01 UTED-00 VC-00 HHS-01 H-01 TEDE-00 INR-00 L-00 VCE-00 AC-01 NSAE-00 NSCE-00 OMB-01 PA-00 PM-00 PRS-00 ACE-00 P-00 SCT-00 SP-00 SS-00 TEST-00 TRSE-00 T-00 USIE-00 PMB-00 DSCC-00 PRM-00 DRL-02 G-00 NFAT-00 SAS-00 /007W ------------------FC2114 221044Z /38 R 220957Z OCT 02 FM AMEMBASSY VATICAN TO SECSTATE WASHDC INFO AMEMBASSY BUCHAREST AMEMBASSY MOSCOW AMEMBASSY ATHENS AMEMBASSY SOFIA USEU BRUSSELS UNCLAS SECTION 02 OF 02 VATICAN 005138 SIPDIS SENSITIVE DEPT. FOR EUR/WE (MENNUTI), EUR/NCE, E.O. 12958: N/A TAGS: PREL, SOCI, RO, VT SUBJECT: THE POPE AND THE ROMANIAN PATRIARCH: REINFORCING BRIDGES TO ORTHODOX EUROPE SECTS" INTO FORMERLY COMMUNIST STATES. (NOTE: "NEW RELIGIOUS MOVEMENTS" IS A VATICAN EUPHEMISM FOR U.S.-BASED PENTECOSTAL CHURCHES. END NOTE). THE POPE AND THE PATRIARCH LAMENTED THE FACT THAT THESE COUNTRIES WERE SEEN AS "SPIRITUALLY UNCLASSIFIED PAGE 02 VATICA 05138 02 OF 02 221043Z EMPTY," VIRGIN TERRITORY BY THE NEW MOVEMENTS WHEN IN REALITY CHRISTIANITY IS MILLENNIA-OLD AND DEEPLY-ROOTED IN MOST OF THEM. ------- COMMENT ------- 6. (SBU) POPE JOHN PAUL II USED HIS PERSONAL FRIENDSHIP WITH ROMANIAN PATRIARCH TEOCTIST, AS HE HAS PREVIOUSLY WITH AN ARMENIAN ORTHODOX LEADER, TO BOLSTER ECUMENICAL RELATIONS WITH THE ORTHODOX CHURCH. IN THE FACE OF PERCEIVED RUSSIAN ORTHODOX INTRANSIGENCE AND INCREASING PRESSURE FROM RUSSIAN AUTHORITIES ON THE CATHOLIC CHURCH IN RUSSIA, SUCH BRIDGE- BUILDING PROVIDES A USEFUL COUNTERPOINT FOR THE POPE TO DEMONSTRATE THE POSSIBILITIES OF CATHOLIC-ORTHODOX DIALOGUE. AS LONG AS THIS POPE REMAINS IN OFFICE, THIS DIALOGUE WILL REMAIN A PRIORITY. IN FACT, THE POPE SUGGESTED THAT THIS DIALOGUE BE GIVEN AN INSTITUTIONAL STRUCTURE THAT WOULD PROVIDE FOR A MORE REGULAR ORTHODOX-CATHOLIC EXCHANGE. THE HOLY SEE AND ORTHODOX CHURCHES IN GENERAL VIGOROUSLY PROMOTE EUROPE'S HISTORICALLY CHRISTIAN HERITAGE IN THE CONTEXT OF EU EXPANSION TO FORMERLY COMMUNIST STATES. THE WELCOME TEOCTIST RECEIVED IN ROME IS PART OF A BROAD VATICAN STRATEGY TO CEMENT ECCLESIASTICAL ALLIANCES TO MATCH THE SECULAR ONES CENTERED ON BRUSSELS AND STRASBOURG, AND ALSO TO SHOW THE RUSSIAN ORTHODOX THEY HAVE NOTHING TO FEAR FROM THIS POPE AND FROM CATHOLICISM. HARDT UNCLASSIFIED PAGE 03 VATICA 05138 02 OF 02 221043Z UNCLASSIFIED > 2002VATICA05138 - Classification: UNCLASSIFIED
16023 2004-04-15 12:22:00 04ANKARA2181 Embassy Ankara UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS ANKARA 002181 SIPDIS SENSITIVE STATE FOR EUR/ACE, EUR/UMB E.O. 12958: N/A TAGS: AL, BK, BU, GR, HR, KSEI, MD, MK, PREL, RO, SR, TU, EUN SUBJECT: DEMARCHE DELIVERED: GOT CONTINUED SUPPORT FOR MOLDOVA'S SEECP OBSERVER STATUS REF: SECSTATE 81576 (SBU) Poloff on April 15 delivered reftel talking points to MFA Balkans Department officer Gul Buyukersen Oral. Oral confirmed Turkey's continued support for Moldova's SEECP bid, but noted that reports from the GOT's mission in Sarajevo indicate Moldova seeks full membership, not/not observer status. Oral said she will attempt to clarify misunderstanding. EDELMAN
17709 2004-06-10 12:56:00 04BRUSSELS2496 Embassy Brussels CONFIDENTIAL C O N F I D E N T I A L BRUSSELS 002496 SIPDIS E.O. 12958: DECL: 06/10/2014 TAGS: PREL, CASC, CVIS, RO, EUN, USEU BRUSSELS SUBJECT: VERHEUGEN RESPONSE TO DEPUTY SECRETARY ON ROMANIAN ADOPTIONS Classified By: Rick Holtzapple, PolOff, Reason 1.4 B/D 1. (U) The cabinet of Enlargement Commissioner Gunter Verheugen has faxed us a letter from the Commissioner to Deputy Secretary Armitage, replying to the Deputy Secretary's letter of May 4 on the issue of Romanian adoptions. The full text of the letter is in para 3 below, and a copy of the original fax with signature has been faxed to EUR/ERA and Embassy Bucharest. 2. (C) The letter confirms what we already know from the copy of the report from the Commission to the GoR on the issue that was provided to Embassy Bucharest. The Commission's legal experts have told the Romanian government that the "proposed approach to pursue on the policy of intercountry adoptions with a very limited exception" is seen as "essentially in line" with the EU's demands. 3. (U) Beginning of Text: Dear Mr. Secretary of State, Thank you for your letter of 4 May 2004 on the issue of intercountry adoptions from Romania. I would like to clarify that the European Commission is not against intercountry adoption as such. However, the UN Convention on the Rights of the Child foresees that inter-country adoption may be considered only if the child cannot be placed in a foster or an adoptive family or cannot in any suitable manner be cared for in the child's country of origin. This "last resort" provision is consonant with the provision in the UN convention that refers to the "desirability of continuity in a child's upbringing and to the child's ethnic, religious, cultural and linguistic background." All Member States of the EU have ratified the UN Convention on the Rights of the Child and therefore should respect the above mentioned principles. Therefore the Commission considers that the moratorium on intercountry adoptions is necessary as long as no legislation is in force that fully complies with this convention, and as long as no administrative capacity exists to implement this legislation. Following Prime Minister Nastase's request for legal advice on children's rights and adoption, the Commission set up an Independent Panel of EU Member State experts on family law. In its latest report, which I have forwarded to Prime Minister Nastase, the Panel noted the fundamental change made by Romania on the issue of intercountry adoption. The proposed approach to pursue on the policy of intercountry adoptions with a very limited exception was considered essentially in line with the UN Convention on the Rights of the Child. Our primordial focus must be on getting the system of child care in Romania right so that we get tot he usual situation in the Member States of the EU where international adoptions are the exception. Therefore, the EU has supported Romania in its efforts to improve the quality of public care for children. This meant that large residential establishments were closed down and replaced with a selection of child protection alternatives ranging from smaller homes and foster care to day-care centres. Of course there remains work to be done, but Romania surely has come a long way in resolving the issue of children in public care. I have been informed that recently a videoconference on this issue was held between the Washington State Department and my services, and that it was considered useful to have both sides express their respective positions. Yours sincerely, /S/ Gunter Verheugen
17917 2004-06-17 15:52:00 04BRUSSELS2593 Embassy Brussels CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 03 BRUSSELS 002593 SIPDIS E.O. 12958: DECL: 06/17/2014 TAGS: PREL, MARR, EAID, XA, XF, TU, HR, RO, BG, EUN, USEU BRUSSELS SUBJECT: MANY EU SUMMIT FOREIGN AND SECURITY POLICY DECISIONS PRECOOKED REF: A. USEU BRUSSELS 2368 B. USEU BRUSSELS 2369 C. USEU BRUSSELS 2502 Classified By: Rick Holtzapple, PolOff, Reason 1.4 (D) SUMMARY ------- 1. (C) During the EU Summit June 17-18 in Brussels, EU sources tell us EU leaders will approve a range of pre-cooked decisions on a broad range of foreign policy topics so that they can focus on Constitutional Treaty negotiations and top-level appointments (septel). EU leaders are expected to endorse recent proposals from High Rep Solana and Commissioner Patten on EU engagement in Iraq, and instruct foreign ministers to agree on a package of "appropriate first steps." The EU will also issue fairly anodyne language on Iran. On the MEPP, EU leaders are to "reaffirm the readiness of the EU to work with the US and other partners in cooperating with the countries concerned." Leaders will agree to start drafting the Accession Treaty for Romania and Bulgaria in July 2004, open accession negotiations with Croatia "early in 2005", and "welcome significant progress" made by Turkey toward qualifying for the start of accession negotiations. Leaders will also issue a decision outlining procedures for an ESDP Operations Center. Our initial read of this ESDP document is that it preserves UK redlines (more septel). One topic that may see new language is Afghanistan, depending on the discussion at the Foreign Ministers' June 17 dinner. END SUMMARY. 2. (SBU) The Irish Presidency has released (on www.eu2004.ie) the Draft Conclusions for this week's EU Summit. Council sources say this draft can effectively be viewed as the final Conclusions, since Heads will not have any serious discussion of most of the topics. At most two hours on Friday morning are set aside to review the text, and in those two hours the focus is supposed to be on the Justice and Home Affairs section. EU FMs, at dinner on Thursday will discuss MEPP, Iran (on both of which Conclusions are already set) and Afghanistan (the one topic that might still be added to these draft Conclusions). IRAQ: EU TO DECIDE "FIRST STEPS" IN JULY ----------------------------------------- 3. (SBU) The Summit Conclusions welcome UNSCR 1546 and the Commission Communication "The EU and Iraq - A Framework for Engagement" as well as the accompanying letter from High Rep Solana and External Relations Commissioner Patten (REFS B and C). The Summit will instruct the July 12-13 GAERC to "agree appropriate first steps to be taken" that could include: technical, economic and reconstruction assistance; close engagement with UN teams, including on elections; enhancing EU representation in Iraq, as (security) conditions permit; beginning political dialogue; and urging neighbors to be constructive. EU leaders also propose an EU-Iraq Troika (presumably at FM-level) with the "new Iraqi government as soon as possible" and an invitation to the Iraqi PM to address the EU's General Affairs and External Relations Council (GAERC). Conclusions also "welcome the possibility of an international meeting to support the Iraqi political transition and Iraqi recovery." The Summit Conclusions do not repeat June 14 GAERC's mention of the prisoner abuse issue. BMENA: "READINESS TO WORK WITH U.S." ------------------------------------ 4. (SBU) The summit will endorse the "Strategic Partnership with the Mediterranean and the Middle East" highlighting familiar themes. In the section directly relevant to the Broader Middle East and North Africa initiative, EU "reaffirms the readiness of the EU to work with the U.S. and other partners in cooperating with the countries concerned. It looks forward to reviewing the MEPP and exploring the possibilities for coordinating our respective efforts to assist the reform process at the coming EU-US Summit on 26 June 2004." The Summit will also issue a page and a half of Conclusions specifically on the Middle East Peace Process, but these include nothing of substance that the EU has not already said several times before, including reaffirmation of the centrality of the road map. IRAN: WAITING FOR THE IAEA -------------------------- 5. (C) In a single paragraph on Iran, the EU "stresses the Union's desire to move towards a closer relationship with Iran, on the basis of action by Iran to address the EU's concerns" on the nuclear program, terrorism, human rights and Iran's approach to the MEPP. The Conclusions note that "the EU will continue discussion in light of IAEA DG El-Baradei's report and the outcome of the IAEA Board of Governors meeting currently taking place in Vienna." (COMMENT: These brief Conclusions reflect the Irish Presidency's desire (REF A) to avoid serious discussion of the Iran issue among leaders at this juncture. END COMMENT.) ESDP Planning Cell: Careful Instructions on Next Steps --------------------------------------------- --------- 6. (C) The Conclusions include a remarkably detailed one-page section on "NATO/EU Consultation, Planning and Operations." The EU leaders ask High Rep Solana to work toward establishing SHAPE and NATO liaison arrangements by end 2004. Heads also will agree to "work on establishing an operations centre" by 1 January 2006 at the latest. In fairly restrictive terms, the text states "this will not be a standing HQ" and that national HQs remain the "main option" for "autonomous military operations." The "objective" should be for an operations center able to plan and conduct operations "on the scale of operation Artemis" (NOTE: Artemis was the ESDP operation in Ituri, Congo, which was planned by French national HQ and involved about 1500, predominantly French, troops. END NOTE). The Summit will also "welcome the understanding that the civ/mil cell and facilities for an operations centre should be located in the same building as the main structures of the EUMS, as well as, to the maximum extent possible, with the pol-mil structures of DGE." This language represents an explicit effort by several member states, led by the UK, to limit the size of the operations center (details septel). Enlargement: Romania, Bulgaria, Croatia and Turkey --------------------------------------------- ----- 7. (SBU) Responding to a successful lobbying effort by the Romanians, the EU will not (at least at this point) "decouple" Bulgaria and Romania in their path to the EU; both are still described as singing a single Accession Treaty "as early as possible in 2005" with the aim of joining the EU in January 2007. In a legally meaningless, but politically significant, gesture, the Summit will decide that drafting of the Accession Treaty for both countries will begin in July 2004 (even if the terms for Romania aren't fully set yet). The Summit will also announce that Croatia will begin accession negotiations "early in 2005", and the Commission will be asked to "prepare a pre-accession strategy" including details of how and when Croatia could get access to the much larger pots of assistance money available in those budget lines. The Conclusions do include a useful reference that "emphasizes that Croatia needs to maintain full cooperation with ICTY and take all necessary steps to ensure that the remaining indictee is located and transferred to The Hague" as well as mention of minority rights, refugee returns, judicial reform, regional cooperation and anti-corruption. The Conclusions make no decisions about Turkey, but reaffirmed that a decision on whether to open negotiations with Turkey will be made in December. At this stage, the EU "welcomes the significant progress made to date by Turkey in the reform process" and "the positive contribution of the Turkish Government" on Cyprus. The Conclusions do include a mention of the need to adapt Turkey's Customs Union, (a document known as "the Ankara Agreement"), to an EU of 25. (NOTE: This is an issue we are told arose anew in the past couple of weeks when Ankara said it would extend the Agreement to all of the new Member States, other than the Republic of Cyprus.) Other External Relation Topics, Including US-EU Summit --------------------------------------------- --------- 8. (U) The Conclusions also cover a real laundry list of foreign policy topics, with passing references to HIV/AIDS, Millennium Development Goals, ESDP in Bosnia, WMD strategy, human rights, and conflict prevention. In a list of references to various EU-third country Summits, the EU "expresses its confidence that the strength, depth and significance of the EU-US relationship will be demonstrated in a successful EU-US Summit on 26 June; the relationship is also being reinforced through enhanced economic partnership and intensified business dialogue." The EU also confirms its new European Neighborhood Policy will include Armenia, Azerbaijan and Georgia. Justice and Home Affairs ------------------------ 9. (U) The Conclusions on these topics are largely an inventory of achievements to date and a repetition of previously set deadlines. They confirm that High Rep Solana is asked to create an intelligence capacity on terrorist threats in the Council Secretariat as soon as possible. Building on suggestions in the March 25 EU Summit Declaration, the Conclusions task the Council with drafting, by December 2004, a "coherent overall approach" to strengthening EU efforts to combat terrorist financing. They also task the Council and Commission with developing by the end of 2004 an overall strategy on the protection of critical infrastructure, and with evaluating the capabilities of Member States in preventing and responding to a terrorist attack. SCHNABEL
23788 2004-12-08 16:23:00 04BRUSSELS5186 Embassy Brussels CONFIDENTIAL C O N F I D E N T I A L BRUSSELS 005186 SIPDIS E.O. 12958: DECL: 12/08/2014 TAGS: PREL, ECIN, RO, EUN, USEU BRUSSELS SUBJECT: ROMANIAN EU ACCESSION NEGOTIATIONS GOING DOWN TO THE WIRE Classified By: Rick Holtzapple, PolOff, Reasons 1.4 (B/D) SUMMARY ------- 1. (SBU) The European Commission has recommended against closing the competition chapter of Romania's accession negotiations because of concerns over state subsidies. No American companies are believed to be involved in any of the major cases of concern. The EU might miss its self-imposed deadline of the end of 2004 for concluding negotiations. If the talks drag too far into 2005, it could even mean delay of Romania's planned EU entry date of January 2007. END SUMMARY. 2. (C) We spoke with Dirk Lange, the European Commission's Head of Unit for Romania, on December 7 about the state of play in Romania's accession negotiations. Lange said that it was still unclear whether Romania would be able to conclude successfully all of its negotiations for EU accession prior to the December 17 European Council meeting. Negotiations between the GoR and the EU's Council and Commission continue "nearly every day", Lange said (another session is being held Dec. 8), and he has "not given up hope that we can conclude by the end of the year." 3. (C) Lange said that both remaining open chapters, justice and home affairs (JHA) and competition, were difficult. On JHA, the Commission had recommended to EU Member States in the Council that Romania's most recent commitments on application of the EU's body of law (the "acquis communitaire") in this area was adequate and the chapter could be closed. But the Council had yet to reach a final decision. Competition was more difficult, and the Commission's most recent recommendation to the Council a couple of weeks ago stated this chapter was not yet ready for closure. Lange explained that under candidate countries' "Europe Agreements" with the EU, states such as Romania were already obligated to conform to EU law. But the Commission needed to see evidence that Bucharest was correctly applying it, and these concerns were not yet met, particularly in the field of state aid or subsidies to companies. Lange said a number of specific state aid cases were of concern, involving both EU and non-EU companies, but he was not aware of any that involved U.S. firms. 4. (C) Lange told us that some Member States had disagreed with the Commission's recommendation not to conclude accession negotiations with Romania. He did not name any, but media reporting indicate that at least France and Italy have been pushing to let Romania in. In the end, the Council could override the Commission's objections and decide to close the competition chapter in any case (although this is made more difficult politically by the fact that competition policy is one of the areas where the Commission has the greatest authority within the EU). He could not predict how events would unfold in the coming days, but was sure that even if the negotiations were finished this month, Romania would be subject to very close monitoring by the Commission all they way up to its planned accession, alongside Bulgaria, in January 2007. (NOTE: The Accession Treaty for Romania and Bulgaria -- which despite suggestions from the European Parliament is still planned to be a single treaty -- will include a clause stating that if the Commission finds a failure to meet accession obligations, and the Council agrees, either country's entry to the EU could be postponed by up to a year. END NOTE.) Lange added, however, that even if negotiations stretched into 2005 there could still be time to prepare, sign and ratify an Accession Treaty prior to that entry date. COMMENT ------- 5. (SBU) Romanian diplomats in Brussels are putting a brave face on developments; expressing confidence they will finish negotiations prior to December 17. But they are very disappointed it has come down so close to the wire. While there is a strong desire among the EU-25 to finish "the current round" of EU expansion to 27 members this year and not drag the process out, many Member States also worry about setting any precedent for future negotiations (i.e., Turkey) if Romania is given too much benefit of the doubt in the final stages of its accession process. MCKINLEY
23916 2004-12-10 15:40:00 04BUCHAREST3413 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 02 BUCHAREST 003413 SIPDIS STATE FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: DECL: 12/10/2014 TAGS: ECON, EFIN, PGOV, PREL, RO SUBJECT: IRAQ DEBT: ROMANIA WANTS ITS MONEY BACK REF: A. A) STATE 261021 B. B) WARSAW 5191 (NOTAL) Classified By: ECONOMIC SECTION CHIEF JOHN RODGERS FOR REASONS 1.4 B AN D D 1. (C) Summary: Joint U.S. and British Embassy discussions with Romanian government (GOR) officials reveal little enthusiasm for debt reduction for Iraq. Instead, Romania is aiming for a &flexible8 solution that could involve oil deliveries, equity in joint ventures or debt restructuring. GOR officials will meet with Iraq officials next week to discuss the debt issue. End Summary. 2. (C) Embassy Econoffs on December 9 and 10, joined with the British Economic First Secretary to encourage the Romanian government to look favorably on the recent Paris Club debt reduction agreement to determine if, in its discussions with Iraqi officials, Romania could also grant Iraq relief from its Ceaucescu-era debt. In approaches to Catalin Ionita, Deputy Director General of UN and Global Affairs in Ministry of Foreign Affairs (MFA), and Paul Ichim, State Secretary in the Ministry of Finance (MOF), the answer was the same: The Romanian government is still examining its position and options, but does not believe it can afford to forgive or reduce the debt Iraq owes to it. Mr. Ionita mentioned some of the preliminary ideas that Foreign Minister Geoana had advanced during his visit to Iraq this summer, including debt restructuring, oil deliveries or equity in joint ventures as alternatives to debt reduction or forgiveness. 3. (SBU) Romanian officials point out, that for their country, the Iraqi debt is significant. According to the Romanian MOF, as of December 31, 2003, Iraq is indebted to Romania in the amount of approximately $2.6 billion, including total principal of over $1.7 billion and total interest of approximately $1.1 billion. This amount includes the following: - $1.19 billion, of which $927 million is principal, and $262 million is interest calculated up to February 1, 1996. - $537 million of additional principal, which includes $98 million under verification and registration, as well as $439 of non- rescheduled debt. - $845 million, which consists of additional interest penalties from February 1, 1996 to December 31, 2003. The MPF calculated these penalties according to the same contractual rates of interest established in 1990 in the deferred payment agreement made with the Iraqis. Note: These claims are based on goods and services delivered to Iraq before December 31, 1989, when Romania was still controlled by communist dictator Nicolae Ceaucescu. The debt owed by Iraq to Romania has been rescheduled on three separate occasions, in 1987, 1988 and 1999. In Baghdad on February 1, 1990, the GOR signed a &Financial Agreement between the Government of Romania and the Government of the Republic of Iraq8. This agreement stipulated that the principal debt would be deferred for six years, of which three were defined as a grace period beginning on February 1, 1990. The total amount of debt covered by this agreement was $1,190 million. Although the claims recovery began in February 1990, it was halted on August 30, 1990 in conformity with United Nations Security Council Resolutions. Three years later Romania submitted a claim for the debt to the United Nationals Compensation Commission (UNCC), which was charged with handling claims related to Iraq,s invasion of Kuwait. However, this claim was withdrawn when the UNCC deemed the debts too old to be within its jurisdiction. 4. (C) Mr. Ichim volunteered that MOF Minister Tanasescu had recently sent a letter to other non-Paris Club creditor nations to urge them to develop a common position on Iraq,s debt (see Ref B). He claimed that no country had yet replied formally to the letter, although Romania,s embassies were reporting some discussions with host country governments on the subject. Ichim also mentioned that Romanian Ambassador to the United States, Sorin Ducaru, had discussed the Iraq debt issue with a (not further identified) USG official, who reportedly stressed that Romania was ¬ being put under any pressure8 to adhere to the Paris Club arrangement. Econoff replied that we were not/not trying to pressure the Romanians, but merely encouraging them to be as flexible as possible when talking to the Iraqis. 5. (C) Comment: Romanian officials stress that they want Iraq to succeed and point to Romanian efforts on the ground to stabilize the country. As a poor country itself, however, Romania does not seem at all inclined to accept that an oil-producing country could not eventually repay a significant portion of its debt in some way. Embassy will follow up with Romanian officials after they discuss the debt issue with Iraqi officials next week in Bucharest. End Comment. CROUCH
23917 2004-12-10 15:54:00 04BUCHAREST3414 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS SECTION 01 OF 02 BUCHAREST 003414 SIPDIS SENSITIVE STATE FOR EUR/NCE - WSILKWORTH, EB/IFD STATE PASS USTR - LISA ERRION TREASURY FOR STUART USDOC FOR 4232/ITA/MAC/EUR/OEERIS/CEEB/BURGESS/KIMBALL STATE PASS USAID E.O. 12958: N/A TAGS: ECON, ETRD, EIND, EFIN, RO SUBJECT: ROMANIA'S PARLIAMENT PASSES 2005 BUDGET This cable is sensitive but unclassified. Handle accordingly Summary ------- 1. (U) In anticipation of the November 28 general elections, Romania's Parliament rushed to pass the budget this year, bypassing substantive debate. Both the 2005 state budget and social assistance budget laws, passed by both legislative chambers on November 10, and ratified by President Iliescu on November 22, changed little from the draft budget laws reviewed by the IMF and submitted to the Parliament in October. The budget anticipates a deficit of 1.5 percent of projected GDP. End Summary. Parliament passed the 2005 budget with record speed --------------------------------------------- ------ 2. (SBU) In an unprecedented move, the Senate and Chamber of Deputies gathered in a joint session to debate the budget provisions expeditiously. Several members of Parliament were absent for the budget vote due to election campaign obligations. A few also used their absence as a protest against the superficial nature of the budget debates and the scant attention given to opposition proposals. The ruling Social Democratic (PSD) party expressed its satisfaction with the efficiency of the debates that lasted only two weeks, rather than the typical one to two months. The president ratified the legislative package on November 22, six days before the elections. 3. (SBU) Although the Parliament followed all constitutional steps in its debate and passage of the budget, many analysts felt that the process was on the edge of the law. Due to the incumbent party's desire to have the budget passed prior to elections, the debate and drafting was superficial and rushed. Everyone gains in 2005 ----------------------- 4. (SBU) The budget shows overall increases in every area, although certain ministries benefit to a greater extent than others. The Ministry of Education and research gains approximately 29 percent in the new budget, giving it the largest overall increase. The Ministry of Administration and Interior was granted the second largest gain, with 28 percent, followed by the National Defense Ministry, with 21 percent more funds next year. With military spending pegged to a strict 2.38 percent of GDP until 2008, this gain is primarily a result of projected GDP expansion. Although everyone wins to a certain extent in this optimistic budget, lower gains are slated for the Ministry of Justice, with only a 1.4 percent increase and the Ministry of Labor, Social Security and Family, with a 5.3 percent increase. Note: Dollar amounts and percentages have been calculated using the average forex rate for 2004 compared with the current exchange rate. The Ministry of Finance's projected 2005 average exchange rate of ROL 35,150 for one USD now seems implausible due to current market conditions. The ROL has been on a solid appreciation trend since the central bank switched to a managed float policy at the end of October. Today the ROL trades at 28,780 to one USD, a difference of 22.1 percent with the Ministry of Finance's prediction for 2005. Revenue Projections Overly Optimistic ------------------------------------- 5. (SBU) The Parliament based the 2005 state budget on the following leading indicators, which the IMF reviewed and sanctioned: - Consolidated budget deficit of 1.5 percent of GDP, a decrease from 2004's 1.65 percent deficit target; - Inflation rate of seven percent, in comparison with 2004's nine percent; - Economic growth of 5.3 percent, much lower than the 8.1 percent annualized growth announced for the first nine months of 2004; and -Current account deficit not exceeding 5.4 percent of targeted GDP. 6. (U) Embassy notes that many analysts consider the 2004 growth rate to be at least somewhat exaggerated and unsustainable, as high agricultural gains due to favorable weather can be regarded as atypical for the climate patterns of recent years. The GOR is probably counting on revenue growth that will not materialize. The GOR may, therefore, need to increase import duties or issue additional Eurobonds, as well as raise taxes, to make up revenue shortfalls. 7. (U) As the basis for its tight budget policy, the ruling PSD party is counting on a projected 5.3 percent economic growth, a 10.3 percent increase in investments, lower tax evasion and higher excise taxes. Year 2005 revenues are projected at $28.3 billion (31.2 percent of the GDP), while expenditures are programmed as US$ 29.7 billion (32.7 percent of the GDP). These figures are based on a 2005 GDP projected to reach US$ 90.8 billion. The state budget will distribute funds amounting to 6.6 percent of GDP to counties and municipalities. This is an increase of approximately 12.4 percent over 2004. Intra-Ministerial Budget Gymnastics ----------------------------------- 8. (SBU) Although the budget law itself is indistinct and thus does not specify individual projects or programs for which money will be used, it includes an annex describing specific projects. This annex presents a more detailed level of information, often listing the budget indicators used to arrive at allocation decisions. The budget law strictly disallows transfers of money between departments or projects; when needs arise for intra-ministerial money shifting, a bizarre mechanism is used for reallocation. Departments in need of cash declare an official emergency, and then team up with other departments who officially declare a surplus. Only after these official statements occur can money be shifted from one area to another. In practice, intra-department shifts due to emergency declarations occur frequently. However, inter-ministerial shifts are much more rare and are approved only under official ordinance, only three of which occurred so far this year. Future Budget Changes Likely Ahead ----------------------------------- 9. (U) PSD MPs and Minister of Finance Mihai Tanasescu presented the 2005 budget as an instrument of social welfare. Social spending will reach approximately 30 percent of the total budget expenditures or 9.8 percent of GDP. Minimum wage is set to increase 11 percent from 2004, reaching the net equivalent of $108 per month. State sector wages will increase 12 percent in comparison with 2004. The new law also stipulates that the GOR will adjust pensions for inflation on a monthly basis, and that high payroll taxes will decrease two percentage points from the current 49.5 percent in an almost invisible attempt to discourage tax evasion. 10. (U) Opposition MPs criticized the majority party's quick passage of the budget as a means to bolster its election campaign. National Liberal (PNL) MPs declared that the economy's growth is a charade, propped up by debt and foreign remittances. Democratic Party (PD) MPs stated that the 2005 budget laws passed by the PSD-dominated Parliament legalize the discretionary allocation of funds based on waste and populist measures. The political opposition vowed to enact revised budget laws if successful in winning the legislative elections. Comment ------- 11. (SBU) The budget reflects the GOR agreement to the tight 2005 deficit target proposed by the IMF. However, the estimated 5.3 percent economic growth is an optimistic target. In 2004, the unusually high economic growth rate was due primarily to a surge in agricultural output, a volatile sector susceptible to unpredictable weather patterns. The GOR's goal of decreasing inflation to seven percent will also be a challenge, given rising international energy prices and increasing wages. The change in the Romanian leu's (ROL) denomination in the third quarter of 2005 may also have an effect as the new "heavy" ROL prices (dropping 4 zeros from the currency) are rounded up. In any case, this is a temporary document, with a new parliament and executive expected to make substantial amendments once the pressure and attention of the election season have passed. Crouch
23977 2004-12-13 12:45:00 04BUCHAREST3421 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 02 BUCHAREST 003421 SIPDIS DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: DECL: 12/13/2014 TAGS: PGOV, PREL, PHUM, KDEM, SOCI, ECON, RO SUBJECT: CENTER-RIGHT CANDIDATE TRAIAN BASESCU WINS PRESIDENTIAL RUN-OFF IN SURPRISE UPSET; NASTASE CONCEDES REF: BUCHAREST 3416 (AND PREVIOUS) Classified By: Political Section Chief Robert S. Gilchrist for Reasons 1.4 B and D 1. (C) Summary: Center-right National Liberal-Democratic (PNL-PD) alliance candidate Traian Basescu has won Romania's presidency, according to official results released early afternoon December 13. PNL-PD leaders tell post that the alliance is still absorbing the surprise win, but will soon begin efforts to form a parliamentary coalition. Cheering supporters crowded Bucharest's University Square late December 12 and early hours the next day to hear Basescu predict a clear victory; similar spontaneous rallies took place in other cities. Throughout the campaign, Basescu advocated strong trans-Atlantic relations. His alliance has promised to combat corruption and to undertake more rapid economic and political reform. Post has begun hearing names of potential cabinet members, but much remains in the sphere of speculation. End Summary. 2. (SBU) Defying predictions in the media and by political insiders from all political persuasions, center-right National Liberal-Democratic (PNL-PD) alliance candidate and Bucharest Mayor Traian Basescu has emerged as the winner of Romania's December 12 second-round presidential run-off elections. With 99 percent of the vote counted, the Central Electoral Bureau (BEC) announced early afternoon December 13 that Basescu held 51.23 percent of the vote compared to 48.77 percent for ruling Social Democratic-Humanist party (PSD-PUR) union candidate Prime Minister Adrian Nastase. PSD insiders tell post that the party leadership is coming to terms with what they see as a clear defeat. Nastase conceded at 2:10 PM local time December 13, noting that the vote indicated a broad urban-rural split in Romania and leaving open the possibility of political cohabitation. 3. (C) Meanwhile, the PNL-PD leadership is meeting in a closed session to discuss options for forming a possible parliamentary coalition. Given that most in PNL-PD were surprised at Sunday's result, the alliance has not engaged in serious discussions with other parties -- unlike the PSD-PUR -- since November 28 parliamentary elections and first-round presidential elections. Senior PD leader Cosmin Gusa confided to PolChief -- "We are just waking up to all of this." Possibilities for a Coalition ----------------------------- 4. (C) Gusa also cautioned the morning of December 13 that it remained too early to determine how the PNL-PD will attempt to form a coalition. Nonetheless, he conceded that there is much speculation both inside and outside the alliance. The possibilities are numerous. Analysts note the first option may be a minority coalition with the ethnic Hungarian party (UDMR), the 18 Chamber of Deputies members reserved for ethnic minorities, and support from individual MPs from other parties, including defectors from the extreme nationalist Greater Romania Party (PRM) (Note: Basescu has repeatedly publicly and privately ruled out a coalition with the PRM. However, analysts note that this would not negate the possibility of many PRM MPs declining to vote against a new PNL-PD led government. End Note.) 5. (C) A second option would be co-opting the Humanist Party (PUR), which holds 18 positions in the Chamber of Deputies and ten in the Senate. With the UDMR and ethnic minority seats, this would provide a clear majority. The PUR released a communique early afternoon December 13 expressing the party's political independence, indicating that this might be a path PNL-PD could pursue. A third option would be to call elections as allowed by the constitution if the parliament meeting in joint session fails to form a government after three votes. Basescu could decide that PNL-PD could build upon momentum generated by the December 12 results to achieve a commanding parliamentary majority by holding new elections. A final option would be cohabitation, allowing the PSD the possibility to form a government. This last option is viewed as the least likely, as it would deny Basescu the capacity to implement PNL-PD's platform. Possibilities for a Cabinet --------------------------- 6. (SBU) Throughout the campaign, Basescu repeatedly stated that PNL-PD's prime minister would be PNL acting president Calin Popescu Tariceanu. This reflects the longstanding deal between PNL and PD that one party would hold the presidency while the other would be accorded the prime minister position. Tariceanu remained at Basescu's side during celebratory comments made late December 12 and was the only other PNL-PD leader to share the microphone with the press. Beyond Tariceanu, Embassy contacts say the composition of a possible PNL-PD cabinet remains unclear. Party insiders and reliable media sources bruit several well-known political figures for the top positions. 7. (SBU) Leading PD member Adriean Videanu is touted as a potential Vice Prime Minister and Minister of Economy. Videanu is one of PD's richest politicians and currently heads the Romanian-American Investment Fund. He was one of the few parliamentarians to voluntarily leave office in accordance with new conflict of interest legislation. His managerial skills and discretion are widely respected across PNL and PD ranks. PD's Sorin Frunzaverde appears to be a frontrunner for Minister of Defense. He briefly held the position in 2000 and is well known by the Embassy. PNL's Valeriu Stoica is a possibility for Minister of Justice, and PNL's leading female deputy Mona Musca will likely be appointed either as Minister of Culture or Minister of Labor. PNL economic advisor Ionut Popescu, a well-known journalist and economist is a wildcard. However, given his position as the chief proponent of PNL's liberal economic strategy, he is likely to receive a key position in a future alliance government. Comment ------- 8. (C) Basescu's win is seen here as a new beginning in Romanian politics, with many hopes and expectations. Upcoming days will focus on coalition building to include frenzied horse-trading for leadership positions in the parliament and senior government slots. We expect PSD will emerge as a tough opponent, with popular outgoing President Ion Iliescu taking over party leadership and with the PSD still highly influential -- through formal and informal bonds -- over state institutions, including the judiciary and intelligence services. Events are evolving quickly in Bucharest. The only certainty is that Basescu and his allies have pulled off an unexpected victory with likely sweeping repercussions on Romania's economic and political life 9. (U) Amembassy Bucharest's reporting telegrams, as well as daily press summaries, are available on the Bucharest SIPRNet website: www.state.sgov.gov/p/eur/bucharest CROUCH
24094 2004-12-15 11:38:00 04BUCHAREST3439 Embassy Bucharest UNCLASSIFIED UNCLAS SECTION 01 OF 04 BUCHAREST 003439 SIPDIS DEPT FOR EUR/NCE - WSILKWORTH DEPT FOR NP/NE:STRATFORD/COMELIA, NP/MNA-GALLINI, L/P:HERR, L/LEI:COLLUMS DEPT PASS DOD FOR OSD/P:MENTZ, JS/J-5:MILLER DEPT PASS NRC FOR COM. JMERRIFIELD, OCM:NFRAGOYANNIS, OGC:KIM, OIP:DUNN-LEE DEPT PASS DOE FOR SO:SOLICH/KOHEN/RIVERS NNSA:JONAS/LEIKEN/CHERRY/BARLOW UNVIE FOR IAEA: L.HILLIARD E.O. 12958: N/A TAGS: KNNP, KTIA, ENRG, ECON, RO, IAEA SUBJECT: REPORT ON NUCLEAR REGULATORY COMMISISON OFFICIALS' VISIT TO BUCHAREST, ROMANIA, SEPTEMBER 25-28, 2004 SENSITIVE BUT UNCLASSIFIED. PLEASE PROTECT ACCORDINGLY. 1. (U) Summary: U.S. Nuclear Regulatory Commission (NRC) Commissioner Jeffrey Merrifield visit to Romania in late September provided the USG insight into the strong Romanian civil nuclear program. End Summary. First Visit to Romania by NRC Commissioner ------------------------------------------ 2. (U) On September 25-28th, 2004, Commissioner Jeffrey Merrifield visited Bucharest, Romania and the Cernavoda nuclear power plant. His Chief of Staff, Margaret Doane, and Jodi Lieberman, Office of International Programs, USNRC accompanied him. While in Bucharest, the Commissioner met with Dr. Lucien Biro, Chairman of the Romanian National Commission for Nuclear Activities Control (CNCAN) and, at the close of his visit, participated in a press conference with Dr. Biro and local media. He also traveled to the Cernavoda nuclear power plant, located roughly 1 hours outside of Bucharest. This was the first visit of an NRC Commissioner or delegation to Romania. The purpose of the visit was to discuss the regulatory and operating experience of the CANDU-6 reactor design in light of NRC's activities in connection with a U.S. utility's interest in the Advanced CANDU Reactor (ACR) 700. CNCAN President Discussions Reveal Operational Readiness --------------------------------------------- ----------- 3. (U) Commissioner Merrifield began his visit with a meeting at CNCAN headquarters in Bucharest with Dr. Lucian Biro, CNCAN President. In addition to Dr. Biro, the Commissioner met with Camelia Liutiev, European Integration and International Cooperation Section, Viviana Grama, Director, Special Material Section and Lucian Goicea, Director, Quality Control Division. Timothy Phillips, Economic Officer at the U.S. Embassy in Bucharest, also attended the meeting. 4. (U) Dr. Biro explained that the CNCAN President is appointed by the Prime Minister and has the status of State Secretary. He reports to the Prime Minister through the SIPDIS Chancellor of the Prime Minister. He added that much of CNCAN's regulatory structure was established using NRC as a model. 5. (U) Dr. Biro presented a brief history of civilian nuclear activities in Romania, the development of CNCAN and the current status of work being done to complete Unit 2 at the Cernavoda NPP. Although there was significant political pressure to build Soviet-designed VVER reactors at Cernavoda, the CANDU-6 reactor design was ultimately chosen for the site because of its strong seismic design qualities, use of a containment structure, and better quality assurance features. 6. (U) Construction of the five CANDU-6 units began in 1980 at the Cernavoda facility, during the regime of Nicolae Ceausescu. Construction was halted with the demise of the Ceausescu regime, but work resumed in the mid-1990s with a decision by the new government to complete Unit 1 with the assistance of CANDU reactor vendor Atomic Energy of Canada Limited (AECL) and Italian firm Ansaldo S.A., which provided the "balance of plant" equipment. 7. (U) Unit 1 was commissioned in 1996, with Unit 2 scheduled for completion in 2006/7. Dr. Biro stated that Nuclearelectrica S.A. (SNN), the utility operating Cernavoda, had already implemented nearly 160 safety improvements at Unit 2, and had secured both a 235 million Euro loan, and a $400 million loan from the Canadian government for completion of Unit 2. He added that SNN is working to secure outside investment to fund completion of Unit 3, noting that South Korea has expressed interest in providing funding for the project. 8. (U) Dr. Biro stated that, although CNCAN has 175 authorized slots for employees, only 130 positions are currently filled. While salaries at CNCAN are reasonably high, SNN is able to offer still higher salaries, making it difficult for Dr. Biro to attract employees. Moreover, he noted that CNCAN staff attrition is a problem, with employees either retiring, or emigrating to Canada, the U.K. and South Africa. CNCAN is a full-fee recovery agency, relying principally on licensee fees for its budget (as does NRC). Dr. Biro explained that, as a political appointee, his salary is capped, preventing the salaries of his employees from rising as well. However, there is some interest in changing his status. Housed in a rather cramped section of a larger government building, CNCAN will soon move to its own, more elaborate building. Dr. Biro stated that he had secured a 10 million euro bank loan to construct a new CNCAN facility in Bucharest, scheduled for completion by 2006/7. 9. (SBU) With regard to Romanian EU accession in 2007,Dr. Biro noted that CNCAN had implemented many of the EU Aquis chapter requirements and had taken steps to revise CNCAN regulations to be in line with those of the EU in areas such as physical protection, quality assurance and safeguards. As CNCAN also has licensing responsibility for radioactive sources, Dr. Biro explained that all sources above a certain activity level (i.e. "High-risk radioactive sources") are tagged so that their movement can be tracked through a GPS system. 10. (U) In response to a question posed by Commissioner Merrifield regarding cooperation with other CANDU regulators, Dr. Biro noted that the CANDU Senior Regulators' Group was the main forum for exchange of information. That group meets annually. He advised that Romania also has agreements with neighboring countries, including Greece, Bulgaria, Hungary, Slovakia and Russia for notification in the event of a nuclear accident or incident. CNCAN and Cernavoda conduct emergency exercises and will host CONVEX 3, an international emergency exercise organized by the International Atomic Energy Agency (IAEA), next year. Dr. Biro invited NRC to observe the exercise. Although CNCAN currently has no emergency operations center, one will be included in the new building. Cernavoda also lacks an offsite emergency operations center, although Dr. Biro stated that one will be built in the future. Through one of the three cellular telephones he always carries, Dr. Biro has direct access to the Romanian government civil command - and the Prime Minister, if necessary - in the event of a nuclear incident or accident. In closing, Dr. Biro expressed interest in touring the NRC Headquarters Operations Center at some point. He visited the backup emergency operations center in NRC Region IV in 2001. Site Visit to Cernavoda ----------------------- 11. (U) Commissioner Merrifield and the delegation proceeded to the Cernavoda site later the same day, where they were met by representatives from SNN, the Canadian/Italian consortium "CNE-Invest", and the Romanian management/construction partner "CNE-PROD". The Commissioner explained that a U.S. utility, Dominion Power, has expressed an interest in the possibility of building an advanced CANDU reactor, an ACR-700, at one of its stations. The NRC is performing a pre-application review for ACR-700 design. 12. (U) Vic Stobie, the Canadian safety and licensing manager for CNE-Invest, presented background information on the construction project to complete Unit 2. Of the 1664 slots allocated for the project, 1457 are allocated for Romanian companies. At present, the project staff consists of 109 AECL, 68 Ansaldo and 1288 Romanian workers. 199 positions remain to be filled. Mr. Stobie discussed the process AECL, SNN, and Ansaldo went through to review the existing materials and equipment in Unit 2, abandoned in the 1980s, followed by an assessment and refurbishment program started in 2002. He noted that preservation of the existing unit hardware was very good and that the majority of items to be replaced before work started on Unit 2 were so-called "perishable" items, e.g. those that were composed of elastomers. The Commissioner asked the extent to which the construction/management team was able to apply efficiencies in Unit 2 based on lessons learned in the completion of Unit 1. Mr. Stobie indicated that much of the construction staff that had worked on Unit 1 is now working at Unit 2. Staff is also coming from the CANDU plant in Qinshan, China. Procedures had also been updated based on Unit 1 experience. 13. (U) During the presentation, Dan Bigou, the Unit 1 station manager, briefly described the inspection and licensing process for Cernavoda. There are currently two CNCAN inspectors at Unit 1 and two at Unit 2. All CNCAN inspectors have unescorted access to the plant and its facilities. Unit 1 has a two-year operating license; SNN must apply for a license renewal every two years. The process will remain the same for Unit 2. Regarding licensing of Unit 2, SNN will need to seek authorization from CNCAN for a number of stages in the commissioning efforts, including authorization to receive and store heavy water and nuclear fuel, and authorization to load heavy water and for manual fuel loading. The utility will also need to seek CNCAN approval for achieving criticality and subsequent increases of power at 25% increments until 100% power is reached. CNCAN is extremely involved in licensing activities at Cernavoda involving Unit 1 and completion of unit 2. During the visit, Dr. Biro spent a lengthy amount of time reviewing SNN submissions to CNCAN for permission to restart Unit 1, then in a maintenance outage. Commissioner's Visit to Unit 2 --------------------------------------------- --------- 14. (U) Following discussions with SNN, AECL, and Ansaldo, the Commissioner toured the partially completed Unit 2. The tour included visits to the spent fuel pond, the partially completed calandria and supporting structures, and the refueling machine. Because the stainless steel calandria, which holds the fuel and moderator, was not yet sealed, the team was provided a rare inside view of the calandria vessel through one of the nozzle holes. This is typically not possible because this hatch is an access hatch that is welded shut at a later period during construction 15. (U) The plant tour concluded with a visit to the Intermediate Nuclear Spent Fuel Storage facility (DICA), which is based on the AECL-designed "MACSTOR" system. When completed, DICA will permit storage of 300,000 spent fuel bundles from operation of Units 1 and 2 over the next fifty years. The average transfer rate is 5000 bundles per year. There will eventually be 27 storage modules, each of them having a capacity of 12,000 spent fuel bundles. Only one module has thus far been completed. Unit 1 Tour -------------------- 16. (U) On the second day of discussions at Cernavoda, the Commissioner met with Vasil Simonov, Health and Safety Manager (CNE-PROD), Marian Serban, Director for Technical Issues and Nuclear Safety (CNE-PROD) and Unit 1 manager Bigou. Following a brief overview of Unit 1 operating information and technical characteristics, the delegation toured Unit 1, which was just coming out of a maintenance outage. During pre-tour discussions, the Commissioner inquired whether the plant management maintains a corrective action program. Plant Manager Bigou noted that the corrective action program at Cernavoda is a performance- based system that includes use of root cause analysis for events. On average, Mr. Bigou stated that they identify and review roughly seven hundred events per year and hold weekly meetings to review the events and follow-on corrective action. The plant management also maintains an event database. 17. (U) The Commissioner asked whether the plant uses level 1 PSA to manage the backlog of corrective actions. Mr. Serban responded by noting that the plant management has been trying to move to a more risk-based system in order to prioritize corrective actions in response to events and has been discussing this with CNCAN. He indicated that the IAEA had conducted an International Probabilistic Safety Assessment Review Team (IPSART) mission that validated CNCAN's PSA model and expects to complete an external PSA by December 2004. 18. (U) The Commissioner asked if the plant management is confident that the staff can effectively identify problems for the corrective action program, to which Mr. Serban replied that, while the process is working well, there is always room for improvement. In 2002, when the plant moved to an event analysis process, there was a significant increase in the number of events identified. However, he did note that investigation reports remain an area for improvement. 19. (U) Mr. Bigou added that Cernavoda uses several other CANDUs to benchmark performance, including sister units Gentilly and Point Lepreau in Canada, but would also like to develop a relationship with a U.S. plant. He continued that, as Canada moves to more U.S. style practices, Cernavoda can benefit indirectly because of its association with the Canadian plants. Commissioner Merrifield suggested that the U.S. experience with restart of Browns Ferry Unit 1 in Alabama might be helpful in completion of Unit 2 and potential completion of the other Cernavoda units. Press Conference at CNCAN Headquarters --------------------------------------------- --------------- --------- 20. (U) Following the delegation's return to Bucharest, Dr. Biro arranged for a press conference with Commissioner Merrifield and local media at CNCAN headquarters. Politically adept, Dr. Biro was able to convene a significant number of radio, television and print press outlets. The press conference was extensively covered in local media. During the press conference, Dr. Biro presented the Commissioner with a statuette commemorating thirty years of U.S.-Romanian peaceful nuclear cooperation. Media questions were fairly benign, although one reporter requested the Commissioner's opinion of the recent Slovak Government decision to complete Units 3 and 4 at the Mochovce nuclear power plant, alluding that these reactors were to be of the same design as those at the now closed Chornobyl site in Ukraine. [Note: The reporter was incorrect. Units 3 and 4, begun during the Soviet era, are likely to be similar to Units 1 and 2 at Mochovce, which are not "Chornobyl-style" RBMK reactors but are instead VVER- 440/213 style units. End note.] Comment ------- 21. (SBU) Commissioner Merrifield's visit proved to be very informative, adding to NRC's knowledge of the unique Romanian civilian nuclear power programs. CNCAN President Biro is a resourceful leader dedicated to ensuring a strong nuclear safety culture. Although Dr. Biro's hands-on approach is admirable and his work thorough, CNCAN lacks "defense-in-depth." Dr. Biro does not have a deputy, and it evident that he does not delegate very much of the key decision making to CNCAN management. Should Dr. Biro be unable to perform his duties as President of CNCAN, it is questionable who on his staff would be prepared to step up and keep the work moving. End Comment. 22. (SBU) Note: This cable is based mainly on NRC notes. Embassy personnel did not attend all meetings in Romania. End note. Crouch
24120 2004-12-15 13:46:00 04BUCHAREST3442 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 03 BUCHAREST 003442 SIPDIS STATE FOR EUR/NCE - WILLIAM SILKWORTH STATE ALSO FOR INR/B E.O. 12958: DECL: 12/15/2014 TAGS: PGOV, PREL, KDEM, SOCI, RO SUBJECT: ROMANIA'S NEW PRESIDENT: FORMER SAILER PILOTS SHIP OF STATE REF: A. A) BUCHAREST 3421 B. B) BUCHAREST 3415 C. C) BUCHAREST 3318 D. D) BUCHAREST 3092 E. E) BUCHAREST 2956 F. F) BUCHAREST 2748 G. G) BUCHAREST 2226 H. H) BUCHAREST 1730 Classified By: POLITICAL SECTION CHIEF ROBERT GILCHRIST FOR REASONS 1.4 B AND D 1. (C) Summary. Romania's President-elect, National Liberal Party-Democratic Party (PNL-PD) alliance co-leader Traian Basescu, is a skilled political campaigner and popular politician, renowned for his tenacity, but also for his approachability and straightforward style. Basescu is a long-standing domestic political figure, serving as Transportation Minister in the 1990's and Bucharest Mayor from 2000 until his presidential victory over Social Democratic Party (PSD) candidate and Prime Minister Adrian Nastase. Basescu characterizes himself as a strong ally of the U.S. and a vocal advocate for strengthening transatlantic relations. He strongly supports Romania's EU integration and is known for his tough stance on corruption and drive for economic reform and modernization. Sometimes criticized for poor managerial skills in Bucharest City Hall, Basescu now faces the challenge of building a governing coalition and constructing a successful governing team. End Summary. The Happy Warrior ----------------- 2. (C) Bucharest's Mayor and President-elect Traian Basescu, the surprise winner in the December 12 runoff presidential election, is little known outside of Romania, as his entire political career has focused on internal politics until now. Within Romania, however, he is renowned as a consummate political wrangler and a longstanding thorn in the side of the center-left Social Democratic Party (PSD), which governed Romania from 2000 until Basescu's upset victory over PSD Prime Minister Adrian Nastase. A native of the seaport city of Constanta, the 53 year-old Basescu will now take on the role of Chief of State from outgoing President and PSD leader Ion Iliescu later this month. His next task is formal designation of a Prime Minister and formation of a government but at the time of this writing, Social Democratic leadership is still arguing that they have the prerogative to form a PSD-centered government based on the majority status of their newly forged parliamentary alliances. (Comment: We may have a Constitutional crisis brewing, but our reading of the Constitutional Article clearly gives a free hand to Basescu to attempt to form a government. End comment) From Sailor to Alliance Leader ------------------------------ 3. (C) Basescu was thrust into the national spotlight in October 2004 following the surprise withdrawal from the presidential race of PNL-PD candidate and Liberal Party president Teodor Stolojan for undisclosed health reasons. However, Basescu is no newcomer to Romanian politics and has been a major player on the Romanian political scene since the early 1990's. Prior to the end of communist rule, Basescu was in the merchant marines, finishing as an oil tanker captain before moving on to become a high-ranking civil servant in Romania's Transport Ministry. Basescu served as Transportation Minister from 1991-92 and 1996-2000. He was elected to parliament as a Democratic Party (PD) deputy from 1992 to 1996. He followed his first election as Mayor of Bucharest in 2000 with another victory in June 2004, handily defeating PSD candidate FM Mircea Geoana and quickly becoming the PD's most popular politician. Indeed, Basescu was arguably the "star" of the PNL-PD local election campaign; his easy win in Bucharest over the popular FM helped energize the PNL-PD Alliance for upcoming parliamentary and presidential elections. 4. (C) Basescu was elected PD president in 2001 after an intense and sometimes acrimonious struggle for control of the party, leading to the defection of some former PD stalwarts. In September 2003, the nominally center-left PD entered into a formal alliance with the center-right National Liberal Party (PNL), elevating Basescu to co-president of the alliance. As alliance co-president, Basescu worked closely with PNL President Teodor Stolojan to forge a unified campaign and strong opposition challenger to the ruling PSD and its well-developed party machine in local and national elections. Promoting the Transatlantic Alliance ------------------------------------ 5. (C) Basescu publicly and privately advocates a strong strategic alliance with the United States. During the final televised presidential debate on December 8, Basescu highlighted the importance of the "Bucharest-Washington-London" alliance. At the same time, Basescu insists that EU accession is Romania's number one foreign policy objective - a view shared by political leaders across the spectrum. During the presidential campaign, however, Basescu hammered his opponent for making concessions to EU negotiators without first laying the necessary groundwork domestically. In the course of his December 13 victory speech, Basescu stressed that political leaders must "explain the costs" of EU accession to the population. 6. (C) Basescu, a fluent English speaker, has long been a candid and reliable interlocutor with the Embassy. Indeed, one of his two daughters attended an American university, and Basescu has complained that Romania's rigid academic hierarchy is hesitant to recognize a U.S. diploma in some instances. Basescu's generally pro-American stance, however, did not prevent him from criticizing during the campaign a sole source highway construction contract awarded by the PSD government to Bechtel Corporation. (Note: Basescu also slammed the PSD government for awarding contracts to European companies under less than transparent circumstances. End Note.) In the past, Basescu has voiced reservations about the 2003 U.S.-led military intervention in Iraq. Subsequently, he has privately and publicly expressed his solid support for continued Romanian troop contributions in Iraq and Afghanistan -- even advocating a potential increase, provided Romania has the capacity to do so. Rolling Up the Shirt Sleeves ---------------------------- 7. (C) Even Basescu's fiercest opponents acknowledge that he is a brilliant debater. He punctuates his blunt speaking style with wry humor and a candid admission of his own weaknesses. Indeed, during the last presidential debate, he bemoaned the fact that Romania's two presidential contenders were both ex-communists. One political observer who had been with Basescu on the hustings in rural Romania during the campaign described audiences breaking into tears as Basescu eloquently described the disastrous impact of corruption and inefficient bureaucracy on the lives of ordinary citizens. Earlier, after his city administration came under attack for lagging road repairs, Basescu occasionally doffed his sport coat and pitched in with one of the repaving crews working in the evening under artificial light. It was great politics and endeared him to the citizens of Bucharest. 8. (C) Basescu is famed for his approachable style. As one Romanian remarked to Poloff, he is not intimidating and "anyone can talk to him." His favored public attire is an open collar polo shirt. When forced by official business to don a tie, his cravat is invariably slightly askew, with top button often undone. During the June mayoral race, the shirt-sleeved Basescu mocked his opponent, FM Mircea Geoana, who campaigned at factories and subway stops in tailored, Italian suits. Basescu's informal, straightforward manner starkly contrasted with PM Nastase's button down reserve during the presidential campaign. Indeed, during the debate Basescu consistently referred to his opponent by his first name and by using the informal form for "you." Those who know Basescu insist that his public demeanor accurately reflects his personal style. In a meeting with the Ambassador, his chief of staff remarked that he was a wonderful person to work for and that what you see is what you get. In stark contrast to many of Romania's political elite, whose lavish lifestyle occasionally is featured on tabloid front pages, Basescu has a reputation for dwelling with his wife in a relatively modest home decorated with model ships he has assembled. Foot in Mouth Disease --------------------- 9. (C) Nonetheless, Basescu's informal demeanor and shoot from the hip style - which can blend irony and pathos in a few sentences - has occasionally been his Achilles heel. During the campaign he caught flack from the powerful Christian Orthodox hierarchy for his statement that one in five Romanians is homosexual and for his reported endorsement of gay marriage. In classic Basescu style, however, he bluntly admitted that he had "made an error." During the presidential campaign, his opponents attempted to portray him as "unpresidential" - perhaps a competent mayor but, at heart, a former merchant marine lacking the "gravitas" to steer Romania through the shoals of EU accession. Sharing the Reins of Power? --------------------------- 10. (C) Some former colleagues of Basescu bitterly complain that his management style is non-consultative and frequently disregards the concerns of colleagues. Indeed, one of the most pointed questions leveled at him during the debate inquired whether he was capable of working with a team. Basescu insisted that he is a "team player," but politicians who have worked with him insist that he is a poor manager. Political insiders caution that Basescu will need finely honed diplomatic skills to build a cohesive and consistent PNL-PD led government. Attacking Corruption --------------------- 11. (C) During the presidential campaign, Basescu identified eliminating rampant corruption as a national security priority. His tough talking stance on corruption resonated with many voters who, despite Romania's impressive macroeconomic growth, continue to live in straitened circumstance fifteen years after the end of communist rule. The Nastase campaign's promises to continue fighting corruption were small beer compared to Basescu's insistence that many PSD leaders were directly or indirectly benefiting from a culture of corruption and that state institutions, including the judiciary, must be insulated from political influence. 12. (C) Basescu himself, however, remains dogged by a National Anti-Corruption Prosecutor's Office (PNA) investigation launched in the summer of 2004 into his alleged profiteering from the sale of Romanian merchant marine ships during his tenure as Transport Minister in the 1990's (Ref G). He has vigorously denied these charges, claiming that they are politically motivated. Similar charges in 1996 were dropped due to lack of evidence, following Basescu's agreement to give up his parliamentary immunity to be investigated. This gesture clearly boosted his popularity, marking him in stark contrast to other MP's that allegedly hid their misdeeds under the cloak of parliamentary immunity. Many Romanians saw the case simply as an attempt by the PSD to tar Basescu with corruption charges. He did not appear to have financially benefited from the fleet sale and any misdoings on his part appear to have been procedural, if that. Constitutional lawyers now say that, with his election to the presidency, the "Fleet File" charges against Basescu will be suspended, as a sitting Romanian president can only be prosecuted for crimes of "high treason." Economic Reform --------------- 13. (C) Since the mid-1990's, Basescu has been a stalwart advocate for economic reform, including transparent privatization of state-run enterprises, fiscal reform, and economic modernization to attract foreign investment. During the presidential contest, Basescu reached out to the domestic and international business community, holding forums with leading business groups and pledging to institute market-oriented reforms. Liberal economic reform -- including major changes to the tax code -- remained a central component of PNL-PD's campaign platform. Political analysts are now watching to see if he will succeed in putting together a government capable of implementing this program. 14. (U) Amembassy Bucharest,s reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest CROUCH
24137 2004-12-15 16:29:00 04BUCHAREST3445 Embassy Bucharest UNCLASSIFIED UNCLAS SECTION 01 OF 02 BUCHAREST 003445 SIPDIS FOR EUR/NCE - WILLIAM SILKWORTH ALSO FOR S/CT AND TTIC E.O. 12958: N/A TAGS: PTER, ASEC, PGOV, PREL, MOPS, ECON, RO, NATO SUBJECT: ROMANIA: 2004 ANNUAL TERRORISM REPORT Ref: State 245841 1. Post's submission in "Patterns format," updating last year's "Patterns of Global Terrorism" report (reftel) follows: Romania is a staunch ally of the United States in the global war against terrorism, providing full public and diplomatic support for US goals to counter terrorism. In 2004, about 1,200 Romanian troops served at any one time in Iraq and Afghanistan, and Romania has promised to maintain its commitment of troops through mid-2005. Romania has made its airspace, ground infrastructure, and naval facilities available to US and NATO forces engaged in the global war against terrorism and senior government leaders have promised to continue to do so in the future. The Romanian Government has established internal mechanisms to combat terrorism, including adoption of a "National Anti- Terrorism Strategy" and guidelines to prevent the use of the Romanian financial and banking system for the purpose of financing terrorist acts. As part of its national strategy, Romania adopted legislation in 2004 that delineates the responsibilities of Romanian government institutions in battling terrorism, providing a clearer framework for interagency coordination and cooperation. Bucharest is the site of the Southeast European Cooperation Initiative, a regional center that provides law enforcement training and intelligence sharing on transborder criminal activities, including terrorism, for 12 member countries in Southeastern and Central Europe. Romania has fully ratified all 12 UN counter terrorism conventions. Romania has adopted adequate legislation to address financial crimes and terrorist financing. Nevertheless, its strategic location bordering Ukraine, Moldova and Serbia makes Romania vulnerable to money laundering and other financial crimes that potentially finance terrorist organizations. Romania's weaknesses include the lack of timely reporting of suspicious transactions and other evidence of criminal activity by Romanian banks and insufficient resources (funds and personnel) directed by the Romanian government to prosecuting financial crimes. 2. In the following addendum, post includes relevant developments during 2004, which demonstrate Romania's commitment to battling terrorism: - Romania adopted on November 25 Law 525, a "Law for Preventing and Fighting Terrorism," as part of its National Anti-terrorism Strategy. The law delineates the responsibilities of Romanian government institutions in battling terrorism, providing a clearer framework for interagency coordination and cooperation. The legislation also aims to provide a unified juridical approach to terrorist activities, including establishment of clear definitions of terrorist activities. This law provides for a special procedure to authorize electronic interceptions for threats against national security, including terrorist acts. Governmental institutions with competence in the field of national security must forward a written request for authorization to the General Prosecutor of Romania. If the request is found to be justified, the General Prosecutor submits it to the President of the High Court of Cassation and Justice. The final decision is made in chambers by a group of specially designated judges, after a careful analysis. The warrant cannot exceed 6 months, but it may be extended several times for 3 months in justified situations. The extension must also be decided by special judges designated by the president of the High Court of Cassation and Justice. The law also provides that in exceptional circumstances (when a present and clear danger to the national security occurs) governmental institutions may begin to intercept communications without the proper warrant issued by the judiciary. The request for authorization must be submitted within a maximum of 48 hours from the commencement of the interception. - The GOR approved a list of persons and companies suspected of engagement in terrorist financing, citing 90 persons and 40 companies engaged in terrorist financing. In November, the GOR asked parliament to enact a draft "Law on Fighting Against Money Laundering and Terrorism." This proposed legislation includes substantive and technical measures aimed at fighting terrorist financing by tightening anti- money laundering legislation. - In June of 2004, the GOR responded to criticism of its National Office for the Combating and Prevention of Money Laundering (Romania's Financial Investigation Unit or FIU) by replacing its management. The new management has taken aggressive action to increase the efficiency and security of the office and to improve its relationship with law enforcement institutions, other FIUs, and the banking industry. Reforms have included new procedures and time limits for analyzing and reporting suspicious transactions. - On November 23, 2004, legislation (Law 508) went into effect that reorganizes police and prosecutorial resources into a directorate under the authority of the prosecutor general for the investigation of organized crime and terrorism. The directorate is authorized to create a database from which it can develop proactive investigations of offenses within its jurisdiction. - The GOR has ratified the 1997 UN "Convention for the Suppression of Terrorist Bombings". Romania has now ratified all 12 UN anti-terror conventions. - The GOR has enacted legislation ratifying the Protocol amending the European Convention for Suppressing Terrorism, enacted in Strasbourg on May 15, 2003. The Protocol concerns penal measures aimed at fighting terrorism, including definition of crimes, establishment of sentencing guidelines and definition of extradition rules. - The GOR modified the Penal Code to contain a new, distinct chapter titled "Crimes and Terrorist Acts" which specifically penalizes terrorist-related crimes, such as terror killing, threats, and financing of terrorist acts. CROUCH
24138 2004-12-15 16:30:00 04BUCHAREST3446 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS SECTION 01 OF 03 BUCHAREST 003446 SIPDIS SENSITIVE STATE FOR EUR/NCE - WSILKWORTH, EB/IFD STATE PASS USTR - LISA ERRION TREASURY FOR STUART USDOC FOR 4232/ITA/MAC/EUR/OEERIS/CEEB/BURGESS/KIMBALL STATE PASS USAID E.O. 12958: N/A TAGS: ECON, ETRD, EIND, EFIN, RO SUBJECT: The Lion in Winter: Romania's Foreign Exchange Policy Changes This cable is Sensitive but Unclassified. Not for Internet distribution. 1. (SBU) Summary: The National Bank of Romania (BNR), the country's central bank, has recently shifted from its long- standing policy of closely managing the Romanian Leu (ROL) foreign exchange (forex) rate to an infrequently managed free float. The BNR now limits its interventions on the forex market and refrains from announcing when they will occur in advance. The Leu (Romanian for "lion") is gaining strength, causing anxiety for exporters and prompting more interest in tools to hedge currency risk. End Summary. Increasing Unpredictability in Foreign Exchange --------------------------------------------- --- 2. (U) The National Bank of Romania (BNR), on October 29, switched to an infrequently managed float of the ROL on the foreign exchange market. Since then, the ROL has appreciated 6.3 percent against the Euro and 11.4 percent against the USD, causing a boom for importers and increasing concern among local exporters. The BNR's decision to cease almost daily interventions in the currency market is based primarily on its increasing forex reserves that have grown more than $4.2 billion from the beginning of 2004, now exceeding $14 billion. This amount is well within the IMF- recommended range of reserves equivalent to four to six months of imports. These robust reserves, coupled with a surplus of currency in the forex market originating from foreign remittances, foreign direct investment, and interest income on the BNR's reserves increased the Bank's comfort level with a freer float. Handling Hot Money ------------------- 3. (U) The BNR has defended its choice of allowing the ROL to float wider and more often as discouraging inflows of speculative or "hot" money. Although Romania officially has always discouraged speculative foreign investments, they were not seriously considered a threat until recently. Historically, this so-called "hot" money naturally avoided Romania due to high investment risk. Today, in spite of incomplete liberalization of the capital account, speculative foreign investment is dramatically increasing due to growing signs of an improved investment environment climate, including: -Fitch, the international credit rating agency, recently upgraded Romania to investment grade; -Macro-economic indicators, including inflation, unemployment and the budget deficits continue to stabilize; -The IMF precautionary standby agreement allows Romania to borrow up to approximately US$367 million if needed and authorized; -European Union membership is expected in 2007; and -Foreign investors have enthusiastically invested in Romanian Eurobonds, which, according to the central bank, may reach Euro one billion by the end of the year. 4. (U) Improved economic conditions set the stage for increased hot money in the Romanian economy. BNR Governor Mugur Isarescu predicts that speculative investments will total approximately Euro one billion by the end of 2004. Speculative investors have been particularly eager to exploit the high interest rates offered on ROL accounts through local banks. Investors can easily benefit from the 11.6 percent annual interest rate on ROL accounts by working through middlemen, a positive spread of 7 to 8.5 percent above Euro-denominated accounts. Speculators exchange hard currency for ROL, invest in interest-bearing ROL accounts controlled by local brokers, then withdraw the money with the intention of quickly exchanging it for hard currency and then exporting the profits. While exchange rates were stable due to central bank intervention, this positive spread was assured. Today, with increasing exchange rate volatility, long-term bank investments, particularly those exceeding six months, may become less attractive for speculators if the ROL reverses its climb. Investments with short-term maturities become more desirable; investors gain both higher interest and benefit from the current ROL appreciation trend. 5. (U) Foreigners resident in Romania will also soon be able to join the group of potential speculators. Currently prohibited from opening ROL accounts on their own, foreigners will be able to open local currency accounts in 2005. 6. (U) The BNR decided to discourage speculative investment by opting for a freer ROL float, rather than choosing to place restrictions on local banks, such as mandatory investment terms, interest-free short term accounts or early withdrawal penalties. Although decreasing the spread between high interest rates on ROL accounts and low rates on hard currency accounts would also mitigate speculative investments, large cuts are unfeasible at this time due to relatively high Romanian inflation rates. Nevertheless, the BNR has begun a process of lowering interest rates, which now stands at 18.25 percent for commercial banks deposits, a 7.15 percentage point spread compared to the 11.1 percent inflation rate. However, recalcitrant local commercial banks have avoided following the BNR's lead to cut their own interest rates on loans, due to a dearth of competition and risk associated with the domestic lending market. Keeping Inflation at Bay ------------------------ 7. (U) In addition to a desire to discourage speculative investment, the timing for the BNR's decision may also be linked to a desire to apply downward pressure on the 2004 inflation rate, targeted for nine percent. At the nine- month mark, the inflation rate stood at 6.6 percent, and, anticipating the need to purchase fuel for heating for the impending winter, the GOR recognized that maintaining the nine percent goal in the face of significant fuel imports was unlikely. A rapidly strengthening ROL has served to keep inflation under control by making imports cheaper. Exporters Concerned about Impact... ----------------------------------- 8. (U) Not everyone is happy about the new managed float. Foreign imports are becoming cheaper for the Romanian population and Romanian export goods are becoming more expensive on foreign markets, hurting local manufacturers. The National Association of Exporters and Importers (ANEIR) recently declared that Romanian exporters lost seven to ten percent of revenue within one month as a direct result of the switch. Bank analysts are taking a more conservative stance, preferring to wait for two to three months of data to analyze to what degree the new forex policy affects exporters. ANEIR is calling for dramatic cuts in interest rates to slow ROL purchases from speculative investors, which are a major factor in the currency's appreciation. 9. (U) In addition, Romanian businesses are becoming increasingly interested in currency hedging strategies, although this is mainly coming from more sophisticated, medium- and large-sized firms. This growing interest is apparent on the Sibiu commodities exchange where ROL-Euro futures contracts have increased from ten in June, 2004 to almost 1300 during the month of November. ROL-USD contracts have also increased from 19 to 194. Exporters who deal mainly in Euros, importing Euro-denominated inputs, and selling finished products priced in Euros, are virtually immune from the switch, although salaries and local utilities continue to be paid in ROL, which will have a negative effect on profits. 10. (U) Romania's Minister Delegate for Foreign Trade recently defended the BNR's policy to let the ROL appreciate, in spite of criticism from exporters. He has called on Romanian exporters to better prepare export strategies and examine ways to become more competitive. He has also has insisted that lower inflation resulting from the new policy will greatly benefit Romanian businesses in the long term. The BNR agrees with this assessment and has described the earlier ROL depreciation against major currencies as an implicit subsidy for uncompetitive Romanian exporters that could not continue. ...But Consumers are Happy --------------------------- 11. (U) While exports decline, imports are surging as Romanians eagerly purchase cheaper products from abroad, including machinery, textiles, minerals and automobiles. Embassy's discussions with a major U.S. car manufacturer and importer located in Romania found increasing first-time customer interest in U.S. vehicles and increasing sales overall on European imports. Low cost imports are also benefiting Romanian businesses by allowing them to purchase tools and raw materials for lower capital costs, which will spur growth. However, as imports increase and exports fall, the trade deficit is widening. ANEIR believes that given the current ROL appreciation Romania may attain a record- high trade deficit by the end of the year. What the Future Holds ---------------------- 12. (U) Capital account liberalization will advance in April 2005, with the anticipated availability of ROL denominated bank accounts for foreigners. This will allow foreigners to benefit from high interest without requiring the services of a middleman. This move may unleash a renewed ROL buying frenzy as speculators move into these accounts. Soon afterwards, The Romanian government will create a secondary monetary market in which domestic T-bills, certificates of deposit and mortgages will be traded and which will likely also be open to foreign residents. This market may also boost confidence in the ROL, perhaps again raising its value. 13. (U) The BNR hopes that an additional important psychological boost for the public perception of the Leu as a serious and stable currency will occur next year when it introduces the "new" Leu to replace the old currency unit. The BNR, between July 2005 and December 2006, will divide all current denominations by 10,000, effectively removing four zeros from the bills. The official currency trading designation of the Leu will change from ROL to RON ("Romanian New"). The BNR hopes that this denomination process will assist disinflation through a psychological effect, similar to the results that followed Poland's currency redomination. In the long term, as Romania approaches European Union membership and eventual adoption of the Euro, possibly in late 2014, the BNR believes volatility between the two currencies will diminish. However, where the rate will stand at that time is impossible to predict, all the more so as a new president with center-right leanings and somewhat undefined policy preferences has just unexpectedly been elected. Comment ------- 14. (SBU) Recent foreign exchange policy has shown that Romania has subordinated exchange rate price stability to inflation targeting, a move that is consistent with international standards and best practices. However, this move makes business difficult for those Romanian exporters that may be unprepared for increased international competition as their goods and services become more expensive. This situation is a good test for the more competitive environment that Romania will face in the future as it approaches EU accession. In the short term the ROL will likely continue to appreciate, absent significant interference from the BNR. In the longer term, if Romania's taste for cheap imports continues, and the trade deficit expands, demand for hard currency should slow and reverse current Leu appreication. Crouch
24141 2004-12-15 17:00:00 04BUCHAREST3447 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS SECTION 01 OF 02 BUCHAREST 003447 SIPDIS SENSITIVE DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: N/A TAGS: PGOV, PREL, KDEM, SOCI, RO SUBJECT: ROMANIAN PRESIDENT-ELECT TRAIAN BASESCU SETS OUT KEY OBJECTIVES IN ACCEPTANCE SPEECH REF: BUCHAREST 3160 THIS CABLE IS SENSITIVE BUT UNCLASSIFIED - PROTECT ACCORDINGLY 1. (U) Summary. In his first speech after acknowledging his win in presidential run-off elections, Romanian President- elect Traian Basescu emphasized EU integration, poverty, political influence on state institutions and corruption, all key Basescu themes in his presidential campaign. He highlighted another campaign plank - the importance of a strong trans-Atlantic alliance. Basescu also stressed that the PNL-PD should lead a parliamentary governing coalition. End Summary. A Jubilant New President-Elect ------------------------------ 2. (U) President-elect Traian Basescu accepted victory December 13 in a brief, nationally televised speech in which he acknowledged the concession of his competitor, center- left Social Democratic Party (PSD) PM Adrian Nastase. Flanked by senior members of his center-right Liberal- Democratic (PNL-PD) alliance bloc -- including PNL leader and potential Prime Minister Calin Popescu Tariceanu -- Basescu outlined the priorities for his administration, stressing themes he had raised repeatedly throughout the campaign. Seeking a PNL-PD led Majority ----------------------------- 3. (U) Basescu said his first priority would be to form a parliamentary majority that would allow him to implement with "total force" Romania's plans for integration into the European Union. "We are aware that after closing negotiations, there are still extremely difficult obligations," ahead for Romania, Basescu declared. He stressed that Romania's EU accession obligations could only be implemented by a government led by the PNL-PD bloc. He stressed that the alliance had obtained 161 seats in both parliamentary chambers, while PSD without its Humanist Party (PUR) ally, had obtained only 160. Basescu said he intended to attract to the PNL-PD led coalition the parliament's "democratic parties," namely PUR and the ethnic Hungarian party (UDMR). Basescu said he will work to "unite the Romanian nation," including Romanians living abroad. The Costs of EU Integration: Informing the People --------------------------------------------- ---- 4. (U) Turning again to EU accession, Basescu said that Romania's primary foreign policy goal is joining the EU in 2007. He said the process would surely fail if Romania's leaders do not fully explain to the Romanian people the costs and implications of integration. As long as the general public sees "Europe" as a matter of concern only for the government, fewer and fewer Romanians would support integration once the costs become clear. He underscored the need for an integration process with a "unified people who accept the costs of integration in exchange for the satisfaction that follows integration." Combating Poverty ------------------ 5. (U) Basescu said that Romania should not be allowed to "hide poverty behind statistics." He said too many pensioners receive allotments that are lower than their monthly bills for winter heating, or electricity, or gas; too many farmers become poorer and poorer even in years with good harvests; too many of Romanian youth have begun to believe that Romania is not a country where they have opportunities. He said addressing these problems would be his priority as president. He acknowledged that combating poverty would have to take into account the realities of the state budget, but stressed that the country would not achieve cohesion as long as the state "humiliates millions of citizens" through poverty. Securing the Independence of State Institutions --------------------------------------------- -- 6. (U) Basescu announced that he viewed as a "special priority" the need to remove state institutions from political influence. State institutions should function according to the constitution and laws, not through the "involvement of politicians in justice, police, the prosecutors office" or other places where "serious issues concerning the legal process are dealt with." Basescu vowed to be a president who would "watch over and protect" state institutions from any kind of political influence. He cautioned that the replacement of the PSD would not simply mean the arrival of "new political masters" but that he would ask all of the leaders of Romania's institutions to fulfill their duties according to the law. Corruption: "A threat to National Security" -------------------------------------------- 7. (U) Echoing a theme he iterated during the presidential campaign, Basescu characterized high-level corruption as a "threat to national security." He promised to include the fight against corruption in Romania's National Defense Strategy. Basescu stressed that key governmental institutions, including the Justice and Interior Ministries and national intelligence agencies, would be charged with battling corruption. The Transatlantic Relationship: Bucharest-London-Washington --------------------------------------------- -------------- 8. (U) Basescu declared that strengthening Romania's security relationship with the United States and United Kingdom is the foundation of Romania's national security strategy. Hearkening to a theme that he first elaborated during a nationally televised presidential debate five days before the December 12 election, Basescu praised the "Bucharest-London-Washington" alliance. Basescu described Romanian as a bridge between the western values, as represented by the EU and NATO, and former communist Eastern European states. According to Basescu, Romania should maintain friendly relationships with Russian, Ukraine and Belarus in order to help provide a "stabilizing force" on NATO's frontiers. Basescu also observed that Romania and Moldova (which share a common language, culture and history) constitute one nation living in two countries and that the "Romania has the obligation to treat Moldovans as good Romanians." Praise from Independent Analysts --------------------------------- 9. (U) Journalist Bogdan Ficeac lauded Basescu for his insistence that state institutions should strive to be apolitical, observing that "I haven't heard any other politician speaking so firmly about this matter."" Respected NGO Pro Democracy's leader Cristian Pirvelescu said that depoliticizing state institutions depends on the "reconstruction of the lawful state," which was not respected during the PSD rule, when "state institutions were captive." He also stated that "political equilibrium leads to economic equilibrium." On the other hand, editorialist Bogdan Chirieac opined that Basescu's talk of a "Washington- London-Bucharest" had stirred uncertainty, confusion and perhaps even annoyance not only in the U.S. and UK, but also in France and Germany. (Comment: EU Ambassadors here in Bucharest have been asking the Ambassador and U.K. Ambassador Quinton Quayle for an explanation for Basescu's remarks. End Comment) Comment ------- 10. (SBU) Basescu's speech contained no surprises and tracked with themes he had stressed during the campaign. The speech's delivery reflected Basescu's typically up front, direct speaking style and represented an attempt to build on the momentum generated by his surprise victory December 12. Basescu spoke with a victor's confidence: his insistence on a PNL-PD-led parliamentary government clearly rejects the possibility of a governing parliamentary coalition including the PSD. 10. (U) Amembassy Bucharest's reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest. CROUCH Crouch
24142 2004-12-15 17:09:00 04BUCHAREST3448 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 02 BUCHAREST 003448 SIPDIS STATE DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: DECL: 12/14/2014 TAGS: PGOV, PREL, KDEM, SOCI, RO SUBJECT: COALITION POLITICS LEAVE ROMANIANS WONDERING WHO WILL FORM NEW GOVERNMENT; NASTASE TRIES TO HANG ON REF: A. BUCHAREST 3416 B. BUCHAREST 3421 C. BUCHAREST 3442 Classified By: Political Section Chief Robert S. Gilchrist for Reasons 1.4 B and D 1. (C) Summary. Center-left Social Democratic Party (PSD) Prime Minister Adrian Nastase is attempting to remain in power through a coalition deal negotiated before his December 12 presidential defeat. Two small parties -- the Romanian Humanist Party (PUR) and the ethnic Hungarian Party (UDMR) -- hold the balance and are sending mixed signals as to which way they will go. President-elect Traian Basescu continues to insist on a government led by his center-right National Liberal-Democratic (PNL-PD) alliance. Basescu's constitutional prerogative to appoint the new prime minister and call snap elections if the parliament fails to approve his cabinet give him the upper hand. The ruling PSD is undergoing internal turmoil, with outgoing President Ion Iliescu poised to return to the helm of the party. End Summary. 2. (C) Contacts in both of the principal political blocs have approached post December 14-15 with information indicating the ruling Social Democratic Party (PSD) is pressing hard to keep intact its planned coalition with the Romanian Humanist Party (PUR) and the ethnic Hungarian party (UDMR). The deal, which had been worked out among the three parties in the two weeks between the two rounds of presidential elections, assumed a Nastase win. Moreover, Nastase used the fact that he had secured an apparent parliamentary governing coalition as a point to boost his standing during the campaign, the logic being that a PSD-led parliament would work best with a PSD president. 3. (C) Prior to Basescu's win, PUR and UDMR contacts told post their parties were "extremely pleased" with the terms they had received in negotiations with the PSD. While full details were not disclosed, the PSD had reportedly promised the ethnic Hungarians a vice premier slot and at least three ministerial portfolios, including Health, Transport, and Education. PSD had similarly promised the PUR key positions, including a second vice premier slot, a key economic ministry and a newly created Ministry of Small and Medium sized Enterprises. The negotiated deal was much better than these two parties had received during their earlier alliance with the PSD. In addition, as political insiders have noted to post, UDMR and PUR "feel comfortable" working with PSD, as they have a long history of collaboration. 4. (C) However, the foundations of the PSD-constructed house of cards were severely shaken by the seismic impact of a clear Basescu victory. December 13-15, as Basescu's win sunk in, both PUR and UDMR issued a series of conflicting statements about their future intentions. Contacts within the parties confided that this reflected intense pressure applied from both PSD and PNL-PD and the new rules-of-the-game set by Basescu. In contrast, one PNL-PD contact told post that he remained alarmed by the high price each of the two small parties sought to exact as its admission fee into a PNL-PD-led government. Late December 14, UDMR leader Marko Bela met with Basescu and likely PNL-PD prime ministerial designee Calin Popescu Tariceanu. The following day, UDMR declined to sign a planned formal protocol setting in stone an alliance with PSD and PUR. UDMR issued a statement that discussions would continue with both sides and that any protocol should be postponed. One PSD insider confided to post that despite intense ongoing negotiations December 15 between PSD and UDMR, ultimately an alliance between the two was "unlikely to gel." Although PUR leader Dan Voiculescu has said his party would prefer an alliance with PSD, he also expressed a willingness to remain open to an agreement with PNL-PD as circumstances require. 5. (C) Meanwhile, President-elect Traian Basescu remains firmly committed to a PNL-PD-led government, as he declared publicly during his December 13 presidential acceptance speech. Given that the central plank in Basescu's campaign was combating what he called PSD-perpetrated corruption, few political analysts see any way he could allow PSD to remain in government. To a great extent, the vote for Basescu was against PSD. Despite some internal dissent, PNL-PD leaders meeting the week before December 12 elections formally set a policy that the alliance would exclude PSD from any PNL-PD-led coalition. Any backtracking by the alliance would be perceived in the media and by the public as indication of insincerity by Basescu and the PNL-PD in their commitment to fight corruption and usher in reform. Tariceanu reminded the press December 14 that PNL-PD had firmly ruled out any alliance or cohabitation with PSD. Moreover, he asserted PSD efforts now to forge a parliamentary majority are only in play to allow PM Nastase's political survival. 6. (C) At the same time, as president, Basescu will wield powerful constitutional prerogatives that give him an upper hand in shutting out PSD by designating a prime minister of his choice, likely to be Tariceanu. Given that PSD on its own does not hold an absolute majority, post's view of the constitution indicates that Basescu is merely obliged to consult all the political parties represented in parliament. If Basescu's choice for PM does not succeed in forming a majority, he still has the option of forcing a minority government. This is provided that such a government could survive a vote of no confidence. Given that the parties and most MPs are reluctant to engage in another electoral campaign so soon, this is unlikely. However, if a vote of no confidence were to pass, Basescu could call new elections as soon as 60 days after the first failed attempt to form a government. 7. (C) In a private conversation with the Ambassador on December 15, Basescu was clearly ebullient. He presented a governing approach aimed at completing the 1989 revolution initiated, but subsequently hijacked, in his view, by second and third tier apparatchiks from the old regime. Like every other political adept in this town, Basescu had done the math and concluded that he can nominate a majority government, without cohabitation with the PSD. Put quite simply, adding the UDMR, the PUR and 18 special seats reserved for ethnic minorities to seats won by the PNL-PD produces a parliamentary majority. 8. (C) Naturally, the PSD has come to the same conclusion and has already made a serious effort at sabotage. Basescu told the Ambassador that the PSD already showed him files throwing dirt on PUR leader Voiculescu, implying that such information could be brought to light to damage a future coalition. The Ambassador observed that full transparency would be the best way of coping with this blackmail threat, but Basescu was quite confident he could build his government owing to his trump card ) the threat of new elections in which he believed he could handily prevail and win a clean majority of parliamentary seats. In his words, &At the end of the day, if I explain to the population the situation, I will become more popular.8 9. (C) Basescu reiterated some of the same themes that he accented during his acceptance speech and campaign style appearance the previous night at Victory Square in front of the Palace of Parliament. Basescu highlighted, however, the necessity of a fight against corruption, at both the top level of the political class and in the institutions of government that had come to serve the ruling party and favored individuals rather than the people. Therefore, he concluded, he could not have cohabitation with those same individuals and political forces. He offered that a few years in opposition would be good for both the PSD and Nastase, providing them the opportunity to rethink their politics and clean house. He immediately added, however, that the PSD might be &irredeemable.8 10. (C) Comment: While PSD emerged with the largest parliamentary bloc in November 28 elections, Basescu's December 12 victory has delivered a tremendous blow to the bloc that has governed for 11 of the past 15 years. Few Bucharest analysts believe Nastase can succeed in keeping his pre-set coalition intact, although tough bargaining positions by the PUR or UDMR with PNL-PD could change the outcome. One Embassy contact has told us that the PSD is already undertaking internal changes, and that Iliescu is preparing to lead his party in opposition. End comment. 11. (U) Amembassy Bucharest,s reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest CROUCH
24315 2004-12-20 05:36:00 04BUCHAREST3479 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 05 BUCHAREST 003479 SIPDIS STATE DEPT FOR EUR/NCE - WILLIAM SILKWORTH STATE DEPT ALSO FOR INR/B E.O. 12958: DECL: 12/17/2014 TAGS: PGOV, PREL, PINR, KDEM, SOCI, ECON, PHUM, RO, biographic information SUBJECT: ROMANIA: BIOGRAPHICAL DATA ON KEY FIGURES IN THE NATIONAL LIBERAL-DEMOCRATIC PARTY ALLIANCE Classified By: Political Section Chief Robert S. Gilchrist for Reasons 1.4 B and D 1. (SBU) Summary. In the wake of President-elect Traian Basescu,s upset victory over PM Adrian Nastase December 12, key members of the center-right National Liberal Party-Democratic Party (PNL-PD) Alliance, which Basescu heads, have moved to the center of Romania,s political stage. While it is too early to determine precisely what roles these key players will assume in a Basescu presidency, post presents below brief bios of essential political figures within the Alliance, as well as two prominent independents with foreign policy credentials. End Summary. Who,s Who in the Liberal Party ------------------------------ 2. (C) The Alliance,s likely PM designate is respected businessman Calin Popescu Tariceanu, a PNL stalwart and leading party figure since the early 1990,s. Within the party, Tariceanu is widely viewed as a conciliatory force, managing to avoid being too closely identified with any of the party,s factions. Tariceanu has been acting PNL President -- and co-leader of the PNL-PD Alliance -- since Theodore Stolojan,s unexpected resignation from the presidential campaign and PNL leadership October 2. Tariceanu was Minister of Commerce and Industry from 1996 to 1997. His political adversaries cried foul during his ministerial tenure when one of his companies struck a deal with the national telecommunications company, RomTeleCom. His polished, urbane style coupled with a certain gravitas made him a logical pick for PNL-PD Alliance spokesman in 2003. Although he lacked the national name recognition of the center-left Social Democratic Party (PSD) PM designee FM Mircea Geoana, Tariceanu,s calm and collected style distinguishes him in a political atmosphere often characterized by hyperbole and florid rhetoric. He is a good foil for rough-hewn President-elect Basescu. One criticism occasionally aimed at Tariceanu by PNL insiders is that his relatively laid back style is perhaps a smidgen too relaxed for the hurly-burly of partisan politics; during the campaign, for example, Tariceanu reportedly insisted on regular rest days. Tariceanu also is proud of his success as a "self made man," having amassed a personal fortune through holding an exclusive franchise for Citroen sales in Romania. A respected and accessible interlocutor, Tariceanu met regularly with PolChief and other Embassy Officers before and throughout the campaign. He speaks excellent English, is married and has two children. 3. (C) Theodor Stolojan remains a key player within the PNL despite his official resignation from the presidential campaign and party politics this fall for undisclosed health reasons. On December 16, media reports indicated that Basescu had selected Stolojan to be Economic Counselor to the President. Respected even by his political foes, including President Iliescu, he, like Tariceanu, is known for his bridge building ability in a party (and a nation) often notorious for its fractious infighting. Indeed, Stolojan played a central role in reorganizing the PNL following the center-right,s electoral debacle in the 2000 general elections. Many within the party felt, however, that the urbane, soft-spoken Stolojan lacked sufficient street fighting skills to tangle with the powerful PSD machine during the 2004 presidential contest. Some Alliance members secretly greeted his withdrawal from the campaign in favor of SIPDIS the tough talking Basescu with sighs of relief. At the very least, Stolojan will be a trusted adviser to the new President. His role may be limited by bona fide health problems; some sources cite longstanding kidney ailments as the source of his woes. Prior to his withdrawal from the campaign, many observers remarked on his waxen complexion, dark circles under his eyes and generally haggard demeanor. The Embassy maintains a close relationship with Stolojan and he met regularly with the Ambassador prior to his decision to pull out of the presidential race. We expect those good relations will continue. Stolojan was prime minister from 1991-1992. He also served as Finance Minister from 1990-1991. From 1992-1998 he worked as a Senior Economist at the World Bank. In 2000, he was the PNL candidate in the first round of presidential elections. 4. (C) Energy mogul Dinu Patriciu, CEO and Chairman of the Board of Rompetrol, is one of the PNL,s most controversial figures. A vocal critic of Stolojan,s leadership and the PNL,s alliance with PD, Patriciu nevertheless provided essential financial support to the Alliance during the campaign. In September 2004, Patriciu and fellow PNL member Valeriu Stoica publicly aired the PNL,s dirty linen when they demanded more effective party leadership. Although their complaints had little resonance among PNL,s rank and file, many observers touted their move as an example of the center-right,s historic lack of unity. The National Anti-Corruption Prosecutor,s Office opened an investigation against him in summer 2004, but it remains unclear whether this was simply politically motivated. Following the PSD,s successful showing in the first round of presidential and parliamentary elections, Patriciu and his confidantes were frequently cited as possible allies in a PSD-led government. Patriciu did nothing to dampen this speculation. 5. (C) Former PNL President and Justice Minister Valeriu Stoica is widely credited as a mastermind behind the formation of the PNL-PD Alliance. However, Stoica was forced to resign from PNL,s leadership in 2002 following his failure to boost the party,s public opinion ratings. In the wake of the center-right,s 2000 electoral debacle, he skirmished constantly with Patriciu over PNL leadership, eventually bruiting Stolojan as a compromise candidate. This summer, he again courted controversy by proposing a &swift merger8 between PNL and PD ) a step farther than most party members are willing to take. His critics acknowledge his brilliant intellect, but observe that he lacks charisma. Although Stoica holds no formal position within the party, he continues to wield significant political clout and could return as Minister of Justice in a future alliance government. The Embassy knows Stoica well, and PolChief and others have met with him regularly. 6. (C) Mona Musca is PNL,s best-known female deputy and, together with Basescu and Stolojan, among the Alliance,s most popular figures. A leading critic of corruption and widely respected for her own probity, she has proposed several bills protecting media freedom and favoring civil society. Her commitment to clean government has earned her the nickname of the &First Lady8 of the PNL. She petitioned the PNA to investigate an allegedly corrupt real estate transaction involving PM Nastase. Musca, a valued Embassy interlocutor, has been bruited as a possible Culture Minister or Labor Minister in an Alliance-led government. 7. (C) Ionut Popescu took over the position of PNL-PD Alliance spokesman following Tariceanu's step up from Alliance spokesman to Alliance PM pick. The former editor-in-chief of &Capital8 magazine and a well-known economic analyst and commentator, Popescu entered politics after PNL leader Theodor Stolojan asked him to become his personal adviser for economic issues. Not surprisingly, Popescu is a strong advocate of a market economy and economic reform. He was second on the Alliance Senate slate for Bucharest. 8. (C) Senator and ethnic Armenian Varujan Vosganian first entered parliament in 1990 as a representative of the Armenian minority. In 1996, he was a cofounder of the Romanian Alternative Party (PAR), joining the PNL after the PAR-PNL merger in 2003. He has served on the PNL Executive Bureau since the merger. Vosganian is one of the authors -if not the principal author - of the Alliance's economic program. He is a mathematician and economist by training. 9. (C) Soft spoken PNL Senator Gheorge Flutur, one of the party's leading electoral strategists and an agricultural specialist tops the list of likely choices for Agriculture Minister. Flutur is a &Vice Leader8 of the PNL Parliamentary Group. According to press reports, Flutur (along with Mona Musca) is one of the Alliance's top negotiators with UDMR and PUR, as PNL-PD aims to entice those parties to join a PNL-PD-led government. 10. (C) Controversial businessman Viorel Catarama has been linked to a series of business scandals, including investigations of the &SAFI8 investment fund and a furniture factory. Catarama entered politics in 1990 and joined the PNL Youth Wing, that also included Dinu Patriciu and Calin Popescu Tariceanu. He was a Deputy State Secretary in the Commerce Ministry in the early 1990,s. Elected as a PNL Senator in 1996, he quit the party in 1999 and ran as an independent for Bucharest,s mayor, losing to Basescu. Catarama later became Chairman of the Romanian National Party (a party subsequently chaired by former Romanian Intelligence Agency (SRI) Director Virgil Magureanu) before leaving that party and joining the Alliance for Romania (APR) party in 2000. He returned in the PNL fold following the PNL-APR merger in January 2002. 11. (C) PNL Senator and Vice President Teodor Melescanu was a diplomat from 1966 to 1996, capping his foreign policy career as Foreign Minister from 1992 to 1996. He entered politics as an ally of Ion Iliescu, but broke with Iliescu to form the Alliance for Romania (APR) party in 1997. Following his unsuccessful bid for president in 2000 and the PNL-APR merger, Melescanu became a PNL Vice President. Three Young PNL Voices ----------------------- 12. (C) Three up and coming PNL Members - and valued Embassy interlocutors - are new Senator Christian David, Deputy Christian Boureanu and Deputy Bogdan Olteanu. David is Director of the PNL,s Department of External Relations and was a close advisor to Tariceanu prior to and during the campaign. He remains near the inner-circle of PNL-PD, including to Basescu, and is a close and reliable contact for the Embassy. David is a businessman and an economist by training. 13. (C) Deputy Boureanu is a staunch advocate of market reform. A regular Embassy interlocutor, he has complained about &old thinking8 among PNL leadership and also lamented that members of Romania,s intelligence services engage in partisan politics. The telegenic and articulate Boureanu was a ®ular8 on television talk shows during the electoral campaign. He speaks fluent, idiomatic English. He is a graduate of Romania's prestigious National Defense College. 14. (C) Deputy Bogdan Olteanu is very close to Alliance PM designate Tarticeanu, is chair of the PNL Honor and Mediation Council (an intraparty rules and ethics body) and has been bruited for a likely high position at a sub-ministerial level in a PNL-PD government. Olteanu is one of two persons the PNL-PD has reportedly charged with drafting a "protocol of cooperation" if the Alliance can strike a deal with the ethnic Hungarian party (UDMR) and Humanist Party (PUR). A lawyer by training and a PNL activist since the early 90's, he is former President of the PNL Youth Wing. Democratic Party Stars ---------------------- 15. (C) Cluj Mayor Emil Boc is the best-known PD politician after President-elect Basescu. He is number two in the PD hierarchy, after Basescu, holding the title of Executive President. When Basescu is sworn in as President of Romania, Boc will take over as PD Acting President until the party convention in May 2005. Boc is a canny politician, respected attorney and political science professor who helped establish the Political Science and Public Administration Department at Babes Bolyai University in Cluj. Never one to skirt controversy, Boc is known for his outspokenness but leavens his idealism with pragmatism. Boc's public performance can be uncontrollably garrulous, even erratic, leading one Cluj resident to remark that on occasion "he speaks too fast, too long and too loud." In the June 2004 municipal elections, Boc defeated both the incumbent mayor, a notoriously xenophobic member of Corneliu Vadim Tudor,s extreme nationalist Greater Romania Party (PRM), and the popular ex-PSD Interior Minister Ion Rus. As a parliamentarian, Boc was a moving force behind drafting Romania,s revised Constitution in 2003 and anti-corruption legislation. He enjoys good personal and professional relations with Basescu. The President-elect is reportedly the godfather of one of Boc,s children, and Basescu recently stated that he would like more &Bocs8 in the Alliance. Boc is a longstanding Embassy contact, appreciated for his candor and accessibility. He speaks excellent English. 16. (C) A likely Alliance vice premier pick, Adrian Videanu is one of PD's richest politicians and currently heads the Romanian-American investment fund. Videanu is one of the few parliamentarians to voluntarily leave office in accordance with new conflict of interest legislation. His discretion and managerial skills are widely respected across PD-PNL ranks. Videanu is widely regarded as president-elect's right hand man and returned to the public spotlight during the campaign among Basescu's inner circle of advisors. Additionally, Videanu is widely regarded as a source of cash ) and economic credibility ) for the Alliance. 17. (C) Former Industry Minister Radu Berceanu has been tarred by corruption scandals, most notably allegations involving his involvement with petrochemical company Sunoil. The Prosecutor General,s office investigated Berceanu on allegations that during his tenure as Industry Minister he bled millions of dollars from state-owned petrochemical concerns while profits flowed into the coffers of Sunoil. Berceanu and three other PD officials denied the allegations and the results of the investigation were inconclusive. Berceanu is PD Vice Chairman and an influential figure within the PD, perhaps because he is a source of funding for the Alliance. 18. (C) Former Minister of Defense (March-December 2000) Sorin Frunzaverde often heads the list of names most-frequently mentioned as a Defense Minister in an Alliance government. Frunzaverde is a PD Vice Chairman and member of the Chamber of Deputies, Defense and Intelligence oversight committees. Many analysts describe his brief tenure as Defense Minister as less than stellar. Moreover, Basescu stated during the campaign that he did not want members of the 1996-2000 failed center-right government to hold ministerial portfolios. Frunzaverde holds pro-American views and is an Embassy interlocutor. 19. (C) PD Vice-President Vasile Blaga is widely bruited as under consideration for Minister of Administration and Interior in a PNL-PD government or as Chief of Presidential Administration. Blaga, a Basescu confidant, is a former prefect with an insider's perspective on Romanian local administration. He played a key role in Basescu's successful presidential campaign. 20. (C) Deputy Cosmin Gusa, like Vasile Blaga and Adrian Videanu, is a key member of Basescu's inner circle and a trusted adviser. He is a member of the party's National Standing Bureau, was coordinator of the PD's local elections campaign in June 2004 and one of the key coordinators for the PNL-PD of this year's parliamentary and presidential campaigns. Gusa is, literally, Basescu's right hand man, accompanying him virtually everywhere. He is leader of PD MPs in the Chamber of Deputies. Gusa began his professional career working in broadcasting for media magnate and PUR leader Dan Voiculescu. Not surprisingly, he began his political career with PUR, but defected to the PSD where he rose quickly to prominence. PM Nastase selected him as the PSD's Executive Secretary, which meant he was in charge of the party's day-to-day activities. His defection to PD in 2003 was a blow to the PSD, as Gusa departed with intricate knowledge of the PSD's inner workings. Since joining the PD, Gusa has become a key dealmaker for the Alliance. He recently told post that he would likely remain in the parliament for the time being, rather than entering the government, as he expected the lack of a clear majority for either major party would lead to "turf warfare" between PNL-PD and PSD heavyweights bitter they are out of government. Gusa speaks fluent English and spent four months in the U.S. in the mid-1990's on a program sponsored by U.S. NGO Freedom House. He meets regularly with PolChief and other Embassy interlocutors, as well diplomats from other countries. A Husband-Wife Team ------------------- 21. (C) Journalists and married couple Adriana and Claudiu Saftoiu, both in their thirties, are trusted Basescu counselors who have worked for the President-elect for the past several years and are almost certain to play pivotal roles in a Basescu administration. According to press reports, Adriana Saftoiu will likely be the Presidency,s spokesperson ) a logical choice since she was the press officer for Basescu,s winning 2004 mayoral and presidential bids and served as government spokesperson in 1999 under the center right government. To be spokesperson, she will need to resign her position as a newly elected deputy. Press reports state that Claudiu Saftoiu will probably be the Presidency,s political counselor. Mr. Saftoiu is director of Capital Promotion, a political consulting firm, and author of a book about the relationship between politicians and the mass media. The Saftoius both helped conceive and execute Basescu,s unconventional but successful media messages, whose eye catching advertisements during the 2004 mayoral campaign, for example, included sepia tinted &retro8 photographs of Basescu and his team and the image of a red hot chili pepper to symbolize Basescu,s outspokenness. One Young PD Leader ------------------- 22. (C) In a party known for its relative youth, one young PD leader and valued Embassy contact is new Deputy Roberta Alma Anastase. Anastase is Executive Secretary of the PD National Board and Secretary of the PD,s Parliamentary Group in the Chamber of Deputies. She is widely recognized as one of PD,s up and coming politicians. Independent Foreign Policy Experts ---------------------------------- 23. (C) In support of the alliance's pro-U.S. and pro-EU foreign policy, Mihai Razvan Ungureanu, an independent, is rumored to be among the Alliance,s top choices for Foreign Minister. A former MFA State Secretary, he is a respected historian who did postgraduate studies at Oxford. He distinguished himself as one of Romania's top young civil servants during his tenure as MFA State Secretary from 1998 to 2001. He followed his MFA State Secretary mandate by serving as the Special Envoy for the South-East Europe Stability Pact Coordinator. Ungureanu has published numerous scholarly articles as well as three historical books. The 36-year-old Ungureanu is fluent in English, French, German, Italian and Hungarian. 24. (C) Another pro-American independent who may figure prominently in Basescu,s administration is former Foreign Minister Andrei Plesu. According to press reports, Plesu is a likely choice for the Presidency,s Foreign Policy Counselor and a senior PD adviser recently confirmed to PolChief that Plesu would be an important figure in Basescu,s administration. Although not a member of the PD and widely viewed as independent, Plesu was something of a protg of former PD leader and ex-PM Petre Roman. Plesu, a dissident in the 1980s, was Culture Minister for almost two years in the early 1990,s. As Foreign Minister from 1997-1999, Plesu strongly supported Romania,s efforts to accede to NATO and took the unpopular position of supporting the NATO-led intervention in the former Yugoslavia. In 1994, he founded the New Europe College; Mihai Razvan Ungureanu has been among its fellows. Plesu recently resigned from the National Council for the Study of Securitate Archives when the Council implausibly cleared extreme nationalist and &court poet8 of communist dictator Nicolae Ceausescu, Corneliu Vadim Tudor, of charges that he collaborated with the communist-era Securitate secret police. 25. (U) Amembassy Bucharest,s reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest. CROUCH
24434 2004-12-21 15:43:00 04BUCHAREST3500 Embassy Bucharest UNCLASSIFIED UNCLAS SECTION 01 OF 03 BUCHAREST 003500 SIPDIS STATE DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: N/A TAGS: PGOV, PREL, RO SUBJECT: INAUGURATION SPEECH DELIVERED BY NEWLY ELECTED ROMANIAN PRESIDENT TRAIAN BASESCU 1. On December 20, 2004, before a joint session of Parliament, newly elected Romanian President Traian Basescu delivered his inauguration speech. 2. The text of Embassy Bucharest's unofficial translation of President Basescu's inauguration speech follows below: "Mr. President of the Senate, Mr. President of the Chamber of Deputies, President Ion Iliescu, distinguished MPs of Romania, distinguished representatives of the Diplomatic Core, distinguished representatives of the Church, esteemed citizens, dear compatriots: Through the democratic will of the people, I have been elected President of Romania. This vote leads me to have greater respect for what I stated when I launched my candidacy for the supreme function of the state - to assure the citizens of this country once again that I will be the President of all Romanians, a powerful, impartial, active President, who will dedicate himself 24 hours a day, seven days a week to the Romanian nation. This is my promise to the Romanian people. I assure you that the next five years of my Presidential term in office will be years in which Romania will become a different country, a functional country, through applying and respecting the laws, a country which will be made noteworthy through its people. The Romanian nation needs a President who will represent it with dignity, who will work closely with state institutions in order to get Romania out of the sewer of poverty and corruption. I will consider that I have succeeded in my mandate if I succeed in uniting the entire population around the objectives of domestic and foreign policies. We cannot talk about dignifying integration in the E.U. without solving the major problems of Romania - corruption and poverty. Dear MPs, I assure you that I will collaborate well with state institutions to fight the corruption and poverty that has been eating away at society, at the Romanian public and at the political system. Corruption at a high level provokes poverty. These are two things that are necessary to one another - corruption and poverty. Right now, corruption at a high level represents the most serious danger to [our] national security. We don't need to mask poverty under statistics. Too many retired people have pensions smaller than their heating bills in the winter. Too many peasants live in poverty, no matter how rich the crops are. Too many young people have begun to believe that Romania is no longer a country that has opportunities. This reality must be changed. To enter life as a poor young person because of an unjust system of promotions and careers is the heaviest burden that a young Romanian can bear. Millions of retired people need a healthy old age, which must be protected by a health insurance system meant to help them, not to bring the ill and the old to desperation when they need medicines and, equally, respect for their years of work. As President of the Supreme Council of National Defense, I will include the fight against high-level corruption in the strategy of defending the country. A fundamental priority of my mandate will also be removing state institutions from political control. I will not accept any political interference in state institutions, which must function according to the Constitution and the laws of the country. They must be immediately de-politicized and put at the service of the citizens. Messrs. MPs, the acute differences between the rural and the urban environments are another major problem of our society. I want to assure you and all the citizens of this country that there are not several Romanias - there are merely politicians who slice Romania up according to their parties' interests and their power of influence. As President of the state, I will defend and promote the interests of every Romanian citizen, be that citizen peasant, townsman, member of some minority group, child, youngster, pensioner, woman, man, rich or poor. I will be the President of all Romanians in one and the same Romania. I will mediate the relationship with the Parliament stubbornly and in good faith. We need a Parliament that is active and reactive to the signals from this country's citizens. We must act in such a manner that Romanians begin to trust the political and law institutions of the Romanian state, after 15 years. I will militate for a Parliament that will be an institution that represents the interests of those who have chosen it, and not a mechanism for the interests of political party clients. I will be a dedicated defender of the freedom of the press, which in recent years has experienced serious setbacks due to unparalleled political constraints and pressures, applied against the Romanian media. Confiscating the freedom of the press is the first step to confiscating the freedoms of the citizens. The successes of democracy cannot take place without the existence of a free press, the right to speech and the freedom of expression. I want to assure you that the new President of Romania will support civil society. Romania needs its civil society to step up its pace in the role of defender and promoter of the rights of every citizen. Education, religion, and culture are the surest and steadiest gates by which the Romanian spirit may enter the family of universal spirits. I will defend the strategic interests of Romania where foreign policy is concerned and I will make our country a partner with a highly regarded word. I will open the horizons of Romania's foreign policy to all cardinal points, in a moment when our country needs allies, partners, and friends in all the democratic countries of the world. A major priority in foreign policy and in the positive evolution of Romania is integration into the European Union. Integration into the European Union is an element of power in the foreign policy of Romania. The integration process will include both the values of an action based on cooperation with the European Commission, and the values of making the best of the traditional bilateral relations that Romania has with countries such as France, Germany, Spain, Italy, Hungary, Poland, Italy and many other European countries. It is extremely clear that now, after ending the negotiations for integration, the fight for integration takes place inside Romania. Here is the place where we must fulfill the obligations assumed by Romania's government in the process of negotiations. The tough fight to integrate into the E.U. must be won at home. Here is where we must obtain the standards of economic and social compatibility with the European Union. Another priority in Romania's foreign policy will be to consolidate our position in NATO. It is essential for Romania to obtain a position and an influence that reflect its real value in this organization, but that also reflect its value as a country able to ensure stability south of the Danube and east of the Prut River, developing good relations with the countries of the former Yugoslavia, with Ukraine and with Russia. We must bear in mind that there are more than six million Romanians who have become citizens of other countries, such as Canada, Australia, the U.S., Germany, France, Spain, Italy and many other countries of the world. We have a duty to re-establish relations with the Romanian diaspora. We have a duty to make these people, who have left their country for one reason or another, feel that the mother- country mourns for them, that their origin country treats them with respect, that Romania is a modern state, a powerful state, a state that respects foreign citizens of Romanian origins, making them feel that they are part of the Romanian people. The Republic of Moldova will benefit from all the openness of the authorities in Bucharest, both in the processes of modernizing the country and in bolstering the sense that part of that country's people are a part of the Romanian people. Above these priorities, Romania will develop privileged relations with the U.S. and Great Britain, countries with which a strategic partnership has developed even since 1995. Distinguished MPs, we all have a very important mission. If the politicians don't explain to the citizens what the costs of the integration process are, it can be transformed into a failure. We need solidarity regarding integration, in order for every citizen to accept the costs of this process. We need an integration process under which the Romanian people will be united, to be able to enjoy the benefits of joining the E.U. I want us to be united in one common effort, and supported by the modernization of the economy based on the principles of rule of law; a dignified Romania, trusting its future. Belonging to one political party or another must not prevent us from working together for the citizens who have invested us with equal amounts of power and responsibility. Please allow me to say a special word to the young Parliamentarians. Dear novice Parliamentarians, I want to assure you of one thing: I have great confidence in you, regardless of your political affiliation. Your promotion to the superior forum of this country leads me to congratulate all those party presidents who nominated you to the Parliamentary lists. I have always been a supporter of rejuvenating the political class, against many skeptical voices. This is why, to convince these skeptics, my wish is that you will be my main collaborators, and I urge you to consider me your supporter. First, you must transform this institution, the Parliament, into a force and an engine of social, political, economical, cultural changes. I have confidence that you will be active and courageous and that you will make all of us who are citizens of this country recognize and change the image of the Romanian politician. I thank you for being here and I hope that you will keep the freshness of your minds and souls. Parliamentarians, dear Romanians, citizens of my country, I ask you to be near me in the next 5 years. I bear in my soul the flag of Romania and you around it. You have my word as President that I will serve you with power, good faith, and trust. We will be together during all trials and difficulties, but above all we will be together in a better life, marked by victories and success. We will live well, in a Romania of Romanians, a European Romania. So help us God!" End text. 3. Amembassy Bucharest's reporting telegrams, as well as daily press summaries, are available on the Bucharest SIPRNet website: www.state.sgov.gov/p/eur/bucharest CROUCH
24641 2004-12-27 15:06:00 04BUCHAREST3524 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 03 BUCHAREST 003524 SIPDIS STATE FOR EUR/NCE - WILLIAM SILKWORTH STATE ALSO FOR INR/B E.O. 12958: DECL: 12/27/2014 TAGS: PGOV, PREL, KDEM, SOCI, ECON, PINR, RO SUBJECT: ROMANIAN PM DESIGNATE PROPOSES NEW CABINET, PARLIAMENTARY APPROVAL PREDICTED "SOON" REF: A. A) BUCHAREST 3513 B. B) BUCHAREST 3512 C. C) BUCHAREST 3479 Classified By: DEPUTY CHIEF OF MISSION THOMAS L. DELARE FOR REASONS 1.4 B AND D 1. (C) Summary. Prime Minister designate Calin Popescu Tariceanu announced his proposed cabinet December 26, with parliament's vote of confidence on the list likely to take place as early as December 28. Many of the proposed ministers are relatively young, with limited experience. The Humanist Party (PUR), which shifted its allegiance to the center-right National Liberal Party-Democratic Party (PNL-PD) Alliance late last week, and the ethnic Hungarian party (UDMR) both hold key portfolios in the proposed cabinet. End Summary. 2. (C) PM Designate Calin Popescu Tariceanu announced the new government's proposed list of twenty-four ministers December 26, affirming that the nominees were selected for their "professional performance and moral integrity." The widely expected announcement came after days of intense PNL-PD Alliance negotiations with UDMR, PUR and the Chamber of Deputies' parliamentary minorities group. According to sources in parliament, Parliamentary Commissions will begin reviewing the nominations December 27. Tariceanu also is expected to submit to Parliament December 27 his proposed "program of government," essentially the center-right Alliance's governing roadmap. Parliament may meet in joint session as early as December 28 to vote on the slate and the program of government. PUR's decision late last week to join forces with the UDMR and the parliamentary minorities group in supporting the PNL-PD alliance (Ref B) provides the necessary "yes" votes for parliamentary approval of the proposed cabinet. 3. (C) Although PNL and PD members dominate the cabinet list, both the UDMR and PUR emerged as big winners following their endorsement of the alliance, securing several key ministerial slots. UDMR President Bela Marko and PUR Senator George Copos will each be Deputy Prime Ministers. Marko will coordinate matters concerning culture, education, and EU integration. Copos' portfolio has not been formally established, but his title encompasses coordination of the "business environment and small and medium enterprises". 4. (C) While Tariceanu's proposed ministerial list contains many fresh - and young - faces. The plethora of new faces has led many Romanian dailies to question whether the new cabinet will possess the professional skills and experience needed in Romania's rough and tumble political scene. Rumors also circulated regarding newly elected President Basescu's "meddling" in the proposed cabinet, with one leading daily reporting that Basescu--renowned for his "hands on" managerial style (read: micromanagement) --changed the distribution of several portfolios after negotiations with the parties already had been concluded. (Comment: Post views these news analyses with caution, since some of the print media is clearly hostile to the new team. End Comment.) 5. (C) The proposed ministerial list is set forth below. Post provides biographical data on designees except in those cases where we have recently submitted biographical background information. (See Refs A and C.): - Minister of State (Vice Prime Minister) for economic activities - Adriean Videanu. -Minister of State (Vice Prime Minister) for culture, education, and EU integration ) Bela Marko. Marko is President of the UDMR and has served in the Romanian Senate for more than a decade. During a nationally televised presidential debate prior to the November 28 parliamentary and first round of presidential elections, Marko infuriated extreme nationalists by delivering his opening statement in Hungarian. He gained five percent in the first round of presidential elections. Until a few weeks ago, Marko's UDMR was allied with the PSD; he was a mastermind of the PSD-UDMR alliance initially formed in 2001. -Minister of State (Vice Prime Minister) in charge of business environment and small and medium enterprises ) George Copos. Recently elected Senator Copos is a newcomer to electoral politics, entering the Senate this fall under the PUR banner. Indeed, he joined the PUR only a few weeks before the November 28 parliamentary elections, receiving a favorable position on PUR's parliamentary list. He is one of Romania's wealthiest businessmen, holding a major share of Ana Holding (industry, trade and tourism). He also owns the popular Bucharest soccer club "Rapid." Affiliated before the revolution with the youth branch of the Communist Party, Copos managed to get state aid for his companies both under the outgoing, center-left Social Democratic Party (PSD) government and previous governments. The 52-year-old Copos appears a marked contrast with the proposed cabinet's youngish, reformist bent. -Minister of Foreign Affairs - Mihai Razvan Ungureanu -Minister of Interior and Administration - Vasile Blaga -Minister of Justice - Monica Macovei is not affiliated with any political party, insisting when she accepted the nomination for Justice Minister that she has no intention of joining any party. She is a lawyer and the president of respected NGO APADOR-CH (Association for the Defense of Human Rights Romania ) Helsinki Committee). She successfully represented Romanian citizens in lawsuits against the Romanian state. APADOR-CH was a founding member of the Coalition for a Clean Parliament, which sought to educate voters on candidates' anticorruption track records during the 2004 parliamentary elections. -Minister of Public Finance - Ionut Popescu -Minister of Labor, Social Solidarity and Family - Gheorghe Barbu is a member of the Democratic Party and was President of the Hunedoara county council from 1996-2000. Elected deputy for Hunedoara in 2000 and again in 2004, Barbu is a Basescu confidant). When Basescu took over the party, Barbu became the PD Vice President for Trade Union Partnerships. A member of the Chamber of Deputies standing Commission on Labor, he focused on problems related to the pension system. The 53-year-old Barbu served as a MOD State Secretary for six months in 2000. -Minister of European Integration - Cristina Parvulescu. The 29-year-old Parvulescu has worked in Bucharest's City Hall since 2001, presently serving as Director of the city's "Directorate of Strategic Planning." Before 2001, she worked at the Ministry of Industry. She is a graduate of the Academy of Economic Sciences. -Minister of Economy - Codrut Seres. Seres is one the PUR's most prominent politicians and is the party's spokesperson. He was nominated as the PUR presidential candidate after PUR's successful local elections campaign in June. Seres withdrew his candidacy after PUR joined forces with PSD late summer this year. As is the case with all PUR politicians, Seres owes his political career to PUR President and media magnate Dan Voiculescu. Seres began working for Voiculescu at his Antenna 1 TV station before being promoted to Director for Development and Strategies at Grivco, one of Voiculescu,s most successful enterprises. He is a graduate of a military academy and is an engineer by training. -Minister of National Defense - Teodor Atanasiu. The 42-year-old Atanasiu is a PNL member and became president of the Alba county council in June 2004. He was manager of the Cugir armaments plant from 1987 to 1995, and from 1997 to 2000, according to press reports. He was a board member of the Privatization Authority from 1996 to 2000. The choice of Atanasiu was widely viewed as a "surprise" pick. -Minister of Transportation, Construction and Tourism - Gheorghe Dobre. Touted as one of Basescu,s right hand men, Dobre has been the Director of Bucharest City Hall,s Inspection and Control department since 2001. He served as the MOT,s Secretary General (1998)2000) as well as in the MOT's Organization and Control department (1996-1998). He was a Prefect for Dolj County in the 1990's. -Minister of Agriculture - Gheorghe Flutur -Minister of Education and Research - Mircea Miclea. PD Member Miclea is chair of the Babes Bolyai University psychology department and is, at 41 years of age, reputedly the youngest professor at the university. Miclea, who has a PhD in cognitive psychology, was Chancellor General for the university from 2000-2003. -Minister of Culture - Mona Musca -Minister of Health - Mircea Cinteza -Minister of Communication and IT - Nagy Szolt. Currently UDMR Executive Vice Chairman for territorial organizations and local public administration, Szolt coordinated the UDMR local and general election campaigns. Nagy is known as a technocrat and a good organizer, but has not yet served in Parliament. He is in his early 30's. -General Secretary of the Government - Mihai Voicu. Since 2001, he has served as the PNL General Secretary, actively involved in party management and the PNL electoral campaigns. The 36-year-old Voicu was president of PNL youth branch from 1991 to 1994. An engineer by training, he has experience as a manager and works as a consultant. He kept a low profile until recently, when he successfully ran for deputy from Dolj County. -Minister of Environment - Sulfina Barbu. The 37-year-old Barbu is a PD member recently promoted to Director of Bucharest City Hall,s Environment Department. She previously served as Deputy Director. She is a graduate of Bucharest University's Geophysics Department. Prior to joining Basescu's City Hall in 2001, she worked in the private sector. -Minister Delegate for implementation of international financing programs - Cristian David -Minister Delegate for Coordination with Control Authorities - Sorin Vicol. This 34-year-old PUR member worked for a short period of time with the State Asset Management Authority (AVAB) and has not held any leading positions within the PUR. -Minister Delegate for Parliamentary Relations - Bogdan Olteanu -Minister Delegate for Public Works and Territorial Administration - Laszlo Borbely. UDMR member Borbely has been a member of the Chamber of Deputies since 1990. He served as State Secretary for the Ministry of Public Works from 1996 to 2000. Borbely is the UDMR Executive Vice President in charge of relations with governmental institutions. He has served on numerous standing committees over the years and is widely respected by his colleagues in the Chamber. - Iuliu Winkler (UDMR, Minister Delegate for Trade) has been President of the UDMR Hunedoara County branch since 2001, was a county councilor (1996-1999) and a Deputy Prefect (1999-2000). He served in the Chamber of Deputies from 2000-2004. He has a background in finance and insurance and has also studied engineering. The 40-year-old Winkler speaks fluent English, as well as German and French, and is a graduate of the prestigious National Defense College. He is a valued Embassy interlocutor. 6. (C) Comment. In keeping with its campaign pledge, Tariceanu's cabinet list proposes to bring many relatively new faces into senior government positions. Few played significant roles in the controversial center-right 1996-2000 government. Moreover, few of the proposed ministers, in marked contrast to the outgoing ruling center-left Social Democratic Party (PSD) cabinet, are tainted by association with Romania's communist past. Many are simply too young. Assuming the Parliament green lights the proposed cabinet, Basescu and Tariceanu's "fresh faces" can anticipate a strong dose of realpolitik as they deal with savvy PSD legislators entrenched in key parliamentary leadership positions, including the presidencies of the Senate and Chamber of Deputies. End Comment. 7. (U) Amembassy Bucharest,s reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest . CROUCH
24798 2004-12-30 15:22:00 04BUCHAREST3560 Embassy Bucharest UNCLASSIFIED UNCLAS SECTION 01 OF 13 BUCHAREST 003560 SIPDIS DEPT FOR EUR/NCE - WILLIAM SILLKWORTH AND TARA ERATH EB/IFD/OIA - ABRYAN DEPT PASS TO USTR USTR FOR LERRION TREASURY FOR DO/GCHRISTOPOLUS USDOC FOR ITA/ATAYLOR USAID FOR E&E E.O. 12958: N/A TAGS: EINV, EFIN, ETRD, ELAB, KTDB, PGOV, RO SUBJECT: ROMANIA: INVESTMENT CLIMATE STATEMENT, 2005 REF: STATE 250356 --------------------------------- A. Openness to Foreign Investment --------------------------------- Encouraging Investment ---------------------- Romania actively seeks foreign direct investment. A new center-right government that assumed power in late December 2004 has emphasized its desire to make Romania a more attractive investment destination and to improve aspects of the business climate. To date, despite Romania's marketplace of 21.7 million consumers, a well- educated workforce, and abundant natural resources, investment remains below potential. Favored areas for American investment include IT and telecommunications, biotechnology, manufacturing, and consumer products. Romania is moving to lower tax rates and strengthen tax administration, enhance transparency, and create legal means to resolve contract disputes expeditiously. Until recently, legislative unpredictability continued to undermine investor confidence. Prospective U.S. investors should consult legal counsel to receive up-to- date legal information. Successful U.S. companies tend to establish a local presence to familiarize themselves with the business climate. Using this expertise, firms develop longer- term strategies and commitments necessary for building lasting partnerships with the Government of Romania (GOR), local government authorities, labor unions, and local partners. These partnerships can ameliorate potential resistance to foreign investment that remains in some quarters, including nationalistic officials, workers fearful of losing their jobs, some managers of state-owned enterprises who are not accustomed to market economy business practices, and some local companies resisting competition through corrupt connections and practices. Investments that involve the public authorities (GOR ministries, local public authorities) are generally more complicated than greenfield investments or joint ventures with private Romanian companies. Large deals involving the GOR - particularly public-private-partnerships- have been stymied by vested political and economic interests and bogged down by inaction within and lack of coordination among governmental ministries. Privatizations by lesser- known buyers have been at times obstructed by the privatization agency's failure to honor its commitments or take other actions consistent with the best interests of the privatized enterprise. EU Accession ------------ Romania has worked to create a legal framework consistent with a market economy and investment promotion, and is moving ahead with EU-compatible legislation in its quest to join the European Union. Implementation lags, however. With an increasing number of EU-driven pieces of legislation, it is at times hard for Romania to balance its EU accession goals with its WTO undertakings. To date, Romania has added into its national legislation over 2000 primary and secondary pieces of legislation from the EU acquis. Romania provisionally closed pre-accession negotiations with the EU in December 2004. Pending continued progress in complying with membership criteria, Romania is to become a EU member on January 1, 2007. However, the EU added a safeguard clause into Romania's Accession Treaty, which enables the EU to postpone Romania's accession by one year, to January l, 2008, if there is clear evidence that Romania is manifestly unprepared to meet the requirements of EU membership. The U.S. Department of Commerce recognized Romania as a market economy for anti-dumping investigation purposes in March 2003. Romania also received functioning market economy status from the EU in October 2004, thus meeting a necessary condition for EU membership. However, Romania's ability to withstand competitive pressures after EU accession remains a concern. Legal Framework --------------- Romania's legal framework for foreign investment is contained in a substantial body of law, largely passed in the late 1990s and subject to frequent revision since. Local counsel should be engaged to navigate through the various laws, decrees, and regulations. Romanian legislation and regulation provides national treatment for foreign investors, guarantees them free access to domestic markets, and allows foreign investors to participate in privatizations. There is no limit on foreign participation in commercial enterprises. Foreign investors are entitled to establish wholly foreign-owned enterprises in Romania (although joint ventures are more typical) and to convert and repatriate 100 percent of after-tax profits. Foreign firms are allowed to participate in the management and administration of the investment, as well as to assign their contractual obligations and their rights to other Romanian or foreign investors. Foreign investors may engage in business activities in Romania via any of the following methods: - Setting up new commercial companies, subsidiaries or branches, either wholly owned or in partnership with Romanian natural or legal persons; - Participating in the increase of capital of an existing company or the acquisition of shares, bonds, or other securities of such companies; - Acquiring concessions, leases or agreements to manage economic activities, public services, or the production of subsidiaries belonging to commercial companies or state-owned public corporations; - Acquiring ownership rights over non-residential real estate improvements, including land, via establishment of a Romanian company; - Acquiring industrial or other intellectual property rights; - Concluding exploration and production-sharing agreements related to the development of natural resources. Foreign investor participation can take the form of foreign capital, equipment, means of transport, spare parts and other goods, services, intellectual property rights, technical know-how and management expertise, or proceeds and profits from other businesses carried out in Romania. Foreign investment must comply with environmental protection, national security, defense interest, public order, and public health regulations. Privatization ------------- Romania has made significant progress in privatizing industrial companies. To date, less than 5% of the industrial assets are still state-owned. Privatization in the energy sector also has progressed, with the privatization of national oil company Petrom, two energy distribution companies, and two natural gas distribution companies. Romania has granted some companies involved in energy privatizations with safeguards against paying for environmental remediation resulting from past contamination. Under current law, the government ministry or agency that has authority over a state-owned company (the State Asset Resolution Authority (AVAS), the Ministry of Economy and Commerce, Ministry of Transportation, Ministry of Communications and IT, or in some cases, local government) also has the authority to privatize it. The law on privatization requires the setting up of pre-privatization management team to facilitate restructuring of the company and eventual privatization. The law permits the responsible authority to hire an agent to handle the entire privatization process. Buyers of state-owned companies must negotiate requirements and restrictions concerning the company's purpose, scope of activities, turnover, and social protections in the form of limited layoffs or funding for retraining programs. Privatizing agencies continue the practice of rolling into privatization agreements provisions of previously negotiated collective labor agreements, which are labor-protective and restrict layoffs. Prospective investors are strongly advised to make a thorough due diligence review before any acquisition. Property and Contractual Rights ------------------------------- Property and contractual rights are recognized, but enforcement through the judicial process can be extremely difficult, costly, and lengthy. Foreign companies engaged in trade or investment in Romania often express concern regarding the lack of commercial experience of Romanian courts. Judges generally have little experience in the functioning of a market economy, international business methods, intellectual property rights, or the application of new Romanian commercial law. ------------------------------------ B. Conversion and Transfer Policies ------------------------------------ Romanian legislation does not restrict the conversion or transfer of funds associated with direct investment. All profits made by foreign investors in Romania may be converted into hard currency and transferred abroad at the market exchange rate after payment of taxes. However, some conversion and transfer procedures can be time-consuming due to Romanian bureaucracy. The Leu is freely convertible on current-account transactions, in accordance with the IMF's Article VII. Proceeds from the sale of shares, bonds, or other securities, as well as from the conclusion of an investment, can also be repatriated. There is no limitation on the inflow or outflow of funds for remittances of profits, debt service, capital gains, returns on intellectual property or imported inputs. In February 1998, the Romanian government implemented new regulations that liberalized foreign exchange markets. However, procedural delays in processing capital outflows remain, mainly from the lack of a domestic inter-bank electronic system, which is under development and scheduled to become operational in 2005. Capital inflows are relatively free from restraint. Only the opening of the ROL deposits by non-residents still requires approval by the Central Bank, in order to prevent inflows of "hot money" from abroad, but this restriction is expected to be removed in April 2005 as capital account liberalization advances. According to Romania's agreements with the European Union and international financial organizations, Romania will gradually implement such liberalization prior to Romania's accession to the EU (i.e. enable ROL- denominated deposit accounts to be opened by foreigners with resident financial institutions, and current and deposit accounts by residents abroad). ---------------------------------- C. Expropriation and Compensation ---------------------------------- The law on direct investment includes a guarantee against nationalization and expropriation or other equivalent actions. The law allows investors to select the court or arbitration body of their choice to settle potential litigation. Since 1989, there have been two American expropriation claims, one arising from a controversial privatization and the other the nationalization of an investor's assets. Several cases involving property nationalized during the communist era remain unresolved. Investors should be aware, when purchasing land or a former state-owned company, that in those cases where a former owner wins title to a privatized asset, it may be restituted in kind and the investor compensated by the public institution that privatized it. If restitution is not possible in kind, the public institution must compensate the former owners. In either case, the current or former owners run the risk of less than fair market value compensation. Prospective investors must conduct a careful due diligence review encompassing potential restitution claims. ---------------------- D. Dispute Settlement ---------------------- Arbitration ----------- Romania recognizes the importance of arbitration in the settlement of commercial disputes. Many agreements involving international companies and Romanian counterparts provide for the resolution of disputes through third-party arbitration. Romania is a signatory to the New York Convention of 1958 regarding the recognition and execution of foreign arbitration awards. Romania is also a party to the European convention on international commercial arbitration concluded in Geneva in 1961 and a member of the International Center for the Settlement of Investment Disputes (ICSID). Romanian law and practice recognize applications to other internationally known arbitration institutions, such as the ICC Paris Court of Arbitration or the Vienna United Nations Commission on International Trade Law (UNCITRAL). Romania also has an International Commerce Arbitration Court administered by the Chamber of Commerce and Industry of Romania (the "Arbitration Court"). Arbitration awards are enforceable through Romanian courts under circumstances similar to those in Western countries. Bankruptcy ---------- Romania's bankruptcy law contains provisions for liquidation and reorganization that are generally consistent with western legal standards. These laws usually emphasize enterprise restructuring and job preservation. Legal and economic education and the training of judges and lawyers lags behind law-making, which often results in inconsistent outcomes. Moreover, social concerns often prevail over economic reasoning, resulting in the survival of overstaffed loss-making companies which should otherwise be dissolved. To mitigate the time and financial costs of bankruptcies, Romanian legislation provides for administrative liquidation as an alternative to bankruptcy. However, investors have complained that the liquidators lack the competence and incentive to expedite liquidation proceedings. For state-owned loss- making companies, state subsidies, accumulation of arrears, debt rescheduling and debt-for-equity swaps are the preferred alternatives to putting such companies through insolvency or bankruptcy procedures. Both state- owned and private companies tend to opt for judicial reorganization to avoid bankruptcy. --------------------------------------- E. Performance Requirements/Incentives --------------------------------------- Incentives ---------- Since 1991, Romania's legislation has seesawed between granting, amending and suspending investment incentives. The availability of incentives is dependent on the economic situation, with the government at times suspending incentives in order to tighten fiscal policy. To meet the requirements of the EU body of law termed the "acquis communitaire" (short form: the "acquis"), Romania is revisiting its fiscal incentives to bring them in line with the EU state aid regulations. Investors are encouraged to verify the current status of investment incentives. As a general rule, new fiscal regulations do not grandfather past incentives. As Romania prepares for EU accession, customs and tax incentives are being phased out for investors in free trade and economically disadvantaged zones. In line with the revised state-aid law, Romanian has capped the state aid available for major investments based on the investment size and location. The state aid available through incentives for companies in free trade zones and disadvantaged zones has been capped at 50% of the investment, and likewise state aid for small and medium- sized enterprises (SMEs) to 65% of the investment. Prospective investors are advised to investigate thoroughly the current status of fiscal incentives and consider possible future changes resulting from EU accession negotiations when drafting business and investment plans. To reduce initial startup costs, a system of industrial parks and technological parks is being created. Tax incentives are available under the law solely for the industrial park operator, while companies that establish themselves in the park benefit from access to utility hookups and infrastructure, and eventual local tax rebates within state aid caps. Tax System ---------- Romania has revised its tax system to bring it closer to EU models and more in line with the recommendations of the World Bank and IMF. In December 2004, a new government amended the Fiscal Code by emergency ordinance, abolishing tax brackets and establishing a 16% flat tax on personal incomes. Corporate taxation will likewise be reduced from 25% to 16%. Both of the measures are to come into force beginning January 1, 2005. Offsetting these cuts is an increase in the micro-enterprise tax from 1.5% to 3%, and a rise of the tax on dividends obtained by individuals from 10% to 15%, in line with the corporate dividend tax of 15%. Tariff Preferences ------------------ Like many other Central and Eastern European countries, Romania provides tariff preferences for EU goods under its association agreement with the EU. In 2003, Romania came under generalized system of preferences (GSP) scrutiny because of preferential tariff treatment (reverse preferences) it offers the EU, but no formal review was taken because Romania reduced its tariffs on Bourbon - the main U.S. industry petitioner. However, Romania took no further action to reduce tariff preferences for other U.S. products, and may actually raise some of the tariffs previously reduced. In June 2004, a pharmaceutical company petitioned USTR for review of Romania's GSP status. --------------------------------------------- ----- F. Right to Private Ownership; Establishing Firms --------------------------------------------- ----- The Romanian constitution, adopted in December 1991, and revised in 2003, guarantees the right to ownership of private property. Mineral, air rights, and similar rights are excluded from private ownership. At the present time, property can only be purchased by foreigners through their participation in a Romanian company. As of January 1, 2007, EU citizens will be able to buy land without restrictions. Foreign investors involved with commercial companies having any foreign capital may acquire land or property necessary for fulfilling or developing the company's corporate goals. If the company is dissolved or liquidated, the land must be sold within one year of the company's closure and may be sold only to a buyer(s) with the legal right to purchase such assets. Foreign investors cannot purchase agricultural land at this time. Under Law 268/2001, investors can purchase shares in agricultural companies that can lease land in the public domain from the State Land Agency. ----------------------------------------- G. Protection of Private Property Rights ----------------------------------------- Mortgages --------- Law No. 190/1999 on mortgage loans for real estate investments allows a debtor's receivables to be used as a guarantee, and specifically addresses the protection of both borrowers and creditors, in an effort to minimize risk to the lender. Domestic private and foreign capital banks and investment funds freely compete on the mortgage market with the state-supported Banca Comerciala Romana (BCR) and with the state-budget National Housing Agency (ANL). Using its limited state budget resources, ANL targets young applicants and charges interest of 7% per annum in EURO for applicants under 35, and 9% for applicants over that age. Banks charge an average 9.87% per annum for USD loans and 9.185% for Euro loans, practice more flexible terms, and have greater resources available for mortgages. Usually, interest charged tracks LIBOR at six months for loans granted in USD and EURIBOR at six months for loans granted in Euro, with the addition of Romanian country spread. Intellectual Property Rights ---------------------------- Romania is a signatory to international conventions concerning intellectual property rights (IPR), including TRIPS, and has enacted legislation protecting patents, trademarks, and copyrights. Romania signed the Internet Convention to protect on-line authorship. While the IPR legal framework is generally good, enforcement is woefully weak. Romania has passed border IPR control enforcement provisions as required under the WTO, yet customs authorities and border police controls remain equally lax. As result of persistent problems in the enforcement of intellectual property rights, the U.S. Trade Representative (USTR) kept Romania on its Special 301 Watch List for 2004. High piracy levels continued across all sectors, optical disc piracy grew, and poor border enforcement led to a surge in imports of pirated material. The situation is further exacerbated by the lack of resources dedicated to enforcement. Prosecution of IPR violators is rare, and when cases are adjudicated, penalties meted out are light. No one has gone to jail for IPR piracy. Patents ------- Romania is a party to the Paris Convention for the protection of industrial property and subscribes to all of its amendments. Foreign investors are therefore entitled to the same treatment as Romanian citizens. Patents are valid for 20 years. A patent application can be contested for six months. A modern Patent Law (No. 64/91) broadens and clarifies the basis on which a patent is granted. By GOR Decision 499 of May 2003, technical enforcement rules on the Patent Law came into force. Several other laws (No. 129/92, on the protection of industrial drawings and designs; No. 16/95, on the protection of integrated circuit designs, etc.) have helped bring Romanian patent legislation up to international standards. Legislation providing for transitory ("pipeline") patent protection was enacted in early 1998. The Romanian Parliament passed legislation to protect confidential drug test data submitted to regulatory authorities for marketing approval. Law 123 of April 2004 clearly articulates data exclusivity provisions. Trademarks ---------- In 1998 Romania passed a new law on trademarks which is generally consistent with international standards. Areas that require improvement are administrative procedures and sanctions. Romania is a signatory to the Madrid Agreement relating to the international registration of trademarks. Trademark registrations are valid for 10 years from the date of application, and renewable for similar periods. Copyrights ---------- Romania is a member of the Bern Convention on Copyrights. Its 1996 law on protection of copyrights and neighboring rights is among the most modern in this field. The Romanian parliament ratified the latest versions of the Bern and Rome conventions. The Romanian Office for Copyright protection (ORDA) was established in 1997, and ostensibly oversees copyright enforcement. However, copyright law enforcement is a low priority for Romanian prosecutors, judges, police officers, and customs officers. Some in government, including those responsible for enforcement, view copyright piracy as a "victimless crime." This attitude, coupled with lack of resources, has resulted in weak enforcement of copyright law and the failure to prosecute and punish violators. Copyright infringement in software, music, and video is pervasive throughout Romania. Although on a decline over the past few years, piracy rates are still high. Latest estimated piracy rates by sector are: 73% of business software; 95% of entertainment software; 56% of music; and 55% of video. Semiconductor Chip Layout Design -------------------------------- Law No. 16/1995 protects semiconductor chip layout design. In order to benefit from this law, the designs must be registered per GOR decision no. 535/1996 with the Romanian Trademark Office. ----------------------------------------- H. Transparency of the Regulatory System ----------------------------------------- Cumbersome and non-transparent bureaucratic procedures are a major problem in Romania. Foreign investors point to the excessive time it takes to secure necessary zoning permits, property titles, licenses, and utility hook-ups. Furthermore, regulations change frequently, often without advance notice. These changes, which can significantly add to the costs of doing business, make it difficult for investors to develop effective business plans. Recognizing the need for more effective communication with foreign investors and Romanian private businesses, in April 2002 the GOR instituted a preliminary consultation procedure before drafting business-related legislation. As a result, some ministries, such as the Ministry of IT and Communications, do consult with businesses, but not all. The labor code adopted in 2003 is a glaring example of the GOR's failure to consult with or listen to the business community. The controversial code gives extensive new rights to labor unions and employees and is a significant impediment to new foreign direct investment. Following general elections in November and December 2004, the GOR pledged to amend some aspects of the code, but whether it will be able to do so in the face of labor unions' objections remains to be seen. Many foreign investors feel they are unfairly targeted by Romanian tax authorities for audits and reviews and that Romanian authorities view them as "cash cows" that can be milked to fill government coffers. Unlike most Romanian companies, foreign investors generally have good financial records, making investigation easier. Foreign investors also tend to be more conscious of the need to remain in compliance with local laws and regulations. Despite the establishment of a new Minister Delegate for Control in June 2003 to coordinate the audits of the various ministries and government agencies, redundant or too-frequent audits and reviews continue to be a hindrance. The presence of large state-owned and government-subsidized enterprises in the economy is a major impediment to the efficient mobilization and allocation of investment capital. An EU-inspired law on state aid aimed to limit state aid of any form (direct state subsidies, debt rescheduling schemes, debt for equity swaps for utility arrears, or discount prices). However, implementation of the law has been slow and preferential debt rescheduling (and on occasions forgiveness) by the GOR has continued. --------------------------------------------- --------- I. Efficient Capital Markets and Portfolio Investment --------------------------------------------- --------- Capital Markets --------------- Romania seeks to develop efficient capital markets. Ordinance No. 18/93 and Government Decision No. 552/92 established a National Securities Commission (CNVM) charged with regulating the securities market in order to protect investors. The process provides for the registration and licensing of brokers and financial intermediaries, filing and approval of prospectuses, and approval of market mechanisms. Romania officially re-opened the Bucharest Stock Exchange (BSE) on June 22, 1995. On November 20, 1995, the stock exchange made its first transactions after a hiatus of 50 years. The BSE operates a two-tier system that, at present, lists a total of 60 companies, with 17 companies in the first tier. The official index, BET, is based on a basket of the 10 most active stocks listed on the first tier. The BSE has a home page at http://www.bse.ccir.ro. In September 1996, RASDAQ, an over-the-counter stock market, was inaugurated. It is supported by several independent registries and is a depository for Romanian securities. 4,040 companies are listed on the RASDAQ, although less than 200 companies are actively traded on an average day. RASDAQ has a home page at http://www.rasd.ro. The BSE and RASDAQ are set to merge in 2005. The new Capital Markets Law 297/2004 allows the Bucharest Stock Exchange to incorporate as a stock company, which permits its merger with the OTC-market, RASDAQ. Once the National Securities Commission (CNVM) approves the merger and the technical plan, the consolidation process should require 5-6 months to complete. Despite the presence of two stock exchanges, Romanian capital markets have developed more slowly than might be expected. This is due in part to legislative instability, non-transparent privatization, lack of performance and liquidity of most listed companies and poor corporate governance. In 2002, the GOR issued several ordinances designed to increase liquidity and transparency and encourage portfolio investment. The GOR also granted additional power to the National Securities Commission (CNVM). Securities Collective Placement Organizations are now allowed to invest locally and internationally in foreign currency- denominated instruments. Tight competition has brought trading fees down, but listed volumes make it difficult to place large purchase orders. This, in conjunction with non-transparent disclosures and the lack of annual audit reports, tends to discourage large institutional investors. Country funds, hedge funds, and venture capital funds continue to participate actively in the capital markets. The Romanian government has responded to complaints by U.S. investment funds regarding the abuse of minority shareholder rights by including some protections in a 2002 GOR ordinance on securities, financial investments and regulated markets. The new reforms allow shareholders owning more than 10% of a stock to request a general shareholders meeting. Dividend payments must now remain in effect six months after the announcement. An ext
23493 2004-12-01 15:41:00 04THEHAGUE3140 Embassy The Hague CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 02 THE HAGUE 003140 SIPDIS EUR/NCE FOR SILKWORTH E.O. 12958: DECL: 08/01/2014 TAGS: AORC, PREL, TU, HR, RO, CY, BU, EUN SUBJECT: EU/TURKEY: DUTCH COMMENT ON DECISION DRAFT Classified By: DCM Daniel Russel for reasons 1.4 (b) and (d). 1. (C) SUMMARY: On November 29 the Dutch circulated draft conclusions on Turkey to EU partners (subsequently leaked to the press) in advance of the December 17 Council meeting that includes strong, but predictable, language on accession (e-mailed to EUR/ERA and USEU). Turkish officials in The Hague have indicated, both to the Dutch and to us, that they will likely accept the Council language as long as it contains a clear "yes" and a date for starting negotiations. The Dutch are watchful for any indication that negotiations on the date for Turkey could be used by Member States to get what they want on the other candidate countries, Romania, Croatia, and Bulgaria. End Summary. DUTCH STRATEGY FOR GETTING TO "YES" ON TURKEY IS ON TRACK 2. (C) Engineering a "yes" on December 17 was the essential act of the Dutch Presidency, Pieter de Gooijer (MFA, Director European Integration) told DCM on the evening of November 30. It was too early to relax, but that thus far the Turkish accession process was going exactly as he had hoped. The Dutch circulated draft Council conclusions on November 29, after resolving an GONL internal dispute over whether to keep the draft secret. They concluded that a last minute attempt by Heads of State to deal with previously unseen texts could precipitate a disaster worse than the negative reactions an early release might provoke. De Gooijer said that he had just spent four hours November 29 with EU DirGen Marnix Krop, PM Balkenende Advisor Rob Swartbol, and visiting Volkan Boskir (Turkish Deputy U/S for European Affairs) reviewing in detail the Presidency's draft Council conclusions on Turkey. The Turks pushed back on multiple points but de Gooijer was finally left with the impression that they seemed prepared to live with all the conditions and caveats as long as they got a clean "yes" with a date. Ambassador Ildem separately told the DCM the same evening that there was a lot that Turkey had not liked in the draft - particularly on Cyprus. After a lengthy discussion of the Ankara Protocol, Ildem finally clarified that he felt Turkey would move on Cyprus (presumably by agreeing to the protocol) "at 1:00 a.m. on the morning of December 18th after we are sure of what we are getting." He admitted that their other complaints about the text as it now stands "were not deal breakers." 3. (C) De Gooijer categorically rejected the Turkish public claim that the circulated draft conclusions were just a "first stab" that bore little or no resemblance to what would ultimately come out of the Council meeting. The Dutch hope no one will reopen the unbracketed parts of the draft, since they felt it could come entirely unraveled. De Gooijer noted that the Heads of State and Government alone can resolve the bracketed portions on December 17, which contain four open decisions: the "yes," the date to start negotiation, the "process" (he did not elaborate), and the clarification that the goal of negotiations was full membership. He said he had "a paragraph on each in his back pocket," but it remained for the Heads to work on them. 4. (C) Finally, de Gooijer reported that a lower-level meeting among EU mission reps in Brussels on November 30 had gone quite smoothly and augured well for the COREPER meeting December 1. (There was only one more COREPER and the December 13 GAERC before the Council, he noted.) The main issues raised had to do with (a) whether to pair or delink the Bulgarian and Romanian candidacies (the French wanted to pair, he revealed), and (b) whether to give Croatia a date (as the Germans want) or make negotiations conditional on surrendering General Gotovina to the ICTY (as the UK wants) (reported septel). EFFECT ON THE TURKEY ISSUE OF NEGOTIATIONS FOR OTHER CANDIDATE COUNTRIES HARD TO PREDICT 5. (C) Jochem Wiers (MFA European Integration Department and principal drafter on Turkey) told Poloff November 30 that the Dutch are beginning to "discern the outlines" of a negotiation strategy in which dates for Romania, Bulgaria, and Croatia are packaged in complex quid pro quo deal making in the late hours of December 17 (septel). While he did not include Turkey in the calculation, he pointed out that in the end, the importance of the Turkey consensus would necessarily affect and be affected by discussions of the other three. Wiers revealed no knowledge of any deal brewing in Brussels involving Turkey and Cyprus, but he said it would help the Dutch now if Turkey could find a way to positively acknowledge Cyprus before December 17. He pointed to Turkey's handling of Cyprus recognition issues at the signing of the Rome Treaty of Constitution as a model for December 17. Confirming what Ildem and de Gooijer had told the DCM, Wiers said the Dutch sense a readiness to be flexible at "high levels" in the Turkish government, but only "in extremis." 6. (C) Looking ahead to the Dutch delegation to the closed Council negotiations, Wiers expects it will include PM Balkenende, joined by advisors Webke Kingma or Rob Swartbol, plus a note taker (three is the maximum for any Member State). Pieter de Gooijer and a small number of other senior staff will be in a side room nearby. RUSSEL
23823 2004-12-09 12:03:00 04THEHAGUE3219 Embassy The Hague CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 02 THE HAGUE 003219 SIPDIS E.O. 12958: DECL: 12/08/2014 TAGS: NL, PREL, KNNP, IR, IS, TU, CR, RO, SU, UP, EUN SUBJECT: NETHERLANDS/EU: EXPECTATIONS FOR DEC 13 GAERC REF: A. STATE 258831 B. BRUSSELS 5186 Classified By: POLCOUNS Andrew Schofer for reasons 1.4 (b) and (d). 1. (C) Summary. Emboffs met with Jaap Werner, Director, Political Affairs, Ministry of Foreign Affairs, on December 8 to deliver points reftel and December 9 with Joep Wijnands, the Deputy Director, and Derk Oldenburg (MFA Dep Dir for European Enlargement). Werner expected smooth sailing on Bulgaria, a troubled "yes" for Romania, a date for Croatia, and many open questions still on Turkey. Discussion of Ukraine is unpredictable given the swiftness of events. Other topics reftel are not expected to receive much discussion. Besides reftel topics, the GAERC will also discuss Iran, Sudan and the EU's action plan for Israel. End summary. EU ENLARGEMENT 2. (C) -- Bulgaria: Werner said that Bulgaria remains "on track" and does not seem to be affected by the discussions/strategizing over the other three. -- Romania: On Wednesday, Werner said that Romania's accession process has "become itchy and tricky" after election fraud reports (ref b). Some Member States are reconsidering their previous support, and "it could be ugly" in the Council. However, the EU's strong desire to keep Bulgaria and Romania together seems to have won out over Commission concerns over JHA and Competition (ref x). On Thursday, Oldenburg said that negotiations were "de facto completed late Wednesday, December 8 at the DepCOREPER level in Brussels." The GAERC will formalize the decision; the negotiations of the IGC will officially close the next day (December 14). He expected Council conclusions not to refer to specific problems in JHA or Competition. However, Romania will be under very strong Commission monitoring throughout 2005. Council decisions on their compliance will be subject to QMV, rather than consensus, meaning it will be easier to take negative decisions, such as pushing Romania's accession back from 2007 to 2008 (meaning a single champion of Romania could not block the delay). The issue of greatest concern, according to Oldenburg, remains the implementation of Romania's new competition legislation (already harmonized with the EU in large part), as well as passage of laws still pending as well as JHA corruption. The crux on the Competition side seems to be education of bureaucrats in local/regional competition authority offices throughout the country (around 40, he guessed) where workers do not understand the new laws or their obligations under it especially with regard to state subsidies. As added incentive to reform, Romania has been clearly told that if implementation failures remain after accession, then they would certainly face expensive, complicated court cases filed by the Commission to bring them into line, Oldenburg concluded. -- Croatia: "We know they are not doing all they can" to capture Gotovina, Werner admitted. The question remains "how high a price to demand from Croatia to get a date." The Dutch expect the Council to give a date in the end, although privately Werner acknowledged our point that doing so would remove much leverage over Croatia to comply with the ICTY. He also agreed that letting Croatia off the hook would weaken the multilateral process at the UN, which the EU otherwise champions at every turn. Heads of state at the December December 17 Council meeting will decide how strong to make the link between ICTY cooperation and accession negotiations. -- Turkey: The Heads of State and Government will discuss Turkey over dinner Thursday night, December 16, in Brussels, and the discussion is expected to continue into Friday, when Werner hoped it would conclude. The answer remains elusive for the question of how movement by Turkey to recognize Cyprus will be enough to clinch the deal, he said. (Note: Werner said the heads of state at the Council would discuss the candidate countries over dinner as well.) Ukraine ------- 3. (C) The GAERC will discuss Ukraine, but the presidency is not attempting to script the discussion since events are moving so fast. It will be necessary to make a decision on the proposed Action Plan (part of the European Neighborhood Policy) regarding whether Ukraine should proceed along the same track as before given the upheaval there and recent developments in EU-Ukrainian relations. Ukraine will be discussed both at the GAERC and at the December 16 Foreign Ministers' preceeding the European Council summit. Depending on events, conclusions may be issued at the GAERC and/or at the summit. 4. (C) Werner said the Dutch believe things in the Ukraine have gone "as well as could be expected." Although the EU intervention is "not according to the book" given the prominent participation of Poland and Lithuania, it is working. Werner stressed that Polish president Kwasniewski is keeping his colleagues briefed on his conversations. Middle East ----------- 5. (U) The Dutch do not expect much beyond what has already been expressed by the EU (Solana's short-term plans, EU support for Palestinian elections, etc.) He did not rule out the possibility that Solana might submit some thoughts on additional medium-term plans to the Council to stimulate discussion. Colombia -------- 6. (C) Werner did not respond to the specific points, including the call to disburse EU funds "more efficiently," saying only that US and EU objectives were generally the same, and noting that Colombia is not a discussion item for the GAERC. The conclusion has already been agreed by COREPER, but Werner said he had not yet read it. Great Lakes ----------- 7. (U) Werner agreed with reftel points made, but said the subject is not expected to be a major item for discussion at the GAERC. Other issues: Iran, Israel Action Plan, Sudan --------------------------------------------- - 8. (C) Now that the "Paris deal" is finished, the EU must arrange to renew its negotiations with Iran on the Trade and Cooperation agreement and will want to reopen its dialogues on human rights and terrorism. Separately, the EU-3 are starting negotiations -- Werner thought as early as next week -- on a long-term nuclear agreement. A GAERC subject for discussion may be the advisability of a change in the modalities of the talks with Iran: some non-EU-3 member states are wondering how long the other 22 member states should continue to endorse EU-3 efforts without greater participation or transparency. 9. (C) Along with discussion of the Ukraine action plan in the European Neighborhood Policy (see above), the GAERC will address a problem with the Israel action plan: the Israelis want a "softer" clause on non-proliferation than the EU has had in its action plans already agreed with some Arab states (e.g., Tunisia, Morocco, Syria). If foreign ministers do not agree to a softer clause, negotiations with Israel will have to continue and Israel may fall out of the "package" of action plans. 10. (C) Sudan will come up for discussion, though Werner could not say to what end other than noting that the UN report on the situation is negative and that both sides seem to be violating ceasefire agreements. RUSSEL
30109 2005-04-05 11:25:00 05ANKARA1953 Embassy Ankara CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 03 ANKARA 001953 SIPDIS E.O. 12958: DECL: 03/25/2025 TAGS: PREL, MARR, MASS, TU, RO, BU, GG, UP, RS, IZ SUBJECT: USNAVEUR ADM MULLEN DISCUSSES IRAQ, BLACK SEA AND BILATERAL RELATIONS IN ANKARA Classified By: Ambassador Eric S. Edelman for reasons 1.4 (b) and (d). 1. (C) Summary: Having arrived from Iraq, USNAVEUR and Joint Forces Command-Naples Commander ADM Michael Mullen provided an upbeat assessment of the situation there to Turkish naval (TNFC) and general staff (TGS) leaders during his visit to Turkey March 22-24. The CHOD and DCHOD expressed cautiously optimistic views of Iraq. On the Black Sea, CHOD GEN Ozkok stated that while he was not opposed to NATO's expansion into the Black Sea per se, he feared such a move could damage NATO's relations with Russia and maybe Ukraine. TGS appeared unaware of the extent of the problems American firms see in the current attack helicopter tender. All of ADM Mullen's interlocutors congratulated him for his nomination to be CNO, while both TNFC and TGS leaders acknowledged that no CNO has visited Turkey in 16 years. The Turks and the Mission appreciated the visit as another step in improving US-Turkey mil-mil relations. End Summary. 2. (C) In Ankara on March 22, Naval Forces Europe (USNAVEUR) and NATO Joint Forces Command-Naples (JFC-N) Commander ADM Michael Mullen attended a dinner hosted by Turkish Naval Forces Commander ADM Ozlem Ornek, and on March 23 made an office call on DCHOD GEN Ilker Basbug and met with CHOD Hilmi Ozkok who also hosted lunch. March 23-24, ADM Mullen called on Turkish naval commanders in Istanbul and on the Aegean coast, and visited JFC-N's air component in Izmir. This message reports the Admiral's meetings in Ankara. ---- Iraq ---- 3. (C) ADM Mullen told his interlocutors that his visit to Iraq just before arriving in Turkey left him much more optimistic than his last trip there in October 2004. The January 30 elections had had a more profound impact than he had understood previously, he continued. The Iraqi security forces were much more motivated now. And surprisingly, the Iraqi people view the armed forces as they have for the past 80 years, as their protectors. ADM Mullen was confident that the ISF would succeed. 4. (C) Basbug said having an ISF that was "sufficient and efficient" was important for success in Iraq. ADM Mullen responded that LTG Petraeus, the MSTC-I commander, reported that the ISF is fighting much better with the coalition and even carrying out their own operations. In many places, CF now provides back-up for ISF. Another factor important for success, Basbug added, would be for the new ITG to be respected and accepted by the people, and govern efficiently. ADM Mullen and the Charge provided an update, noting that the Iraqis were close to an agreement. Regarding the status of Kirkuk, Basbug noted that everyone cites Transitional Administrative Law Art 58 (on returns), but one should not forget Art 53 (defining the KRG area and creating a special status for Kirkuk and Baghdad), he declared. 5. (C) Basbug credited this turn around to training. ADM Mullen noted that, under his NATO hat, he was responsible for the NATO Training Mission-Iraq. He expressed appreciation to both Basbug and Ozkok for Turkey's recently increasing its contribution to NTM-I. The mission was doing well, he observed, with the UK running basic officer training program and the military academy's resuming instruction. The new Iraqi commandant of the academy was enthusiastic about networking his institution with the outside world, something impossible under Saddam. Basbug noted that Turkey had offered leadership training for Iraqis in Turkey. ADM Mullen undertook to check on the status on these offers, but observed that Iraqis preferred to train in Iraq. Basbug acknowledged that no Iraqi decision on out-of-country training was likely before the new government was in place. ------------------- Bilateral Relations ------------------- 6. (C) Ozkok observed that American initiatives in the Middle East were "winning." "Your success is our security," he declared. Despite the Mar. 1, 2003 parliamentary vote preventing US troops from transiting Turkey to open a northern front in Iraq (which Ozkok termed a "parliamentary accident"), Turkey supported the US, such as with air space access (including for cruise missiles, two of whom landed in Turkey). "We shouldn't allow this (Mar. 1) to overshadow our relations," he declared. We cannot only focus on the problems when there are many good elements of our relations. The political leadership was trying to focus on the good, he observed. He thought military relations were generally good, with "only one incident" providing a cloud (the July 4, 2003 arrest of Turkish military personnel in Suleymania), "and even that is fading," he said. ADM Mullen agreed that it was time to focus on ways to move forward in the relationship. 7. (C) ADM Mullen mentioned to Ozkok that a USN vessel would participate in the Marmaris festival in April. Ozkok was appreciative, noting that ship visits are useful economically and they demonstrate to the public that the bilateral relationship is sound. He also noted that public opinion was increasingly hard to control. 8. (C) At lunch, ADM Mullen, the Charge and ODC-T Chief MajGen Sutton all raised the recently released attack helicopter tender with Ozkok, Basbug and TGS/J5 LtGen Babaoglu, noting the considerable problems that American companies have voiced and that have resulted in one manufacturer's, Bell Helicopter, droping out of the competition. They averred ignorance of the procurement process, which is handled by a civilian procurement agency. (Comment: Subsequently, Babaoglu invited MajGen Sutton to a March 28 meeting to review the American companies' issues with the tender.) ------------------------- Russian and the Black Sea ------------------------- 9. (C) ADM Mullen noted that Russia had recently sent two ships to participate in OAE and was deploying vessels to the North Atlantic in numbers not seen for a long time. Ozkok said that he had insufficient information to make a definitive judgment about Russia, but that Ankara was cautiously trying to cooperate with Moscow. In the Black Sea, the risks were fewer than during the Cold War, but Russia has yet "to live up to its commitments." (Comment: Ozkok did not elaborate, but this is likely a reference to Russia's Istanbul Commitments to reduce forces in the Caucasus and Moldova.) He was generally cautious on Russia, noting that Turkey wants to be friendly, but within limits. In fact, there were not many bilateral military connections between Russia and Turkey, with most of their contact coming through the NATO-Russia Council. Bilateral relations were mainly economic, he said. 10. (C) While NATO and the NRC are useful channels, NATO cannot do everything, Ozkok continued. That was why Turkey views regional cooperation as important. However, regional cooperation should proceed in a manner that Russia does not see as harming its interests. In the Black Sea, where there is intelligence that smuggling is occurring, Turkey began Operation Black Sea Harmony and is now inviting other littorals to join. BLACKSEAFOR is growing and shows promise. Turkey wants to create a secure environment in the Black Sea. It is not opposed to NATO's eventually expanding into the Black Sea, but does not want to damage the fragile confidence Russia and the Ukraine have in the NRC and the NUC. 11. (C) ADM Mullen noted that SACEUR was anxious to support Turkey's strategy of countering trafficking and smuggling in the region through regional engagement. Turkey should lead the effort, he said. NATO could help. OAE has been effective in the Mediterranean. Expanding OAE to the Black Sea was one possible approach. He invited Ozkok to let him know how he could help, either as the JFC-N commander or as CDR USNAVEUR. 12. (C) Ozkok observed that the Black Sea is the only region where Russia still has the capability to maintain constant operations. As OAE is an Article 5 operation, its expansion into the Black Sea might be seen as insulting to Moscow -- an indication that the Alliance has no confidence in Russian forces. 13. (C) ADM Mullen observed that both Romania and Bulgaria were anxious to have NATO expand its presence into the Black Sea as quickly as possible. Ukraine was coming around to the same view. Ozkok changed the subject, commenting that Turkey's aim is to have a democratic region that would yield stability and predictability. Georgia and Ukraine have evolved in a democratic manner; Egypt, Saudi Arabia and Pakistan have even had some positive movement toward democracy. Nothing would be better for Turkey's security. ---- NATO ---- 14. (C) ADM Mullen praised Turkey's support for NATO, both in the quality of the officers it sends to NATO HQ positions as well as its contribution to NATO missions, such as in the Balkans where the Alliance has made a real difference. Ozkok observed that in Kosovo, the international community needed to find a way to transition to a permanent resolution. ADM Mullen agreed that Kosovo was only "one incident away from a disaster" politically, although the military situation was good. "Time is the enemy," he said. 15. (C) ADM Mullen and Ozkok agreed on the need to better educate Alliance political leaders on the new command structure. They also agreed that the NRF concept was good. ADM Mullen noted, however, that of the 18,000 troops under his NATO command, only about 33% were available to respond to a crisis. --------------------- Moving On/Coming Back --------------------- 16. (C) All the Turks congratulated ADM Mullen on his nomination to be the next CNO. Both sides were perplexed that no CNO had visited Turkey in 16 years. ADM Mullen thanked them and said he intended to come to Turkey again. 17. (C) Comment: ADM Mullen's Turkish counterparts were pleased with his visit and especially with the opportunity to develop a rapport with someone they expect to be a member of the Joint Chiefs soon. They clearly were interested in putting past difficulties over Iraq behind us and moving forward cooperatively. They, and we, saw this visit as another step in moving our bilateral military relations to a more positive footing. End Comment. EDELMAN
30432 2005-04-08 15:06:00 05ANKARA2060 Embassy Ankara CONFIDENTIAL//NOFORN C O N F I D E N T I A L SECTION 01 OF 04 ANKARA 002060 SIPDIS NOFORN E.O. 12958: DECL: 04/06/2015 TAGS: MOPS, MARR, PREL, PARM, TU, RS, GG, UP, RO, BU, NATO SUBJECT: TURKISH MFA OFFICIAL: "NATO INVOLVEMENT IN THE BLACK SEA IS OUR END GAME" REF: ANKARA 802 Classified By: DCM Robert S. Deutsch for reasons 1.4 (b) and (d). Summary ------- 1. (C) Turkey shares with us the goal of eventual NATO involvement in the Black Sea, an MFA official told us April 7. At BLACKSEAFOR's March 31 senior officials meeting, the members agreed on a common threat assessment and agreed that it would be beneficial to build some ties with outside states and organizations. Indeed, the U.S. and other interested states are welcome to observe BLACKSEAFOR's "activation" in Constanta, Romania this August. Ukraine declared itself ready to join Turkey's maritime interdiction operation in the Black Sea; a number of other littorals--including Russia--are giving it a serious look. Turkey's deliberate approach seems to be bearing fruit. End summary. 2. (C) PolMilCouns and PolMilOff called on MFA Deputy Director General for Security Affairs Fatih Ceylan and NATO Department Head Atilla Gunay on April 7 to get a readout on the March 31 BLACKSEAFOR meeting of MFA senior officials. Before Gunay could provide his readout (Ceylan could not attend due to illness), Ceylan (unprompted) said that Turkey's long-term goal is for NATO to be involved in the Black Sea. "That's our end game," he declared. Ceylan insisted there is "no plot" for Turkey and Russia to turn the Sea into their own personal lake. He said Turkey was moving slowly in this regard, but also that the Turks have told the Russians that eventually BLACKSEAFOR or something like it would have a "NATO affiliation." Ceylan reported that Russia did not object to this. 3. (C) Gunay explained that the main goal of the Kiev meeting was to reach agreement on a senior experts report evaluating threats in the Black Sea maritime domain, chiefly terrorism and WMD proliferation. The nations agreed that the wider Black Sea region may have many threats--WMD proliferation, terrorism, trafficking in persons and SA/LW, etc.--which have the potential to "spill over" into the maritime domain. However, Ceylan injected, based on Turkey's BLACK SEA HARMONY operation (see reftel) and input from the other littorals, Turkey cannot now make an assessment that there is an "imminent and direct" threat in the maritime domain. Ceylan also pointed out that Turkey had worked assiduously to have the threat assessment include the same issues that are of concern to the Alliance and to the EU. In essence, Ceylan said, the BLACKSEAFOR nations agreed to measure their threat assessment by Euro-Atlantic standards. Ceylan allowed us to briefly review the threat assessment, but said he would need permission from his superiors to hand us a copy; he subsequently provided us a copy on April 8 (see para. nine), asking that we hold it closely. 4. (C) The officials in Kiev focused on two issues: How to operationalize dealing with threats in the Black Sea, and whether the member nations had the legal framework in place to do so. On the first issue, the nations agreed on the need to improve communications. Additionally, the nations agreed to create some sort of command center, at first during activations of BLACKSEAFOR. The officials assigned their respective naval commands to look into these issues. On the legal issue, the officials agreed that in general the BLAKSEAFOR founding agreement and relevant UNSCRs (especially 1540) provide an adequate legal framework. 5. (C) Gunay reported that the member states also agreed on delicate language for how BLACKSEAFOR will relate in the future to the "outside world." First, the officials agreed that the U.S. and other interested countries were welcome to observe BLACKSEAFOR's "activation" scheduled to begin August 8 in Constanta, Romania. Second, they agreed on language stating that it would be beneficial for the littorals to (collectively) look into "ways and means to interact with other states and organizations" in the future. 6. (C) Gunay reported on Turkey's efforts to multilateralize its BLACK SEA HARMONY maritime interdiction operation (MIO) on the Black Sea. Ukraine has volunteered to join and has only to sort out technical issues with the Turkish Navy. The Russian official at the meeting said Russia is also quite interested in joining but needs higher-level political approval. Georgia is interested, although it essentially has no navy. The Bulgarians said they had yet to complete their interagency policy process on this issue. Romania was apparently silent. Gunay noted that the Romanians did not speak up as much as they normally do at the Kiev meeting, but added that the Romanian official was fairly new. (COMMENT: We defer to Embassy Bucharest, but wonder if Romania's silence was based on what we understand is its reluctance to carry out MIO in the Black Sea under the BLACKSEAFOR rubric. END COMMENT.) Ceylan reported that--as fellow NATO Allies--Turkey had offered Bulgaria and Romania "first dibs" at joining BLACK SEA HARMONY as early as January of this year, but that neither had responded by the time of the Kiev meeting, where Turkey threw it open to others. 7. (SBU) Gunay noted that the next BLACKSEAFOR political consultations will likely take place before June of this year and again in the fall, followed by another senior officials meeting NLT December 2005. 8. (C) Comment: While Turkey continues to take a "go slow" approach with us vis-a-vis NATO or U.S. involvement in Black Sea maritime security, we are impressed by Ceylan's comment that NATO involvement is in Turkey's end game. The willingness to accept foreign observers for the August BLACKSEAFOR activation is encouraging. If the Turks' readout of the BLACKSEAFOR meeting is accurate, their deliberate approach seems to be working. We recommend that we continue to support Turkish leadership in this area, while also reminding all the littorals that we are always interested in learning more and standing by to assist at any time we are asked. End comment. 9. (C/NF) Text of BLACKSEAFOR document "Maritime Risk Assessment in the Black Sea" BEGIN TEXT (Note internal paragraph numbering) Maritime Risk Assessment in the Black Sea 1. Definition of Maritime Risks: Maritime risks encompass all actions with the potential to disrupt law and order as well as to inflict certain damages on persons, property and environment in the maritime areas, caused by deliberate actions or negligence. Maritime risks in the Black Sea are endogenous and exogenous in nature. The following are the main risks which can be encountered in the maritime areas. a. Asymmetric Risks: Asymmetric risks are those terrorism-related maritime risks of non-military nature. These asymmetric risks may also stem from spillover effects of risks such as aggressive nationalism, separatism, religious intolerance, xenophobia, temporary inability of some littoral states to enforce law and order, trafficking in human beings and drugs, illicit transfers in small arms and light weapons and possible proliferation of WMD, their means of delivery and related materials. Vessels can be used in illegal activities, including terrorism at sea, and thus become tools of asymmetric risks. Merchant shipping may also be misused to transport asymmetric means (material and manpower) in between certain geographic locations. Furthermore, financial gains by merchant ships through commercial activities might also be used in support of asymmetric acts. Asymmetric risks in the maritime areas also entail activities using surprise as an element, as well as unexpected venues and means. Asymmetric risks jeopardize the safety and security of navigation, as well as of the maritime areas. b. Organized Crime: Illegal activities may be carried out in the maritime areas, due to the difficulty in controlling vast sea areas. When sea-lines of communications, as well as critical choke points are controlled and partolled, these illegal activities might be redirected into areas where no shipping lines cross or no systematic surveillance takes place. Organized crime might entail, but not be limited to the following illegal actions: (1) Drug Trafficking (2) Illicit Transfers in Small Arms and Light Weapons (SALW) (3) Illegal Migration (4) Trafficking in Human Beings (5) Illicit Trafficking in Weapons of Mass Destruction (WMD), delivery systems and related materials. c. Environmental Risks: Any environmental incident polluting the maritime areas poses a major risk to public health, economy and natural habitat, thus generating, in some cases, far-reaching consequences. These risks might be generated either by deliberate action (e.g. dumping waste), or human error (e.g. collision at sea). 2. Assessment of Risks: a. Asymmetric Risks: The Black Sea has become a major route for oil, as well as passenger and containerized cargo transportation. As in other regions of the world where there is an increase in the volume of maritime transportation, there are chances that cargo traffic may be misused to disrupt security. In the Black Sea, one specific incident took place in 1996, in which a Panama flagged ferryboat was hijacked from Turkish port of Trabzon. One cannot rule out such an incident happening again in the future. b. Organized Crime: Trafficking in human beings exists in the territories of the Black Sea region. However, there are no indications that it is systematically done through maritime transportation. Illegal migration stemming from the region, as well as from parts of Europe, Asia, the Middle East is mainly using terrestrial routes, but is has already started to cross the Black Sea region. There is no firm evidence that systematic drug trafficking exists in the Black Sea. Narcotics destined to Europe from Afghanistan via Central Asia are currently transported through land. Although smugglers always use the most secure paths and alter them frequently as possible, the Black Sea may be used as a transit route in some isolated smuggling cases. However, it remains a possibility that sea lines of communications may be used more often in the future, if not controlled properly. Illicit transfers in SALW are increasing all over the world. There are indications that the Black Sea is currently used to a certain degree for such activities. On the other hand, there have been no reported cases of illicit trafficking in WMD, delivery systems and related materials in the Black Sea. However, this risk cannot be ruled out, given the lucrative nature of such activity. As it is the case in any other region, there is also a connection between international terrorism and transnational organized crime, illicit drugs, money-laundering and illegal arms-trafficking in the Black Sea region. The Black Sea is not immune from possible illegal movement of nuclear, chemical, biological and other potentially deadly materials. c. Environmental Risks: No major catastrophic environmental incident occurred in the Black Sea originating from asymmetric causes. Some past incidents appear to have been caused by adverse environmental conditions and/or human error. On the other hand, some cases involving dumping or discharge or industrial waste have been reported in the Black Sea. 3. Suspect Vessels in the Black Sea: Since vessels prefer the shortest and safest routes to their destinations-generally defined as sea lines of communication - a vessel crossing the Black Sea through an unusual path or wandering in areas outside usual navigation routes might rationally be temporarily considered as a suspect vessel. Such vessels may possibly be involved in activities creating maritime risks, and deserve closer observation and monitoring. Likewise, vessels identified by credible intelligence as involved in illegal activities, but have no such records in the past, may be classified as temporarily suspect vessels. Any vessel, formerly designated as temporarily suspect, with continuous record of being involved in illegal activities creating maritime risks may be classified as a "suspect vessel." 4. Overall Assessment: The strategic location of the Black Sea at the crossroads of Europe, Asia and the Middle East and as an important transit route makes it vulnerable to asymmetric risks. Instability in the Black Sea region would have widespread implications for the security and stability of the Euro-Atlantic area. While there is no security void in the Black Sea maritime areas, asymmetric risks, organized crime and environmental risks are the main security challenges which might be encountered. It is evident that the maritime areas are not fully immune to risks of different nature that may originate from potential sources of instability in and around the Black Sea region. Terrorism, trafficking in human beings and drugs, illicit transfers in SALW and possible proliferation of WMD, their means of delivery and related materials require the littoral States to remain vigilant against the probability of the spillover effects of such risks into the maritime areas. In other words, the principal challenge in this respect would arise from the possibility of the Black Sea maritime areas being turned into a transit route for sinister purposes. In this regard, suspect vessels pose a major challenge, and the potential of their use for illegal purposes makes continuous surveillance of selected maritime areas as well as trailing of such vessels necessary. This requires, inter-alia, combined efforts by the six littoral states in this vein to create synergy. BLACKSEAFOR is an instrument available to be used effectively for countering the risks, threats and challenges in the Black Sea. END TEXT EDELMAN
36057 2005-07-07 12:58:00 05ANKARA3953 Embassy Ankara SECRET//NOFORN S E C R E T SECTION 01 OF 03 ANKARA 003953 SIPDIS NOFORN E.O. 12958: DECL: 06/25/2025 TAGS: PREL, MARR, MASS, TU, RO, BU, GG, UP, RS, IZ SUBJECT: USNAVEUR ADM ULRICH DISCUSSES BLACK SEA, IRAQ AND BILATERAL ISSUES IN ANKARA Classified By: Charge d'Affaires Nancy McEldowney for reasons 1.4 (b) a nd (d). 1. (C) Summary: During introductory calls as USNAVEUR and Joint Forces Command Naples commander, ADM Ulrich won Turkish Navy's agreement to hold consultations on information sharing between the Turks' Black Sea Harmony (BSH) operation and Allied Maritime Component Command Naples sometime before August. The Admiral also alerted Turkish military leaders that the US Navy would be sending ships into the Black Sea several times a year, and that they would welcome the opportunity to work with the Turks while there. The Turks requested that ADM Ulrich encourage the Bulgarians and Romanians to cooperate in tracking suspicious ships that enter their territorial waters after being shadowed by the Turkish Navy. ADM Ornek announced that Turkey would begin a BSH-like operation in the eastern Mediterranean given the steady reduction of OAE coverage of the area over the last year and the requirement to protect increased ship traffic after the Baku-Tiblisi-Ceyhan oil reaches the terminal in Ceyhan. DCHOD General Basbug informed the Admiral that Turkey was considering contributing trainers in addition to the five staff personnel already committed to the NATO Training Mission - Iraq. GEN Ozkok asked for US assistance with the identification and safe destruction of IEDs. End Summary. 2. (U) Admiral H.G. Ulrich made initial calls as Commander, US Naval Forces Europe and Commander, Joint Forces Command Naples on Chief of the Turkish General Staff (TGS) General Hilmi Ozkok, Deputy Chief General Ilker Basbug and Turkish Naval Forces Commander Admiral Ozlem Ornek on June 29. The Turks congratulated ADM Ulrich on his recent appointment to his commands during the three cordial meetings. --------- Black Sea --------- 3. (C) ADM Ulrich explained to GEN Ozkok and ADM Ornek that Operation Active Endeavor needed better information on what is happening in the Black Sea. He proposed that a team led by a flag officer from TNFC visit CCMAR Naples to discuss what information OAE collects, how this data is processed, disseminated and used. This would permit Turkey to then provide better, more timely information collected by Turkey's OAE-like Operation Black Sea Harmony. With ADM Ornek, he expressed the hope this could be done before Ornek's retirement (in August). GEN Ozkok noted Russian sensitivities regarding the Black Sea, but did not see a problem in talking. Ornek was less guarded, saying "we will do it." 4. (C) As the USNAVEUR commander, ADM Ulrich explained, the US Navy would continue its practice of sending vessels to work in the Black Sea, probably two or three times per year. With Ornek, he recalled that C6F Commander VADM Stufflebeem had proposed to Ornek that the two USN vessels going to the Black Sea in July exercise with the Turkish Navy both before and during their Black Sea deployment. In more general terms, whenever USN vessels are in the Black Sea, ADM Ulrich wanted them to work with Turkey in ways that assist Turkey's ongoing operations there. Ornek lamented the lead time was too short to plan as ambitious an exercise as proposed by VADM Stufflebeem, but his staff was working on an alternative, a large PASSEX in the Aegean involving two frigates, two fast patrol boats, a submarine and two aircraft sorties. NAVATT expressed appreciation for the enthusiasm TNFC staff have demonstrated for working with the US Navy. 5. (C) Both Bulgaria and Romania have requested naval training from the US, and USNAVEUR would welcome Turkey's advice on what training would be most useful. Ornek initially replied, "all kinds." ADM Ulrich said he wanted to have bilateral consultations in advance on what would be most useful to provide to the two new NATO members. Ornek agreed that the Turkish Navy understood their neighbors' deficiencies given that the Turkish Navy has two or three exercises per year with each of the two countries, plus the experience of semiannual BLACKSEAFOR activations. 6. (C) In addition to training, RADM Gurdeniz hoped that ADM Ulrich would encourage the Romanians and Bulgarians to utilize the information provided by Turkey to shadow suspicious vessels and report on their activities when these ships enter territorial waters. Turkey, through BSH, follows these vessels, but cannot do so in other countries' territorial waters. Despite excellent cooperation among littoral countries' coast guards, Bulgaria and Romania do not take any action regarding vessels reported to them by Turkey. ADM Ulrich thought developing better information through the talks between TNFC and CCMAR Naples would help, and he agreed to raise the matter when he visited Bucharest and Sofia. ----------------------- Black Sea Harmony South ----------------------- 7. (C) Ornek informed ADM Ulrich that Turkey was planning a national operation in the eastern Mediterranean similar to Black Sea Harmony. He was unhappy that over the past six to twelve months the force devoted to Operation Active Endeavor had diminished, leaving holes in the area. In September, oil would begin reaching the port of Ceyhan from the Caspian (via BTC pipeline), and the resulting increase in traffic must be protected. He recalled in the past working with DEA to intercept drug shipments in the region that would have been used to finance terrorism. When OAE operated there, this threat was deterred, but with its departure he feared criminal activity would return. Therefore, Turkey would conduct its own OAE-like operation beginning in July, continuing indefinitely, and would coordinate with OAE. As with BSH, Turkey would pass information collected on suspicious vessels to NATO. ADM Ulrich noted this made the need for talks on information requirements more pressing. ------------------- Iraq/NTM-I Trainers ------------------- 8. (C) Deputy TGS Chief GEN Basbug discussed other regional issues with ADM Ulrich. Basbug noted the Turkey had increased its personnel on the NATO Training Mission Iraq (NTM-I) staff from three to five recently. He said TGS also "may consider sending trainers" to Baghdad. He recalled how for the past two years Turkey had made numerous proposals to train Iraqis in Turkey. Two months earlier, at NTM-I's request, Turkey developed a proposal to receive two groups of 15 officers for training and submitted it to SHAPE. There has been no response, he said. Recently, however, two Iraqi officers arrived for training at Ankara's PfP Training Center. ADM Ulrich responded that it was understandable that Iraq would be reluctant to take personnel out of the fight to send them abroad for training. He and Basbug agreed that training was nonetheless essential for success, with Basbug adding a second requirement -- "efficient government." ---------------- Bilateral Issues ---------------- 9. (S/NF) On bilateral issues: -- ADM Ulrich proposed increasing the number of medium-term (2-3 month) exchanges, putting officers and senior enlisted personnel on each others' ships. Besides affording the opportunity to share skills and experience, this would strengthen Navy-Navy relations as personnel on both sides came to understand the other side better. -- NAVATT expressed appreciation for Turkish support on force protection for ship visits. Ornek approved of what he perceived as an increased frequency of visits. Basbug thought there were not enough ship visits. ADM Ulrich said his intention was for USN ships to call at Turkish ports more often. -- ADM Ulrich thanked GEN Ozkok for cooperation on examining the Syrian SCUD that landed in Turkey earlier in the month. -- CDA noted that the cargo hub at Incirlik was working well and expressed gratitude for Turkey's support of that operation. -- GEN Ozkok thought much of the intelligence the US was sharing on the PKK was "too general." What Turkey truly appreciated was "timely, practical" (read: actionable) intelligence. -- GEN Ozkok noted that, with plenty of explosives in Iraq in "unauthorized hands," IEDs were showing up more in Turkey. Most have been radio detonated, but there have also been wire and pressure triggered devices found. He asked for US assistance in detecting and disposing of these devices. ODC-T Chief MajGen Sutton recalled that this subject was discussed during GEN Basbug's meeting with VCJCS Gen Pace. ADM Ulrich and GEN Ozkok thought a team from Joint Staff should visit Ankara ASAP to continue the discussion. --------------------------- Comment: Removing Irritants --------------------------- 10. (C) ADM Ulrich's proposals to improve Turkey's cooperation with NATO and the US in the Black Sea could go a long way in removing this irritant from our bilateral relations. The test will be whether the Turks follow through. We believe there is a good chance that they will. Turkey's new national operation in the eastern Med makes sense given the increased tanker traffic that will come as BTC comes on line and as more Iraqi crude is pumped through the northern pipeline (which also terminates in Ceyhan). However, this operation could increase Turkish naval activity near Cyprus, potentially causing a reaction there. Finally, Ozkok's reiteration of the request Basbug made in Washington in early June underscores the seriousness with which the Turks view the threat from IEDs. We encourage the Joint Staff to respond to the Turkish request for information as soon as possible. End comment. ------------ Participants ------------ 11. (U) The Admiral was accompanied by the CDA, JFC-N POLAD Amb Dean Curran, ODC-T Chief MajGen Peter Sutton, NAVATT CAPT Devon Goldsmith, USNAVEUR Deputy EA CDR John Rinko, Flag Aide LCDR Craig Mattingly, and PolMilCouns. JFC Naples Deputy Chief of Staff for Operations MG Emin Alpman participated in all three meetings; TGS/J5 LTG Aydogan Babaoglu sat in the TGS meetings; and RADM(UH) Nusret Guner (TNFC/N3) and RADM(LH) Cem Gurdeniz (TNFC/N5 Strategy and Agreements Director) participated in the meeting with ADM Ornek. 12. (U) USNAVEUR cleared this cable. MCELDOWNEY
36244 2005-07-10 11:06:00 05ANKARA4013 Embassy Ankara CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 004013 SIPDIS E.O. 12958: DECL: 07/08/2030 TAGS: PREL, MARR, ECON, EU, RO, TU, NATO SUBJECT: TURKS DENY GO IT ALONE POLICY IN THE BLACK SEA REF: A. BUCHAREST 1432 B. ANKARA 3953 Classified By: PolMil Counselor Timothy A. Betts for reasons 1.4 (b) an d (d) 1. (C) Summary: An MFA official and a Turkish admiral admitted to us June 30 that RADM Kadir Sagdic's comments on the margins of a Harvard Black Sea Security Conference earlier that month (ref A) were "extreme" and did not reflect GOT policy. They credited his comments to personal views prompted by frustration with Romanian political-level resistance to greater maritime cooperation with Turkey in the Black Sea. End summary. 2. (C) MFA International Security Affairs DDG Fatih Ceylan agreed to meet PolMilCouns one-on-one on June 30 to discuss statements by Turkish Admiral Kadir Sagdic on Turkey's Black Sea maritime security policy at the June 7-10 Harvard Black Sea Security Conference in Chisinau. At Ceylan's request just prior to the meeting, TNFC/N5 Strategy Chief RADM (LH) Cem Gurdeniz joined as well. 3. (C) PolMilCouns informed Ceylan and Gurdeniz of what Sagdic had told US participants on the margins of the Chisinau conference, drawing from ref A, para 2, He noted that this differed from what Ceylan and Gurdeniz had previously explained to us was Turkey's policy and from what Turkish Navy Commander ADM Ornek had told USNAVEUR ADM Ulrich earlier in the week (ref b). 4. (C) Ceylan, holding a copy of Sagdic's prepared remarks for the conference, said "this is Turkey's policy," not what Sagdic told our SECI Coordinator. Both he and Gurdeniz thought Sagdic had poorly chosen his words; when he described NATO policies regarding PfP as "dictatorial," he likely meant "declared" or "directed". After an extended discussion, they conceded that his language was "extreme." 5. (C) Regarding Turkey's "going it alone," both Gurdeniz and Ceylan said that was not possible. Currently, Turkey's OAE-like Operation Black Sea Harmony (BSH) covers only 45% of the Black Sea. Other littorals must participate to gain complete coverage of the sea. In this regard, they were critical of Romania. Gurdeniz repeated what he had said during the Ornek-Ulrich meeting: Turkey alerts the Romanians when suspect vessels enter Romania's territorial waters, but Bucharest does nothing with the information. They neither shadow the vessels nor report on their destination and cargo. Turkey had invited fellow NATO members Romania and Bulgaria to join BSH before the other littorals in the hope of giving the operation more of a NATO flavor before the others joined. Neither Bucharest nor Sofia indicated any interest, so BSH was opened to other littorals. Now Russia and Ukraine have indicated a desire to join and still no word from the two Allies. 6. (C) Ceylan explained that Turkey had worked for two years to convince Russia to join BLACKSEAFOR (BSF). Moscow had been reluctant to place its vessels under the command of others during BLACKSEAFOR activations. The Russians' agreement to do so was a first for the Russian Navy. When they were considering participation in BSH, the information sharing elements concerned them. Finally, the Turks convinced them to join. Throughout this process, the Russians were learning the NATO concepts and vocabulary the Turks use, contributing to the broader Russian-NATO relationship. But while Russia was becoming more comfortable with NATO, it was still wary of the Alliance's intentions. He argued that as Russia became more confident in its relationship with NATO, it would be open to more engagement by the Alliance and regional Allies. He noted Russia's acceptance of foreign observers for the next BSF activation ceremony as a significant step. He predicted that Russia might accept the deployment of foreign observers to participating ships in 2006. This step-by-step approach would eventually lead to Russian acceptance of NATO activities in the Black Sea. 7. (C) Gurdeniz added that with 10,000 Russian flagged vessels transiting the Turkish Straits every year together with the threat of Chechen terrorism, Russia's cooperation on maritime security was essential for Turkey. Turkey had no objection to US activities in the Black Sea that conformed with the Montreux Convention, but believed a formal NATO presence would bring to an end Russia's cooperation. This in turn would increase the risk to shipping through the Straits -- an important international energy corridor that passes through the heart of Istanbul. 8. (C) After Gurdeniz's departure, Ceylan confided that another possible reason for Sagdic's defiant tone was the deep frustration the Turkish Navy felt towards Romania. The navy-to-navy relationship is fine, with the Romanian navy requesting and receiving considerable assistance from their Turkish colleagues in support of Romania's participation in OAE. However, the Turks believe Romania's political leadership is blocking their navy's greater participation in regional Black Sea efforts, instead pressing for NATO to rush into the region. 9. (C) Comment: Sagdic's reported comments do represent Turkish policy regarding the here and now. They do not, however, reflect what both civilian and military officials at all levels tell us in Ankara are Turkey's long-term goals for the region. While the Turks are proud of their creations in the Black Sea -- BSF and BSH -- and want to preserve their leadership role, they also have a genuine desire to keep Russia positively engaged in cooperative maritime security. We are hopeful that the consultations between NATO's Maritime Component Command Naples and the Turkish Navy (ref b) will improve the transparency of BSH and make the Turks' profession of its "NATO affiliation" closer to a reality. End comment. MCELDOWNEY
41915 2005-10-04 09:03:00 05ANKARA5953 Embassy Ankara CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 02 ANKARA 005953 SIPDIS E.O. 12958: DECL: 09/22/2015 TAGS: PREL, MARR, MASS, TU, RO, BU, GG, UP, RS SUBJECT: WHAT IS BEHIND TURKEY'S BLACK SEA POLICY? REF: A. BUCHAREST 1778 B. BUCHAREST 1991 C. ANKARA 2060 D. ANKARA 3581 Classified By: Counselor for Political-Military Affairs Timothy A. Bett s for reasons 1.4 (b) and (d) 1. (C) Summary: Turkey makes a strong distinction between Black Sea maritime security and broader security challenges in the larger region (such as frozen conflicts). We see Turkish pride of place as a main driver of their approach to the former, though a genuine desire to draw Russia into cooperation with western security institutions may also be in play. This may be a false distinction, but will drive how open Turkey will be to Romania's "Black Sea Forum of Dialogue and Partnership" initiative. The initial Turkish reaction to this Romanian proposal is cool. End summary. 2. (C) We note with interest recent reporting from Embassy Bucharest on the GOR's concern that Turkey and Russia are pursuing a "closed sea" policy with regard to Black Sea security (ref b, among others). Turkey has made a significant distinction between broader security concerns in the Black Sea region (frozen conflicts, for example) and maritime security in the Black Sea proper. Turkish officials tell us that they welcome NATO, EU, and other interested parties' cooperation, assistance, and input on broader issues, but prefer for now to limit maritime security primarily to the littoral states. 3. (C) When the Turks explain this distinction, they cite Russian sensitivities as their chief concern. MFA officials have told us that NATO involvement in the Black Sea is Turkey's "end game," but have asked that we take a go-slow approach and allow the Turks to bring Moscow along (ref c). They believe that if NATO (including the U.S.) were to play an active role in maritime security now, this would spook the Russians and cause Moscow to back off from the cooperation it has agreed to thus far under BLACKSEAFOR. (In any case the Montreux Convention already precludes a sizable NATO presence outside the three littoral NATO states, only one of which--Turkey--has a capable navy.) Officials explain that multilateralizing Turkey's Black Sea Harmony operation (a maritime interdiction operation similar to OAE, under which Turkey provides data to NATO) under the BLACKSEAFOR rubric is Turkey's way of integrating Russia into western security institutions. N5 Chief RADM (LH) Cem Gurdeniz told PolMilOff Sept. 21 that Black Sea Harmony will have a "NATO affiliation." Still, Turkish officials express exasperation with what they see as Romania's efforts to undermine Turkey's efforts to make BLACKSEAFOR into a more effective organization and Bucharest's insistence on putting the NATO stamp on Black Sea maritime security now. 4. (C) The Turks' sharp differentiation between maritime and broader security concerns in the region is somewhat odd. While we defer to Embassy Moscow's analysis, the Russians appear to be just as reluctant to engage meaningfully with NATO, the EU, or other "outsiders" in solving frozen conflicts and other regional security threats as they are to participate with these groups in maritime security. One explanation may be that the Turks want to carve out a specific security sphere (maritime) in which they have some measure of control (as the founder of BLACKSEAFOR and through Montreux's restriction on non-littoral navy traffic in the Black Sea) to establish a meaningful OAE-type operation and to bring the Russians slowly into enhanced cooperation with NATO. 5. (C) Another likely explanation is pride of place. Turkish officials and military officers tell us repeatedly that for 50 years of Cold War, Turkey was the bulwark which prevented Soviet domination of the Black Sea. Many Turkish policymakers appear to perceive the Black Sea as a Turkish lake, and they want to be the lead nation in providing for maritime security. Although they don't particularly want to share with the U.S., the EU, or with the Alliance, they realize that the U.S. wants to engage, and that they will likely not be able to ensure that maritime security remains indefinitely as a "littorals only" project. The Turks do not have the same attitude toward broader security challenges in the region writ large; they recognize that neither Turkey nor even all the littorals can solve the economic and political challenges facing the region. 6. (C) Some will posit a warmer Russia-Turkey relationship as a possible motivation for the GOT's go-slow policy on NATO involvement in Black Sea maritime security. There is some logic to this, but we do not see Turkey's policy as merely kowtowing to Moscow. With several recent reciprocal Erdogan-Putin visits and a burgeoning trade relationship as well (including 3 million Russian tourists a year visiting Turkey and Turkey's reliance on Russia for petroleum products), there is no question the relationship is growing. Additionally, some senior foreign policy advisers close to Erdogan and FonMin Gul promote the concept of "strategic depth," arguing that Turkey needs to reach beyond its traditional western foreign policy orientation and seek closer ties to its north and east. However, this concept is unpopular in the military and the bureaucracy, who appear to be the main architects of BLACKSEAFOR and Black Sea Harmony. These officials do not show a deep affection for Russia; they assert to us that they are working to integrate Russia slowly within western security institutions, not necessarily to bring Turkey and Russia closer together. 7. (C) We understand the Romanians are proposing to hold a "Black Sea Forum of Dialogue and Partnership," and are seeking U.S. assistance to persuade the Russians and Turks to attend (ref a). MFA Head of Department for NATO Political Affairs Atilla Gunay told PolMilOff Oct. 3 that Turkey is cool to the Romanians' proposal, but is still studying the idea. The Turks and Romanians are clearly annoyed with each other on the Black Sea issue. Whatever the outcome on the Romanian proposal, we hope it will not create a larger wedge between these two NATO allies. MCELDOWNEY
45258 2005-11-16 08:15:00 05ANKARA6751 Embassy Ankara UNCLASSIFIED UNCLAS SECTION 01 OF 02 ANKARA 006751 SIPDIS E.O. 12958: N/A TAGS: OTRA, PGOV, PREL, IZ, AU, PL, RO, RS, IT, FR, BE, NATO, EUN, Iraq SUBJECT: COUNTRY CLEARANCE GRANTED FOR DEPUTY SENIOR ADVISOR TO THE SECRETARY, AND DEPUTY COORDINATOR FOR IRAQ ROBERT DEUTSCH AND SENIOR IRAQ DESK OFFICER MICHELE SIDERS TO TRAVEL TO TURKEY DECEMBER 1 - 2, 2005 REF: STATE 206925 1. (U) Mission warmly welcomes and grants country clearance to Deputy Senior Advisor and Deputy Coordinator for Iraq Robert Deutsch and NEA Iraq Desk Officer Michele Siders to travel to Turkey from December 1-2, 2005 for consultations on Iraq. The point of contact for the visit is Political Officer Carl Siebentritt who can be reached at (90)(312) 455-5555 extension 0, 24 hours a day or via cell phone at 0532 620 5294. Hotel and scheduling information will be forwarded in separate communications. 2. (U) Visas: All Americans traveling to Turkey must have a valid visa. Travelers without a visa can obtain a visa valid for one entry/three months at port of entry upon payment of a USD 20 fee. This fee is payable only in U.S. dollars cash. There is no fee for official travel if the visa is obtained outside of Turkey. 3. (U) Health Safety: Information on vaccinations and other health precautions can be obtained from the Center for Disease Control and Prevention hotline for international travelers (tel: 1-877-394-747); fax 1-800-232-3299; or via the internet at HTTP//www.cdc.gov. 4. (U) Security Assessment: In the aftermath of Operation Iraqi Freedom (OIF) there continues to be the potential for both transnational and indigenous terrorist groups to target U.S. interests in Turkey. After the Gulf War, the predecessor to the Turkish Terrorist Group Revolutionary People's Liberation Party/Front (DHKP/C) assassinated four Americans in Turkey and carried out numerous bombings of U.S. targets (mostly private sector businesses, although two rockets were directed toward the Consulate General in Istanbul). Subsequent to the ending of OIF hostilities, there have been isolated terrorist bombings attributed to DHKP/C and other indigenous terrorist groups in protest of OIF. Other Turkish terrorist groups with anti-Western sympathies include Marxist-Leninist Communist Party (MLKP), Turkish Communist Party/Marxist Leninist (TKP/ML), Turkish Workers and Peasants Revolutionary Army (TIKKO) and Islamic Greater Eastern Raiders/Front (IBDA/C). Al-Qa'ida threats to target U.S. facilities in Turkey have been public knowledge for some time. On November 15, two synagogues in Istanbul were the targets of suicide car bombs. On November 20, 2003, the British Consulate General and the London-based HSBC bank in Istanbul were damaged by powerful explosions, killing dozens and wounding hundreds. These incidents represent a significant change from prior attacks in Turkey, which have previously involved small-scale, random bombings and small numbers of casualties. The investigations of these incidents in Istanbul remain open but transnational terrorist links are suspected. The potential for violence and terrorist actions against U.S. citizens and interests continue. The Turkish National Police (TNP) is quite responsive in their role as protector of U.S. diplomatic and military interests in Turkey. The TNP has provided enhanced coverage at each of our facilities in Ankara, Istanbul, Adana and Izmir. The incidence of crime, both violent and the more traditional tourist crimes (pick pocketing, purse-snatching, etc.), is relatively low throughout Turkey. Visitors to Istanbul should be aware that tourist-type crimes are more prevalent there, especially in the traditionalist tourist areas, such as Sultanahmet and Istiklal Caddesi. The security office encourages visitors to report any security incidents, including surveillance, to the RSO immediately. Useful security information about Turkey is available on the following websites: --Embassy Ankara: HTTP://WWW.USEMB-ANKARA.ORG.TR (Click on Security Matters) --Consulate General Istanbul: HTTP://USCONSULATE-ISTANBUL.ORG.TR 5. (U) For further information regarding travel in Turkey, consult the consular information sheet. The consulate information sheet and public announcements are available on the internet at: HTTP://TRAVEL.STATE.GOV Other information is available on the following websites: --The State Department Consular Affairs (CA) websites: HTTP://WWW.TRAVEL.STATE.GOV/TURKEY.HTML --US Embassy Ankara: HTTP://WWW.USEMB-ANKARA.ORG.TR MCELDOWNEY
26857 2005-02-11 13:57:00 05ANKARA802 Embassy Ankara CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 03 ANKARA 000802 SIPDIS E.O. 12958: DECL: 02/09/2015 TAGS: MOPS, MARR, PREL, PARM, TU, RS, GG, UP, RO, BU SUBJECT: TURKS SEEK TO INCREASE MULTILATERAL MARITIME EFFORTS ON BLACK SEA, BUT REQUEST U.S. STAY OUT REF: A. BUCHAREST 308 B. ANKARA 552 Classified By: DCM Robert S. Deutsch for reasons 1.4 (b) and (d). Summary ------- 1. (C) Turkish military and civilian officials have told us that Turkey is working to multilateralize its current Black Sea Harmony (BSH) operation, which monitors and assesses Black Sea maritime traffic and reports the findings to NATO. This effort would only extend to the other five littoral states. Turkey envisions that within the next 12-18 months, all six littorals will participate in BSH and share information both with each other and with NATO, in essence creating a mini-Operation Active Endeavor (OAE) in the Black Sea. The Turks want to place this operation under the umbrella of BLACKSEAFOR (BSF), and are resistant to efforts (even by fellow littorals like the Romanians) to bring NATO or the U.S. into the Black Sea, citing concerns by Russia. The Turks emphasize that they continue to want to work with us on frozen conflicts and other issues which affect littoral states themselves, but they do not want any real outside maritime presence in the Sea itself. End summary. 2. (C) On Feb. 7, NAVATT and PoMilOff called on Chief of the Turkish N5 RADM (UH) Deniz Kutluk and N5's Chief of Strategy and Agreements RADM (LH) Cem Gurdeniz to discuss Black Sea issues. In addition, on Feb. 8 PolMilCouns and PolMilOff called on MFA Deputy DG for Security Affairs Fatih Ceylan, who told us that he had been instructed to carry out consultations with the U.S. on Turkey's latest efforts on Black Sea security. Turkish Officials: We Share the Same Goal... -------------------------------------------- 3. (C) The Navy's Kutluk portrayed the Black Sea as a center of stability for the past 70 years, citing the relative calm that reigned in the Sea throughout World War II and the Cold War, during which Turkey was "an honest broker." All our interlocutors claim that Turkey, the U.S., and NATO all share the same goal for the Black Sea: peace and vigilance against asymmetric threats such as terrorism, WMD and dual-use item smuggling, and TIP. Though Turkey does not discount the risk of these threats, Kutluk said that Turkey's year-old unilateral Black Sea Harmony (BSH) operation--which monitors, hails, and inspects (on a voluntary basis) ships within Turkey's Exclusive Economic Zone waters and reports the results to NATO--has an assessment that these threats are quite limited. According to Gurdeniz, since March 2004 the Turkish Navy has monitored 9000 vessels and physically inspected 300, but have found no items or passengers of concern. MFA's Ceylan added that the Navy has detected some smuggling of illegal migrants but BSH has deterred this activity. He admitted, however, that BSH only extends to Turkey's Exclusive Economic Zone (EEZ) waters, and the GOT believes some of the illicit traffic now bypasses BSH's areas of operation. 4. (C) According to Ceylan, the BSF countries agreed in 2004 to compile a joint threat assessment of the Black Sea. Officials reviewed this during their Feb. 3-4 consultations in Istanbul, and will present it to a BSF senior officials meeting in Kiev in March (date not yet set; we understand it has slipped from January, perhaps due to the political situation in Ukraine). 5. (C) Gurdeniz reported that within the next 12-18 months, the other five littoral states will join the BSH operation in practice, sharing information not only among themselves but with NATO. Ceylan said fellow NATO Allies Bulgaria and Romania would join first, with the others following as their suspicions recede and their confidence grows. Gurdeniz said there are some "political and administrative" barriers which may prevent the other littorals from stating explicitly that they are joining under the BLACKSEAFOR (BSF) rubric. (NOTE: Since Turkey only operates BSH in its EEZ, we are not sure why Turkey is so sanguine that the Black Sea presents little in the way of asymmetric threats, but if all the littorals indeed begin to carry out a similar cooperative operation the picture should become more accurate, something the Turks claim they are aiming for. END NOTE.) ...But Please Stay Out of the Pool ---------------------------------- 6. (C) Gurdeniz's account does not exactly jibe with the Romanians' and Bulgarians' understanding that BLACKSEAFOR will not carry out "constabulary functions" that NATO could do (ref a). The Turks have complained to us before that Romania and Bulgaria (especially the former) are overanxious to involve NATO (and by extension the U.S.) in Black Sea maritime security. Both our MFA and Navy interlocutors claim that any effort to involve NATO in Black Sea maritime security will spook the Russians, even something as apparently innocuous as a PfP or PSI maritime exercise or the U.S. observing BSF's relatively modest annual exercises. The Turks have thus explicitly requested us not to seek any U.S. or NATO role in this area, citing their concern that the Russians would then cease cooperation within BSF. Indeed, the Turks say, now that half the littorals are NATO Allies and the multilateral BSH operation will report its results to NATO, NATO is effectively in the Black Sea anyway. Ceylan told us, however, that should the littoral states determine that their combined efforts are not enough to deal with security risks in the Black Sea, Turkey would urge its fellow littorals to approach NATO for assistance. 7. (C) Both Ceylan and Kutluk emphasized that the Turkish request for the U.S. to stay out of the Black Sea only extends to the maritime arena. The Turks want to continue to work with us on issues on land, such as frozen conflicts and economic development, but want us--in Kutluk's words-- to "leave the maritime domain to Turkey." They cite their continuing cooperation with us in areas such as the Caucasus Working Group. (COMMENT: We find this argument somewhat disingenuous; the Turks seem to be saying that asymmetric threats stop at the water's edge. We are not the only ones who doubt Turkish motives. The Georgian DCM recently told PolMilOff that Turkey turns a blind eye to maritime smuggling emanating from Turkey into Abkhazia. We raised this with Ceylan, but he only responded that Georgia (as well as Romania and Bulgaria) has limited maritime capability at present. END COMMENT.) 8. (C) In addition to Turkish concerns--real or imagined--that any U.S. or NATO activity in the Black Sea would anger the Russians and make them cease cooperation, the Turks observe that the Montreaux Convention serves as a brake on non-littoral navies' role in the Black Sea. The Convention limits both the tonnage and duration of stay (21 days) of outside naval forces. Both Ceylan and Kutluk emphasized that Turkey has no interest in altering Montreaux; Kutluk in particular criticized alleged U.S. efforts to pressure Turkey to change the treaty in the past. Comment: Perhaps They Protest Too Much -------------------------------------- 9. (C) It should come as no surprise that the Turks insist on having the lead in the Black Sea, and they are jealous of what they perceive as U.S. desires to nose our way in. The positive side of this is that the Turks thus feel pressed to make BSF more effective and meaningful and to ensure BSH fulfills the role the OAE plays in the Mediterranean. BSF's exercises up to now have been limited in scope and are also hampered by interoperability and language problems (the Turks insist that English be BSF's working language, though probably all the other navies could more or less manage in Russian). It is clear that the Turks' fellow Allies on the Black Sea have a more welcoming approach to U.S. or NATO involvement, and the Turks have responded to this pressure by working to multilateralize BSH and share the resulting information with the Alliance. 10. (C) Arguing that they are already doing what needs to be done, Turks are suspicious of our efforts to participate in the Black Sea. A heavy-handed U.S. approach--especially vis-a-vis maritime security--will only increase Turkish resistance. While we should not buy into all the Turks' rhetoric on the Black Sea, we should express appreciation for their taking the lead as they have. We would defer to Embassy Moscow on whether U.S. participation as observers or more actively would inhibit Russian cooperation in BSF or eventually BSH. Regarding Turkey, both military and civilian authorities emphasize that their comments applied only to the maritime arena. When USDP Feith visited Ankara in late January, he told the Turks that Washington was considering expanding the Proliferation Security Initiative from the maritime theater into ground and air operations (ref b). Perhaps one way to break down Turkey's resistance to U.S. activities in the Black Sea would be to encourage the Turks to host a PSI air exercise in 2006 focusing on the Black Sea region. We will explore with Turkish officials receptivity to such an event in the weeks ahead. End comment. EDELMAN
36946 2005-07-20 11:29:00 05BAGHDAD3010 Embassy Baghdad SECRET S E C R E T SECTION 01 OF 02 BAGHDAD 003010 SIPDIS E.O. 12958: DECL: 07/19/2015 TAGS: MOPS, PHUM, PINS, PINR, PTER, RO, IZ, Detainees SUBJECT: DISPOSITION OF IRAQI-AMERICAN DETAINEE MOHAMMAD MUNAF REF: A. FEINBERG-PILZ EMAIL JULY 13 B. SILKWORTH-PILZ EMAIL JULY 13 C. FEINBERG-PILZ INTERVIEW JULY 19 Classified By: Charge d' Affaires David M. Satterfield for reasons 1.4 (b) and (d). 1. (S) Summary and Action Request. This cable seeks concurrence as to the legal disposition of Iraqi- American national Mohammed Munaf (or Muneef), now held as a security internee by Coalition Forces in Iraq under the authority of UNSCR 1546. (Background: Munaf, a former resident of Romania, was detained in May 2005 due to his suspected involvement in a kidnapping plot involving Romanian journalists.) 2. (S) On July 18, an Article V panel convened by MNF-I found Mohammed Munaf has the legal status of "security internee"; this fact will soon be formally reported to OSD. We understand that DoD intends to proceed now with interagency discussions on Munaf's disposition on the basis of informal reporting. 3. (S) It is DoD policy as pertains to security internees in USG custody in Iraq that the intent of the USG to bring charges against an internee be considered first among parties likely to bring such charges. Should the USG lack evidence on which to proceed, the ability and willingness of the Iraqi courts to try the internee will be considered next. 3. (S) Post has not received notification of USG interest in prosecuting Munaf. However, the Central Criminal Court of Iraq has requested his appearance as a witness and as a defendant. Post and MNF-I recommend that the established procedures with respect to American citizens held as MNF-I security internees be followed should the USG opt not to initiate legal proceedings against Munaf. Post and MNF-I further recommend that: (a) the CCCI be allowed to call Munaf as a witness on the understanding that he will remain in MNF-I's legal and physical custody during and after his court appearance; (b) the CCCI be subsequently allowed to try Munaf as a defendant (a decision that would transfer legal custody of Munaf to Iraq); and (c) that physical custody of Munaf be transferred to the Iraqi Ministry of Justice should he be convicted and given a custodial sentence. 4. (S) As noted in reftels, the Government of Romania has requested that MNF-I make Munaf available for a judicial hearing on "Romanian legal territory" at the Romanian Embassy in Baghdad. We understand that a second request was made recently that Munaf be interviewed by Romanian prosecutors at his place of detention. 5. (S) MNF-I does not object to Romanian access to Munaf if it takes place at the detention site, is investigatory in nature, and does not prevent the USG or the CCCI (should Embassy Baghdad and MNF-I's recommendation be adopted) from proceeding with Munaf's prosecution. 6. (S) We recommend that the USG respect the intent of an Iraqi court to try an Iraqi-American national for crimes committed inside Iraq and that this issue be given priority. The issues of Romanian extradition or assumption of custody should be handled bilaterally between Iraq and Romania. The Embassy will be pleased to facilitate these bilateral contacts. -------------- ACTION REQUEST -------------- 7. (S) Given the urgency of the Iraqi and Romanian governments' requests, we request the Department's guidance on this matter as soon as possible. Satterfield
48333 2005-12-21 15:05:00 05BAGHDAD5083 Embassy Baghdad SECRET//NOFORN S E C R E T SECTION 01 OF 02 BAGHDAD 005083 SIPDIS NOFORN E.O. 12958: DECL: 12/20/2015 TAGS: MOPS, PHUM, PGOV, KJUS, IZ, RO, Detainees, Human Rights SUBJECT: UPDATE ON MOHAMMED MUNAF CASE REF: A. BAGHDAD 4671 B. BAGHDAD 3010 C. BUCHAREST 2348 Classified By: Classified by Acting Deputy Chief of Mission David C. Litt for Reasons 1.4 (b) and (d). 1. (S/NF) On December 9, Florin Razvan Radu, Director for International Law, Judicial Cooperation, and Foreign Legal Affairs at the Romanian Ministry of Justice contacted Pol-MilOff by e-mail to request the video appearance of Iraqi-American national Mohammed Munaf, held by the USG in Iraq as a security internee and wanted on criminal Charges by the Central Criminal Court of Iraq (CCCI) as a criminal defendant in Romanian court. Mr. Radu also requested the video appearance of six Iraqi nationals not held by the USG. 2. (S/NF) Pol-MilOff explained by telephone that the CCCI had agreed to Mr. Munaf's video testimony in Romanian court as a witness only (Reftel A), and that Mr. Munaf faced criminal charges in Iraqi court. Mr. Radan expressed surprise on both counts, and stated to Pol-MilOff by e-mail on December 15 that "it is essential...to hear Mr. Munaf and according to the Romanian Criminal Procedure...he cannot be heard by the Romanian Court in this file (where O. Hayssam is a co-defendant) as a witness, but only AS A DEFENDANT." -------------- ACTION REQUEST -------------- 3. (SBU) Post requests that the Department and/or Embassy Bucharest re-iterate the following points to the GOR: - It is the position of the USG that the Central Criminal Court of Iraq (CCCI) has priority in the criminal trial of Mr. Munaf, an Iraqi-American accused of committing crimes inside Iraq; - The CCCI has offered to make Mr. Munaf available as a witness via video-link in Romanian court in exchange for video witness testimony from four Romanian witnesses; - The CCCI has not given permission for Mr. Munaf's video trial as a defendant in Romanian court, and may not be willing to do so until or unless Iraqi judicial procedures are complete; - The GOR does not appear to have engaged the USG or ITG to date on the CCCI's request for the video testimony of four Romanian witnesses; - The USG does not have the practical or legal ability to compel the testimony of the six Iraqi citizens whose appearance the GOR also seeks, as none are held by MNF-I. 4. (SBU) In the meantime, Post will refer questions from Romanian prosecutors and other GOR officials to the Department and/or to Embassy Bucharest. ---------- BACKGROUND ---------- 5. (S/NF) In March 2005, Post understands that the GOR informed Embassy Bucharest that Iraqi-American national and former Romanian resident Mohammed Munaf had been kidnapped in Iraq with two Romanian journalists for whom he was working as an interpreter. In May 2005, Munaf and the two journalists were rescued; exit interviews indicated that Mr. Munaf was involved in the kidnapping, and he was detained by MNF-I for imperative reasons of security. 6. (SBU) At the request of the GOR, MNF-I provided Romanian interviewers access to Mr. Munaf at his place of detention in Baghdad in May and September 2005. In July 2005, the Central Criminal Court of Iraq (CCCI) requested Mr. Munaf's appearance as a witness, and indicated that it wished to try Mr. Munaf himself under Iraqi law for crimes committed inside Iraq. 7. (S/NF) In Reftel B, Post recommended that the USG follow established DoD procedure regarding AmCit detainees held in Iraq - that is, that DoJ be given priority to prosecute and that, if DoJ declined, Iraqi authorities be offered the same opportunity. On September 7, OSD sent a memo to MNF-I concurring with this recommendation and instructing MNF-I to permit Mr. Munaf's appearance before an Iraqi investigative judge. 8. (S/NF) On September 26, 2005, the GOR issued an arrest warrant against Mr. Munaf and delivered this warrant, with an extradition request, to Embassy Bucharest. (NOTE: Romania has no extradition treaty with Iraq; moreover, from a legal standpoint, it is not clear what authority the USG might rely upon to extradite or transfer to a third country an Iraqi- American held inside Iraq and wanted on criminal charges by Iraqi authorities. END NOTE.) 9. (S/NF) Following a re-affirmation of the USG position, Embassy Bucharest reported in Reftel B that President Traian Basescu informed Embassy Bucharest on November 11 that Romania accepted the U.S. decision to give Iraq legal custody over Munaf. Post then informed the Department in Reftel C that the CCCI was willing to allow Munaf to video witness testimony in Romanian court in exchange for the video testimony of four named Romanian witnesses. 10. (SBU) Mr. Munaf remains in Coalition legal and physical custody pending his initial appearance at the CCCI as a defendant; the CCCI has delayed his initial hearing pending a response from the GOR to the CCCI's offer to provide Mr. Munaf as a witness by video-link in exchange for the video testimony of key Romanian witnesses. At no point has the CCCI agreed to permit Mr. Munaf to stand trial as a defendant in Romanian court. KHALILZAD
26180 2005-01-31 15:39:00 05BRATISLAVA70 Embassy Bratislava UNCLASSIFIED UNCLAS BRATISLAVA 000070 SIPDIS E.O. 12958: N/A TAGS: PARM, ETTC, PREL, KSTC, BU, RO, LO SUBJECT: Country Clearance granted for NP/ECC personnel: Paul B. van Son and Jason C. McClellan REF: SECSTATE 16278 1. Embassy Bratislava welcomes the NP/ECC personnel: Paul B. van Son and Jason C. McClellan and grants country clearance for the period of February 1-2, 2005. The embassy point of contact is Larry Adkins, EXBX Program Advisor, tel: +421-2-5922-3375, fax: 421-5922-5038. Reservations have been made at the Hotel Carlton (Address: Hviezdoslavovo nam. 1, Bratislava, tel.+421-2- 5939-0512, res.no 119228, 119227). Room charge at the hotel is USD 150 which is within Bratislava perdiem. 2. The u.s. embassy's address is Hviezdoslavovo nam. 4, 811 02 Bratislava, Slovakia. Telephone numbers are: +421-2-5443- 0861 or +421-5443-3338. 3. Security clearances and building access: if necessary, the regional security officer will provide a temporary embassy badge for you. Thank you for providing your clearance level in reftel. 4. Computer access to mission facilities: privately owned laptops and personal computers (including palm pilots), peripherals, diskettes and tapes are prohibited in all mission facilities. Travelers with United States Government (USG) owned unclassified laptop or notebook computers, peripherals, diskettes and tapes must receive RSO/IPO authorization prior to being granted access to U.S. mission buildings. USG-owned classified computers must be sent to post via classified diplomatic pouches. Classified equipment must bear external USG bar codes, inventory numbers, and classification marking commensurate with the highest level of information processed on the system. 5. Security: post reminds traveler that we are under a high level threat of potential terrorist activities. This warning is especially applicable to those of us in diplomatic missions overseas. The U.S. government continues to receive credible indications that extremist groups and individuals are planning additional terrorist actions against u.s. interests worldwide. Such actions may include, but are not limited to suicide operations. Because security and security awareness have been elevated within the United States, the terrorists may target U.S. interests overseas. There is a possibility that American citizens may be targeted for kidnapping or assassination. Employees are reminded to remain vigilant with regard to their personal security and to exercise caution. 6. The Slovak republic has a "medium" rate of crime, although violent crime is relatively uncommon. Visitors are urged to exercise reasonable precautions. If you must walk alone at night, keep to populous and well-lighted areas. Pay attention to your wallet, purse, handbag and cellular telephone, as all are popular targets of the local thieves. The local pickpockets are professional and most active during the summer. They tend to utilize distraction techniques to confuse their target, preferring locations such as shopping centers, markets and public transportation in the vicinity of the "old town", near major hotels where foreigners stay and tourist sites, and the night trains to Prague and Warsaw. Power struggles between organized crime elements, which can be violent, occur from time to time. This activity is not/not directed against Americans or other foreigners. The rate of auto theft, which is also connected to organized crime, is very high in Bratislava. Up- market European and American cars are preferred targets. The use of alarm systems or anti-theft devices is strongly encouraged. 7. Medical: if you experience a medical emergency after work hours, contact the embassy duty officer at cell phone 0903-703-666. If you cannot reach the duty officer, the embassy has a contract with an English-speaking Slovak doctor, dr. Capova, who is available 24 hours a day to provide consultations and arrange treatment at local hospitals. Dr. Capova can be reached at 6252 5068 (home) or at 0904 637 836 (cell phone). Tell dr. Capova that you are with the U.S. embassy and require emergency assistance. If necessary, dial 155 to contact the city ambulance service. THAYER NNNN
41412 2005-09-27 07:35:00 05BRATISLAVA772 Embassy Bratislava UNCLASSIFIED UNCLAS BRATISLAVA 000772 SIPDIS E.O. 12958: N/A TAGS: EAID, SL, HU, RO, LO SUBJECT: Country Clearance granted for USAID contractors Mary Linehan, Catherine F. Cleland, Lisa Adams, Diana Selezeanu, Robert Rosenburg, Eun-Joo Chang and John Capati REF: SECSTATE 176598 1. Embassy Bratislava welcomes USAID contractors: Mary Linehan, Catherine F. Cleland, Lisa Adams, Diana Selezeanu, Robert Rosenburg, Eun-Joo Chang and John Capati and grants country clearance for the period of October 2-7, 2005. The embassy point of contact for your visit is Richard "Trey" Lyons, POL Officer, tel: +421-2-5922-3210, cellphone: +421-903- 257-719. Post understands no logistical assistance is required. 2. The U.S. Embassy's address is Hviezdoslavovo nam. 4, 811 02 Bratislava, Slovakia. Telephone numbers are: +421-2-5443- 0861 or +421-2-5443-3338. 3. Security clearances and building access: if necessary, the regional security officer will provide a temporary embassy badge for you. However a clear telegraphic indication of your security level must be provided for unescorted access into any mission facility. 4. Computer access to mission facilities: privately owned laptops and personal computers (including palm pilots), peripherals, diskettes and tapes are prohibited in all mission facilities. Travelers with United States Government (USG) owned unclassified laptop or notebook computers, peripherals, SIPDIS diskettes and tapes must receive RSO/IPO authorization prior to being granted access to U.S. mission buildings. USG-owned classified computers must be sent to post via classified diplomatic pouches. Classified equipment must bear external USG bar codes, inventory numbers, and classification marking commensurate with the highest level of information processed on the system. 5. Security: post reminds traveler that we are under a high level threat of potential terrorist activities. This warning is especially applicable to those of us in diplomatic missions overseas. The U.S. government continues to receive credible indications that extremist groups and individuals are planning additional terrorist actions against U.S. interests worldwide. Such actions may include, but are not limited to suicide operations. Because security and security awareness have been elevated within the United States, the terrorists may target U.S. interests overseas. There is a possibility that American citizens may be targeted for kidnapping or assassination. Employees are reminded to remain vigilant with regard to their personal security and to exercise caution. 6. The Slovak republic has a "medium" rate of crime, although violent crime is relatively uncommon. Visitors are urged to exercise reasonable precautions. If you must walk alone at night, keep to populous and well-lighted areas. Pay attention to your wallet, purse, handbag and cellular telephone, as all are popular targets of the local thieves. The local pickpockets are professional and most active during the summer. They tend to utilize distraction techniques to confuse their target, preferring locations such as shopping centers, markets and public transportation in the vicinity of the "old town", near major hotels where foreigners stay and tourist sites, and the night trains to Prague and Warsaw. Power struggles between organized crime elements, which can be violent, occur from time to time. This activity is not/not directed against Americans or other foreigners. The rate of auto theft, which is also connected to organized crime, is very high in Bratislava. Up- market European and American cars are preferred targets. The use of alarm systems or anti-theft devices is strongly encouraged. 7. Medical: The Embassy's principal physician liaison is Dr. Julia Bruce (tel.+421-2-5922-3138). If you experience a medical emergency after work hours, contact the embassy duty officer at cell phone 0903-703-666. If you cannot reach the duty officer, the embassy has a contract with an English-speaking Slovak doctor, Dr. Capova, who is available 24 hours a day to provide consultations and arrange treatment at local hospitals. Dr. Capova can be reached at 6252 5068 (home) or at 0904 637 836 (cell phone). Tell Dr. Capova that you are with the U.S. embassy and require emergency assistance. If necessary, dial 155 to contact the city ambulance service. VALLEE POSSIBLY MISSING ADM AID OR AIDAC CAPTION NNNN
31318 2005-04-22 13:39:00 05BUCHAREST1003 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 03 BUCHAREST 001003 SIPDIS STATE DEPT FOR EUR/NCE - WILLIAM SILKWORTH STATE DEPT ALSO FOR INR/B E.O. 12958: DECL: 04/22/2015 TAGS: PGOV, PREL, KDEM, SOCI, ECON, PINR, RO, election results, biographic information SUBJECT: GEOANA WINS SOCIAL DEMOCRATIC PARTY PRESIDENCY; DEMOCRACY COMES TO ROMANIA'S OPPOSITION REF: BUCHAREST 982 Classified By: Political Section Chief Robert S. Gilchrist for Reasons 1.4 B and D 1. (C) Summary. In a move that surprised the media and nearly all of Romania's political class, former Foreign Minister Mircea Geoana won the presidency of Romania's opposition Social Democratic Party (PSD) in the early hours of April 22 at a dramatic party congress. Other reformers within the party -- including former Interior Minister Ioan Rus -- also gained key slots in the leadership. Although former President Ion Iliescu was the frontrunner up until a day before the vote, his gaffes during the party congress as well as the first-ever use of a secret ballot inside the party turned the tide of delegates against him. Although some of the PSD old guard remain in the top tiers, delegates declined to elect several of the most controversial PSD heavyweights to senior positions. Iliescu's involuntary exit signals the end of an era, and marks the commitment of mainstream PSD members to break with the party's communist past. End Summary. "Comrade" Iliescu Stumbles --------------------------- 2. (C) More than 1500 PSD delegates gathered April 21 in Bucharest's Palace Hall for the party's biannual congress. The congress was the first major meeting of the rank-and-file since the PSD's fall from power after the defeat of PSD candidate and former Prime Minister Adrian Nastase in December 12 presidential elections. In the weeks leading up to the congress, PSD heavyweights had attempted to choreograph an outcome for the congress in backroom meetings and elaborate power sharing arrangements. Iliescu was slated to be voted party President and Nastase as Executive President, with other key party "barons" retuned to senior leadership slots. Nonetheless, in the words of one PSD insider, events during the congress "turned these arrangements upside down." The PSD was clearly "gasping for democratic air..... it finally arrived." 3. (C) The backroom deals began to crumble in the Congress' first hour when Iliescu announced to the assembled delegates that we would give the floor to "Comrade" Nastase, a taboo term since the fall of communism. Although he quickly retracted his slip of the tongue, the delegates reacted with a collective gasp of astonishment, shocked laughter and a buzz of conversation that continued for the next several minutes. A few minutes later, Nastase attempted to make light of Iliescu's faux pas by addressing his remarks to "friends, colleagues and comrades." Delegates laughed appreciatively, but Iliescu's untoward remark hung in the air for the rest of the Congress. Some delegates remarked to PolOffs that Iliescu -- who chaired most of the proceedings -- strangely came across throughout the congress as an odd mix of a "befuddled grandfather" and "old school party apparatchik." His calls for votes by acclamation on organizational matters even resembled the structure of a Ceausescu era party meeting, with no calls for dissenting votes or abstentions. While many delegates expected that former FM Geoana would receive a respectable showing in his challenge against Iliescu for the party presidency, it was Iliescu's poor performance during that day that tipped the balance firmly in Geoana's favor. 4. (C) The nail in the coffin for Iliescu's bid to return to the helm of the party he founded was his wooden delivery in his two addresses to the assembled delegates. He offered no new vision for a party still trying to define itself after its December defeat and beleaguered by continued allegations of corruption and communist old-think. Rather than imparting inspiration and wisdom as some PSD contacts said they had hoped to hear, he simply said he had "no personal ambitions" and claimed to have the experience, authority, and morality necessary for returning to the helm of the PSD. He also called himself a "coagulant" who could bring the party together. Instead, as one PSD contact joked to PolOff, his support continued to "hemorrhage" throughout the day and evening. 5. (C) In stark contrast, a youthful and energetic Geoana delivered, in the words of Nastase, "the best speech of his political career." Geoana stated that he had delayed throwing himself into the competition for the party presidency because he expected a "top-down reform" that never came. He said now was the time to begin a "bottom-up transformation" to revitalize the party, and he promised delegates that he and other key reformers could effect that change. He referred to the previous weeks as "devastating" for the party, due partially to a growing scandal involving Syrian Businessman Omar Hayssam and some of PSD's most senior leaders. (Note: Credible reports tie Hayssam to the kidnapping of three Romanian news people in Iraq in a complicated scheme to launder money and/or escape judicial attention for various economic crimes.) He hoped for a PSD that "members would be proud of again" and urged delegates to end their current inertia in favor of implementing needed change. He extended an olive branch to Iliescu, assuring him that he would always have an important place in the party. However, he criticized his rival for failing to willingly step down in favor of the next generation. 6. (C) Geoana's calls for reform did not occur in a vacuum; he was preceded by a series of like-minded speakers who called for reform in the party, including his ally and former Interior Minister Ioan Rus, who proclaimed "a lack of vision is worse than blindness.... we need leaders who transform vision into action." He maintained that PSD "could not afford to move backwards." Rus also pointed out that PSD was failing to attract young voters, including the children of its own members. Rus' call for reform, coupled with his private support for Geoana, proved to be critical in turning the crowd. A Sea Change for PSD -------------------- 7. (C) The rising tide against Iliescu turned into a tsunami when key party leaders began to shift their support towards Geoana throughout the day. A key player was Mitrea, who has a strong local base in Vrancea country and developed an extensive network of friends and allies during his tenure as Transport Minister in the last government. Mitrea and his base were miffed by Iliescu's refusal to support the latter's candidacy for the party's number three slot of Secretary General. Mitrea -- along with several local leaders in his camp -- reportedly openly urged delegates in the lobby of the convention site to vote for Geoana. According to one contact, Mitrea easily swayed support towards Geoana by as much as 200-300 votes. At the same time, Rus' group, comprised loosely of delegates from ten Transylvania counties, brought several hundred additional votes for Geoana. Rus also urged his delegates to support Mitrea, in exchange for Mitrea's support for Geoana. Meanwhile, one PSD insider told post that PSD stalwarts -- Viorel Hrebenciuc, Octav Cozmanca, Dan Matei Agathon, and Dan Ion Popescu -- attempted to keep together alliances that they had relied on since the early 1990's. However, their pleas "fell upon deaf ears," as many delegates and emerging leaders saw them as liabilities for the party. Secret Ballot "Liberates" Party SIPDIS ------------------------------- 8. (C) At the same time, the implementation of a secret ballot was also fundamental in the outcome of the vote. The decision to move in this direction came as result of immense pressure after the December defeat to present a clear image of internal democratic reform. All previous elections for the PSD leadership had been orchestrated in backrooms without competition. PSD contacts confess openly that if that had been the formula again, Iliescu would have not even been challenged. In a speech at the congress, former PSD vice-president Sorin Oprescu asserted that the secret ballot was fundamental for party reform, as from then on no one could predetermine "who, how or what" the party would be. He compared the institution of secret ballots with the liberation of "slaves on a plantation." While various leaders were seen hovering by voting booths to pressure delegates, several PSD contacts told post that this was by far the most free internal vote the PSD rank-and-file have ever had. Others At The Top ----------------- 9. (C) Beyond Goeana's surprise victory, key reformers made headway in gaining other important positions in the new leadership structure, including seven of the eleven party vice presidencies. These include Rus; former Finance Minister Mihai Tanasescu; former Agriculture Minister Ilie Sarbu; former IT Minister Dan Nica; former party spokesperson Titus Corlatean; and leader of the PSD Women's Organization Rovana Plumb. However, several old faces remain. In fact, the number two and three slots in the party will be filled by Nastase as Executive President and Mitrea as Secretary General. Mitrea is closely associated with the old guard, whereas Nastase maintains important links both with party stalwarts and reformists. In additions, four solid Iliescu allies were among those elected to the eleven party vice president slots. These include respected ex-DefMin Ioan Mircea Pascu; Senate President Nicolae Vacaroiu; former Chamber of Deputies President Valer Dorneanu; and, Iliescu protege and longstanding adviser Corina Cretu. 10. (C) However, some of the PSD's most controversial longstanding political operatives, including several Iliescu allies, either failed to run for a VP slot or did not muster enough votes to win a position. Failed candidates include Bacau-based behind-the-scenes power broker Viorel Hrebenciuc, longstanding Iliescu crony and former national security adviser Ioan Talpes, Iliescu ally Dan Ioan Popescu, and ex-Tourism Minister Agathon. All four have been publicly linked with high profile corruption scandals. Perhaps sensing the handwriting on the wall, several other prominent PSD pols and longtime Iliescu allies declined to run for VP posts: Octav Cozmanca, Serban Mihaelescu, Ion Salcanu, and Doru Ioan Taracila. Comment: What a Difference a Day Makes -------------------------------------- 11. (C) Many analysts have likened Geoana's surprise ascension in the PSD to the December 12 surprise victory of center-right President Traian Basescu. Both events are milestones in Romania's democratic development, representing a clear break with the country's communist past. For the first time ever, the majority of PSD senior leaders do not track their roots to the senior levels of the former communist party. Geoana, Rus, and other reformers will continue to face entrenched opposition from some segments of the old guard, notably Mitrea and Nastase who remain in powerful positions. Also not to be underestimated is the economic and political clout of entrenched local organizations. Nonetheless, the reformers' victory means the PSD will now be better positioned to address the allegations of corruption and stagnation that have plagued the party for more than a decade. More fundamentally, these fresh but well-known faces may also ensure the PSD survives as a political force for the next elections and beyond. 12. AmEmbassy Bucharest's Reporting telegrams, as well as daily press summaries, are available on the Bucharest SIPRNet website: www.state.sgov.gov/p/eur/bucharest DELARE
31584 2005-04-27 14:23:00 05BUCHAREST1030 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 02 BUCHAREST 001030 SIPDIS DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: DECL: 04/27/2015 TAGS: PGOV, PREL, PTER, MOPS, IZ, RO, hostage, military cooperation SUBJECT: HOSTAGE CRISIS TESTS ROMANIAN PRESIDENCY; BASESCU VOWS TO STAY THE COURSE IN IRAQ Classified By: CLASSIFIED BY POLITICAL SECTION CHIEF ROBERT GILCHRIST F OR REASONS 1.4 B AND D 1. (C) Summary: The kidnapping and potential killing of three Romanian journalists presents an unprecedented challenge to President Traian Basescu, four months into his tenure. He has staked out a firm position in favor of strong transatlantic ties and a continued Romanian military contribution to Iraq and Afghanistan. However, to a degree unseen since the beginning of the war, many in the Romanian media and some mainstream politicians are now calling for withdrawal. If the hostages are killed, Basescu and the government may also face scrutiny over their handling of the crisis, effectively a first scratch in what so far has been a "teflon" presidency. The terrorists' taped threat to kill the hostages on April 26 has intensified pressure on the government and captivated a nation glued to television screens. Basescu has told us he plans to stay the course and will not succumb to the terrorists' demands. End Summary. Cynicism Becomes Horror ----------------------- 2. (C) The March 28 kidnapping of three Romanian journalists and their American-Iraqi guide, Mohammad Munaf, has dominated Romanian news headlines in recent weeks. In the early days, however, the media and much of the public had become convinced that the kidnapping was merely the work of wealthy Romanian-Syrian businessman Omar Hayssam. According to general media opinion, Hayssam had been involved in nefarious business deals linked to prominent members of the opposition Social Democratic Party (PSD). He now sought to orchestrate a crisis that he could solve and thus win the favor of Romania's new leadership. This view was also shared by some in government. Hayssam's arrest by the Romanian police on April 5 convinced many Romanians that the crisis would soon be resolved. This seemed to be confirmed by the fact that the initial videotape of the hostages on March 31 did not resemble the tapes released by known Iraqi terrorist groups. Perpetual rumors that the hostages had been freed and were being secretly detained by the Romanian or U.S. governments added to many Romanians' misplaced optimism. 3. (C) The release of a second tape on April 22, however, marked the beginning of a new stage in the crisis, focusing public attention on the true plight of the hostages. With the terrorists holding guns against their heads, the distressed hostages in the tape stated the kidnappers planned to kill them if the Romanian government did not withdraw Romanian troops from Iraq within four days. A third videotape, broadcast by Al-Jazeera on April 26, set a new deadline of 17:00, April 27. The release of the third tape followed a telephone call earlier in the day in which kidnappers announced the same deadline to the news director of the Romanian television station employing two of the hostages. Wavering Public Resolve ----------------------- 4. (C) In addition to the horror many have expressed in response to the crisis, in recent days there have also been new calls for the government to reevaluate its troop commitment to Iraq. Covered extensively in the news have been public demonstrations in Bucharest and other major cities to show solidarity for the victims and to call for their release. Mixed with these messages have been emotional calls, including by the victims parents, for the withdrawal of Romanian troops. These sentiments have also drifted into political rhetoric, particularly that of opposition politicians. Former Foreign Minister and new PSD leader Mircea Geoana April 25 urged President Basescu develop "correct balance" toward a calendar for troop withdrawal without giving the image that Romania has yielded to "political blackmail." (Comment: Geoana immediately called the Charge to "explain" his position, agreeing that Romanian troops, in fact, should not be withdrawn unless conditions on the ground permitted. Charge also told Geoana that his rhetoric ran a risk - in that "calls for a calendar could develop expectations for a near-term withrdrawal." End comment) Some PSD leaders have also criticized Basescu for not having an "exit strategy" from Iraq. On April 26, one of the victims' father, who is also a PSD senator, tearfully called upon the population to organize peaceful demonstrations so that troops could be withdrawn beginning immediately. He emotionally declared that the most recent videotape showed young people who looked like they did not have much time to live. Late afternoon April 27, roughly thousand protesters marched peacefully down a major Bucharest thoroughfare calling for troops to depart. 5. (SBU) Politicians from lesser parties have also joined the fray. The crisis has been a mainstay in publications of the extreme nationalst Greater Romania Popular Party (PPRM), with PPRM leader Corneliu Tudor calling for an immediate withrawal of Romanian troops from Iraq and Afghanistan. Dan Voiculescu, leader of the small Romanian Humanist Party (PUR) has similarly called for a withdrawal and even volunteered to travel to Iraq to exchange himself for the three journalists. PUR is a member of the center-right governing coalition. The Parliament is scheduled to debate the crisis further in a joint session the afternoon of April 27. 6. (SBU) While most public voices recognize that ceding immediately to the terrorists' demand would be the equivalent of succumbing to blackmail, the crisis has provoked far greater discussion on Romania's troop presence in Iraq than ever before. The evolution of this crisis has dovetailed with Romania's first combat death in Afghanistan since October 2003. Public polling on Romania's troop contribution -- which was scarce during the last two years of PSD government -- has now begun to appear more regularly in daily newspapers. A Center for Urban and Regional Sociology (CURS) blitz poll conducted April 23-24 asked respondents if Romania should withdraw its troops in response to the terrorist demands in order to save lives -- 70 percent said "yes" and 18 percent "no", with 12 percent "no response/don't know. When asked whether or not troops should be withdrawn irrespective of the journalists fate, 57 percent said "yes," 33 percent "no," and 10 percent "don,t know/don,t answer." Another CURS poll carried before the crisis showed similar figures. (Note: The CURS poll was sponsored by PUR leader Voiculescu, already firmly out in front in opposition to Romanian participation in Iraq.) Basescu/Tariceanu Stand Firm ---------------------------- 7. (C) The Government's public reaction has been to stress that it is doing everything possible to free the victims without yielding to the terrorists. Prime minister Calin Popescu-Tariceanu April 26 made a televised appeal for Romanians to trust the authorities and to refuse to endorse kidnappers, demands. He said that the pressure to give-in is increasing, but he reassured the public that the authorities are acting responsibly, know how to handle the situation, and will make every effort to release the hostages. Basescu -- who has been repeatedly criticized by the media for being too opaque about the crisis -- has relied largely on press statements released by his spokesperson. Some media analysts have asserted that Basescu has micromanaged the crisis without consulting advisors, cabinet members, or other key political players. 8. (U) Mid-afternoon April 27 Romania's top defense officials issued a press release urging the terrorists to extend the deadline. They also asked Sunni religious leaders to become involved in freeing the hostages, including through negotiations. 9. (C) Comment: In his conversations with Charge, Basescu continues to emphasize that Romania will not succumb to blackmail and will stay the course in Iraq. Given his strong commitment over time to such a policy, we believe that his determination is steadfast. Nonetheless, the ongoing hostage crisis has prompted the most intense debate yet over Romania's troop commitment to Iraq. It also marks the first real test of Basescu's presidency. We share the view of some in the media that Basescu has centralized decision-making on the hostage situation. Indeed, the crisis has prompted several of his senior advisors to approach us requesting long-term assistance on crisis management and organization structure. We are now looking at options to provide such assistance. More fundamentally, however, we continue to reassure Basescu that we are doing all we can -- at multiple levels -- to assist him and his government during this trying time. End Comment. 10. (U) Amembassy Bucharest,s reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest . 11. (U) Minimize considered. DELARE
31587 2005-04-27 14:37:00 05BUCHAREST1031 Embassy Bucharest UNCLASSIFIED UNCLAS BUCHAREST 001031 SIPDIS FOR AID/OFDA: ROBERT ANDREW, ALEX MAHONEY AID/E&E/ECA: NSTUDZINSKI, SBERRY RSC/DIR: JKIRKLAND E.O. 12958: N/A TAGS: EAID, RO, disaster relief, flood SUBJECT: DECLARATION OF DISASTER - ROMANIA 1. SUMMARY: In response to heavy damage caused by recent storms and floods, the Embassy hereby declares that a state of disaster exists in seven counties located mainly in the West and South-Western parts of Romania and requests $50,000 to be provided to assist in the relief effort. END SUMMARY 2. During April 21-24, 2005, heavy rains and floods struck seven counties in Romania. The Ministry of Environment and Water Management reported that floods damaged more than 3,700 houses in 175 communities and destroyed about 43,000 hectares of crops. Also, 339 bridges were destroyed and 340 kilometers of county roads became inaccessible. As a result, many areas are left without potable water and electricity. Roads and railroads are also flooded, especially near the border with Serbia-Montenegro. One person lost her life and 3,350 were evacuated from their homes. 3. The storms have imposed an excessive burden on the Government of Romania (GOR) and we anticipate that the disaster will have a significant negative impact on the economy of the devastated counties. The most severely affected counties are Arad, Bihor, Caras-Severin, Hunedoara, Mehedinti, Suceava, and Timis. A preliminary estimate of the losses ranges from ROL 500 billion to 700 billion (USD 18 - 25 million). In Timis, the most affected county, the state of alert was declared yesterday. 4. The GOR is providing food, water, sleeping bags, tents, and medicines in the affected communities, but the basic requirements are far beyond the capacity of the local emergency services. The GOR's ability to meet most immediate needs is extremely limited. USG funding is requested to help to compensate by providing urgently needed assistance, especially to those families whose dwellings have been totally destroyed and who are now evacuated from their homes. 5. Ms. Lucia Ana Varga, Secretary of State, Ministry of Environment and Water Management, has written to the USAID Director requesting emergency disaster assistance for the people living in the worst affected areas. 6. I, therefore, declare that a state of disaster exists in the Arad, Bihor, Caras-Severin, Hunedoara, Mehedinti, Suceava, and Timis counties which are affected by the heavy rains and floods. 7. For OFDA: Embassy requests $50,000 be allotted telegraphically to USAID, as authorized in OFDA Disaster Assistance Guidance, to initiate an intervention in support of the victims affected by floods. Please direct fund citation to RSC/RFMO Budapest and USAID/Romania. 8. USG assistance will be focused primarily in the Foeni and Otelec communes, located in Timis county. Commodities will also be supplied to other severely affected communities of Timis and Caras-Severin counties. We anticipate that around 1,250 people will receive direct assistance. 9. We plan to use the USAID funds to procure emergency relief commodities consisting of water, personal hygiene kits, food supplies, well water purification kits, and portable gas stoves. The assistance will be coordinated with county authorities. 10. Our plan is to procure the services of World Vision to provide the emergency assistance. World Vision has successfully implemented similar humanitarian assistance for USAID/Romania during the past three years. DELARE
31628 2005-04-28 09:22:00 05BUCHAREST1035 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS SECTION 01 OF 03 BUCHAREST 001035 SIPDIS STATE FOR EUR/NCE - WSILKWORTH, EB/IFD, D STAFF - WILSON STATE PASS USTR USTR FOR LERRION TREASURY FOR STUART USDOC FOR 4232/ITA/MAC/EUR/OEERIS/CEEB/BURGESS/KIMBALL STATE PASS USAID SENSITIVE E.O. 12958: N/A TAGS: ECON, ETRD, EIND, EFIN, RO SUBJECT: TAX REVENUES IN ROMANIA SHOW IMPRESSIVE GROWTH IN FIRST QUARTER OF 2005 REF: BUCHAREST 000130 SENSITIVE BUT UNCLASSIFIED SUMMARY ------- 1. (SBU) Romania's budget revenues soared in the first three months of 2005. Embassy attributes this to a variety of factors, including unexpectedly high GDP growth in 2004, wider general tax compliance (perhaps linked to the new flat tax) and the threat of increased tax collection enforcement. However, corrupt mid-level managers continue to compromise tax collection efforts within the fiscal authority. End Summary Higher Tax Revenues. -------------------- 2. (U) According to preliminary data released in early April by the Ministry of Finance (MOF), first quarter consolidated budget revenues grew to nearly Romanian Lei (ROL) 177.9 trillion, or approximately $6.3 billion up from nearly ROL 153.2 trillion, the equivalent of $4.7 billion, during the same period in 2004. The MOF stated that revenues increased more than ROL 8.38 trillion in January, ROL 5.39 trillion in February, and ROL 10.94 trillion in the first 23 days of March 2005 when compared with the same period in 2004. The aggregate three-month increase over the same period in 2004 amounted to ROL 24.7 trillion, the equivalent of $1.5 billion. The MOF believes in the sustainability of these trends, and points to the elimination of tax relief and tax rescheduling options as one reason for optimism. The GOR also claims to see an overall widening of the tax base due to a mix of economic growth and conversion of grey market revenue to the legitimate economy. .Above Budget Forecasts ----------------------- 3. (U) These higher revenues came in above the previous government's planning targets for 1Q 2005, in spite of the flat tax. Forecasts made in 2004 predicted consolidated budget revenues for the first quarter 2.6 percent lower than actual results. Corporate profit tax collection was up 13.9 percent from projected, although the lower tax on personal income resulted in numbers 7.1 percent lower than initially expected. The increase in revenues from corporations was likely due both to greater enforcement and unexpectedly high growth. Other areas that benefited from tighter policing include customs, with revenues up 16.1 percent from projected, and VAT collections, up 5.0 percent. Revenues from excise taxes were lower than planned, mainly due to the GOR's January 1 elimination of excises on certain categories of electronic goods, such as digital cameras. This decision was later repealed in March after conversations with the IMF. Municipal contributions to the GOR budget also exceeded projections by 9.4 percent. 4. (U) The previous government based its 2005 tax revenue projections on an estimated GDP growth rate of 5.3%. However, the Ministry of Finance has not yet calculated growth for the first quarter to determine how it compares with projected. Without this statistic, it is not possible to determine to what extent increased tax revenue is a result of unexpectedly fast economic growth versus greater tax collection efforts. Flat Tax Starting to Show its Effects? -------------------------------------- 5. (U) Another factor contributing to increased tax revenues may be the "flat tax" that is now in effect. On December 29, 2004, the new Romanian coalition government passed an emergency ordinance fulfilling its campaign promise to implement flat personal and corporate tax rates effective January 1, 2005. The new government hailed this 16 percent tax as a method of attracting foreign investment, boosting job growth and remaining competitive as Romania approaches EU membership in 2007. Excluding Georgia (12 percent), the flat tax on corporate profits is the region's lowest. 6. (U) According to common economic wisdom, the imposition of a flat tax should cause a dip in income tax revenues for a time before showing a rise. The data from the first quarter of 2005 show glimmers of this. For example, an expected decrease in revenues from individual tax payers was evident, but much less severe than many analysts predicted, considering the ten percentage-point average drop in personal tax rates due to the flat tax. The possibility, however, that 2004 taxes (at the higher tax rates) were being paid into the GOR's coffers in 2005 make the picture too uncertain to make any explicit linkages to the flat tax at this point. Government Clamp-Down on Tax Dodgers ------------------------------------ 7. (U) A third element in increased 2005 revenues is probably the "fear factor." President Basescu has made the fight against corruption a matter of national security and the GOR has initiated a flurry of investigations against high-profile "businessmen." Pragmatism also drives the anti- corruption strategy, since the GOR is faced with increased spending requirements in preparation for EU membership in 2007 and lower tax rates must necessarily go hand-in-hand with increased tax enforcement. 8. (U) To this end, on April 7, the GOR approved a draft law making tax evasion equivalent to a felony crime. This legislation, now being debated by the Senate Budget and Legal Commissions, imposes jail sentences for tax evaders on a clear sliding scale, leaving little room for creative court interpretation. Penalties increase based upon the amount owed. Three to ten years of prison is prescribed for those owing at least EURO 10,000; four to 12 years for those owing at least 100,000 Euros; five to 16 years for those owning at least 500,000; between 10 and 20 years for those at least EURO 1 million; and 3 to 15 years for those making illegal VAT reimbursements. Persons barring fiscal authorities from inspecting corporate property would be punished though jail terms ranging from six months to three years. 9. (U) When the Senate Commissions complete their debates, the draft law will arrive in the two houses of Parliament for further debates and revisions. Once the law is passed, it would normally come into force within thirty days, unless the Parliament decides upon a longer transition period. U.S. Department of the Treasury Advisors Propose Changes --------------------------------------------- ----------- 10. (SBU) Romania welcomes USG ideas on how to move from the theory of tax collection to practical methods of enforcement. Members of the U.S. Department of the Treasury's Office of Technical Assistance from March 28 to April 8, traveled to Bucharest to review the MOF's methods of collecting tax revenues. The team identified ways to increase tax receipts quickly by improving the collection process. Suggestions included sending letters to delinquent tax payers threatening seizure of property for nonpayment, focusing GOR resources on the highest monetary value cases, expanding the use of installment agreements and ceasing to waste efforts on unsalvageable cases. More ambitious ideas include legislative changes to limit taxpayer ability to contest minor government errors and the augmentation of MOF authority to seize assets and proceed against managers responsible for non-payment of taxes of a legal entity. 11. (SBU) MOF Secretary of State Sebastian Bodu who heads up the Agency for Fiscal Administration (AFA) concluded that the GOR could implement some of the recommendations, although he rejects installment payments in a nod to the IMF's more conservative fiscal policies. Mr. Bodu is most concerned, however, about the corrupt mid-level managers that persist throughout the fiscal administration agency, and is frustrated with his inability to clean house due to restrictions on firing civil servants. He hopes to create an internal investigation unit, partially composed of law enforcement officers, in an attempt to examine reports of employee malfeasance. If created, this unit would have the authority to arrest those suspected of corruption. Comment ------- 12. (SBU) Post is encouraged by the preliminary three-month tax collection data, although a longer time horizon is necessary to formulate a solid opinion on sustainability and the true full effect of the imposition of the flat tax. In addition, the GOR made amendments to the fiscal code in March which raised taxes on banking interest, capital gains, and real estate gains beginning in the second quarter. A number of excise taxes also increased on April first. Thus, three to six months of additional data are needed to come to meaningful conclusion. Nonetheless, Post is cautiously optimistic that revenues will continue to climb since Romania seems to be in a solid growth mode. 13. (SBU) An even larger problem looming for the GOR, however, is the continuation of a high level of mid-manager corruption within the AFA. This will continue to impede tax collection efforts until Mr. Bodu is given the necessary tools for reform. Post recently held an interagency brain storming session to identify ways to assist the AFA and offer training and suggestions; several ideas were proposed and their feasibility is currently being investigated. Delare
31654 2005-04-28 14:00:00 05BUCHAREST1044 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS SECTION 01 OF 03 BUCHAREST 001044 SIPDIS STATE FOR EUR/NCE - WSILKWORTH, EB/IFD, D STAFF - WILSON STATE PASS USTR USTR FOR LERRION TREASURY FOR STUART USDOC FOR 4232/ITA/MAC/EUR/OEERIS/CEEB/BURGESS/KIMBALL STATE PASS USAID SENSITIVE E.O. 12958: N/A TAGS: ECON, ETRD, EIND, EFIN, RO SUBJECT: TAX REVENUES IN ROMANIA SHOW IMPRESSIVE GROWTH IN FIRST QUARTER OF 2005 REF: BUCHAREST 000130 SENSITIVE BUT UNCLASSIFIED SUMMARY ------- 1. (SBU) Romania's budget revenues soared in the first three months of 2005. Embassy attributes this to a variety of factors, including unexpectedly high GDP growth in 2004, wider general tax compliance (perhaps linked to the new flat tax) and the threat of increased tax collection enforcement. However, corrupt mid-level managers continue to compromise tax collection efforts within the fiscal authority. End Summary Higher Tax Revenues. -------------------- 2. (U) According to preliminary data released in early April by the Ministry of Finance (MOF), first quarter consolidated budget revenues grew to nearly Romanian Lei (ROL) 177.9 trillion, or approximately $6.3 billion up from nearly ROL 153.2 trillion, the equivalent of $4.7 billion, during the same period in 2004. The MOF stated that revenues increased more than ROL 8.38 trillion in January, ROL 5.39 trillion in February, and ROL 10.94 trillion in the first 23 days of March 2005 when compared with the same period in 2004. The aggregate three-month increase over the same period in 2004 amounted to ROL 24.7 trillion, the equivalent of $1.5 billion. The MOF believes in the sustainability of these trends, and points to the elimination of tax relief and tax rescheduling options as one reason for optimism. The GOR also claims to see an overall widening of the tax base due to a mix of economic growth and conversion of grey market revenue to the legitimate economy. .Above Budget Forecasts ----------------------- 3. (U) These higher revenues came in above the previous government's planning targets for 1Q 2005, in spite of the flat tax. Forecasts made in 2004 predicted consolidated budget revenues for the first quarter 2.6 percent lower than actual results. Corporate profit tax collection was up 13.9 percent from projected, although the lower tax on personal income resulted in numbers 7.1 percent lower than initially expected. The increase in revenues from corporations was likely due both to greater enforcement and unexpectedly high growth. Other areas that benefited from tighter policing include customs, with revenues up 16.1 percent from projected, and VAT collections, up 5.0 percent. Revenues from excise taxes were lower than planned, mainly due to the GOR's January 1 elimination of excises on certain categories of electronic goods, such as digital cameras. This decision was later repealed in March after conversations with the IMF. Municipal contributions to the GOR budget also exceeded projections by 9.4 percent. 4. (U) The previous government based its 2005 tax revenue projections on an estimated GDP growth rate of 5.3%. However, the Ministry of Finance has not yet calculated growth for the first quarter to determine how it compares with projected. Without this statistic, it is not possible to determine to what extent increased tax revenue is a result of unexpectedly fast economic growth versus greater tax collection efforts. Flat Tax Starting to Show its Effects? -------------------------------------- 5. (U) Another factor contributing to increased tax revenues may be the "flat tax" that is now in effect. On December 29, 2004, the new Romanian coalition government passed an emergency ordinance fulfilling its campaign promise to implement flat personal and corporate tax rates effective January 1, 2005. The new government hailed this 16 percent tax as a method of attracting foreign investment, boosting job growth and remaining competitive as Romania approaches EU membership in 2007. Excluding Georgia (12 percent), the flat tax on corporate profits is the region's lowest. 6. (U) According to common economic wisdom, the imposition of a flat tax should cause a dip in income tax revenues for a time before showing a rise. The data from the first quarter of 2005 show glimmers of this. For example, an expected decrease in revenues from individual tax payers was evident, but much less severe than many analysts predicted, considering the ten percentage-point average drop in personal tax rates due to the flat tax. The possibility, however, that 2004 taxes (at the higher tax rates) were being paid into the GOR's coffers in 2005 make the picture too uncertain to make any explicit linkages to the flat tax at this point. Government Clamp-Down on Tax Dodgers ------------------------------------ 7. (U) A third element in increased 2005 revenues is probably the "fear factor." President Basescu has made the fight against corruption a matter of national security and the GOR has initiated a flurry of investigations against high-profile "businessmen." Pragmatism also drives the anti- corruption strategy, since the GOR is faced with increased spending requirements in preparation for EU membership in 2007 and lower tax rates must necessarily go hand-in-hand with increased tax enforcement. 8. (U) To this end, on April 7, the GOR approved a draft law making tax evasion equivalent to a felony crime. This legislation, now being debated by the Senate Budget and Legal Commissions, imposes jail sentences for tax evaders on a clear sliding scale, leaving little room for creative court interpretation. Penalties increase based upon the amount owed. Three to ten years of prison is prescribed for those owing at least EURO 10,000; four to 12 years for those owing at least EURO 100,000; five to 16 years for those owning at least EURO 500,000; between 10 and 20 years for those at least EURO 1 million; and 3 to 15 years for those making illegal VAT reimbursements. Persons barring fiscal authorities from inspecting corporate property would be punished though jail terms ranging from six months to three years. 9. (U) When the Senate Commissions complete their debates, the draft law will arrive in the two houses of Parliament for further debates and revisions. Once the law is passed, it would normally come into force within thirty days, unless the Parliament decides upon a longer transition period. U.S. Department of the Treasury Advisors Propose Changes --------------------------------------------- ----------- 10. (SBU) Romania welcomes USG ideas on how to move from the theory of tax collection to practical methods of enforcement. Members of the U.S. Department of the Treasury's Office of Technical Assistance from March 28 to April 8, traveled to Bucharest to review the MOF's methods of collecting tax revenues. The team identified ways to increase tax receipts quickly by improving the collection process. Suggestions included sending letters to delinquent tax payers threatening seizure of property for nonpayment, focusing GOR resources on the highest monetary value cases, expanding the use of installment agreements and ceasing to waste efforts on unsalvageable cases. More ambitious ideas include legislative changes to limit taxpayer ability to contest minor government errors and the augmentation of MOF authority to seize assets and proceed against managers responsible for non-payment of taxes of a legal entity. 11. (SBU) MOF Secretary of State Sebastian Bodu who heads up the Agency for Fiscal Administration (AFA) concluded that the GOR could implement some of the recommendations, although he rejects installment payments in a nod to the IMF's more conservative fiscal policies. Mr. Bodu is most concerned, however, about the corrupt mid-level managers that persist throughout the fiscal administration agency, and is frustrated with his inability to clean house due to restrictions on firing civil servants. He hopes to create an internal investigation unit, partially composed of law enforcement officers, in an attempt to examine reports of employee malfeasance. If created, this unit would have the authority to arrest those suspected of corruption. Comment ------- 12. (SBU) Post is encouraged by the preliminary three-month tax collection data, although a longer time horizon is necessary to formulate a solid opinion on sustainability and the true full effect of the imposition of the flat tax. In addition, the GOR made amendments to the fiscal code in March which raised taxes on banking interest, capital gains, and real estate gains beginning in the second quarter. A number of excise taxes also increased on April first. Thus, three to six months of additional data are needed to come to meaningful conclusion. Nonetheless, Post is cautiously optimistic that revenues will continue to climb since Romania seems to be in a solid growth mode. 13. (SBU) An even larger problem looming for the GOR, however, is the continuation of a high level of mid-manager corruption within the AFA. This will continue to impede tax collection efforts until Mr. Bodu is given the necessary tools for reform. Post recently held an interagency brain storming session to identify ways to assist the AFA and offer training and suggestions; several ideas were proposed and their feasibility is currently being investigated. Delare
31740 2005-04-29 12:47:00 05BUCHAREST1062 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 02 BUCHAREST 001062 SIPDIS STATE FOR EUR/NCE - WILLIAM SILKWORTH STATE ALSO FOR CA/OCS/CI - BALLIF AND BERNIER-TOTH E.O. 12958: DECL: 04/29/2015 TAGS: PREL, CASC, PGOV, SOCI, RO, EU, adoption SUBJECT: ROMANIA: DEMARCHE CONCERNING PENDING INTERNATIONAL ADOPTION CASES REF: STATE 73821 Classified By: CHARGE D'AFFAIRES THOMAS DELARE FOR REASONS 1.4 B AND D 1. (C) Begin Summary: Recent conversations with the President,s domestic affairs advisor and the State Secretary for Adoption Affairs reveal substantial philosophical opposition to international adoption and even concern about alleged irregularities in the registration of such cases. This is despite general acknowledgment of the pledge made by President Basescu in the White House to find a solution to the problem of so-called &pipeline cases.8 Romania is currently engaged in a &protection plan8 that entails the case review of every child abandoned in Romania, with the expressed intent of reuniting such children with their birth parents if possible, or with other Romanian families. Even if not specifically targeting U.S. adoptive families, the on-going program may drastically reduce the total number of pipeline cases. End Summary. 2. (C) Charge called upon Presidential Domestic Affairs Advisor Claudiu Saftoiu on April 23rd and raised reftel points concerning pending international adoption cases. Saftoiu readily acknowledged the commitment made by President Basescu during his recent White House visit to seek resolution of the so-called &pipeline cases8 and said he will attempt to &work8 this category of adoptions. Charge also warned that formal signature of Romania,s scheduled entry into the EU on April 25 would mark the beginning of a much more active campaign on our part to secure changes in Romanian adoption law and practices. In a later conversation that day, Saftoiu reported that he had briefed the President on our demarche. 3. (C) Unfortunately, Saftoiu would not directly reply to Charge's questions about implementation of the Child Welfare/Adoption Law. Charge stressed that implementation should not target prospective international adoption cases as the government investigated whether birth parents or extended families were now in a situation to take back children from institutional care. Saftoiu responded that he had just been briefed by Theodora Berti, State Secretary of the Romanian Office for Adoption, who told him that many of the international pipeline cases had been registered after the 2001 moratorium on international adoptions went into effect were regarded as &corrupt8. Charge urged Saftoiu to seek more concrete information on ostensible corruption so that we might find a way forward without that damaging charge hanging over the process. 4. (U) On April 26, the Consul General (CG) called on Berti to inquire how the GOR planned to proceed on the adoption question following the April 25 signing of the EU agreement, and to follow up Charge,s conversation with Saftoiu. 5. (U) Berti stated that she had no evidence that corruption per se was involved in the registration of any adoption request by U.S. citizens. But she did aver that unspecified irregularities may have been in play. Regarding the specific &targeting8 of U.S. adoptive parents, she claimed that the ROA is creating a &protection plan8 for every abandoned child in Romania, not only for those matched with U.S. families. That process will be completed in July, and will include scrutiny for any evidence of corruption. After July, the ROA will consider whether to recommend the GOR create an international commission to assess "exceptional8 cases for potential international adoption. Berti doubts that such a commission would be needed, believing that there are domestic solutions ) family reunification or domestic adoption ) for all the children. 6. (U) Other foreign embassies have withdrawn many cases pending international adoption since January 1, Berti said, and have followed up with lists of cases of exceptional humanitarian concern. CG declined to provide such a list of U.S. cases, as our position is that child welfare experts should determine the best interests of each child in a legal, transparent process. 7. (SBU) Asked whether there was any hope that cases registered during the moratorium could ever be processed for international adoption, Berti responded that, at present, Romanian law and the philosophy the GOR has adopted preclude international adoption except by biological grandparents. The ROA will try to resolve cases that were registered during the moratorium if current law allows, for example by recommending approval of Romanian residency for foreigners seeking both to become residents and adopt Romanian children. (Note: This same option was raised by Saftoiu with the Charge, but the latter dismissed it as impractical and missing the point. End Note.) 8. (SBU) COMMENT: Despite President Basescu's commitment for positive action on the adoption issues, we see no movement by the GOR towards processing the pending international adoption cases to conclusion. Rather, the ROA has more explicitly embraced opposition to international adoption, in part out of philosophical conviction and, in part, owing to an admitted fear of EU criticism. Assistant Secretary Maura Harty,s upcoming May 10-11 visit to Bucharest will be an important opportunity to emphasize to the GOR leadership the importance the USG places on finding a legal, transparent method for processing to conclusion international adoption cases registered before the ban. DELARE
31749 2005-04-29 13:36:00 05BUCHAREST1063 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 04 BUCHAREST 001063 SIPDIS STATE DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: DECL: 04/29/2015 TAGS: MARR, MASS, PGOV, PREL, PINR, PINS, ENRG, SENV, ECON, TU, GG, RS, UP, UK, RO, NATO SUBJECT: BLACK SEA CONFERENCE HIGHLIGHTS ROMANIAN EFFORTS TO DEFINE A REGIONAL SECURITY STRATEGY REF: BUCHAREST 429 (AND PREVIOUS) Classified By: POLITICAL SECTION CHIEF ROBERT S. GILCHRIST FOR REASONS 1.4 A, B AND D 1. (C) Summary. An April 20 conference on strategic opportunities in the Black Sea region permitted Romanian President Basescu to highlight his view that democratic stability, security, and prosperity in the region depended on Euro-Atlantic cooperation. He also emphasized that Romanian strategic thinking will become less reactive, and in recognition of widespread democratic change, will seek development of more intensive relationships with neighboring states. Basescu's remarks, together with his sponsorship of the conference, reflect his hands-on, highly engaged approach to developing Romania's foreign policy, especially in regard to its immediate neighbors. They also illustrate that Romania is still seeking to define and execute a coherent and comprehensive Black Sea regional strategy. The Embassy Charge d'Affaires emphasized Euro-Atlantic institutions, including NATO, and called for a broader definition of the challenges and opportunities facing the region. Other speakers also evoked the importance of anchoring the region to Euro-Atlantic institutions. On the other hand, two Western European speakers outlined a "Euro-centric" vision that contrasts with Romania's support for a more robust NATO role in the region. End Summary. 2. (SBU) President Basescu delivered the keynote address at an April 20 Bucharest conference on "Black Sea Area and Euro-Atlantic Security: Strategic Opportunities," sponsored by the Romanian Presidency's National Security Department and supported by the U.S., UK, and German Embassies as well as the George C. Marshall European Center for Security Studies. In his remarks, Basescu stressed that the Black Sea area needs "a real Euro-Atlantic strategy designed to ensure democratic stability, security and prosperity." He also noted that three countries in the Black Sea area are NATO members while others are members of the Partnership for Peace or have developed special relationships with NATO. Basescu, who has repeatedly referred to a "Washington-London-Bucharest axis," dismissed concerns voiced in some Western European quarters that the GOR has moved too close to the U.S. and UK, adding that both countries have a "special interest" in the Black Sea region and that Romania should take advantage of the region's strategic opportunities. 3. (SBU) Basescu pointedly claimed that Romania had now completed its transition to democracy and had now entered into a period of "normalcy". He foreshadowed themes we expect to see in Romania,s Defense White Paper shortly, namely * that Romania would no longer be merely a "consumer of security", but would also be a provider. Formulating the idea a little differently, he then said that Romanian strategy would be less reactive, and would instead become more anticipatory of possible threats. Looking at the Black Sea region, he called it vital to Romanian interests, and noted that "our region can no longer be considered on the periphery of Europe, but in the midst of an active geopolitical process." Noting that he is an "optimist," Basescu continued "at the present time the Black Sea zone is, first of all, a zone of strategic opportunities. The principal risk. . .is losing momentum" in dealing with pressing issues. These include "bad governance, frozen conflicts, arms, narcotics and human trafficking, organized crime, and extremist-separatist movements (which) constitute strategic risks for the security of the Euro-Atlantic community." 4. (U) Charge d'Affaires also delivered a keynote address in which he stressed the importance of defining geographic parameters of the somewhat ambiguous "Black Sea region," given that there is no accepted definition of the term. He focused on the importance of adopting a holistic, integrated approach to security, democratization and economic development. He further recommended incremental, tangible steps toward concrete goals, channeling efforts through existing multilateral institutions with proven track records, particularly NATO. The Charge observed that policy makers are increasingly coming to recognize the importance of the Black Sea region, especially given that the end of the Cold War, the spread of democratic institutions and values and increased economic development have increased opportunities for constructive engagement in the region. He noted that these factors have contributed to a geopolitical reality in which the Black Sea region presents a historical opportunity for multilateral engagement and cooperation. 5. (C) The British Ambassador to Bucharest outlined in general terms the risks facing the region, including trafficking in narcotics, persons, and arms, observing that the "Black Sea must not become a Black hole." The UK envoy also expressed support for extending an "Operation Endeavor type program in the Black Sea." (Note: The British Defense Attache subsequently clarified to PolOff, however, that HMG favors this extension if all littoral states are in accord. End Note.) A "Euro-Centric" View of Black Sea Security? -------------------------------------------- 6. (C) Two Western European speakers implicitly called into question a major NATO role in the Black Sea region, stressing instead a "Euro-Centric" vision. Norbert Baas, Special Envoy of the German Federal Government for Eastern Europe, Caucasus and Central Asia, gave a keynote address that stressed the primacy of European institutions and praised BLACKSEAFOR as a "key tool." Baas gave only a brief nod to NATO at the end of his remarks, when he noted that NATO engages in useful dialogue with Russia and Ukraine. One member of the audience later remarked that Baas' remarks contained nary a hint that Romania and Germany are both members of the NATO Alliance. 7. (C) Later in the conference (when two thirds of the participants had already departed), Onno Simons, the Deputy of Head of the European Commission in Bucharest, cited "prevailing tension between European models and non-European models" in the Black Sea region. Simons outlined four EU priorities for the region: addressing hard security issues, including frozen conflicts; solving soft security issues, such as TIP and organized crime; giving proper attention to energy issues; creating a stable trade and investment climate. Simons added that Romania could make a "contribution" to development of an EU security policy, but did not address a NATO role in the region. Marshall Center Professor Detlef Puhl offered a more balanced "European view," opining that a Black Sea strategy should be "inclusive," incorporating a role for NATO as well as compatible with EU issues. 8. (SBU) Other speakers explicitly called for a more robust NATO role in the region (a view strongly endorsed by the GOR). Cristian Istrate, Director General of the MFA's Strategic Policy Division, underscored that the Black Sea area should be "anchored" to Euro-Atlantic institutions and praised the NATO Istanbul Summit's evocation of Black Sea security issues, concluding that regional security cooperation should be "a win-win instead of zero sum game." Bulgarian Ambassador to Romania Konstantin Andreev also evoked the Istanbul Summit Declaration and described the Black Sea region as an "indispensable part of Euro-Atlantic security." Dr. Jeffrey Simon of the National Defense University expressed support for creation of a NATO Black Sea/Caucasus strategy and proposed creation of a NATO "Black Sea Group." Chamber of Deputies Defense Commission President Mihai Stanisoara stated that EU and NATO should jointly create a "strategic umbrella" over the region. A Diversity of Regional Themes ------------------------------ 9. (C) The conference did not have a single focus, but explored in a general fashion a number of themes, including energy issues and the apparent lack of a Black Sea regional identity. It provided a forum for speakers, and participants in the question and answer sessions, to explore diverse themes related to Black Sea security: - Common challenges: The speakers shared a broad consensus on the principal risks facing the region, including frozen conflicts, economic disparities, uneven democratic development, and trafficking in persons, narcotics, conventional weapons, and WMD. At the same time, speakers generally agreed that a shared commitment to democratic values (albeit in varying degrees throughout the area) bodes well for the development of multilateral solutions to regional challenges. - Energy: Senior Presidential Adviser and National Liberal Party (PNL) elder statesman Teodor Stolojan underscored early in the conference that "energy security is the key" to the Black Sea Region, a view shared by a number of other speakers. Professor Roger Kangas of the Marshall Center stated that access to energy reserves to the east of the Black Sea littoral is an important element in the region's security. - Black Sea "Identity": Several speakers questioned whether a "Black Sea identity" exists, with the NDU's Dr. Simon contrasting the historical presence of a "Balkan identity" with the apparent lack of a "regional identity" in the Black Sea area, where frozen conflicts are stumbling blocks to developing unity. Other speakers, including Professor Kangas, agreed on the lack of regional identity but opined that its absence is not necessarily an impediment to regional thinking. - "Locally Owned" Solutions: Several speakers stressed the importance of Black Sea littoral states devising and executing solutions for regional problems that reflect a regional consensus - rather than solutions imposed from outside the region. A number of speakers similarly underscored that policy makers should work through existing institutions rather than creating new administrative structures. - Parliamentary Roles: Romanian Defense Commission President Stanisoara stressed that "parliaments must play a role in contributing to democracy in the region," especially given that "parliamentary dialogue will be necessary to develop a Black Sea identity." He suggested the creation of a "Black Sea Parliamentary Assembly" modeled on the NATO Parliamentary Assembly and concentrating on "confidence and consensus building." Stanisoara, a Basescu ally, later observed enthusiastically to PolMilOff that the area's parliaments could help build a regional identity. - BLACKSEAFOR: Several speakers gave a cautious "nod" to BLACKSEAFOR. Professor Puhl observed that BLACKSEAFOR has had a slow start, while Dr. Simon noted that the U.S. has "met resistance" to an observer role and that BLACKSEAFOR has been so far limited mostly to "confidence building activities." The Foreign Ministry's Istrate repeated GOR support for BLACKSEAFOR "confidence building mechanisms" and "enhancement of soft security mechanisms." Underlying the discussions about BLACKSEAFOR was an implicit recognition - stated explicitly by some speakers - that Russia should be "fully engaged" in developing regional security strategies. Bulgarian Ambassador Andreev articulated this sentiment when he observed "we need to guarantee constructive engagement of Russia." Several speakers, in addition to the UK envoy, also expressed general support for an activity in the Black Sea similar to "Operation Active Endeavor." Comment: Romania Seeks to Define Its Regional Role --------------------------------------------- ----- 10. (C) The conference received the full support of President Basescu and reflects the growing importance that Romania places on Black Sea regional security issues. Indeed, President Basescu underscored that importance in a private meeting the day of the conference with Marshall Center Director Dr. John Rose and Embassy ODC Chief. In the course of that meeting, Basescu also observed that Romania does not want Russia to perceive Romania as being "too much of a leader" on Black Sea issues, but that, for the time being, Romania should focus on developing an "organizational role." During a coffee break at the conference, however, a presidential staffer (who took credit for drafting Basescu's keynote address) acknowledged to PolMilOff that the GOR has still failed to achieve a satisfactory level of high-level interagency dialogue and information sharing on Black Sea concerns. 11. (C) While the conference reflected Romania's successful effort to keep the Black Sea on the front burner of NATO and EU discussions about regional security, it also highlighted the divergence between U.S. and Romanian views on one hand and EU (including German) views on the other. As Basescu's speech, and his other public remarks and private conversations, have made clear, Romania continues to consider its strategic alliance with the U.S. and NATO as the lynchpin of its strategic security policy. At the same time, Romanian policy makers, including Basescu, are still groping to define a coherent Black Sea regional policy, and the April 20 conference reflects this ongoing effort. It would be a mistake, however, to view Basescu's attention to Black Sea issues as an isolated phenomenon. Since taking office at the end of last year, Basescu has energetically engaged in the development of a regional foreign policy, illustrated by his visit to Moldova (the first by a Romanian president in half a decade) and lengthy meeting in Bucharest this month with Ukrainian President Yushchenko. Basescu has demonstrated a willingness to "engage" on tough issues, including the conflict in Transnistria, and has not been shy about calling for a larger Romanian role. Romania's emerging regional policy is still a "work in progress," but Basescu appears committed to developing a policy for the Black Sea region that binds Romania even more closely to NATO and the U.S. End Comment. 12. (U) Amembassy Bucharest's reporting telegrams are available on the Bucharest SIPRNet website: www.state.sgov.gov/p/eur/bucharest. DELARE
32046 2005-05-05 12:03:00 05BUCHAREST1084 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS SECTION 01 OF 06 BUCHAREST 001084 SIPDIS SENSITIVE DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: N/A TAGS: PGOV, PHUM, SOCI, KDEM, ECON, IZ, RO, poll SUBJECT: POLLS SHOW ROMANIANS' VIEWS ON IRAQ, EU INTEGRATION, AND OTHER KEY ISSUES SENSITIVE BUT UNCLASSIFIED, PLEASE HANDLE ACCORDINGLY 1. (SBU) Summary: Two recent polls show mixed results about Romanian military engagement in Iraq, with numbers varying as to when and how the question was asked. Results generated by an April 23-24 poll directly linking a pull-out to saving Romanian hostages' lives showed 70 percent in favor of a troop withdrawal. Two weeks earlier, similar questions showed a plurality of respondents favoring maintaining or increasing Romanian military engagement in Iraq. Post provides the following results of diverse polling in past weeks as a useful "snapshot" of the Romanian public's thinking on Iraq as well as topical issues such as EU integration, possible early elections, effectiveness of current political leaders, discrimination in society, etc. End Summary. Opposed to Troops in Iraq? -------------------------- 2. (U) The Center for Urban and Regional Sociology (CURS) conducted a national blitz poll April 23 and 24 regarding the presence of Romanian troops in Iraq. CURS queried 1,020 subjects over 18 years of age shortly after kidnappers threatened that they would kill three Romanian journalists held hostage in Iraq unless the Romanian government withdraws its troops from Iraq. The poll has a maximum error of 3 percent and was commissioned by TV channel "Antena 1." Asked whether Romania should pull out its troops from Iraq, as the kidnappers have demanded, in order to save the journalists' lives, respondents answered as follows: 70 percent - yes 18 percent - no 12 percent - don't know/no answer. A break-down on gender, age, education, and residence area categories yielded the following results: Gender Men 63 percent - yes 25 percent - no 12 percent - don't know/no answer. Women 76 percent - yes 10 percent - no 14 percent - don't know/no answer. Age 18-30 years of age 67 percent - yes 20 percent - no 13 percent - don't know/no answer. 31-55 years of age 71 percent - yes 18 percent - no 11 percent - don't know/no answer. 56 years of age and over 73 percent - yes 15 percent - no 12 percent - don't know/no answer. Education Primary school 78 percent - yes 11 percent - no 11 percent - don't know/no answer. High school 71 percent - yes 18 percent - no 11 percent - don't know/no answer. Higher education 62 percent - yes 26 percent - no 12 percent - don't know/no answer. Area of residence Urban 65 percent - yes 23 percent - no 12 percent - don't know/no answer. Rural 74 percent - yes 13 percent - no 13 percent - don't know/no answer. 3. (U) When asked whether Romania should pull out its troops whether or not the journalists are released, the respondents stated: 57 percent - yes 33 percent - no 10 percent - don't know/no answer. 4. (SBU) Requested to give grades on an ascending 1 to 10 scale, the respondents indicated an average 7.2 for the manner in which the media covered the crisis of the hostages and an average 6.9 regarding the authorities' efforts to solve the crisis. 5. (SBU) The poll's results triggered controversy immediately when media magnate Dan Voiculescu, who owns "Antena 1," expressed support for a troop pull-out based on the poll's results. Voiculescu heads the Romanian Humanist Party (PUR), which is in alliance with the center-right government, but is suspected by some of being a "Trojan horse," retaining loyalty to its erstwhile ally, the former ruling, center-left Social Democratic Party (PSD). Governing Liberal-Democratic (PNL-PD) Alliance leaders responded, however, that crucial foreign policy decisions should not be based on polls taken during an emotionally charged time. Indeed, CURS Director Sebastian Lazaroiu acknowledged that the percentage of those in favor of the withdrawal of the troops would have been lower under "normal conditions." Poll Prior to Hostage Crisis Shows Different Results --------------------------------------------- ------- 6. (SBU) A separate poll carried out by the National Institute for Opinion Polls and Marketing (INSOMAR) between April 12 and 17 and commissioned by a trade union, PETROM, shows that a narrow plurality favor keeping troops in Iraq or increasing their numbers. The poll was conducted nationwide on a sample of 1,668 people of over 18 years of age and had a maximum error of 2.4 percent. Significantly, the poll took place after the hostages were in custody and a film of them had been released by their captors but, unlike the CURS poll, it was conducted prior to the release of a disturbing second film portraying the hostages held at gunpoint and threatened with death. Asked what course of action the government should consider after the kidnap of Romanian citizens, the respondents answered as follows: 40.3 percent - should withdraw the troops from Iraq, 34.3 percent - should keep the troops in Iraq, 7.5 percent - should increase military presence in Iraq, 17.9 percent - don't know/no answer. 7. (U) Asked whether they think the Presidency is making sufficient efforts to release the Romanian journalists from Iraq, respondents answered as follows: 60.4 percent - yes 26.7 percent - no 12.9 percent - don't know/no answer. To the same question, but regarding the government, the respondents said the following: 54.8 percent - yes 30.3 percent - no 14.9 percent - don't know/no answer. Most Romanians "Satisfied" with Political Leaders --------------------------------------------- ---- 8. (U) Asked to express their degree of satisfaction with President Basescu's activities, respondents indicated the following: 12 percent - very satisfied 51 percent - pretty satisfied 25 percent - pretty dissatisfied 11 percent - very dissatisfied As for the degree of satisfaction with the Tariceanu government's activities, the respondents answered as follows: 8 percent - very satisfied 47 percent - pretty satisfied 32 percent - pretty dissatisfied 13 percent - very dissatisfied Poll Shows PNL-PD Alliance Would Win Early Elections --------------------------------------------- ------- 9. (U) When asked which party or political alliance they would vote for if elections were to take place next Sunday, respondents answered the INSOMAR poll as follows: 55.8 percent - PNL-PD Alliance 26.4 percent - Social Democratic Party (PSD) 8.2 percent - Greater Romania Popular Party (PPRM) 3.0 percent - Democratic Union of Hungarians (UDMR) 2.1 percent - Romanian Humanist Party (PUR) 1.2 percent - Christian-Democratic Popular Party (PPCD) 3.2 percent - other party (Comment: These results tend to support President Basescu's assertion that the center-right PNL-PD alliance would trounce the PSD if early elections take place. Based on these results both the UDMR and PUR would risk losing their parliamentary representation, since a party must gain five percent of the national vote to have a voice in parliament. End Comment.) 10. (SBU) Break-downs on education, age and residence area indicate the preference of all education categories for the PNL-PD Alliance, with a larger majority of those with higher education favoring the PNL-PD. Respondents under 65 years of age are more inclined to vote for the PNL-PD Alliance, whereas those over 65 years of age lean toward PSD. The largest differences in favor of the PNL-PD Alliance appear in the 18-34 and 35-49 age categories. A large majority of urban respondents favor the PNL-PD Alliance whereas in rural areas, traditionally a PSD stronghold, support is almost equally distributed between the PNL-PD Alliance and the PSD, with a slight advantage for the former. (Note: the INSOMAR pollsters did not release the complete statistical results for the categories described in this paragraph. End Note.) 11. (SBU) A large majority of the INSOMAR respondents would rather vote for individual candidates than for party slates, as follows: 63.4 percent - would prefer to vote for individual candidates 17.6 percent - would prefer to vote for party slates 19.O percent - provided no answer Fearing God.and Trusting the Church ----------------------------------- 12. (SBU) When asked by the INSOMAR pollsters what they fear, Romanians responded: God (91 percent), disease (88 percent), price increases (83 percent), poverty (82 percent) and corruption (76 percent). Asked about institutions, the respondents stated that they have "much confidence or very much confidence" in the church (87 percent), army (72 percent), media (62 percent), and Presidency (53 percent). The least trusted institutions are Parliament (27 percent), trade unions (30 percent), the judiciary (34 percent), and the government (37 percent). 13. (SBU) Most Romanians express a high level of trust in the church, with a majority attending regular religious services at least several times a month. When asked how often they go to church, respondents gave the following answers: 33.8 percent - several times/year, on the main religious holidays (Christmas, Easter) 23.6 percent - several times/month 21.7 percent - once a week 11.6 percent - once a year or less 6.2 percent - several times a week 3.3 percent - don't go at all City Folk Rosy on EU ---------------------- 14. (U) The Institute for Free Initiative and CURS conducted a poll between March 17 and 23 on a sample of 1,208 people aged 18 years or older of age from urban areas. The survey had a maximum error of plus-minus 2.8 percent. More than a month prior to President Basescu's April 25 signing of the EU accession treaty, pollsters asked respondents whether they support Romania's EU accession. Respondents answered as follows: 85 percent - yes 10 percent - no 5 percent - can't tell 15. (U) When asked their opinion on how their everyday life would change if Romania becomes an EU member, respondents said: 43 percent - for the better 26 percent - it will be the same 16 percent - for the worse 15 percent - can't tell 16. (U) Asked which of three alternatives they would favor regarding reforms that imply economic sacrifices for the population (decrease in living standards), the respondents favored the following opinions: 53 percent - Romania should implement reforms faster in order to integrate with the EU in 2007 34 percent - Romania should implement reforms gradually even if this means postponing integration. 17. (U) In answer to a question regarding possible obstacles to EU integration, the respondents indicated the following: 29 percent - corruption 14 percent - behavior of Romanians abroad 13 percent - way in which the Romanian economy operates 12 percent - Romania's failure to meet assumed commitments 9 percent - low living standard 9 percent - political instability 8 percent - low competitiveness of Romanian companies on the EU market 4 percent - economic and political interests of other countries 2 percent - can't tell 18. (U) According to the poll, urban Romanians think that "significant effects" of Romania's EU integration will be: price increases (81 percent), increased foreign investment in the Romanian economy (79 percent), shutdown of some companies (74 percent), Romania will become a market for Western products (71 percent), development of Romanian agriculture (65 percent), tax increase (63 percent), decrease of corruption in Romania (54 percent), increase of unemployment (51 percent), increase of Romanians' incomes (50 percent), and increase of inflation rate (39 percent). Gallup Poll: Youth Optimistic, Apathetic ---------------------------------------- 19. (U) The Gallup Organization and the British Council released April 12 results of a joint opinion poll designed to provide an image of Romanian youth. The survey was conducted between May and November 2004 in Bucharest, Brasov, Cluj, Constanta, Iasi, Sibiu, and Timisoara, on a sample group of 1004 people between 15 and 35 years of age. Margin of error is plus-minus 3.0%. The survey's questions focused on EU integration, tolerance toward minorities, equal opportunity for men and women, and interest in the political life and civic involvement, among other issues. Gallup also used focus groups to supplement findings of the survey. 20. (U) When asked their views of EU integration, 56 percent of the respondents said they believe that it will bring more personal advantages than disadvantages; 27 percent believe it will bring them neither advantages nor disadvantages; 8 percent believed it would bring more disadvantages, and 9 percent had no reply or did not know. 61 percent believed their personal income would increase with EU accession, and 50 percent believed it would increase their opportunities to study abroad. 21. (U) At the same time, young Romanian respondents expressed little interest in political life. 78 percent are not interested at all, are interested to a very small extent, or to a small extent in anything that is perceived as political activity, i.e. joining a party, going to the polls, or being informed about political developments. Young people are also reluctant to do volunteer work, with 59 percent of the respondents expressing little or no interest in such activities. (Comment: Many Romanians have a jaundiced view of volunteerism since during the communist era "volunteer work" was, in fact, mandatory service. End Comment.) 22. (U) Regarding minorities, respondents were asked a question regarding individuals who are gay/lesbian, Roma, Hungarian, or disabled. For each minority category, pollsters asked respondents to chose from the following answers: such people should not live in Romania; I would accept them to live in Romania; I would accept such a person to live in my town; I would accept such a person to be my colleague at work; I would accept such a person to be in my group of friends; I would accept such a person to be a member of my family. For sexual minorities, 21 percent of the respondents agreed with the statement that "such people should not live in Romania" while 24 percent favored "I would accept them to live in Romania"; only 5 percent of respondents said they accept sexual minorities as members of their families. As for ethnic minorities, 11 percent of the respondents think that Roma should not live in Romania and 9 percent share this opinion for ethnic Hungarians. The respondents showed a high acceptance level for disabled people and there were no negative remarks about them in the focus groups. Focus groups also revealed a high intolerance for Roma. The cluster analysis indicated, in terms of tolerance, that 15 percent of the respondents showed rejection, 44 percent were moderately tolerant, while 41 percent showed high acceptance. Most young Romanian men (69 percent) think that women have as many rights as needed, 18 percent believe women have too few rights, 9 percent opine women have too many rights, and 4 percent don't know/don't answer. Women have a different opinion, 56 percent of the respondents opining that women have too few rights, 40 percent thinking that they have as many rights as needed, 1 percent believe women have too many rights, 3 percent don't know/don't answer. 23. (U) While most respondents are satisfied with the possibilities to travel to cities for recreation and to study in the cities, a majority (68 percent) are "dissatisfied" or "not too satisfied" with urban job opportunities. Knowledge of foreign languages, solid professional education and PC and IT abilities are the three qualities judged by young people to be the most useful for getting a good job. For 84 percent of respondents, a good salary heads the list of the top three important criteria in choosing a job. The next two priorities are a safe job and a pleasant working environment. A majority of respondents do not go at all to classic music concerts (69 percent), opera (73 percent), theatre (54 percent), ballet (80 percent), or exhibits (66 percent). 24. (U) The respondents gave a positive appraisal of the Romanian education system; 61 percent of them think that what is taught in Romanian schools is useful for students further in life. Regarding IT, 88 and 80 percent of the respondents use computers and the internet, respectively. 68 percent of the respondents report that they speak one or two foreign languages fluently. 25. (SBU) Comment. We are hesitant to draw far-reaching conclusions regarding the CURS polling on a troop pullout from Iraq, given both the emotionally charged atmosphere in which the polling was conducted and PUR leader-Antenna 1 owner Dan Voiculescu's potentially ambiguous political motivations. A better sense of Romanian attitudes toward their Iraqi role will probably emerge after resolution of the current hostage situation. However, these polls offer a "snapshot" of current Romanian attitudes toward both "front page" issues and social values. What is clear is that Romanians are generally satisfied with Basescu and the new government and optimistic about their future within the EU. It is also clear that the political divide evident during November/December elections between rural and urban voters and the elderly and other population groups has widened in the past several months. Even more than before, support for the previously omnipotent Social Democrats (PSD) has shrunken to a bedrock of elderly and rural voters. That does not bode well for its future. Also significant are prejudicial Romanian social attitudes toward gays and Roma. Levels of acceptance, even among presumably more "open" younger Romanians, are very low. End Comment. 26. (U) Amembassy Bucharest's reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest. DELARE
32359 2005-05-11 10:35:00 05BUCHAREST1114 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS BUCHAREST 001114 SIPDIS SENSITIVE STATE FOR EUR/NCE - WSILKWORTH STATE FOR EUR/EB/TPP/MTA/MST - JALLEN STATE PLEASE PASS TO USTR USDOC FOR 4232/JBURGESS/JKIMBALL E.O. 12958: N/A TAGS: ETRD, ECON, RO, WTO SUBJECT: WTO SERVICES NEGOTIATIONS: ROMANIA DECLINES TO SUBMIT AN INDEPENDENT PROPOSAL REF: (A) STATE 58384; (B) STATE 81619; (C) BUCHAREST 00839 SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY 1. (U) EconOff delivered the key points in reference (B) on WTO services negotiations to Foreign Trade Department Director General for Trade Policy Vasile Radu on May 4, 2005. 2. (SBU) Radu responded on May 10, restating Romania's previous position that the GOR will not submit an independent services offer due to the GOR's recent signing of the Treaty of Accession and scheduled entry into the EU on January 1, 2007. By signing the Treaty, Romania is no longer an EU candidate country, but an accession country. Upon entering the EU, Romania must undertake the same commitments in the services area that are applicable to all EU members. He opined that Romania's membership in the EU will probably occur before the conclusion of the Doha round and entry into force of its results. Under these circumstances, he concluded it would be counterproductive for Romania to submit a separate list of proposals or enter into negotiation outside of EU common positions. DELARE
32480 2005-05-12 13:46:00 05BUCHAREST1123 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 04 BUCHAREST 001123 SIPDIS DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: DECL: 05/06/2015 TAGS: PTER, PGOV, PREL, KDEM, ECON, SOCI, KCRM, RO, corruption SUBJECT: BASESCU AND HIS GOVERNMENT TACKLE CORRUPTION REF: A. A) BUCHAREST 1003 B. B) BUCHAREST 0835 C. C) BUCHAREST 0658 D. D) 04 BUCHAREST 3293 Classified By: POLITICAL SECTION CHIEF ROBERT GILCHRIST FOR REASONS 1.4 B AND D 1. (SBU) Summary: Four months into its tenure, Romania's center-right government has taken cautious but concrete steps towards combating Romania's widespread corruption, its key campaign pledge. This includes passing anticorruption legislation and indicting several businessmen allegedly involved in notorious corruption cases, who experts claim were previously shielded from prosecution by the former PSD government. Despite these initial steps, critics point out that a major anticorruption case has yet to be prosecuted under the new leadership. President Traian Basescu and his team will be challenged to reform Romanian institutions and fundamentally change a political and economic culture in which corruption is an integral and even expected component. Their job is all the more difficult given that the EU may be obstructing some needed reforms. End Summary. Fighting the Corruption Battle: Matching Words..... --------------------------------------------- ------- 2. (SBU) Throughout Romania's 2004 electoral campaign, then presidential candidate Traian Basescu and the leading members of his Liberal-Democratic (PNL-PD) alliance made corruption the central plank in their platform. Recognizing the strong concern corruption remained to voters and the vulnerability of the then governing Social Democratic Party (PSD) on the issue, PNL-PD insiders told post that Basescu made a point of raising corruption in "every stump speech and at every press appearance he could." When he met cheering crowds on December 13 to announce his impending electoral victory, he stated that "corruption is a threat to national security," and promised to make anticorruption the top priority of his government. In his inauguration speech on December 20, he stated: "We cannot talk about joining, with dignity, the EU, without solving the major problems of Romania: corruption and poverty.... Today, high-level corruption is one of the greatest dangers to national security." Basescu made this anticorruption commitment repeatedly to the international community. He pledged to the foreign diplomatic corps January 18 to "solve Romania's persistent corruption," finally translating "words into deeds." Prime Minister Calin Popescu-Tariceanu and others in the new cabinet have similarly used strong language to underscore the importance of the anti-corruption fight. 3. (SBU) Among Basescu's early stops as president were the key institutions charged with combating corruption -- the Intelligence Services, the Ministry of Interior, the National Anticorruption Prosecutor's Office (PNA), and the Supreme Magistrate Council (CSM). At each stop, Basescu reiterated that anticorruption was his top priority and instructed the institutions to improve their efficiency and interagency cooperation. He told the Romanian Intelligence Service that it must provide substantial information about corruption sources and share such information with anticorruption agencies if it is to be effective in eliminating corruption from the Romanian government. In addition, Basescu has expressed his desire to establish an "intelligence community" in Romania, so as to enhance interagency information sharing on corruption and other domestic national security concerns. He told the PNA it must concentrate efforts on tackling large-scale cases, lamenting that the majority of those pursued were insignificant when compared to the magnitude of Romania's corruption problem. .... With Deeds ---------------- 4. (C) By declaring corruption a national security concern, Basescu thereby brought the issue under the purview of the presidency and the Supreme Council of Defense (CSAT) -- the interagency council comprised of the President, the Senior Advisors, the Ministers of Defense, Economics, Foreign Affairs, Interior, and the Chairs of the intelligence services. The parliament's adoption of a National Anticorruption Strategy ) which Basescu has stated he will put before the legislature by the end of June ) will serve to firmly anchor corruption legally as a national security concern. Furthermore, as an issue within the CSAT, Romanian intelligence services can now be tasked to collect information domestically on potentially corrupt individuals (Ref A). (Note: This is a controversial issue within Romanian society, and as such, Basescu appears to be moving cautiously. Transparency International Romania (TIR) has argued against using intelligence services to combat corruption, arguing that the services themselves are likely afflicted by corruption. TIR opines that using intelligence services will actually complicate the prosecution of corruption cases by introducing additional procedures to an already lengthy prosecution process. End Note.) 5. (SBU) The new PNL-PD led coalition under the direction of Prime Minister Tariceanu made passage of key anticorruption legislation a centerpiece of its first 100 days in power. That effort included: -- A bill introduced on 3 March to revise the wealth disclosure procedure for more detailed picture of total income and income sources for all public officials. The Senate, largely due to efforts of opposition PSD members, drastically weakened the proposal on 21 April. The bill has now moved to the Chamber of Deputies, where additional changes are expected. (Note: The Senate's act was symbolic, as full authority for this measure rests with the Chamber of Deputies. See septel. End note.) -- An emergency ordinance * passed by the Chamber of Deputies on 29 March * to eliminate penal immunities of former ministers. It is now before the Senate for approval. -- A law passed by both chambers as of March 31 to eliminate penal immunities that public notaries had previously enjoyed. 6. (C) While the former PSD government similarly passed extensive anti-corruption legislation, PNL-PD Minister for Parliamentary Relations Bogdan Olteanu asserted to PolChief that "the big difference now is that the current government actually plans to enforce the laws." Critics reply that it is still too early to tell if PNL-PD will emerge with a better legislative record on corruption than the PSD. Other proposed legislation currently under discussion include judicial reform, specifically the monitoring and verifying of public officials' wealth and interest declarations. The government has expressed hope that this mechanism will be in place by July 2005 (See para 14). A New National Anticorruption Strategy -------------------------------------- 7. (SBU) At the same time the new cabinet, to comply with an EU requirement, established on March 30 a government-wide National Anticorruption Strategy (NAS) for 2005-7. Defining corruption as bribery, influence peddling, and receiving undeserved money or goods, the NAS was designed to be the official roadmap of the government's anticorruption goals. The NAS establishes the standards by which the EU will measure Romania's anticorruption progress from now until November 2005, the month in which the European Commission will publish Romania's country report. If this report deems Romania's progress insufficient, the European Commission has stated that it will delay Romania's EU accession by one year under a clause especially included in Romania's accession treaty. Understanding the importance of the NAS as the yardstick by which the EU will measure progress, Basescu has told government agencies that he wants specific individuals named responsible for the various aspects of implementation, so as to bolster accountability. He has pledged to follow up with these appointees. 8. (SBU) The NAS prioritizes a list of comprehensive anticorruption initiatives and establishes a list of responsible ministries and the date by which tasks are to be completed. These task include increasing transparency and integrity in public administration, preventing corruption in business, organizing anticorruption campaigns and educational programs, strengthening and improving the efficiency of the judicial system and reducing the number of governmental agencies involved in anticorruption, so as to centralize efforts. A Few Big Arrests ----------------- 9. (SBU) The early months of the new government have also been characterized by arrests in several major corruption cases. Although our law enforcement contacts point out that these cases had been under investigation for quite some time, the arrests nonetheless added credence to Basescu and Tariceanu's claims that they are serious in the anti-corruption fight. Indeed, independent analysts point to a link between the new government taking power and a relative flurry of arrests of individuals who had long been under investigation, but left undisturbed due to apparent shielding from prosecution. Although there has yet to be a prosecution in a large scale corruption case, one journalist opined to PolChief that the difference now, is that there finally appears to be some momentum. 10. (SBU) The most dramatic arrest occurred in January soon after the new government took office. Bucharest papers carried front-page headlines when police handcuffed and escorted RAFO refinery boss and PSD moneyman Corneliu Iacubov to the Bucharest central jail, where Iacubov shouted, "This is from Basescu! What he gives is what he will get!" The Prosecutor General's Office accuses Iacubov of large-scale money laundering and financial fraud. Similarly, the PNA indicted in April petroleum king and PNL Senator (and financier) Dinu Patriciu on charges of money laundering, tax evasion and fraud. This indictment is particularly notable in that it defies allegations that the government would use the anti-corruption battle only against the opposition. 11. (SBU) Other recent high profile cases include the April 13 indictment of former National Securities Commission President Gabriela Anghelache for "abuse of position" in her role in the privatization of the bustling downtown Bucharest Bucur Obor market complex. PNA alleges that Anghelache temporarily lifted a trading ban on the company's shares to allow one of its main shareholders, Laurentiu Postavaru, to purchase additional shares. Postavaru is also under investigation by the PNA. 12. (SBU) Corruption again made the front pages in connection with the March 29 kidnapping in Iraq of three Romanian journalists and their American-Iraqi guide. On April 5, Romania's General Prosecutor's office arrested Syrian-born businessman Omar Hayssam, whom the press (and some in government) believed orchestrated the kidnapping (ref B). Hayssam, one of Romania's wealthiest individuals, was formally charged with fraud resulting in a combined loss of 1.8 million euros to four different companies. In following days the media linked him to a wide swath of Romania's most senior opposition politicians. This included former President Ion Iliescu, former PSD Vice President Viorel Hrebenciuc, and former PSD deputy and member of communist securitate Ristea Priboi. Iliescu reportedly included Hayssam on a number of official delegations, including to the United Arab Emirates, Vietnam, the Philippines, Japan, Singapore, Uzbekistan, China, Russia and Kazakhstan. In addition to the charges already filed, Hayssam is also being investigated for numerous other acts of fraud, tax evasion, money laundering and organized crime, not to mention acts related to his alleged involvement in the kidnapping. One PSD political advisor told PolChief that many in the PSD are "seriously worried" about how far these investigations will go. The scandal involving Hayssam is also attributed to influencing the results of the April 21 PSD internal elections, in which Iliescu, Hrebenciuc, and other stalwarts were ousted from the party leadership. (Ref B). Changing the Institutions ------------------------- 13. (C) Basescu and his team have repeatedly acknowledged that essential in the fight against corruption is a fundamental change in government institutions, both in terms of personnel and of how the institutions carry out their functions. Basescu vowed that no individual who had been tainted by credible corruption allegations would be appointed to the cabinet, a promise he and Tariceanu largely kept. The most notable appointment was new Justice Minister Monica Macovei, a largely apolitical figure from an important local human rights NGO. Early on Macovei confessed to visitors that she had "no idea of where to start" in cleaning up a Justice Ministry she described as riddled with "old communist bureaucrats" and "PSD political plants." She was simultaneously challenged with implementing EU-mandated reforms, more sweeping in Justice than in any other sector. Nonetheless, by mid-March many government interlocutors and NGO contacts reported that Macovei appeared to be "hitting her stride." 14. (SBU) On 7 April Macovei appointed Prosecutor Doru Dobocan as head of the General Department for Protection and Anti-Corruption within the Ministry of Justice. The press has dubbed Dobocan as a "pit bull" in the fight against corruption. Macovei is also developing in the Ministry a new investigative body * the Agency for Integrity and Statements of Wealth * which would investigate the veracity of public officials' asset declarations. 15. (SBU) Also fundamental in the anticorruption fight is the National Anticorruption Prosecutor's Office (PNA), which was established in 2002 as an independent entity to prosecute major corruption cases. Although the PNA budget is ample by Romanian standards and its prosecutors are among the best trained, it has yet to prosecute a major corruption case to conclusion. Embassy Resident Legal Advisor notes that the delay in concluding such trials is at least partially due to Romanian jurisprudence practices, which do not facilitate swift justice. Some Embassy contacts have confided that Basescu and Tariceanu may seek to replace PNA Director Ion Amarie, despite the fact that the latter's tenure is not due to expire until 2008. Minister Macovei has stated that Amarie should take responsibility and resign for what she views as the PNA's poor anticorruption record. (Note. Post will report more on the current debate over the PNA septel. End note.) 16. (SBU) The Ministry of Interior has also taken a series of positive steps in efforts to root out internal corruption. It has established its own anticorruption office, which is charged with investigating and preventing corruption within the Ministry of Interior. In recent months, the Ministry has replaced police directors, border police and customs officers, citing corruption as the reason for their removal. The Ministry of Interior has announced that their replacements will be selected via a process of open and fair competition. Comment: A Good Start, But the Task is Big ------------------------------------------ 17. (C) Basescu, Tariceanu, and their team have amply demonstrated their commitment to fighting corruption, in word and (at least early on) in deed. Their National Anti-Corruption Strategy earns high marks from the EU and the Embassy team. A real test of anticorruption efforts will be whether the PNA and courts are able to prosecute major cases to conclusion without political interference. Preserving the judiciary's independence while fostering a get-tough on corruption environment will likely prove a difficult balancing act for the new government. An even bigger challenge will be fundamentally altering a culture of corruption that has strong historical roots and permeates virtually all levels of Romanian political and economic life. According to Transparency International, Romania ranks as one of the most corrupt countries in Europe (only Albania ranks worse). On the latest worldwide index of 145 countries, Romania is tied for position 87 with the Dominican Republic and Iran. 18. (C) Perhaps even more frustrating to the current government are the seemingly mixed signals from the EU concerning domestic anti-corruption efforts. Several State Secretaries, as well as Minister of Finance Ionut Popescu, SIPDIS have expressed deep frustration with the corruption in the middle levels of the government bureaucracy. Currently, it is nearly impossible to remove a civil servant from his/her job without a judicial finding of malfeasance, or even to move them permanently to another, equal position elsewhere. This hampers the current reformist government's ability to root out corrupt bureaucrats and replace them with hopefully more honest employees. In response to Econ Chief's direct query about a civil service overhaul that could rid the government of the corrupt and incompetent in one fell swoop, Minister Popescu replied that the EU has signaled that the GOR should not do this, ostensibly out of fear that it would "demoralize" the bureaucrats or appear to be a political purge. He also expressed frustration that on some occasions in the past, the EU has intervened to prevent individual personnel changes in the ministries. 19. (C) In sum, by electing Basescu and his PNL-PD led government, Romanians made clear that they want a serious effort to diminish the country's endemic corruption. Four months is little time for any government to make a significant dent in such a large problem, but it appears that the center-right government is serious about the problem and its initial steps, while limited, have been in the right direction. 20. (U) AmEmbassy Bucharest's Reporting telegrams, as well as daily press summaries, are available on the Bucharest SIPRNet website: www.state.sgov/p/eur/bucharest DELARE
32536 2005-05-13 09:38:00 05BUCHAREST1126 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 03 BUCHAREST 001126 SIPDIS DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: DECL: 05/13/2015 TAGS: PTER, PGOV, PREL, KDEM, KCRM, ECON, SOCI, RO, corruption SUBJECT: OPPOSITION PARTY STALLS ON KEY ANTI-CORRUPTION LAW, ALLEGES U.S. MEDDLING Classified By: ROBERT GILCHRIST FOR REASONS 1.4 B AND D 1. (C) Summary: Deputies from the opposition Social Democratic Party (PSD) stormed out of the Romanian Parliament May 10 to avoid a vote on strengthened financial disclosure legislation, a key component in the new government's anti-corruption program. The PSD, which lost the 2004 presidential vote amid allegations of corruption, attempted to shift the debate from the disclosure law to alleged "U.S. meddling," referring to a letter from the Charge to Chamber President and former PM Adrian Nastase. The governing Liberal-Democratic (PNL-PD) Alliance plans to pass final legislation in coming days with the help of strict coalition discipline. End Summary. A Silly Response to a Sensible Law ----------------------------------- 2. (C) The Romanian media has focused heavily on a dramatic walkout May 10 by the entire PSD opposition from Romania's Chamber of Deputies. Although such dramatic posturing has been relatively common in the past, it is the first walkout since the new PNL-PD government assumed power in January. Surprisingly, it is also over the issue on which the PSD is most vulnerable -- high-level corruption. The specific legislation relates to the disclosure of assets and income by government and elected officials to close loopholes in the current law. The law currently in force, crafted by the former PSD government, allowed officials to claim artificially low net worth figures by transferring assets to spouses and children or by investing in categories not covered by the current law, such as art or stocks and bonds. The new bill -- issued by the government as an emergency ordinance -- closes those loopholes. Officials would be officially required to publish asset declarations on the websites of their institutions. Investigations of false statements would be carried out by a panel of two judges and a prosecutor attached to the Court of Appeals. This degree of specificity has obviously touched a raw nerve within the opposition PSD. 3. (C) The first blow against the bill came on April 20, when the Senate gutted key measures, passing a revised draft that widened the loopholes found in the original law. Justice Minister Monica Macovei called the changes "opaque" and expressed hope that the Chamber of Deputies -- which has final say on the proposed legislation -- would change the proposal to its original state. Charge d'Affaires wrote a letter to Chamber President Nastase appealing to him to take a leadership role when the bill reached the lower house. Shortly after the letter was sent, PSD Senator and former Defense Minister Ion Pascu told Charge that the letter caused somewhat of a stir among more "energetic" PSD members, notably outspoken Deputy Victor Ponta. However, he said that the party recognized it as a continuation of the Embassy's long-term efforts against corruption. Throwing down the Gauntlet -------------------------- 4. (C) The PSD subsequently shared the letter with the other parliamentary parties. The day before the bill in its original state was due to be voted on in the Chamber, the entire text of the letter was printed in "Tricolorul," a daily newspaper owned by extreme nationalist leader Corneliu Vadim Tudor. In the newspaper, Tudor also alleged American interventionism, calling Charge "worse than former Soviet Commisar Visinski in 1945." Tudor's vitriol thereby sparked a public debate over the letter, thereby detracting from the actual content of the legislation. On May 10, the PSD cited the allegations against the U.S. as a pretext to walk out of the Chamber just as the vote on the bill was beginning. Even Chamber President Nastase departed, leaving the PNL-PD-led coalition to pass the bill article by article, as required by parliamentary procedure. Tudor's extreme nationalist Greater Romania Popular Party (PPRM) remained in the Chamber, but voted against the measure and spoke out against it. 5. (C) The final Chamber vote on the legislation, which must now be voted on in its entirety, is now slated for May 17. The PNL-PD led coalition is calling for strict voting discipline by its membership, which holds a thin majority in the lower house. The PSD, which will meet to discuss its strategy against the bill on May 16, may choose a second walk out if as expected the governing coalition turns out in force to support the measure. Minister Delegate for Relations with the Parliament and PNL deputy Bogdan Olteanu told PolChief that the measure will absolutely pass. He also noted that, as the bill was introduced as an emergency ordinance, it is already in effect and that officials in Parliament and throughout the country are already obliged to post their assets on the internet. He opined that the government's biggest problem is not the Parliament, but rather with the many local officials who are having difficulty completing the forms or who are clearly falsifying their claims. Text of the Letter ------------------ 6. (SBU) The complete text of Charge's letter to Nastase is as follows: Begin text: Dear President Nastase: I am writing you in your capacity as President of the Chamber of Deputies and in anticipation of a vote in that body in the near future on a draft law changing requirements for wealth and interest declarations for government officials. As you know, the Plenum of the Senate recently voted to make major amendments to the bill proposed by the government. To be precise, I understand that the Senate voted against inclusion of an estimated value for securities, jewelry and art from statements. Another change eliminated a requirement that statements be complete, accurate and public. A third change struck out the need to declare the incomes of children of those making declarations. We were profoundly disappointed by the actions of the Senate in this matter. I am sure that comes as no surprise, given the long history of discussions between the U.S. Embassy and the Romanian government on the subject of fighting corruption in government, as well as personal conversations between you and Ambassadors Crouch and Guest on that subject. I strongly encourage you to take a leadership role in this matter in order to secure passage of strong conflict of interest and wealth declaration legislation in the Chamber. Passage of such legislation should aim at fulfillment of conditions requested by the EU to bring Romania into conformity with the Aquis chapter on Justice and Home Affairs. However, it is just as important that the Romanian people be assured that their elected and non-elected officials are neither profiting from their positions, nor taking decisions based on their personal interests. I can also assure you that the foreign investor community, including U.S. firms now looking at Romania for possible sites for their operations, would welcome such legislation as a sign of Romania,s seriousness in creating a hospitable business climate. Sincerely, Thomas L. Delare Charge d,Affaires End text 7. (C) Comment: PSD accusations of U.S. meddling were clearly a ploy to divert attention from the party's opposition to legislation that PSD members believe will disclose too much about personal finances, at least some of which has no doubt been gained from dubious business practices. The Embassy has sent many letters to the Parliamentary leadership in the past on issues of adoptions, tax issues, language content in advertising, etc. This is the first instance that there have been charges made of "meddling". One PNL-PD politician joked to PolChief that he is eager to see the value of Nastase's famed art collection, although he harbored little hope that true figures would be reflected in any of the opposition's disclosure statements. He asserted "they will still be able to hide everything, even under the new law." Editorial positions on the issue have been widely in favor of stricter legislations, with the U.S. role in this dustup being generally praised and that of the PSD negatively caricatured. Perhaps realizing his mistake press reports on May 13 report Nastase's new desire to engage in a constructive debate on the bill when it comes up for a second vote. 8. (C) Post's informal poll of average Romanians finds that few believe the PSD had any other motive for opposing the revised assets disclosure legislation than to protect the interests of individual wealthy politicians. For a party that lost the December 12 presidential elections largely over the issue of corruption, the PSD's decision to engage in melodramatic behavior over this particular anti-corruption legislation shows a disappointing resistance to learning from past mistakes. 8. (U) AmEmbassy Bucharest,s Reporting telegrams, as well as daily press summaries, are available on the Bucharest SIPRNet website: www.state.sgov/p/eur/bucharest DELARE
32580 2005-05-13 14:16:00 05BUCHAREST1129 Embassy Bucharest UNCLASSIFIED UNCLAS BUCHAREST 001129 SIPDIS STATE DEPT FOR EUR/NCE - WILLIAM SILKWORTH STATE DEPT ALSO FOR INL/AAE, EUR/ACE E.O. 12958: N/A TAGS: PREL, PGOV, PARM, RO, SECI SUBJECT: SECI CENTER OFFICIALS TRAVEL TO HQ OF ORGANIZATION FOR BLACK SEA ECONOMIC COOPERATION (BSEC) Summary -------- 1. On April 26-27 DoS Coordinator for SECI Center, RSO and SECI Public Affairs Officer traveled to BSEC Secretariat in Istanbul. This responds to a recent invitation extended by the BSEC Secretary General and Executive Manager to discuss the possible cooperation. During this meeting BSEC stated that the main challenge for them in the Black Sea region is organized crime. BSEC sees SECI as a model in meeting this challenge and proposed the exploration in cooperation by the two organizations. BSEC suggested entering into a MoU with SECI for further cooperation. SECI agrees to this in principal and Post hopes the Department can support the proposal. End Summary. BSEC Proposes Memorandum of Understanding ----------------------------------------- 2. In March 2005, BSEC officials traveled to Bucharest and spoke to SECI officials in an effort to learn more about SECI and how the process of sharing information that SECI employs between countries facilitates the fight against transborder crime. BSEC officials stated they were interested in further contact with the SECI Center and invited DoS Coordinator for SECI Center to visit BSEC and continue the discussion of SECI/BSCE cooperation. In the discussion on April 26 BSEC purposed that a Memorandum of Understanding (MoU) between SECI and BSEC might be a suitable mechanism to bring about a closer partnership. This MoU, while falling short of an official relationship between the two organizations, could bring about an informal affiliation mutually beneficial to both. More than Partnership, Less than Membership ------------------------------------------- 3. DoS SECI Coordinator and RSO thanked BSEC officials for hosting the meeting and reaffirmed the desire of SECI Center Acting Director and Joint Cooperation Committee (JCC) Chairperson to explore a closer relationship. DoS SECI Coordinator agreed with BSEC officials that a MoU or other informal link would be the best option rather than looking for a means of formal affiliation by both organizations. This approach would look at challenges common to both organizations, such as organized crime in general, and trafficking and financial crime specifically, with an aim to share a set of principles, values and standards which could be employed to meet those challenges. In short, the idea would be to share ideas, but not institutions. DoS Coordinator pointed out that existing task forces at SECI such as financial crime, anti-smuggling and anti-narcotics could be building blocks in a process which would not duplicate efforts, funding or strategy in fighting organized crime. These building blocks could, in fact, be key elements in looking at a wider strategy for the region such as a common security space in which both SECI and BSEC would employ mechanisms within their respective organizations to carry out their mandates, while informing each other of present and future actions. These measures, though not formal in nature, could still serve to further the fight against organized crime, which should assist the goal of sustaining a safe and secure Black Sea region. (Comment: JCC is the governing Board of SECI Center made up of elected Chairperson, elected Deputy Chairperson and one representative from each of the Twelve member states. End Comment) Comment ------- 4. In post's view, proposed shared actions and joint cooperation between BSEC and SECI is worth pursuing. Both organizations share common members, security challenges and area of operations with the goal to address multilateral risks by sharing strategies and limited resources to confront transborder asymmetrical threats. Both SECI Acting Director as well as the Chairperson of Joint Cooperation Committee (JCC) agree that cooperation with other international organizations in the region is critical in the fight against one of the new security threats in the area, organized crime. SECI Center will explore and pursue as appropriate informal cooperation with BSEC. Post hopes the Department can seek avenues for supporting SECI in this effort. DELARE
32581 2005-05-13 14:18:00 05BUCHAREST1130 Embassy Bucharest UNCLASSIFIED UNCLAS BUCHAREST 001130 SIPDIS STATE DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: N/A TAGS: MARR, MASS, PARM, AF, RO, military cooperation SUBJECT: INTERNAL TRANSPORTATION COSTS AND END USER AGREEMENT FOR ROMANIAN ARMAMENT DONATION TO THE AFGHAN NATIONAL ARMY 1. The Embassy Office of Defense Cooperation (ODC) received a letter dated May 4 from the Romanian Ministry of National Defense addressed to ODC regarding Romania's offer to donate armaments to the Afghan National Army. Post notes that the MOD letter states that the GOR cannot pay for the "internal transportation" cost of the armaments, estimated at USD 35,520, nor "handling costs" at the airport of shipment. The letter also underscores that the GOR requires an end user certificate from the Afghans. The text of the letter is in Romanian and Post's informal translation of the letter follows: Unclassified SIPDIS Copy no. 1 Romania. Ministry of National Defense General Staff. Logistics Directorate 05/04/2005 Nr. L/4153 Bucharest To Mr. LTC IRA C. QUEEN CHIEF OF THE OFFICE FOR DEFENCE COOPERATION The Romanian Ambassador to Washington, Mr. Sorin Ducaru, has sent us Diplomatic Note nr. 043/2005 from the US Embassy in Bucharest, which provides notice of the agreement for the donation and informs us that you and Mr. Christopher Palmer are the contact persons at the US Embassy. At the same time, [America] inquires about the possibility of [Romania] covering the costs of the internal transportation of the donation, to the airport of shipment and whether the armament should be taken from another location. In this regard, we would like to ask you to communicate to the Embassy the following: - the airport of shipment is the International Airport "Mihail Kogalniceanu"; - the armaments are currently in the Targoviste garrison, located 350 kilometers from the airport; [Embassy Note: The reference to "the airport" refers to the Mihail Kogalniceanu airport near the city of Constanta. The distance between the cities of Constanta and Targoviste is more than 300 kilometers. End Embassy Note.] - the armaments will be shipped to a location five kilometers from the airport, one or two days before the airplane arrives and will remain there until boarding; - Romania can cover neither the costs of the internal transportation of the armament estimated at USD 35,520 (according to the annex), nor the handling costs at the airport of shipment; - Romania cannot initiate the procedure of promoting a government decision to approve the donation, unless it receives the end user certificate from the Afghan government. The certificate in original is necessary for the issuance of the export license; - the details regarding the dimensions of the donation are in conformity with the annex. Annex: one page, unclassified. SIPDIS Respectfully yours, Brigadier General Dr. Craciun Leucea Deputy Chief of the Logistics Directorate For the Chief of the Logistics Directorate Drafted by Colonel Aurel Filip, tel. 1001341 End informal Post translation of text. 2. Attached to the letter is an "Unclassified Annex" in table format, which provides a breakdown in Romanian of the cost of internal shipment of the armaments from their current location to the airport of shipment. The annex also provides details about the quantity, size, volume and weight of the armaments to be donated. Delare
32897 2005-05-19 07:35:00 05BUCHAREST1158 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS SECTION 01 OF 02 BUCHAREST 001158 SIPDIS DEPT FOR INL DEPT FOR EUR/NCE - WSILKWORTH, EB/IFD/OIA - MROCHE DEPT PASS TO USTR USTR FOR GBLUE TREASURY FOR DO/GCHRISTOPOLUS USAID FOR E&E SENSITIVE E.O. 12958: N/A TAGS: ECON, EINV, RO, Investment Disputes, Privatization SUBJECT: ROMANIA: INVESTMENT DISPUTE UPDATE Ref: Silkworth EUR/NCE; May 13, 2005 This message is Sensitive but Unclassified. It contains business proprietary information. Not for distribution outside of USG channels. Background ---------- 1. (SBU) Romania's piecemeal approach to privatizations resulted in discontent from a number of foreign investors concerned over inequitable or dubious privatization proceedings. The current government is aware of the damaging impact of investment disputes on Romania's image, but lacks the technical expertise and professional approach to alleviate investors' concerns. Below are brief outlines of potential and current investment claims lodged against Romania. Noble Ventures (U.S.) --------------------- 2. (U) Noble Ventures ("NV") acquired a local steel mill in Resita, Romania. NV claims that the GOR then illegally repossessed shares of the company. Romanian government officials contend that because NV failed to meet its commitments under the privatization contract, the GOR had the legal right to seize NV's shares. Claimant D filed for $350 million in damages with the World Bank's International Center for Settlement of Investment Disputes (ICSID) in Washington, D.C. In 2003, the GOR re-sold the firm to another investor. The case is pending. A decision by ICSID is expected in 2005. New Century Holdings (U.S.) ------------------------- 3. (SBU - Business Proprietary) New Century Holdings (NCH) purchased 11.66 percent of the shares in the domestic Constanta Oil Terminal. In 2001, the Romanian Government transferred certain pipeline assets owned by the Oil Terminal to state ownership. The owners were not compensated for this transfer. The expropriated assets were valued at more than $20 million and constituted approximately 80 percent of the company's capacity for transporting oil. After the expropriation, the Oil Terminal was forced to enter into a concessionary agreement with the government to use the assets it previously owned. The Bucharest Stock Exchange suspended trading of the shares in the Oil Terminal, and the stock lost 50 percent of its value. In 2003, NCH submitted an application to the European Court of Human Rights against Romania based on the expropriation. The case is pending. Both parties have indicated that they prefer to settle the claim directly rather than in court. Cross Lander (U.S.) ------------------- 4. (SBU - Business Proprietary) In 2004 Cross Lander (CL) acquired an off-road vehicle manufacturing company. GOR moved to free the company from past budgetary arrears as agreed in the privatization contract. Because of unsettled non-budgetary arrears to state-owned energy companies, the company was put under judicial reorganization under insolvency law. CL is seeking an amicable resolution of the issue, but is also contemplating the possibility of filing for international arbitration with ICSID for an amount to be determined should it fail to solve the issues. S&T Oil Equipment and Machinery (U.S.) --------------------------------------- 5. (SBU - Business Proprietary) S&T Oil Equipment (S&T) acquired a majority stake in a Romanian explosives and domestic fertilizer production company in November 2003. The contract had as a precondition the fulfillment of a debt for equity swap of the company's arrears to energy companies. The GOR claims to have received S&T's written waiver of the precondition. In 2005, because of overdue debts, the Romanian company was placed under judicial reorganization through Romanian insolvency law. In 2005, the GOR terminated the privatization contract and seized S&T's shares, contending that S&T was in breach of contract. S&T announced intent to file for international arbitration with ICSID for an amount TBD. Gavazzi Steel (Italy) --------------------- 6. (U) Gavazzi Steel (GS) bought a state-owned local steel mill in 1999. The company was subject to reorganization under the Romanian insolvency law, reportedly due to GOR's failure to reschedule debts, as agreed in the initial privatization deal. In 2004, the GOR terminated the privatization contract and seized GS's shares. In 2005, the GOR sold the steel mill to a Russian company. GS announced intent to file claim with ICSID for an amount TBD. Comment ------- 7. (SBU) Key economic players in the current Romanian government are keenly aware that the ICSID's impending decision on the Noble Ventures case has the potential to damage the GOR's reputation and credit rating. Despite these potentially serious consequences, the GOR still has not created a damage control plan or strategy for addressing possible fallout as the country still struggles on a daily basis to handle immediate political and economic issues, as well as challenges resulting from upcoming EU accession. Delare
33012 2005-05-20 13:20:00 05BUCHAREST1173 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 03 BUCHAREST 001173 SIPDIS FOR CA-A/S HARTY, CA/OCS/CI, EUR/NCE - WILLIAM SILKWORTH E.O. 12958: DECL: 05/16/2015 TAGS: CASC, PREL, OVIP, RO, adoption, Repatriation SUBJECT: A/S HARTY MEETINGS IN ROMANIA ON ADOPTIONS Classified By: CONSUL GENERAL BRYAN DALTON FOR REASONS 1.5 B AND D SUMMARY AND ACTION REQUEST -------------------------- 1. (C) In meetings May 10 and 11 with President Basescu, Foreign Minister Ungureanu and other officials of the Government of Romania (GOR), Assistant Secretary Maura Harty found no evidence that the GOR had specific plans or strong commitment to resolve pending cases of international adoption affected by the law in place since January 1 banning adoptions out of Romania. She informed her interlocutors she would have to share that impression with American families whose petitions to adopt Romanian children were affected by the ban. She reiterated to FM Ungureanu the message given by the Secretary during his meeting with her in Washington, that establishing a road map towards eventual inclusion of Romania in the U.S. Visa Waiver Program (VWP) would depend on progress towards resolving the pending cases. 2. (C) (Summary, cont,d.) After his meeting with A/S Harty, President Basescu appeared to have changed his mind and decided to take positive action on the issue. On May 12, he informed Charge d,Affaires that he had discussed the adoption issue with EU Commissioner for Enlargement Olli Rehn on May 11; would instruct FM Ungureanu to write the EC expressing the desirability of putting in motion a process to resolve the cases; and that Romania would take the initiative to convince the Germans, Italians, French and others to wield their influence and urge the EC to view resolution of the cases favorably. End summary. 3. (C) Action Request: Per internal discussions during A/S Harty,s visit, post requests Department consideration of a letter from the Secretary to the European Commission urging the EC support humanitarian resolution of pending international adoption cases from Romania. End request. BASESCU OBSTINATE ON ADOPTIONS, DEFLECTS DISCUSSION OF NAZIS --------------------------------------------- --------- 4. (C) A/S Harty opened her May 10 meeting with President Traian Basescu by expressing support for Romania as it seeks release of Romanian journalists being held hostage in Iraq. She thanked Basescu for his commitments made in Washington on March 9 and 10, to President Bush and to American families who have petitioned to adopt Romanian children, to explore resolution of pending cases of international adoption legally registered before the GOR instituted Law 272/2004 banning such adoptions on January 1, 2005. She noted the families and the Department had respected Basescu,s request not to discuss the issue publicly until after Romania,s April 25 signing of its treaty of accession to the European Union. She regretted that, since that date, the Government of Romania (GOR) appeared to have taken no action towards finding a solution for the cases. She urged that the GOR expeditiously determine which of the children might no longer be eligible for adoption, so the families waiting for them would not keep up their hopes in vain. She acknowledged there are those who oppose permitting adoptions out of Romania, but noted that the European Parliament and the EU Rapporteur for Romania had publicly condoned adoptions in certain cases. 5. (C) Basescu said he did recall his conversations in Washington, but that raising this subject in Brussels with the EU was like &starting the clock on a bomb.8 Romania currently has huge problems with the EU. The GOR needs to settle this issue for France and Germany as well, and hopes in the coming months to find some opportunity to advance a special law regarding children pending adoption. Some of those children already are in the U.S. without completed adoptions. He hoped people in Brussels would understand the situation in Romania more clearly in the coming months, so there could be discussions of the pending cases. He stated he had not abandoned the issue and wanted to clear up this problem in Romania,s relations, including with France and Germany. Now is an &uncertain period8 due to politicians in Germany campaigning for office who try to appear tough on countries seeking to join the EU. 6. (C) Basescu reported that on May 11 he would be meeting EU Commissioner for Enlargement Olli Rehn, visiting from Brussels, and would discuss the 256 children being sought for adoption to various countries, including Israel. 7. (C) A/S Harty explained that Basescu,s comments in Washington had given the families hope for action after April 25, and asked whether there were a new reference date or &road map8 she could share with them. Basescu said there was not, but that if he failed on this issue he would fly to the U.S. to tell the families himself. 8. (C) Asked whether there were support within the European Commission to resolve these cases, Basescu responded that now was a &very inappropriate moment8 to discuss the issue, even with the European Parliament. The &right way8 to proceed would be to talk to the EC. Basescu confirmed that the &backbone of the problem8 was the shadow Rapporteur for Romania,s EU accession, Baroness Emma Nicholson. (Note: Nicholson is a British member of the European Parliament, former Rapporteur for Romania and fierce foe of inter-country adoption out of Romania. End note.) Basescu said he agreed with Nicholson in principle, but that the pending cases required solution. 9. (C) A/S Harty pressed again for a timeline on the issue, but Basescu replied he would have to first &test the atmosphere8 and might have some idea after his May 12 meeting with Rehn . 10. (C) Basescu stated the issue of the pending adoptions was a &closed subject8 and that he would discuss it with Rehn. When A/S Harty responded that she certainly hoped the subject was not closed, Basescu responded emphatically &it is closed. I have my obligation to the families. Look at the realities ) we have huge problems in Brussels. Do not focus on small issues(focus on our big problems.8 He said that, now the EU accession treaty was signed, he would begin discussion of the issue, starting with Rehn. Meanwhile, he had 22 million Romanians and Brussels to worry about. 11. (U) A/S Harty made clear the USG did not regard the issue as small. She assured Basescu the American families seeking to adopt the children would be relentless in pressing for resolution. She offered USG assistance in intervening with the EU, France or Germany. Basescu responded that such approaches in the past had been tried but were a disaster, due to interventions by &our friend(,dear, Emma8 Nicholson. He said it was &ridiculous8 to block the pending cases but no one was prepared to create a confrontation within the EC. He speculated that Nicholson might become less aggressive on the issue now it was clear her party had lost in the recent elections in the UK. He said Nicholson was key to the issue and had mobilized uninformed European parliamentarians, creating unfair pressure against the children being sought for adoption, for the sake of a &political game(without principle.8 12. (C) Basescu closed the discussion by saying &we will do everything we can. It is no longer a political problem for me, but a personal one.8 REPATRIATION OF FORMER NAZIS ---------------------------- 13. (U) A/S Harty commended Basescu for his public acts and words acknowledging Romania,s role in the Holocaust, and urged that Romania accept repatriation of several Romanian national former Nazis subject to deportation from the U.S. Basescu claimed not to have known this issue would be on the agenda and was not prepared to discuss it. (Note: Embassy had alerted MFA in advance that A/S Harty would raise the issue. End note.) 14. (U) A/S Harty was joined in this meeting by Angela Aggeler, Spokesperson for the Bureau of Consular Affairs, Charge d'Affaires Thomas Delare, and Consul General Bryan Dalton (notetaker). Basescu was joined by Foreign Ministry Director General for Global Affairs Stelian Stoian and Director General for Consular Affairs Cristian Gaginsky, Presidential Counselor Elena Udrea and State Counselor Anca Ilinoiu. FM UNGUREANU: MORE TALK, NO WALK -------------------------------- 15. (C) A/S Harty told Ungureanu she was at loss as what to tell families with regards to Romania,s closed adoption policy, saying &Hope is not a policy.8 Families cannot wait an indeterminate amount of time and a preparatory step needs to be made to deal with the 200 pending cases. She sought a determination as to which children were not eligible for adoption so the Americans seeking to adopt them could move on with their lives. She proposed that the cases pending when Law 272/2004 came into effect be &grandfathered8 and processed to conclusion under the law in effect when they were registered with the Romanian Adoption Committee. 16. (C) When FM Ungureanu raised the question of including Romania among countries on a &road map" towards eventual inclusion in the U.S. Visa Waiver Program (VWP), A/S Harty reiterated the position that Secretary Rice had laid out in her meeting with Ungureanu in Washington the week before, that there would be no &traction8 on VWP unless there were &traction8 on adoptions. 17. (C) FM Ungureanu stated a general solution to all of the international adoption cases was needed, if not general, then on a case-by-case basis. He has started to prepare a solution and needs the time to discuss it with the European Commission. The road map needs to be taken to Brussels. He wants to know how Brussels feels about this issue before Romania makes a final decision. Ungureanu assured A/S Harty that they were on the same side of the issue, and that he was looking for a solution and would work with her in good faith. 18. (U) A/S Harty was joined in the meeting by CA Spokesperson Aggeler, CG Dalton and Vice Consul Ann Marie Everitt (notetaker.) Ungureanu was joined by MFA Director General for Consular Affairs Cristian Gaginsky, Presidential Counselor Ileana Tinis and MFA Desk Officer Alina Stoicescu. PRIME MINISTER,S OFFICE: BETTER DISCUSSION BUT NO SPECIFICS --------------------------------------------- ----- 19. (U) On May 11, A/S Harty called on State Counselor Ambassador Mihnea Constantinescu, Director of the Prime Minister,s Office, Theodora Bertzi, Secretary of State of the Romanian Office for Adoptions (ROA) and MFA Advisor Calin Fabian. A/S Harty began the discussion by expressing her disappointment with her May 10 meeting with President Basescu. That discussion led her to believe that the two sides are farther apart than she originally thought. A/S Harty stated that the American families must know if there is a roadmap for resolving the pending cases so they can pursue the adoptions or move on with their lives. She suggested the GOR could address the concerns of both the foreign families seeking to adopt and the EU by treating the pending cases under a different law but enforcing the current law for any new adoption cases. In addition, A/S Harty asked if it would be useful for the U.S. to coordinate with other countries with pipeline cases. Finally, she expressed the need for a thorough inventory of the pending cases. 20. (C) Constantinescu explained that although the GOR is committed to resolving the adoption issue, it was not a high priority for the new government during its first months in office. Regarding the idea of two laws, one for the old cases and one for the new, Mr. Constantinescu asked whether the U.S. could support Romania if it made such an offer to the EU. A/S Harty informed him that her deputy would be in Brussels soon and could assist the GOR. Regarding USG coordination with other pipeline countries, Mr. Constantinescu replied that the GOR has not felt much pressure from the Europeans on this issue. He advised that both the USG and GOR must &take the temperature8 of Brussels and the European capitals on the matter. Mr. Constantinescu also agreed that there must be an up-to-date inventory and examination of the pending cases. He pledged to raise A/S Harty,s concerns with Romanian Prime Minister Calin Popescu-Tariceanu. 21. (C) A/S Harty and Constantinescu concluded their meeting by agreeing on the importance of continued communication. In closing, Mr. Constantinescu asked whether the roadmap towards inclusion of Romania in the Visa Waiver Program were a priority for the USG, saying the GOR needed to know whether this issue remained on the bilateral agenda. A/S Harty said discussions should continue but there could be no progress on the visa waiver program if there were no progress on adoptions. 22. (U) A/S Harty was joined in the meeting by CA Spokesperson Aggeler, CG Dalton and Vice Consul Kevin Opstrup (notetaker). BASESCU,S CHANGE OF HEART? -------------------------- 23. (C) On May 12, Charge attended a meeting between Basescu and visiting Assistant Secretary of Commerce William Lash. Basescu abruptly interrupted his discussion, and, addressing the Charge, said he had discussed the adoption issue with EU Commissioner for Enlargement Olli Rehn on May 11; would instruct FM Ungureanu to write the EC expressing the desirability of putting in motion a process to resolve the cases; and that Romania would take the initiative to convince the Germans, Italians, French and others to wield their influence and urge the EC to view resolution of the cases favorably. COMMENT ------- 24. (C) Post believes Basescu,s May 12 statements indicate he took to heart A/S Harty,s message and realized anew how seriously the USG takes resolution of the pending cases. His was the most forward-leaning commitment to action by the GOR leadership to date. Post will follow up with his advisors, the Prime Minister,s office and the MFA in the coming days, and continue to discreetly explore with European embassy interlocutors possibilities for their engaging the EC and European Parliament to resolve pending adoptions. End comment. DELARE
33101 2005-05-23 13:55:00 05BUCHAREST1190 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 02 BUCHAREST 001190 SIPDIS STATE FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: DECL: 05/23/2015 TAGS: PREL, PGOV, PTER, CASC, IZ, RO, Hostage SUBJECT: ROMANIA CELEBRATES RETURN OF HOSTAGES; SEEKS RETURN OF AMCIT GUIDE REF: A. A) BUCHAREST 1184 (EXDIS) B. B) BUCHAREST 1030 Classified By: POLITICAL SECTION CHIEF ROBERT GILCHRIST FOR REASONS 1.4 B AND D 1. (SBU) This message contains information on an American Citizen protected by the privacy act. 2 (C) Summary: Romanians welcomed home from Iraq May 23 the three Romanian journalists released by kidnappers on May 22. President Traian Basescu thanked Romanian security services as well as authorities at the U.S. Embassy in Baghdad for their efforts. Although Romanian actions leading to the release remain unclear, Basescu is riding high politically, with most political commentators praising his efforts throughout the crisis. The GOR continues to seek the return to Romania of U.S.-Iraqi dual national Munaf Mohmammad, who served as guide to the three journalists. End Summary. 3. (C) Romanian media covered heavily the afternoon of May 23 the emotional return of the three Romanian journalists who had been held hostage in Iraq. The return of the hostages brings an end to the 55-day crisis, which led to some calls domestically for Romania to reassess its troop presence in Iraq. The press noted that not among the returnees was American-Iraqi dual national Omar Munaf Mohammad, who was a longtime resident of Romania and served as a guide for the journalists. The President's office noted in a press statement that Mohammad remained in Iraq under detention by the Multinational Forces. Throughout the crisis, post worked closely with the GOR in ensuring a constant exchange of information. In the days before the release, however, the GOR had been relatively quiet and there had been no indication of the hostages' imminent release. Basescu: Thanks to Families, Intelligence Services --------------------------------------------- ----- 4. (SBU) The first confirmation to post of the hostages release came in a May 22 telephone call from Basescu to Charge. Shortly after that call, Basescu held a press conference broadcast on most major television and radio stations. He announced that the hostages had been taken into the custody of the Romanian Embassy in Baghdad and would be returned to Bucharest soon. He thanked first the families of the hostages for their "decency and decorous conduct," which played an important part in helping bring the hostages home. He expressed a special thanks to the Romanian intelligence services, which he said had executed "100 percent" the release of the hostages. He specifically commended the Foreign Intelligence Service (SIE), Internal Intelligence Service (SRI) and Army Defense Intelligence Service (DIA) for their cooperation. Among others, he also thanked the special Romanian anti-terror team sent to Baghdad, foreign intelligence services, Romania's Arab community, and "not the least", U.S. authorities in Baghdad for their support and help in transporting the hostages to the airport 5. (C) Although he did not provide details on how the Romanian government obtained the release of the hostages, he said that Romania did not "negotiate its present or future foreign policy and did not pay any ransom." He said that the case involving the hostages was "very complex," and he anticipated making another statement when it is completely resolved, "probably in a couple of weeks." (Note: Other top Romanian officials -- including PM Calin Popescu-Tariceanu have similarly emphasized that Romania had not paid a ransom. Presidential counselor on security issues Constantin Degeretu again underscored directly to post that Romania "did not negotiate a ransom, did not negotiate money... we just tried to save lives." End note.) A Different Kind of Kidnapping ------------------------------ 6. (C) Basescu's assertion that the case is "very complex" hit a strong chord with many in the Romanian media and independent local analysts. From early on, the central belief has been that the kidnapping was orchestrated by wealthy Syrian-Romanian businessman Omar Hayssam. According to general media opinion, Hayssam had been involved in nefarious business deals linked to prominent members of the opposition Social Democratic Party (PSD). He then sought to orchestrate a crisis that he could solve and thus win the favor of Romania's new leadership. This view of Hayssam was also shared by many in government. Hayssam was arrested by Romanian police on corruption charges on April 5 and remains in detention. As a close business associate of Hayssam, Munaf Mohammad has also been implicated in the case. According to the press, on May 22 the Romanian prosecutor's office stated that charges were pending in Romania against Mohammad in absentia for unspecified "economic crimes." Some media reported separately that an arrest warrant had been issued against him. 7. (C) Although Hayssam's arrest stirred Press allegations of a pervasive "Arab Mafia" in Romania, it is also clear that Romania sought assistance from the local Arab community and from Arab countries in resolving the kidnapping. On May 23, Dr. Isam Rifai, head of a local Romanian-Arab business association, claimed that the hostages had "never been in danger" and that Romanian Arabs "used their influence" in Iraq to help with the case. FM Ungureanu traveled to Syria on April 30. The First Secretary at the Egyptian Embassy in Bucharest told PolChief that Romania had also approached Cairo for "any help possible" on the kidnapping. Presidential Counselor Degeratu also privately praised the contributions of the Romanian Muslim community in helping to resolve the crisis. Basescu "Riding High" --------------------- 8. (C) While the circumstances surrounding the kidnapping and the release remain opaque, as one political analyst conveyed to post, it is obvious that "Basescu is now riding high in public opinion." The summer 2004 kidnapping and killing of two hostages from neighboring Bulgaria had been covered heavily in the Romanian media. Many Romanians now expected the same for the three journalists and Mohammad, particularly after the kidnappers threatened to kill the hostages in April. Although a few dissenting voices have questioned Basescu's "micromanagement" of the crisis, nearly all in the media are now lauding what is viewed as a success "against all odds" in bringing the hostages home. A news director for Prima TV, which employs two of the journalists, thanked Basescu for "having the guts to resist pressures" during the crisis and managing the situation with utmost "efficiency." The mother of one of the hostages said she had "trusted the president until the end" and thanked him profusely for doing "all he could." 9. (C) Several commentators also noted that Basescu may use this surge in popularity for other political ends, potentially to bring about a new cabinet shakeup or even snap parliamentary elections to bring a larger majority for the government led by the Liberal-Democratic alliance. (Note: Presidential Advisor Claudiu Saftoiu previously mentioned this possibility to PolChief in the event the hostages were safely released. Saftoiu said at the time that Basescu had decided to remain relatively quiet about his interest in new elections during the crisis. Saftoiu believed that Basescu could renew these calls after the hostage's return, particularly if PM Tariceanu agreed to a new vote. End Note.) 10. (C) Comment: The last month has been a hard one on Romania, as the hostage crisis deepened and torrential flooding in the western part of the country rendered many homeless. This tension has now been replaced by jubilation over the hostages' release. We anticipate that the GOR will continue to press for Mohammad's return, as they believe he may hold the key to the motivation for the kidnapping. At the same time, however, Romania's commitment to a strong strategic relationship remains strong and we anticipate Basescu will stick to his word to keep Romanian troops in Iraq until their presence is no longer needed. 11. (SBU) Comment continued: On May 22, Consul General spoke by telephone with Munaf Mohammad's wife, Victoria Mohammad, who has dual U.S. and Romanian citizenship and resides in Romania. CG confirmed that Mohammad had been released and committed to remain in contact and provide updates as appropriate. End Comment. 12. (U) MINIMIZE CONSIDERED. DELARE
33250 2005-05-25 13:30:00 05BUCHAREST1205 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS SECTION 01 OF 02 BUCHAREST 001205 SIPDIS STATE FOR EUR/NCE - WSILKWORTH, EB/IFD STATE PASS USTR USTR FOR LERRION TREASURY FOR STUART USDOC FOR 4232/ITA/MAC/EUR/OEERIS/CEEB/BURGESS/KIMBALL STATE PASS USAID SENSITIVE E.O. 12958: N/A TAGS: ECON, PGOV, ETRD, EIND, EFIN, RO SUBJECT: ROMANIA PLANS TO USE THE CAPITAL MARKETS TO PAY PROPERTY RESTITUTION CLAIMS 1. (U) SUMMARY: The Tariceanu Government has proposed the creation of a real estate investment fund as a novel way of addressing the property restitution issue without drawing from government funds. By unlocking the value of static state holdings through transfer to a publicly traded fund, the GOR will in effect compensate claimants without impacting the budget. The GOR plans to select a financial firm by November first, preferably one with Wall Street expertise, to manage the fund and to secure its listing on a European exchange. The proposal is in response to increasing calls by the IMF for fiscal prudence and growing pressure from former property owners to settle their claims equitably. END SUMMARY COMPENSATING OWNERS WHILE AVOIDING A BUDGET CRUNCH --------------------------------------------- ------ 2. (SBU) On May 16 Econoffs met with the fund's creator, Secretary of State Nicolae Ivan, who described the property SIPDIS fund as a way to simplify owner compensation in the face of a tight budget which constrains borrowing. He stated that the GOR plans to submit draft legislation on the project to the Parliament for consideration in early June. The fund will be composed of real estate holdings, foreign receivables and shares of state-owned companies, the composition of which will be determined by the GOR. The State Privatization Agency (AVAS) has stated that it will exclude non-viable companies from the list. 3. (SBU) The fund will be used to compensate those whose property was confiscated by the Romanian state during Communism. The fund will not be used, however, to settle property disputes between the Greek Catholic and Orthodox churches. Although the GOR's stated preference is for original owners to reacquire their real estate assets if at all possible, in reality this has infrequently occurred, usually when owners have taken the GOR to court. Nevertheless, Ivan emphasized that by law a current tenant of confiscated property must vacate the location within a specified time period. Only if the property has been destroyed, no longer exists, or is otherwise impossible to return will the equity fund compensate a former owner. Local authorities will make the first determination whether or not a claimant has the right for compensation through the fund. If the authority disagrees with the claim, the former property owner may opt to appear before a judge to argue the case. An original owner has the right to compensation by the fund in an amount equivalent to the property's estimated value. AMBITIOUS PLAN TO BRING FUND TO MARKET -------------------------------------- 4. (SBU) The GOR plans to transfer property from state entities into the property fund within thirty days of the law's passage in Parliament. The GOR intends to hire, no later than August, a law firm with international expertise to conduct a tender offer for a fund manager. Ivan's plan involves selecting a manager by November first, and signing a binding contract with the selected firm no later than January 1, 2006. The GOR's goal is to float the fund on both the Bucharest and a yet-to-be-determined European exchange within one hundred days of contract execution. Ivan emphasized that transparency in the fund's operation is critically important and that he privately hopes that an American firm will be awarded the contract. 5. (SBU) The funds' total value will be equivalent to the value of outstanding property claims, currently $4.5 billion, with fixed assets, such as land and forests, to be listed at book value. The GOR would tap an independent expert to conservatively value state-owned companies; Ivan expects valuations for these assets to be at or close to book value. As claims are added, the total book value of the fund will similarly increase as the GOR adds property equivalent to the revised value. Shareholders will have the right to immediately cash out of the fund upon its launch, or may opt to hold their shares for sale at a later date. Claimants will have until January 1, 2007 to request compensation from the fund. The fund will terminate at the ten-year mark, and properties will be liquidated at that time. 6. (SBU) Secretary Of State Ivan asked Post for assistance in spreading the word about the fund's upcoming tender to interested parties, while stating his preference for Wall- Street firms with experience in real estate fund management. Ivan hopes to interview with financial publications, such as the Wall Street Journal, that will reach his target audience. Econoffs promised to raise this with Public Diplomacy. Ivan hopes that Romanians will view the fund as a safe place to invest money for retirement. Comment ------- 7. (SBU) Post believes that the fund represents a creative means of compensating former property owners through available resources without damaging the budget. Many questions, however, remain unanswered, including which assets will be transferred into the fund, how the portfolio will be valued, and how claimants, most of them elderly, will receive information on how to convert shares into cash. Press reports about the program have been skeptical, possibly due to memories of the unsuccessful mass privatization program which occurred in the early 1990's. That program was criticized for its lack of transparency and absence of an education campaign to inform shareholders of their investment options and rights. In order to avoid a repeat of past mistakes, the GOR will need to compensate claimants in a transparent and equitable manner, while dispersing necessary investor information and education to shareholders. Although AVAS has announced that nonviable companies will be excluded from the portfolio, Post will closely monitor the fund's composition to ensure that it does not become a "dumping ground" for low quality assets. Delare
33325 2005-05-26 12:58:00 05BUCHAREST1243 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS BUCHAREST 001243 SIPDIS SENSITIVE STATE FOR EUR/NCE - WILLIAM SILKWORTH BAGHDAD FOR HOSTAGE WORKING GROUP E.O. 12958: N/A TAGS: PTER, PREL, IZ, RO SUBJECT: ROMANIAN REQUEST TO PARTICIPATE IN INTEROGATION OF MOHAMED MUNAF SENSITIVE BUT UNCLASSIFIED - PROTECT ACCORDINGLY 1. (U) This is an action request - see para 3. 2. (SBU) CDA received letter for General Prosecutor Botos 5/26/05 requesting contact information at FBI to facilitate GOR participation in the interrogation of Mohamed Munaf in Baghdad. Text of letter is below. Begin Text: Your Excellency: The Romanian Public Ministry - Prosecutor's Office attached to the High Court of Cassation and Justice presents its cordial salute to the Embassy of the United States of America in Bucharest, and has the great honor to thank your Excellency and your representatives for the support granted in the investigation that led to the release of the three Romanian journalists. Your support is the proof of Romania's cooperation on all levels with the United States of America and a guarantee for future enlargement of the relations between the judicial authorities of our countries. I take this opportunity to kindly ask for your support in establishing a contact with the Director of the Federal Bureau of Investigation. A direct contact would be very helpful for us in obtaining the agreement for joining the interrogation of Mohamed Munaf, who at present is in the custody of the U.S. authorities in Iraq. We stress the fact that from our investigations resulted with certainty that Mohamed Munaf was involved in the kidnapping of the three Romanian journalists and is also a suspect in several cases of organized crime related offences and economic offenses. I use this opportunity, Your Excellency, to assure you of my highest consideration. Ilie Botos General Prosecutor of Romania End Text. 3. Action: Please advise. 4. Minimize considered. DELARE
33326 2005-05-26 13:13:00 05BUCHAREST1245 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS SECTION 01 OF 02 BUCHAREST 001245 SIPDIS SENSITIVE DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958, AS AMENDED: N/A TAGS: PGOV, PREL, KDEM, SOCI, ECON, RO, political assessment SUBJECT: ROMANIAN POLITICAL PARTIES SEARCH FOR AN IDENTITY AS THEY PREPARE FOR EUROPEAN PARLIAMENT MEMBERSHIP REF: BUCHAREST 0716 1. (SBU) Summary. Two of the six parties in the Romanian parliament have explicitly redefined themselves as "popular" or "conservative" this year and President Basescu's Democratic Party (PD) is considering a similar move. Their motive is to curry favor with the European Popular Party (EPP), a heavyweight in the European Parliament (EP). Starting in September, Romanian political parties represented in parliament will send a total of 35 observers to the EP. How the parties define themselves will determine their affiliations within the EP, where, after Romania's likely EU accession in 2007, Romania will send full-fledged MEPs. End Summary. Rightward Trend for President's Party ------------------------------------- 2. (SBU) Senior leaders of President Basescu's Democratic Party (PD) have confirmed to Embassy officers that the PD is on the verge of formally redefining itself from a "social democratic" to a mainstream conservative party. Former Minister of Defense Sorin Frunzaverde characterizes the expected move as an attempt to allow the PD to affiliate itself in the European Parliament with the center-right European Popular Party (EPP). Frunzaverde, who publicly acknowledges that during the PD June 25 national convention that he will throw his hat into the ring for party president, describes the PD as essentially a center-right party, with an urban, middle class constituency. Other senior PD officials have told us that a formal break with left-of-center social democratic ideology would allow the PD to distinguish itself more clearly from its arch-rival -- the former ruling Social Democratic Party (PSD), from whose predecessor the PD split in spring 1992. 3. (SBU) PD leaders took the first public steps to break the party's formal ties with the center-left when they decided May 7 to allow candidates for the party's leadership positions to run on platforms that do not espouse social democratic values. Although the Constitution required President Basescu to resign his party membership when he assumed the presidency (based on the premise that the nation's president should abandon partisan politicking), the combative Basescu will probably dictate the PD's future ideological course - and its key leadership positions. 4. (SBU) One clear indicator of the party's probable future direction: Basescu, party leaders and ordinary rank and file members are still smarting at the Party of European Socialists (PES) May 19 decision to "postpone" the PD's membership bid - and to grant the PSD full membership. The PES acerbically concluded that the PD still needs to define its ideological stance. PES representatives also visited Bucharest May 10-11 in an (entirely unsuccessful) attempt to reconcile the viscerally opposed PD and PSD. Acting PD president and Basescu confidante Emil Boc drove a stake through the heart of Romanian social democratic unity, however, when he declared May 11 that the PD "cannot shake hands with the PSD, a corrupt, anti-reformist and communist party." Additionally, relations between PD and the international socialist movement have been chilly ever since the Socialist International openly backed PSD in the December 2004 parliamentary and presidential elections. Although many PD leaders and members would be relieved to finally sever their international social democratic ties, old habits die hard and some PD loyalists may still be wed to a vaguely left-of-center philosophy. Indeed, during a recent visit to Parliament, PolOffs observed PD deputies and staffers wearing lapel pins featuring the party's initials atop the socialists' trademark rose. Opportunist "Humanists" Turn "Conservative" ------------------------------------------- 5. (SBU) Over the same period, the PD's tiny governing coalition partner, the Romanian Humanist Party (initially a self-avowed "social-liberal" party and the smallest of the six parties represented in parliament) decided May 7 to change its name to the Conservative Party (PC) and to take steps to affiliate the newly named CP with the EPP. Media magnate, party president, and chief source of party funds Dan Voiculescu proposed the move to the party's congress, which dutifully followed his "suggestion." Voiculescu, unsurprisingly reelected as party president by the congress, declared that "only a right-wing identity" can boost the party's sagging poll standings. He asserted that "striking similarities" exist between the humanist and the conservative doctrines - citing respect for private property, a hesitant attitude toward government meddling in the economy, and respect for family values, the Church, the armed forces and the nation. Many analysts view Voiculescu's move to redefine his party as the death throes of a dying - or at least very ill - political party: recent polls give the PC (vice PUR) less than a two percent standing in the polls. In any event, all independent political analysts and most ordinary Romanians recognize the PC as exactly what it is - a creation of tycoon Voiculescu lacking a meaningful ideological orientation, despite its attempts to paint itself as a reformist movement. EPP's other Romanian Buddies ---------------------------- 6. (SBU) The ethnic Hungarian party (UDMR), the fifth largest of the six parliamentary parties and a member of the center-right coalition, has been affiliated with the EPP since October 1999. The tiny Christian Democrat National Peasants' Party (PNTCD), with a modest support base in western Romania, is also an EPP member. The PNTCD decided March 5 to change its name to the Christian Democrat Popular Party (PPCD), in an attempt to curry favor with the EPP following its consecutive failures (in 2000 and 2004) to gain enough votes to enter parliament. Traditionally, the PNTCD has been the party in Romania most closely identified with the EPP; the PPCD's fragile electoral existence coupled with the move of more mainstream parties to the right calls into question the continuity of this relationship. 7. (SBU) Many political analysts deride as sheer opportunism the recent attempts of extreme nationalist Corneliu Vadim Tudor to reshape his Greater Romania Party (PRM) as a mainstream conservative party, redubbed March 12 as The Greater Romania Popular Party (PPRM). (Ref) The "new" PPRM, which has on paper shed Tudor as its leader, also approached EPP for support - but EPP rejected the request. PNL and PD deputies told PolOffs May 24 that PPRM appears to be a party on a steady downhill spiral, as its most hardcore backers, including ex-members of the notorious communist-era "Securitate" secret police die off and its "new" message attracts few, if any, voters. Nonetheless, the PPRM remains a force on the political scene, virtually tied for third place in Parliament with PD and having shown itself willing to enter into de facto alliances of convenience with the PSD in parliament against the PNL-PD-led center-right coalition. The Big Question: Where to Sit at the European Club? --------------------------------------------- ------- 8. (SBU) Comment. Ideology counts for little on the Romanian political scene. As one senior PD politician recently told us, Romanian parties are "pragmatic." A more jaundiced observer would describe them as "wholly opportunistic." In any event, a road-to-Damascus conversion to free market principles and limited government a la Margaret Thatcher does not underlie the migration by several parties toward the right of center mainstream. Rather, the driving force is Romania's road to Brussels following its April 25 signature on the EU Accession Treaty, which entitles Romania to send 35 "observer" MPs to the European Parliament in September of this year. These observers will become full-fledged Members of the European Parliament (MEPs) upon Romania's almost certain EU accession on January 1, 2007. This means that each party in the Romanian parliament needs to decide, literally and figuratively, where it will sit in the European Parliament. 9. (SBU) Hans-Gert Poettering, an EPP German leader, announced May 21 that EPP will hold a special meeting of its leadership in Bucharest on June 2-3 to review the applications of Romanian parties. Assuming the PD moves definitively to the right, that party looks like the EPP's best bet, given that the PNTCD is nationally insignificant, the UDMR and PC are relatively minor parties and the PPRM remains an extremist masquerading as a moderate. Of the mainstream conservative wannabes, only Basescu's PD brings real muscle to the EPP. End Comment. 10. (U) Amembassy Bucharest's reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest. DELARE
33385 2005-05-27 10:49:00 05BUCHAREST1256 Embassy Bucharest UNCLASSIFIED UNCLAS SECTION 01 OF 02 BUCHAREST 001256 SIPDIS STATE DEPT FOR EUR/NCE - WILLIAM SILKWORTH STATE DEPT ALSO FOR INL/AAE, EUR/ACE E.O. 12958: N/A TAGS: PREL, PGOV, PARM, KJUS, KCRM, SNAR, RO, SECI SUBJECT: INL ACTING ASSISTANT SECRETARY NANCY POWELL - MAY 10-11 VISIT TO BUCHAREST Summary ------- 1. International Narcotics and Law Enforcement Affairs (INL) Acting Assistant Secretary Nancy Powell traveled to Bucharest May 10-11 for meetings at the Southeast European Cooperative Initiative (SECI) Center and to discuss INL regional and bilateral programs and issues with key Romanian officials. Romanian President Traian Basescu underscored continued Romanian commitment to SECI Center and expressed strong appreciation for USG support over the years. Deputy Interior Minister Florin Sandu similarly emphasized the importance of SECI Center's regional role and the value of USG continued support of the work of SECI. End Summary. SECI Welcomes AA/S Powell ------------------------- 2. SECI Center Acting Director General Alexandrou Ionas welcomed AA/S Powell May 10 on her first visit to SECI Center. SECI is a twelve member state organization, with police and customs representatives assigned from each. In addition to acting as an information sharing center on current cases, a series of operational task forces develop new cases in transborder crime. Ionas expressed firm appreciation for the support the U.S. had provided SECI over the years, including the recent funding of the financial crime task force. That task force had been dormant for several years and now is being reactivated with the assistance of the Secret Service and the Italian Financial Police and the posting of an INL officer at the Center to coordinate assistance funds. 3. In the overview of SECI programs, General Ionas detailed a recent case in which a Moldovan trafficking witness, who was forced to testify a second time by a Macedonian court, did so via video teleconferencing from Moldova. The equipment was purchased by the FBI liaison at SECI and was coordinated through the Macedonian and Moldovan officers posted to the SECI Center. This video testimony was the first of its kind in the region, supported by recently enacted laws in both Moldova and Macedonia which made the testimony possible by not requiring the victim to travel to the location of the court that is hearing the case. AA/S Powell congratulated the SECI Center on this operation and expressed her hope that future opportunities would allow this and other technological advances to be utilized in transborder crime issues. 4. AA/S Powell was also briefed on the possible role of SECI in a larger Black Sea Security Initiative and how that role could expand in cooperating with the Black Sea Economic Cooperative (BSEC) Organization. General Ionas pointed out that threats in the Black Sea region will come from non- state actors with associations to organized crime. He demonstrated that SECI is well equipped to assist in the fight against organized crime, not only in the Balkans but in the Black Sea region. He based that conclusion on the fact that a majority of SECI states are also members of BSEC, thereby facilitating cooperation between the two organizations. 5. AA/S Powell also received a detailed briefing on the work of the Southeast Europe Prosecutor's Advisory Group (SEEPAG) and how their work is directly linked with that of the SECI Center. Ionas concluded the briefing with a tour of the headquarters, which is located in a section of the Palace of the Parliament, which had been originally constructed by former dictator Nicolai Ceasescu. 6. In her comments, AA/S Powell praised the recent successes in human trafficking convictions and emphasized the importance of targeting human trafficking in the region, the reactivation of the financial crime task force, since this has proven to be an effective tool in combating organized crime, and the plans of involving SECI in the Black Sea Security Initiative. She further expressed her pleasure that SECI has done so much in the fight against transborder crime in only four years of operation. Finally, she said it was important for SECI to reach out to EU institutions as the date for EU accession approaches. President Basescu: Thank You for Your Support --------------------------------------------- 7. During the Southeast Europe Cooperative Process (SEECP) meeting being hosted in Bucharest, the heads of government of all Southeast European Countries took the time to visit the SECI Center on May 11. AA/S Powell had the opportunity to meet Romanian President Traian Basescu as well as Special Coordinator of Stability Pact (SCSP) Ehrhard Busek. She also exchanged greetings with UNMIK Deputy Special Representative of UN Secretary General (DSRSG) Larry Rossin, and spoke briefly with him about SECI's role in building stability in the region by targeting organized crime. In a brief exchange, Basescu thanked AA/S Powell for the firm support of the SECI Center and commented later to SECI Acting Director Ionas that US support is critical for SECI to build on its current successes such as the recent February arrests of human traffickers. Finally, Busek pointed out the importance of resources devoted to SECI to remain at SECI. He recognized the importance of other regional initiatives such as GUAM but argued they should not divert SECI resources. Deputy Interior Minister Sandu Appreciative of INL Programs --------------------------------------------- ------------- 8. In a meeting with Deputy Interior Minister Florin Sandu AA/S Powell was thanked for the INL bilateral programs initiated and coordinated through Post. Sandu emphasized the programs in anti-trafficking, cyber crime and anti- narcotics as examples of highly successful programs that have produced visible results. Additionally, the International Law Enforcement Academy (ILEA) was cited as a vital program not only for Romania but for the entire region. Sadu pointed out that over two hundred Romanians have graduated from ILEA and AA/S Powell added that many of those two hundred Romanians graduated at the top of their class. Deputy Minister Sandu then thanked AA/S Powell for support and INL leadership with the SECI Center. He stated that SECI fills a gap in regional law enforcement which could not be filled by INTERPOL or EUROPOL. He added that he would like to see SECI's role expand to risk analysis in the transborder crime arena, going beyond these first steps of information sharing between police and customs officers in the region. He pointed out that SECI has the advantage of having customs as well as police assets. This he viewed as a force multiplier in combating fraud cases. 9. Acting Assistant Secretary Powell cleared this cable. 10. AmEmbassy Bucharest's Reporting telegrams, as well as daily press summaries, are available on the Bucharest SIPRNet website: www.state.sgov/gov/p/eur/bucharest. DELARE
33481 2005-05-31 12:03:00 05BUCHAREST1270 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 03 BUCHAREST 001270 SIPDIS STATE DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: DECL: 05/31/2015 TAGS: KNNP, MNUC, PARM, PGOV, PREL, ENRG, SENV, ECON, TU, GG, RS, UP, UK, RO, NATO SUBJECT: ROMANIA EXPRESSES CONCERNS ABOUT RESURGENT BLACK SEA HARMONY/BLACKSEAFOR - SEEKS U.S. VIEWS REF: A. STATE 90931 B. STATE 90564 C. BUCHAREST IIR 6 883 0153 05 (AND PREVIOUS) D. BUCHAREST 477 E. BUCHAREST 1174 Classified By: Classified by Political Section Chief Robert S. Gilchrist for Reasons 1.4 A, B, and D. 1. (U) This is an Action Request for the State Department. See Paragraph 10. 2. (C) Summary. GOR interlocutors who handle Black Sea issues express appreciation for U.S. views on Romania's possible contributions to the Proliferation Security Initiative (PSI) and the Romania-organized Black Sea Border Security Initiative (BSBSI). Romanian contacts are alarmed, however, at the recent decision of the Russian Federation, Bulgaria and Georgia to join as permanent members the Turkish-led Operation Black Sea Harmony, to be renamed BLACKSEAFOR. They also flagged surprising Turkish assertions that the new arrangements have USG approval. The GOR urgently seeks guidance about U.S. views on Russian and Turkish joint efforts to dominate Black Sea maritime security and exclude non- littoral state actors from playing a role. End Summary. 3. (C) Naval Attache and PolOff discussed Black Sea regional security issues, including Romanian interest in increased involvement in operational activities of the Proliferation Security Initiative (PSI) and the Romania-organized Black Sea Border Security Initiative (BSBSI), May 23 with MFA NATO Division Director Mirela Maghiar, MFA Arms Control and NonProliferation Division Director Dan Neculaescu and MOD Counselor and assistant to Acting presidential security adviser General Constantin Degeratu, Iulia Ionescu (Refs A and B). GOR interlocutors expressed gratitude for an opportunity to discuss both the PSI and BSBSI, noting that the GOR will participate in the Czech-led PSI exercise and underscoring Romania's abiding commitment to PSI goals. MFA NATO Director Maghiar observed that our nonpaper (Ref B) underscores a concept which the GOR supports - that PSI and BSBSI are "mutually reinforcing." They also expressed a commitment to "working together" to achieve a "complementary" relationship between PSI and BSBSI. 4. (C) During the course of discussions, however, the Romanians provided a somber assessment of the May 17-18 meeting of the Chiefs of the Black Sea Navies (Russian Federation, Turkey, Bulgaria, Georgia and Romania). They expressed dismay at the decision - apparently agreed on by the Russians, Turks, Bulgarians, and Georgians in advance of the plenary meeting of naval commanders - to join as permanent members the Turkish-led Operation Black Sea Harmony, establishing a permanent "operations center" in Turkey (Ref C). The Romanians stated that the Turks (and Russians) had stressed that the purpose of Operation Black Sea Harmony will be to assure security in the Black Sea. 5. (C) From the Romanian perspective, the coup de grace of this unexpected and unwanted outcome was the Turkish announcement that to "avoid confusion" and to obviate the need for formal approval to join a new organization, Operation Black Sea Harmony should be called BLACKSEAFOR. The Romanians told us that they are opposed to BLACKSEAFOR "taking over" Operation Black Sea Harmony but at the same time the GOR does not want to "upset the Turks." The Romanian interlocutors stressed that the proposed morphing of Black Sea Harmony into BLACKSEAFOR would not happen immediately as "more meetings need to occur at a working level and at the experts' level," with the first working group set for June 1-2 in Istanbul. They also expressed the hope that even if an expanded BLACKSEAFOR comes into being it could still be possible "to leave things open for a future NATO role." (Note: Romania participates in BLACKSEAFOR but characterizes the Russian-dominated organization as fundamentally a regional confidence building measure that should focus on activities such as search and rescue exercises but should not expand its mandate to serving as a guarantor of maritime security. (Ref D) End Note.) 6. (C) Our Romanian interlocutors stressed that during the May 17-18 meeting the Russian representatives iterated that non-littoral states should play no role in maintaining maritime security and that an Active Endeavor-like operation has no place in the Black Sea - a view the Russians have previously asserted. MOD Counselor Ionescu noted that during both the May 17-18 meeting as well as during previous encounters, the Turks have unrealistically "downplayed asymmetric threats" in the Black Sea region, insisting that littoral states could and should exclusively guarantee Black Sea security. The GOR interlocutors insisted that threats in the Black Sea region, including trafficking in conventional arms, are "real and extensive" and cannot be adequately addressed exclusively by littoral states. 7. (C) More troubling - and surprising - from the Romanian perspective was the Turks' assertion during the meeting that the expansion of Operation Black Sea Harmony to include all littoral states with the aim of guaranteeing maritime security, together with its morphing into BLACKSEAFOR, enjoys the support of the USG. According to the Romanians, the Turks averred that an American admiral in a previous meeting had stated he "admired" Turkey's "vision" for the Black Sea. 8. (C) MFA NATO Director Maghiar stressed that "it is very important for us to know what the U.S. position is" regarding the proposed expansion of Black Sea Harmony. "Does the U.S. indeed endorse the Turkish 'vision' for the Black Sea?" asked Maghiar. The Romanian interlocutors expressed a need for "some clarification from the U.S." and underscored the GOR's strong preference that "transatlantic institutions" (read: NATO, with U.S. leadership) guarantee Black Sea security. 9. (C) Comment: Dead in the water, at least for now, is the Romanian proposal to create a Black Sea Task Force (Ref D), given the Turkish and Russian commitment to steam ahead with plans to "operationalize" Black Sea Harmony under the aegis of BLACKSEAFOR. While the Romanians are evidently peeved at this development, they have made it clear to us on previous occasions that the GOR has no intention of being the odd man out on Black Sea security issues -- especially given the GOR's apparent belief that Romania could cooperate with its littoral neighbors on regional security initiatives and still "leave things open for a future NATO role." Senior GOR officials have recently reaffirmed strong support for a U.S. military facilities presence on Romanian soil (Ref E), which they equate with a boost in Black Sea regional security. Romanian officials have also expressed gratitude for U.S. "backing" during the May 10 joint meeting at NATO Headquarters of the Political-Military Steering Committee on Partnership for Peace and the Political Committee. In addition, MFA interlocutors expressed gratitude for State Department representation May 27-28 at the BSBSI Planning Conference in Bucharest for the "Styx 2005" exercise. During our May 23 meeting with the Romanians, however, they appeared genuinely concerned that the U.S. may have endorsed the Turkish maritime security "vision" - leaving Romania's oft-enunciated goal of a region "anchored to trans-Atlantic institutions" high and dry. 10. (C) Action Request for State Department: Post would appreciate any guidance and feedback we can share with the Romanians regarding plans to significantly expand the scope of Operation Black Sea Harmony under the rubric of BLACKSEAFOR. 11. (U) Amembassy Bucharest's reporting telegrams are available on the Bucharest SIPRNet website: www.state.sgov.gov/p/eur/bucharest DELARE
25419 2005-01-14 15:46:00 05BUCHAREST130 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS SECTION 01 OF 03 BUCHAREST 000130 SIPDIS STATE FOR EUR/NCE - WSILKWORTH, EB/IFD STATE PASS USTR - LISA ERRION TREASURY FOR STUART USDOC FOR 4232/ITA/MAC/EUR/OEERIS/CEEB/BURGESS/KIMBALL STATE PASS USAID SENSITIVE E.O. 12958: N/A TAGS: ECON, ETRD, EIND, EFIN, RO SUBJECT: ROMANIA: NEW GOVERNMENT INAUGERATES FISCAL REVOLUTION WITH ADOPTION OF FLAT TAX RE: Bucharest 01873 THIS MESSAGE IS SENSITIVE BUT UNCLASSIFIED - PLEASE PROTECT ACCORDINGLY 1. (SBU) SUMMARY: Just before New Year's eve, and the day after receiving Parliament's vote of confidence, the new center-right government of PM Calin Popescu-Tariceanu carried out its campaign pledge to amend the Fiscal Code and introduce a 16% flat tax on personal income and corporate profits. The new tax rate was effective January 1, 2005. The IMF is concerned that the measure may result in the GOR's not meeting this year's programmed budget deficit target of 1.5% of GDP. The Government is counting on new revenues from both the hitherto untaxed gray economy and from economic growth. Measures to increase tax compliance must still be enacted, but legal actions just taken against some of the most dubious objects of economic largesse of the last Government may have a salutary impact on revenue collections. END SUMMARY. ROMANIA JOINS THE FLAT TAX CLUB ------------------------------- 2. (U) One of the main pledges of the center-right Liberal- Democratic (PNL-PD) alliance throughout the autumn parliamentary and presidential campaign was to introduce a flat tax of 16% on personal income and corporate profits. On December 29, in the first cabinet meeting after receiving a Parliamentary vote of confidence, the first major act of the new PNL-PD led government was to enact the measure through an emergency ordinance effective January 1, 2005. Prime Minister Calin Popescu-Tariceanu and the new Finance Minister Ionut Popescu declared that the purpose was to put more money in Romanian taxpayers' pockets, create more jobs and stimulate foreign direct investment (FDI). Through the "multiplier" effect generated by increased employment and greater disposable incomes, the Romanian government expects to collect more tax revenue over time. In addition, the GOR hopes to reduce tax evasion and bring more money into national coffers through "surfacing" the underground (gray) economy, in which many workers receive unreported, untaxed wages. (Note: The last Government estimated a full quarter of the economy was represented by the informal or gray economy in 2004. 3. (U) Romania is not the first country in Eastern Europe with a flat tax. According to information available to post, Estonia, Latvia, Serbia, Ukraine, Slovakia, Russia, and most recently Georgia have adopted flat tax rates ranging from 12 to 26%. Romania's 16% corporate tax is the region's second lowest (Georgia's is 12%), while only Russia (13%) and Georgia (12%) have lower flat tax rates on personal income. GOVERNMENT MESSAGE: EVERYONE WINS, NO ONE LOSES --------------------------------------------- -- 4. (U) The Government promises that no employee will lose through replacement of the former personal tax brackets (which ranged from 18-40%) with the new 16% flat tax. Under the flat tax, the main deduction an employee receives are the personal and dependent deductions. For employees earning up to a gross monthly wage of ROL 10 million ($345), the deductions range between ROL 2.5 million ($86), for those with no dependents to ROL 6.5 million ($225), for a wage-earner with four or more dependents. Deductions are gradually lowered for employees with gross monthly wages between ROL 10 and ROL 30 million ($1,037), with no personal deductions for those with gross monthly wages exceeding ROL 30 million. Other deductions preserved include private health insurance (up to euro 200 per year per person), social security contributions, optional contributions to occupational pension schemes (life insurance, up to euro 200 per year) and expenditures for employees carrying out independent activities (commerce or professions such as lawyers, medical doctors). BUSINESS HAPPY, LABOR COMPLAINS -------------------------------- 5. (U) The business community's reaction was predictably enthusiastic. Both the American Chamber of Commerce in Romania and the Foreign Investor's Council hailed the measure as a step forward toward creating a stable and predictable tax environment for investors. Trade union leaders, however, denounced the flat tax as "socially unfair," disproportion ally benefiting wealthy taxpayers. The former governing Social Democratic Party (PSD) similarly characterized the flat tax as a "political measure," claiming the flat tax will lead to major medium and long term problems for the budget and will have to be compensated by either raising excise taxes or by drastic budget cuts. FISCAL IMPLICATIONS SUBSTANTIAL... ---------------------------------- 6. (U) According to Finance Minister Popescu's estimate, the budget revenue losses could amount to $242 million from the profit tax cut and $830 million from the 16% flat income tax. While conceding a transition period of budget revenue losses, the Finance Minister is optimistic that budget revenues will ultimately increase, as has happened in other countries that have adopted a flat tax. ...SOME TAXES SET TO RISE -------------------------- 7. (U) To compensate for these projected losses, the new Government introduced a series of tax hikes. The micro- enterprise tax, applicable to firms with nine employees or less, was doubled from 1.5% to 3.0% of total turnover. According to the Finance Minister, the doubling of the tax paid by mico-enterprises is an attempt to uncover personal incomes disguised as micro-enterprise revenues. A significant number of these enterprises are organized to circumvent payment of employee-employer payroll taxes through "spinning off" operations into micro-enterprises for favorable tax treatment. 8. (U) Other tax increases include: Dividends obtained by individuals will be taxed at 10%, level with the corporate dividend tax; - Agricultural income tax is increased from 15% to 16%; - Gambling tax is increased from 10% to 16%. 9. (U) Despite the fact that the former PSD government approved a 2% cut in payroll taxes for 2005, the new government annulled this measure, maintaining social insurance contributions at 49.5%. The downside to this is with social contributions remaining high, a strong incentive remains for employees to continue working in the untaxed "gray" economy. IMF'S CAUTIOUS REACTION ----------------------- 10. (U) The IMF initially expressed concern regarding the GOR's recent fiscal step. The IMF resident representative met with Finance Minister Popescu prior to the cabinet meeting of December 29, 2004. He conveyed the message that the 1.5% of GDP deficit for 2005 is the maximum Romania can afford and perhaps should be decreased in order to ensure Romania meets inflation and current account deficit targets. He also advised the GOR to refrain from taking any step prior to the visit of the IMF's technical team scheduled for January 25. Nevertheless, he conceded the new Cabinet's move to introduce the 16% flat tax was in line with regional trends to reduce taxation. He subsequently softened his position, noting that the IMF visitors would examine budgetary implications. REFORM BY DECREE - THE MECHANISM -------------------------------- 11. (U) The government introduced the flat tax on December 30, 2004, through Emergency Ordinance 138 to Law 571/2003 of the Fiscal Code. In the preface to the ordinance the Government stated it was necessary for the measure to take effect at the beginning of the year (2005), because waiting until later would result in fiscal confusion and uncertainty for taxpayers and complicate tax collection. 12. (U) Two issues cloud the issuance of the emergency ordinance. Formal consultations with the Social and Economic Council (CES), required before passage of emergency ordinances, did not occur as the CES was on vacation. However, the new Government stated it had received the CES's approval "in principle." Secondly, as with all emergency ordinances, the flat tax measure will ultimately have to be ratified by the Parliament at a later date. Parliament could ultimately reject the flat tax, although this is unlikely given the current majority held by the Government. COMMENT ------- 13. (U) The new GOR's ordinance has positive and negative implications for the new government. On the positive side, it demonstrates the Tariceanu government's commitment to keep its election promises to cut taxes to improve living standards and build a more business friendly environment. Further, the new government's tax philosophy makes sense as long as the 2005 tight budget deficit (1.5% of the GDP) and disinflation process are not endangered. The flat tax simplifies fiscal legislation, cuts fiscal administration and collection costs, and renders the economy more transparent. On the negative side, however, there is a risk of macroeconomic disequilibria, with government revenues initially expected to decline. 14. (SBU) Changing the mentality of Romanians is another major obstacle. A high payroll tax (49.5% of wages) is still the main obstacle to bringing the wages actually earned, but not reported, out in the open. It will keep substantial numbers of Romanians in the "gray" economy. What is likely to be more openly reported is the incomes of self-employed persons (architects, accountants, lawyers, physicians), who might elect to pay the 16% flat income tax rather than risk being charged with tax evasion. It is significant that anti-tax dodging measures have not been put into place. Nevertheless, the average taxpayer and corporation can hardly fail to absorb lessons carried in the daily press in recent days about new indictments issued against some of the country's corrupt "big fish" who had taken advantage of favorable tax debt for shares swaps or tax holidays. 15. (SBU) Post does not perceive that a major problem has arisen between the IMF and the GOR regarding the flat tax or that the IMF doubts the GOR's commitment to continuing prudent fiscal policies. Nonetheless, post plans to speak with the local IMF representative to gauge IMF flexibility with the new government and report Septel. DELARE
33802 2005-06-03 13:24:00 05BUCHAREST1304 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS SECTION 01 OF 03 BUCHAREST 001304 SIPDIS SENSITIVE DEPT FOR EUR/NCE - WSILKWORTH, EB/TPP/ATT USDOC FOR 4232/ITA/MAC/EUR/OEERIS/CEED/JBURGESS/JKIMBAL L TREASURY FOR STEWART LONDON FOR EBRD - GRETCHEN BIERY E.O. 12958: N/A TAGS: EFIN, ECON, ETRD, RO, EBRD, corruption SUBJECT: PROSPECTIVE EBRD LOAN WOULD REINFORCE UNFAIR COMPETITIVE ADVANTAGE OF ROMANIAN COMPANY THIS MESSAGE IS SENSITIVE BUT UNCLASSIFIED. IT CONTAINS BUSINESS PROPRIETARY INFORMATION AND SHOULD BE HANDLED ACCORDINGLY. 1. (SBU) Summary: Post was unpleasantly surprised to learn that the EBRD office in Bucharest is contemplating a loan worth over 200 million dollars to a Romanian company that has repeatedly come into our sights as an unfair and abusive competitor in the soft drinks and consumer product markets. Post believes strongly that awarding bad corporate practices by granting a preferential loan to such a company would send a signal that cheating is the best way to get ahead in Romania's market economy. Post therefore strongly opposes this loan. End Summary. A Surprise from the Local EBRD Representatives --------------------------------------------- - 2. (SBU) An alert member of the Economic Section's staff in Bucharest noticed on May 31 an EBRD website announcement about a contemplated loan of over 200 million dollars to Romanian food and beverage company European Drinks Group. She immediately alerted us to this because Embassy considers this particular company to be one of the worst in Romania for its blatant financial and tax manipulation that helped it gain unfair competitive advantage over other companies, including Coca-Cola. 3. (SBU) In subsequent communication with the USG's EBRD representative in London and in discussions directly with EBRD representatives in Bucharest, it became evident that EBRD Bucharest had circumvented both the U.S. Embassy and U.S. companies in Romania in its so-called "due diligence" in investigating European Drinks Group (ED). This is astonishing, because if EBRD had queried companies belonging to the American Chamber of Commerce in Bucharest and/or the U.S. Embassy, the EBRD's representatives would have heard a resounding salvo of complaints about ED. 4. (SBU) According to the project summary document on the EBRD website, the European Drinks project has passed the concept review and is pending final review. This makes it all the more urgent that officials in Washington and the USG's representative to the EBRD in London understand the implications of allowing this loan to go forward. 5. (SBU) Post Economic and Commercial Officers have now held two information sharing meetings with EBRD local Deputy Head of Office and the EBRD's Associate banker responsible for the crafting the loan project. We expressed our disappointment at not being put into the process of due diligence until the project is seemingly a "done deal." Moreover, since it is our strong impression that the EBRD has already made a decision to move forward with this project, we are providing now to USG officials the same basic set of concerns that we submitted to the EBRD in Bucharest for its response, rather than wait for the EBRD's replies. A Company with a Reputation for Dubious Business Tactics --------------------------------------------- ----------- 6. (SBU) Post has heard and read many negative reports about this company and the men who control it. Emerging from the raucous early years of post-revolution Romania as "entrepreneurs," the main owners of the company, twin brothers with the family name Micula, have aggressively pursued business growth, seemingly at any price. They have created a network of holding and offshore companies to become substantial players in Romania's growing beverages and food sector. They are also allegedly engaged in bribery and intimidation as a part of their business strategy. However, in a country with pervasive political and administrative corruption and a dysfunctional judiciary, most of the reports of wrongdoing and corporate malfeasance will never even reach a formal legal investigation and will almost certainly not be tested in a court of law. In addition, sadly for Romania, officials at every level in this country are still easily bought off and will change records for a fee. 7. (SBU) Despite the murkiness of the roots of ED's wealth and the slipperiness of its owners, Post believes that overwhelming circumstantial evidence points to a company that has repeatedly manipulated the political and economic system in Romania to claw its way to a substantial market position to the detriment of honest American companies that must hold themselves to a higher standard of integrity. 8. (SBU) The following list outlines our major concerns with this company and with the manner in which the local EBRD office pursued its "due diligence" for this potential loan: - Avoiding American opinions. As already stated, EBRD's work in preparing the loan circumvented the U.S. Embassy in Bucharest and also American companies directly harmed by ED's business practices. Post notes that the EBRD's Bucharest Deputy Director claims to have consulted with other foreign embassies in Bucharest and with the Bucharest- based Foreign Investors Council (FIC), on whose Board the EBRD's Director sits. - Political conflicts of interest. Current Finance Ministry Secretary of State Doina Dascalu is married to Romulus SIPDIS Dascalu, director of the "SC Scandic Distilleries SRL" and "General Transilvania Exim SRL," firms of the European Drinks Group. People employed by European Drinks Group hold political positions in various cities and counties in Romania in which the company has received special treatment. - Anticompetitive practices using state aid. European Drinks has notoriously been one of the main beneficiaries of state aid, to the detriment of legitimate corporate taxpayers and to free market in Romania. By financing a company that has benefited from the distorting mechanism of preferential state aid, the EBRD would reinforce the outcome of these practices. This is inconsistent with EBRD's stated goal to "help move the country closer to a full market economy." - Possible improper externalization of debt by the European Drinks Group. The transfer of two companies of the group (General Transilvania Exim and Interstock) that had ROL 450 billion (about 13.8 million dollars at the average 2004 exchange rate) in arrears to the state, to two offshore companies resulted in decrease of ED's reported arrears. Manipulation of ED's books to make it seem less like a tax deadbeat is an obvious possible result. - Noncompliance with antitrust legislation and other financial legislation. European Drinks was allowed to purchase state-owned entities (enterprises and hotels) at a time when it owed the Romanian treasury back taxes. Post questions how this could have been done legally, since Romanian privatization legislation restricts companies with budget arrears from purchasing state-owned companies. These probably were not approved by the Romanian Competition Council in a manner which will stand up to the current intense scrutiny of the European Commission Directorate General for Competition. - Operations of ED in tax havens. European Drinks transferred ownership of Original Prod company to Limerock Holdings Limited in Cyprus. The management of Limerock included Traian Bulzan. At the same time, Mr. Bulzan held a managerial position with European Drinks. Post questions the ability of EBRD to perform the necessary due diligence for a company with obvious complex ties to offshore entities and the possible implications for financial transfers to those offshore companies. - Intimidation and harassment of Coca-Cola company in Romania. Managers of the local Coca-Cola company in Romania have complained many times in the past of the thuggish tactics of ED in destroying its property and threatening its employees. Since Coca-Cola is a member of the American Chamber of Commerce (AmCham) in Bucharest and adheres to the ethics of the AmCham, it is already in a disadvantaged position vis-a-vis many Romanian and other foreign competitors in its own choice of business tactics. In addition, Coca-Cola always pays its debts on time; again, another disadvantage in its competition with European Drinks that seems always able to find a way out of paying its fair share of the national tax burden on time. - Abuse of customs legislation through imports through disadvantaged zones. American soft drinks companies and the Romanian Sugar Association have repeatedly complained about ED misusing the custom duty exemption for imports into disadvantaged zones to import sugar that it has either re- exported or used for soft and alcoholic drinks, in breach of Romanian legislation, and with an unfair price advantage compared to its law-abiding competitors. Conclusion ---------- 9. (SBU) Post strongly urges the USG to oppose this EBRD loan project in order to prevent the American taxpayers' money to go to help a company as unsavory as European Drinks Group. Post notes that it is deeply ironic that the stated purpose of the EBRD loan is to make ED "more transparent in its corporate operations." We believe that there must be honest entrepreneurs in Romania who are already transparent and ethical for whom an EBRD loan would enhance their ability to compete fairly in a modern market economy. Delare
33821 2005-06-03 14:23:00 05BUCHAREST1307 Embassy Bucharest UNCLASSIFIED UNCLAS SECTION 01 OF 02 BUCHAREST 001307 SIPDIS STATE FOR EUR/NCE - WSILKWORTH, EB/IFD USDOC FOR 4232/ITA/MAC/EUR/OEERIS/CEEB/BURGESS/KIMBALL E.O. 12958: N/A TAGS: ECON, ETRD, EFIN, PGOV, PREL, RO SUBJECT: BECHTEL BEGINS TO SHUTDOWN ROAD CONSTRUCTION IN ABSENCE OF PAYMENTS THIS CABLE IS SENSITIVE BUT UNCLASSIFIED. NOT FOR INTERNET DISTRIBUTION. 1. (SBU) Summary: High-ranking Bechtel representatives currently in Bucharest failed to obtain sufficient funds from the GOR to cover mounting arrears on work performed on the 2.8 billion dollar Transylvania Motorway project. Discussions at ministerial level have provided no clear way ahead for the short term. As a result, subcontractors were told to shut down June 2nd and the majority of the direct- hire work force was sent home June 3rd. This will be an enormous story with negative implications for business climate perceptions. Post recommends high-level and sustained USG pressure on this important commercial issue. A USG approach should also push for relaxation of an extremely strict IMF deficit target that is seen by the GOR as a barrier to needed infrastructure spending, particularly as massive flooding in large areas of the country has diverted substantial financial resources to relief and reconstruction. End Summary. Bechtel Says "Show us the Money" -------------------------------- 2. (SBU) In the past several weeks, Post has worked closely with Bechtel representatives to press the GOR to provide compensation for work that Bechtel has already performed in 2004 on the Transylvania Motorway project, as well as to provide a mechanism for timely payments for work finished or scheduled for 2005. Current arrears stand at approximately 80 million euros. Since the current government came to power in December 2004, only 16 million euros of payments have been made. 3. (SBU) Despite three different potential funding sources for the project, the GOR has experienced difficulties in accessing any money for the project and provides it only after Bechtel's constant prodding and then only in small allotments. The three sources of funds that the GOR is supposed to use for the project are: - Internal budgetary funds. There are supposed to be 213 million euros earmarked in the 2005 Transportation Ministry budget for the Bechtel project. Due to a (repeatedly) delayed government budget rectification, however, the Ministry claims it cannot release the money for work performed. They note that there is both need for emergency spending in the wake of widespread spring floods and claim that the expected rectification could result in a lower budget allocation than projected. - U.S. Ex-Im Bank loan. Activation of this 144 million dollar package has been delayed due to GOR nitpicking regarding language of the letter of agreement (eighteen revisions and counting). In addition, this loan can only be drawn down for purchase/use of American goods and services, a point that many in the GOR still don't seem to understand. - External credits. The GOR must finance the rest of the motorway through commercial loans and the GOR has been reluctant to take on this debt, because it will count against the IMF-mandated limits on state debt. After much prodding from Bechtel and Post, however, the Finance Ministry is working on a syndicated loan package for 100 million euros. This money, however, will probably only be available, in the best of circumstances, in late July or August. Increasing Pressure, Increasing Frustration ------------------------------------------- 4. (SBU) Post for many months has been working closely with Bechtel representatives to get the project on track. But just when everything seems to be working, the GOR reverts to historic bad habits that include ignoring Bechtel's repeated requests for meetings to discuss the project, repeating vague assurances of payments that then do not materialize and indulging in round-robins of blame-shifting to other ministries or to the IMF. 5. (SBU) Post had hoped that a breakthrough had come after President Basescu's visit to Washington this spring and his assurances that he would support the project. Indeed, small payments were made and some movement on outstanding issues did occur. But another lull came later in the spring. Similarly, Post was hopeful that the project would start moving in the right direction after Commerce Department's Assistant Secretary Lash, on May 12, received assurances from President Basescu that he would work to resolve issues related to the motorway. However, little has happened positively since then. Bechtel's Work Shutdown Begins ------------------------------ 6. (SBU) With only a token payment of 10 million euros from the Transportation Ministry in sight (enough to pay some of Bechtel's local contractors), and after a very unsatisfactory meeting between the Charge and Bechtel's London-based representatives and Minister of Transportation Dobre on June 3 (obtained only through the direct intervention of the Embassy with the Prime Minister's Economic Advisor), Bechtel has stopped work on the motorway and is sending home its Romanian contractors and workers. Subsidiaries were told to cease work yesterday, June 2nd, while direct hire local employees were mostly told to go home today, June 3rd. Bechtel is complying with all legal requirements in this procedure and will continue to pay workers three-fourths of their salary while they are in forced work stoppage. Bechtel will perform no more roadwork without substantial payments, although minor ancillary work on archeological and environmental projects will continue for the time being. 7. (SBU) Both Embassy and Bechtel urged the Transport Ministry and earlier, the PM's economic advisor, to improve communication between government bodies required to coordinate on funding projects and to exercise political will to take on board necessary external financing. In all meetings, GOR reps eventually ducked behind the IMF, claiming that the strict 0.7 percent of GDP deficit target set by the IMF prevented the GOR from expensing the project at a more rapid rate - either through straight budgetary outlays or loans. They also noted that massive spring flooding (still affecting parts of western Romania) made it incumbent that the government maintains budgetary reserves for emergency relief and infrastructure repair. Comment ------- 8. (SBU) The current GOR continues to behave as if Bechtel will continue to absorb operating expenses for at least some additional months while external credits and an EXIM loan are put in place. Bechtel, under edict from home office, has simply refused to play along any longer. The shut down of the works now taking place should serve to disabuse the GOR of the idea that the free lunch will continue indefinitely. Bechtel needs to meet operating expenses in order to start up again. 9. (SBU) Post recognizes that recent flooding in the western areas of the country has caused unforeseen budgetary strains for the GOR. Nonetheless, the chaotic nature of the GOR's decision-making process and traditional Romanian penchant to "put off until tomorrow what you can get away with" indicates that only the squeaky wheel here will get the grease. 10. (SBU) Post recommends high-level State Department and Commerce Department intervention with the GOR to express concern that the project is still in danger of stalling despite assurances from the highest levels of the GOR that the motorway contract is legal and binding. Post also suggests that the USG should make the GOR aware of the damage it will cause to its own image as a business-friendly country if the motorway is stopped for even a brief time due to inability to pay. Finally, we also recognize that the GOR does not want to challenge the IMF with a request for further flexibility, even though a relaxation of the deficit target to take flooding damage into account would be a useful means to spur the GOR to think about moving ahead with truly desirable infrastructure projects. Post believes that serious discussions with the IMF, by the USG and GOR, are in order. DELARE
25422 2005-01-14 15:59:00 05BUCHAREST131 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 02 BUCHAREST 000131 SIPDIS DEPT FOR INL DEPT ALSO FOR EUR/NCE - WILLIAM SILKWORTH TREASURY FOR FINCEN JUSTICE FOR OIA, AFMLS, NDDS E.O. 12958: DECL: 01/14/2014 TAGS: SNAR, KSEP, EFIN, RO, KFTN SUBJECT: ROMANIA: ANTI-MONEY LAUNDERING AGENCY LACKS RESOURCES TO COMBAT FINANCIAL CRIMES REF: BUCHAREST 2514 Classified By: ECONOMIC SECTION CHIEF JOHN R. RODGERS FOR REASONS 1.4 B AND D 1. (C) SUMMARY: Romanian authorities have the political will to combat illegal currency flows out of the country, but the Director of Romania,s National Office for the Prevention and Control of Money Laundering (NOPCML) claims his office lacks the training and resources to track illicit fund transfers. Post intends to implement programs to assist NOPCML in carrying out its mission of tracking and reporting financial crimes. END SUMMARY. Central Bank Supports Efforts ----------------------------- 2. (C) With the Government of Romania (GOR) in transition as the result of the largely unexpected election in December 2004 of center-right opposition National Liberal Party-Democratic Party (PNL-PD) Alliance candidate Traian Basescu as President over Adrian Nastase of the previously governing center-left Social Democratic Party (PSD), Post was concerned about the possible outflows of funds illegally obtained through politically connected transactions, including bribes, privatization kickbacks, and corrupt practices from Romania. EconOff, accompanied by a U.S. Treasury representative, discussed this topic with Nicolae Cinteza, Director of Supervision, National Bank of Romania (BNR) and Iulian Dragomir, Secretary of State and President of NOPCML. 3. (C) Cinteza understood our main interest to be money from cronies of the previous government that might be transferred to off shore destinations (Cayman Islands, Virgin Islands, Cyprus and other locations). He stated the BNR was eager to cooperate and that he, too, would like to see such flows halted and those responsible jailed. However, in his opinion, such money has already left the country. Nevertheless, he advised he would send out notices to all commercial banks advising them to be extra vigilant and immediately report any suspicious transactions. He affirmed the excellent working relationship the BNR now has with NOPCML since Iulian Dragomir,s appointment as President and that the two institutions would work together to address the problem. NOPCML,s Director Admits Agency,s Limitations --------------------------------------------- 4. (C) Following the meeting with Cinteza, EconOff, Treasury, and FBI met with Iulian Dragomir, President of NOPCML. EconOff stated we appreciated the Office,s past efforts in combating financial crimes and money laundering, but were concerned that in Romania,s current transitional period illicit money may be exiting the country. We urged he take extra measures to report &suspicious transactions8 and significant capital outflows. 5. (U) Judge Dragomir, formerly the Vice President of the Bucharest Court of Appeal, was appointed President of NOPCML in June 2004. Prior to his appointment, the agency was severely criticized by the BNR, banking regulators and the industry in general for its inefficiency and extraordinary delays in reviewing and reporting suspicious transactions. In some cases, investigative leads were reported to prosecutors over a year after discovery. 6. (C) Dragomir stated he was committed to fighting financial crimes, but provided us with a frank assessment of his agency,s limited ability and resources, candidly admitting NOPCML lacks the ability to real time track illicit fund transfers. In particular, he cited the following limitations: - His staff lacks training and know-how. Almost all of the agency,s current 72 staffers were hired by the agency,s former President. Although the salary is relatively good for Romania ($600 - $700 per month), he acknowledged the professional skills of most of his staff were weak. Most of his employees were graduates of &second tier8 private law schools and lack basic analytical skills. He gave as an example that it took one employee four months to conclude a file. He advised he is in the process of &cleaning house,8 but it will take a long time before the agency acquires the talent to perform its mission. - NOPCML lacks sufficient logistical support. He noted that his archivist doesn,t know how to archive, with the result the office has to rely almost exclusively on hard copy. He also informed that some files have simply &disappeared.8 His employees lack both knowledge and expertise in working in a classified regime. Also, he bemoaned the fact that the agency lacks the equipment and software necessary to perform its mission. - Lack of manpower and training. The agency has the same operational staff as prior to 9/11, despite the agency,s expanded mission. He believes the agency needs double the personnel it has at present. None of this staff has any experience or training in combating terrorist financing. 7. (C) Dragomir is attempting to get help from other financial intelligence units (FIUs) especially from the United Kingdom and U.S. FINCEN. In November 2004, the Department of Justice,s Office of Overseas Prosecutorial Assistance and Training sponsored an assessment of NOPCML by U.S. FINCEN and a future technical assistance project between the two FIUs is planned for 2005. Dragomir stated he has been successful in developing cooperative protocols with other GOR agencies concerned with financial crimes, which has resulted in increased sharing of information. NOPCML has a twinning agreement with Italy under an EU PHARE program, but Dragomir has not been pleased with the assistance the Italians have provided. When the program expires in May, he hopes to replace it with one based on U.K. or German models. 8. (C) Comment: Dragomir,s candid assessment is that without outside assistance NOPCML cannot adequately perform its mission. While he did not specify in exact detail the skills NOPCML requires, it appears training in a full range of analytical and investigative skills would be helpful. Dragomir is extremely positive regarding NOPCML,s newly established relationship with U.S. FINCEN, and desires a closer relationship and increased cooperation with the U.S. FIU. Post,s resident Treasury representative has offered to assist NOPCML by conducting a training course in January on wire transfers and how to detect money laundering. End Comment. 9. (U) Amembassy Bucharest's reporting telegrams are available onthe Bucharest SIPRNet website: www.state.sgov.gov/p/eur/bucharest DELARE
33915 2005-06-06 10:15:00 05BUCHAREST1313 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 03 BUCHAREST 001313 SIPDIS DEPT FOR EUR/NCE - WSILKWORTH AND JMESSENGER, EB/IFD TREASURY FOR STUART JUSTICE FOR OIA, AFMLS, NDDS E.O. 12958: DECL: 06/06/2015 TAGS: ECON, ENRG, EPET, ETRD, SENV, SOCI, KCRM, KFRD, PGOV, PHUM, CASC, RO, biographic information, corruption SUBJECT: CHAIRMAN OF ROMPETROL OFFICIALLY INDICTED; BUSINESS SECTOR SHAKEN REF: 04 BUCHAREST 9613 1. (U) SUMMARY: One of Romania's most important companies, Rompetrol, was shaken by the recent arrest and temporary detention of its high-profile CEO on a variety of economic charges. The case has important ramifications for rule of law and the investigation of corruption here. The organized business community, U.S. Embassy, and European Commission Delegation warned of serious consequences unless justice is delivered expeditiously, transparently and in full accordance with the law. Rompetrol is 20% owned by an American Citizen who is also under investigation. END SUMMARY. Chairman of Rompetrol Arrested, Detained ---------------------------------------- 2. (U) During the evening of Thursday, May 27, Dinu Patriciu, Chairman and main shareholder of the Rompetrol Group, was taken into custody by the Romanian General Prosecutor's Office and detained during a marathon "hearing" which lasted approximately 32 hours. Patriciu, a National Liberal Party (PNL) member with close ties to Prime Minister Tariceanu, is 80% owner of Rompetrol Group. The remaining 20% is owned by an American citizen, Phil Stephenson, the company's Deputy CEO. The General Prosecutor's Office is investigating Rompetrol and members of its management group for alleged tax violations and improper behavior related to the privatization of the refinery SC Rompetrol Rafinare SA (Petromedia) by the Rompetrol Group in 2001. 3. (U) Prosecutors allege that the Rompetrol Group committed economic crimes by failing to fulfill its contract obligation to make a USDOL 15 million investment in Petromedia as required by the privatization contact. They further charge that as a result of an audit control made in 2003 by the Constanta office of the Financial Guard, they found financial transactions not registered in Petromedia's books. These transactions reportedly resulted in a decrease in taxes and fees payable to the state of an estimated USDOL 10 million. The Prosecutor's Office is also investigating the way in which monetary transfers occurred among the several companies which are members of Rompetrol Group, alleging fiscal fraud and money laundering. Prosecutors' Conduct Raises Human Rights Concerns --------------------------------------------- ---- 4. (U) At the end of the hearing at approximately 4:00 A.M. on Saturday, May 28, Patriciu's attorney claimed prosecutors had "trashed" his client's defense rights and that his arrest and detention were an abuse by the General Prosecutor's Office. Breaches of the European Convention for the Protection of Human Rights and Fundamental Freedom were alleged. This includes the principle that detention of persons should only occur as an exception, not as a rule, and that a defendant's right to be immediately informed of charges and presumption of innocence were denied. The American Chamber of Commerce in Romania issued a press release noting continuing judicial reform in Romania must assure the objective and impartial treatment of foreign and local investors. (NOTE: AmCit and Deputy CEO of Rompetrol Philip Stephenson is a member of the Board of Directors of the AmCham. END NOTE.) The Human Rights Association - Helsinki Committee (APADOR-CH) was more adamant, demanding the immediate resignation of Romanian General Prosecutor Ilie Botos and of investigators involved in the detention of Patriciu and other known high profile suspects under investigation for their "lack of professionalism." The NGO characterized the detention of Patriciu for over 24 hours as a significant deprivation of liberty. The Association of Romanian Magistrates (AMR) requested the Supreme Council of Magistrates (CSM) to review whether prosecutors observed relevant criminal procedures or not. Economic Impact --------------- 5. (C) For the company this case is a damaging exercise. Share values fell by about 40 percent, even though they have bumped up somewhat from that low point. However, management rightly fears that continued prosecution (or conviction, of course) could cause the collapse of the company. It has current plans to expand operations to Kazakhstan and Russia as it shores up firm sources of crude for its refinery. Lending necessary for that expansion is, naturally, now in jeopardy. More essential to survival though are the short-term credits used by the company to finance crude purchases for its refining operations. The credit agreements are apparently renewable unless there is a "material change in the company's circumstances." According to the American Deputy CEO, the arrest of management board members would probably be regarded as such "material change" which could then cause business operations to grind to a halt. Importantly, this crisis for Rompetrol could have a broader political and economic impact. The company contributes about 7% of total revenues collected by the state budget, while also representing about 2 1/2% of total GDP. Botos Publicly and Privately Defends Conduct -------------------------------------------- 6. (C) In to criticism from these and other sectors, General Chief Prosecutor Botos publicly voiced his outrage at the NGOs' demand that he resign, claiming that the prosecutors investigating Rompetrol and its competitor RAFO (reftel) worked correctly and observed legal procedures. He alleged that the NGOs requesting his resignation do not represent civil society in Romania and that he would continue his fight against organized crime and corruption. Furthermore, he stated such demands amounted to a gross interference with the judiciary and the "politicization" of cases such as Rompetrol and RAFO. He claimed to have personally verified the prosecutor's steps and the measures they took were correct and according to law. 7. (C) Post has a fair degree of confidence in Botos. He repeated his contention that he had a real case against Rompetrol in a frank discussion with the Embassy's DOJ legal advisor several days ago, alleging that he had documentary proof to back up a number of fraud charges -- moving the case away from the mere misinterpretation of tax liabilities. We also note that the supervisory prosecutor in the case is someone whom we have partly trained and slated for an International Visitor's Grant next year. In other words, the prosecution team might not be up to U.S. standards, but they have been exposed to our methodologies. In addition, Botos claimed that evidence developed against Rompetrol had involved work by Financial Investigatory Unit of the National Bank, the Financial Guard, and the anti-Money Laundering authority, implying that this was no politically motivated fishing expedition. Embassy Demands Fair and Objective Investigation --------------------------------------------- --- 8. (SBU) Noting that the investigation of Rompetrol has been on going for a considerable period of time, Post issued a press release upon being informed of Patriciu's questioning that reminded the GOR that the American Government strongly believes in the transparency of the judicial process and called upon the government to be fair and objective. The Embassy further warned that if the investigation proved to be anything other than legitimate, it would severely damage Romania's business climate. Similarly, the European Commission Delegation stated in a press release that it expects criminal cases to be conducted in compliance with rule of law, in compliance with the rights and procedural guarantees of persons. Since the initial Embassy release, the same points have been made by Embassy staff to Chief Prosecutor Botos, Prime Minister Tariceanu's Economic Advisor and President Basescu himself. Complexities Abound in Petromedia Case -------------------------------------- 9. (C) The charges so far made against Rompetrol basically can be reduced to three categories: fraud, money laundering and tax evasion. A number of them strike us as typical of disputes arising out of the privatization confusions of the past decade and a half. A number are quite complex. For example, for the sake of illustration, we note that part of the case rests with the recouping of liabilities due to the Romanian state after Petromedia's privatization. In the 1980s, the GOR concluded an agreement with the Libyan National Oil Company for shared exploration and exploitation of Libyan oil fields. In 1992, the GOR, owner of Petromedia at the time, sold the rights to a Spanish company for $85 million, payable in 10 annual installments. The Spanish company had not made any payments on the debt when Petromedia was privatized. Subsequently, Rompetrol was able to collect an estimated USDOL 35 million on the debt, which tax inspectors claim should have reverted to the state budget. The General Prosecutor's Office investigators also maintain that the USD 15 million capital increase originating with the recouping of the Spanish debt was not paid for out of the buyer's own resources, but from state funds. Latest Events ------------- 10. (C) Dinu Patriciu was questioned again Friday, June 3, but permitted to return home. There had been apprehension in the Rompetrol camp that the prosecutors would seek to hold him for 30 days so as to prevent him from destroying evidence or tampering with witness recollections. (Comment: Letting him go home was probably a smart move on the part of the government, as it removes most of the angst about tampering with his human rights. End Comment). Also noteworthy was the fact that the hearing of AmCit Phil Stephenson, scheduled for tomorrow, June 7, has been postponed indefinitely. Comment ------- 11. (C) We do not want to discourage the GOR from taking action against "big fish" -- hence the need to tread carefully with this. Moreover, there may indeed be liabilities or unpleasant conclusions under some unturned Rompetrol rocks. Nonetheless, there is no need for this to resemble a show trial like that of Yukos in Moscow, a point we have made forcefully with the GOR. Where does Basescu stand in all this? He and Patriciu have some antagonism between them. Patriciu flirted with the PSD before the last election, making him less of a political stalwart than he might be in Basescu's eyes. Basescu is probably not too displeased to see a potential rival humbled -- or to see a counterpoise to prosecutions of PSD barons or PSD-linked businessmen. It makes the process look more credible. That point was made by Chief Prosecutor Botos as well. But what will be the cost? We believe Basescu is smart enough not to want to damage the Romanian economy, hinder FDI flows or create a roadblock to January 2007 EU accession. However, at the moment, all three are in some jeopardy. Accordingly, we look for him to try to rein in Prosecutor General Botos -- dropping the allegedly abusive court treatment, but keeping the case alive. End Comment. 12. (U) Amembassy Bucharest's reporting telegrams are available on the Bucharest SIPRNet website: www.state.sgov.gov/p/eur/bucharest DELARE
25516 2005-01-18 12:41:00 05BUCHAREST132 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L BUCHAREST 000132 SIPDIS STATE FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: DECL: 01/14/2015 TAGS: PARM, PREL, MASS, MARR, PGOV, AF, RO SUBJECT: ROMANIAN RESPONSE TO REQUEST FOR CONTRIBUTIONS FOR AFGHAN ARMY; ESTABLISHMENT OF A PRT REF: STATE 4896 Classified By: POLITICAL SECTION CHIEF ROBERT GILCHRIST FOR REASONS 1.4 A, B AND D 1. (C) This is an Action Request for State Department. See Paragraph 3. 2. (C) PolMilOff discussed possible Romanian contributions of weapons to the Afghan National Army (ANA) with Andreea Pastarnac, Director of the MFA's Middle East, Africa and Asia-Pacific Department, on January 12 (REFTEL). Pastarnac stated that she would immediately prepare a briefing paper for PM Tariceanu and DefMin Atanasiu, stressing that the FM would not be the final decision maker on whether, and to what degree, Romania would donate weapons to the ANA. 3. (C) Pastarnac continued that Romania's "new political leadership" (to include the PM and DefMin) will require "political background" on the situation in Afghanistan. She emphasized that she would "try to provide political information (to them)" giving a "positive" angle to our request. She underscored that any background information the U.S. could provide about Afghanistan would help her "provide a very hard core of arguments" in support of the request. Embassy Bucharest requests State Department provide additional information, ideally in the form of a nonpaper, regarding the current political situation in Afghanistan and supporting REFTEL request for weapons donation to ANA. 4. (C) In a separate meeting between DefMin Atanasiu and NATO Supreme Commander Jones on January 11, the Minister heard the General observe that a great deal of energy was going into expansion of the NATO role in Afghanistan, with PRTs serving as the "mechanism driving reconstruction." Atanasiu responded to the suggestion that Romania might want to establish its own PRT by promising to examine such a proposal "with great attention," noting that the U.S. "might be surprised by a yes." (See also septel) We believe this apparent readiness to assist with the Afghan Mission makes it all the more important that we keep the GOR informed on Afghan developments, particularly ass high-level leadership has just seen a 100 percent turnover. 5. (U) Amembassy Bucharest's reporting telegrams are available on the Bucharest SIPRNet website: www.state.sgov.gov/p/eur/bucharest DELARE
25519 2005-01-18 12:58:00 05BUCHAREST133 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS SECTION 01 OF 03 BUCHAREST 000133 SIPDIS SENSITIVE STATE FOR EUR/NCE/BILL SILKWORTH, EB/DMALAC, OES/HLEE USDA PASS FAS/OA/BSIMMONS STATE PASS TO USAID/JLEWIS, SHELLER, MWINTER SOFIA FOR AGRICULTURAL ATTACHE E.O. 12958: N/A TAGS: SENV, EAGR, ETRD, ECON, SENV, TBIO, RO SUBJECT: BIOTECHNOLOGY OUTREACH PROJECT FOR ROMANIA REF: STATE 244670 THIS CABLE IS SENSITIVE BUT UNCLASSIFIED - PROTECT ACCORDINGLY 1. SUMMARY: (SBU) Unique in the region, Romania which is expected to join the European Union (EU) in 2007, is a biotech pioneer, promoting and cultivating transgenic soybeans currently not approved for commercial planting in the EU. The Mission's objective is to help Romania enter the EU with its viable biotech industry firmly secured, as well as with an educated populace that understands the merits of biotechnology. By increasing efforts in Romania now, the US will have a strong European ally with common interests and shared beliefs to combat the EU's anti-GMO position in the years ahead. State Department funding for this initiative is now critical as Romania counts down to EU membership, while pressure from anti-GMO groups builds. With this in mind, Post is proposing a broad public education campaign, in order to disseminate scientifically sound information about modern biotechnology through workshops and forums. END SUMMARY. BACKGROUND ----------- 2. (U) The Mission currently has a well-defined biotechnology program funded by USAID with technical assistance from FAS. The Embassy would like to complement its current program, which focuses only on high-level biotech policymakers, by conducting a broad public educational outreach campaign to reach the average consumer. Despite repeated attempts by a number of anti-biotech organizations to influence public opinion through sensational newspaper headlines, to date consumers' rejection of bioengineered food is limited. This presents an opportunity for the US Mission to create a comprehensive public outreach plan focused on the benefits of agricultural biotechnology, before opinions are formed. The proposed program builds on existing contacts, local expertise on USAID and FAS matching funds. 3. (U) The goal of the Embassy's public diplomacy initiative is to spur debate and discussion about biotechnology, create positive public opinion, and to provide broader availability of scientific information about agricultural biotechnology to both the media and everyday consumers. Part of the educational campaign will target key opinion leaders in the following fields: media, education, the environment, the food industry, among others. They will learn about the scientific, research and regulatory processes involved in agricultural biotechnology as well as the benefits for Romania. Gaining key opinion leaders' support will help increase the public's awareness and trust in foods derived from GMO products. The proposed program has been discussed with and received the backing of local counterparts who have created an informal consortium to steer the program's activities and content. This Consortium includes: the National Biosafety Commission, food research institutes, the local Association for Consumer Protection, environmental NGOs, and the Science and Education Department of the Romanian National Broadcasting Corporation (who offered air-time as an in-kind contribution). PROJECT PLAN ------------- 4. (U) The proposed consumer-oriented public outreach campaign will be conducted within a nine-month timeframe and will conclude before end of FY05 via the following set of activities: A. Biotech Seminars: Ten focus group discussions with media participation in five large urban areas of Romania, where the main agricultural universities are located - Bucharest, Timisoara, Iasi, Cluj and Craiova. To open and maintain dialogue among relevant groups, two sets of seminars will be held in each location. To effectively communicate positive messages on biotechnology to the public, we will use formal presentations by identified local opinion leaders. International speakers and scientists will also be utilized. Venues will be provided by the Project. Participants will be recruited among university professors with relevant expertise, local industry representatives, and local media representatives, including television and radio commentators and newspaper reporters. B. Educational Materials: To complement the workshops and media events, English language publications on the benefits of biotechnology will be made available for translation into Romanian, to reach mass audiences with local language materials. C. Web Site: A stand-alone web page for the project will be designed for information dissemination, and to serve as a clearinghouse for various other GMO-related websites to ensure a broad outreach. The content of the webpage will be cleared by the Consortium and key opinion leaders. Funds will be made available for the web designer. After the project's termination, funding for maintaining and updating the webpage will be provided by relevant USAID-projects, FAS, or by interested local partners such as local industry or the Biotech Farmers Association. Materials that will be circulated at workshops will be posted on Project's webpage prior to organizing the event. D. Surveys: The Steering Commission will contract a survey on consumers' attitudes on biotech food both immediately before and after the project to measure the effectiveness of the diplomacy initiatives and outreach campaign. The information obtained from the surveys will be useful for continued efforts funded by FAS and USAID, and will serve as a barometer on the effectiveness of influencing consumer attitudes on GMO issues in other countries. E. Local Organization Outreach: Funding will be provided to host country organizations interested in promoting and disseminating positive information on agricultural biotechnology such as the Biotech Farmers Association. These organizations will develop, publish and disseminate, on behalf of their organization, materials that promote GMO products and teach about their usefulness and safety. Materials printed by local organizations may carry more credibility and have a greater impact on consumer opinions than materials produced and disseminated by US organizations. 5. (U) EXPECTED RESULTS: This project expects to influence the opinion of the average Romanian consumer towards biotechnology by focusing on price, health and other social benefits. This initiative will educate the media about biotechnology and expose professors, consumers and other participants to arguments explaining that biotech products are as safe as their conventional alternatives. By the end of the outreach campaign, the Mission expects that at least 40 press articles, as well as additional television and radio spots will be disseminated throughout Romanian society. It is expected that at least 70 percent of the country's population will be exposed to positive GMO messages as a result of this campaign. Additionally, local partners will sustain the biotechnology website, the Biotech Farmers' Association will have gained greater recognition and credibility, and we believe the Media will continue to print positive updates on GMO issues as opposed to negative anti-GMO propaganda. REQUESTED FUNDING ------------------ 6. (U) A part-time person will be hired to organize logistics and participation in ten events. Partial cost estimations for this activity are as follows: - fee for subcontractor: $1000/event * 10 = $10,000; - transportation, lodging, M&IE for organizers during planning/organizing stages: $3,360 - rental rooms and conference packages : $500/day * 5 * 2 = $5,000; - funding lodging M&IE for three local biotech speakers: $200 * 20 days = $4,000 - local transportation: $800 * 3 persons = $2,400. - reproduction costs for materials to be distributed to participants: $5 * 2 events * 5 locations * 40 participants = $2,000 - communication costs: $2,000 - support to local GMO promoters (bio-safety commission, Farmers' Association) to produce and disseminate pro-GMO publications: $10,000 - translation and reproduction of materials into Romanian language: $8,000. - webpage design and maintenance: $4,000 - consumer attitude survey: $10,000 - miscellaneous and unexpected costs: $1,000; -Total budget: $59,960 7. (U) U.S. Embassy Bucharest is contributing matching funds from USAID and FAS to cover following expenses: - international airfare for three (3) International Speakers/Scientists: $1200 * 3 = $3,600 - M&IE and lodging $228 * 30 days = $6,840 - funding local travel for three international biotech speakers: $800 * 30 days = $2,400 - honoraria for International Speakers/Scientists $3,000 * 3 = $9,000 - FAS and USAID employee contributions to coordinating workshops, developing materials, recruiting speakers, translation, and overall oversight of project: $20,000 -Total Local Embassy Contribution: $41,840 8. (U) Contributions from local Romanian Organizations include the above-mentioned members of the steering committee who will be responsible for the design of content of workshops, as well as the development and dissemination of published materials. A radio station with nation-wide penetration has agreed to broadcast a series of weekly two- minute spots focusing on the project's message and events. 9. (SBU) Embassy Control Officer will be Erin Kotheimer (Economic Officer, ext. 451). Please do not hesitate to contact her if you require additional information about this proposal. Post believes that we have reached a critical juncture as Romania approaches EU membership. A strong push for public education is now needed to build momentum as Romania seeks to position its biotechnology industry within the legal framework of the EU. DELARE
34358 2005-06-10 07:08:00 05BUCHAREST1336 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS SECTION 01 OF 02 BUCHAREST 001336 SIPDIS SENSITIVE STATE DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: N/A TAGS: PGOV, PHUM, SOCI, RO, minority rights SUBJECT: ROMA HUMAN RIGHTS SEMINAR HELD JUNE 1 AT EMBASSY BUCHAREST SENSITIVE BUT UNCLASSIFIED, PLEASE HANDLE ACCORDINGLY. 1. (U) Summary: Representatives from the Government of Romania, NGOs, international institutions, and academia met in the Embassy Public Diplomacy auditorium June 1 for a half- day seminar on the progress of Roma human rights issues. Some seventy attendees interacted with panels addressing a wide range of Roma concerns, including health, education, and under-employment. GOR representatives highlighted the early progress the center-right government has made towards addressing ROMA concerns. Civil society representatives, however, asserted that these efforts generally look much better on paper than in reality -- good laws, but inconsistent implementation. Visiting Congressman Chris Smith (R-NJ) also addressed the conference, noting the strong interest of the U.S. Congress in ensuring full respect for the rights of Roma and securing their full inclusion in society. End Summary. 2. (U) Embassy Bucharest June 1 hosted a half-day seminar titled "Promoting Human Rights for the Roma." The event was organized by resident Fulbright scholar and Roma expert Elena Roemer with the support of the Embassy. USAID Director of Democracy and Social Sector Reform and CAO jointly gave opening remarks, emphasizing the significance of the recently inaugurated "Decade of Roma Inclusion" (DRI) initiated by eight Central and Eastern Europe governments and signed in Sophia in February 2005. Romania will be the first to chair the International Steering Committee of the DRI starting this July. International Institutions: Big Goals, Tight Budgets --------------------------------------------- ------- 3. (U) The first panel included local representatives of the World Bank and the Council of Europe's Commission against Racism and Intolerance (ECRI). World Bank operations officer Ana Maria Sandi cited a number of programs funded by the Bank for Roma, most notably a USD 41 million "Roma Education Fund" aimed to integrate Roma in mainstream schools. The World Bank also has in place four "social inclusion" programs focused on emergency intervention and poverty alleviation, co-financing of domestic social projects with NGOs and host governments, leveraging EU funds for social projects working with Roma, and capacity-building. Sandi lamented that this last goal is admittedly the most difficult, as strengthening local institutions and improving human capabilities requires a long-term commitment and "the process has just begun." ECRI representative Raluca Besteliu focused on the reporting carried out by ECRI, including a special report on Romania due out in June 2006. She noted that ECRI also makes policy recommendations based on its findings, and it works closely with local civil society. More information on ECRI on Roma programs is available at www.coe.int/t/E/human_rights/ecri/. Government Officials: "We're doing a lot" ----------------------------------------- 4. (U) The panel of Romanian national institutions included Presidential Counselor Renate Weber, and officials from the Ministry of Health (MOH), Ministry of Labor (MOL), National Agency for Roma (NAR), and National Council for Combating Discrimination (NCCD). Panelists emphasized that the Bacescu-led government is making a concerted effort for Roma integration into mainstream society, at both the policy and program level. They acknowledged a lack of funding for some efforts but conveyed an overall sense that Romania is providing ample and readily-available services. They specifically noted improvements since the new government came to power in late 2004, facilitated by passage in 2000 of Romania's anti-discrimination law. Weber cited unspecified opinion polling noting "an openness of the Romanian people to affirmative action" programs. NCCD Director Csaba Asztalos also stated that until 6 months ago, NCCD had no minority representation; now they are "better equipped" to investigate discriminations and take action. MOL representative cited a Roma job fair held last month. MOH discussed the 170 health mediators hired nationally to tackle with healthcare issues. Civil Society: "Poor Execution, Minimal Progress" --------------------------------------------- ----- 5. (U) During the Q&A session following, Civil Society representatives challenged the validity of many GOR programs. They noted that the Roma job fair mentioned by the Ministry of Labor representative was almost cancelled due to poor attendance by Roma and employers as a result of poor advertising of the event. Despite the 170 health mediators in place, one Rom participant in the audience noted multiple examples when Roma were denied fair treatment by health care facilities. She said that she, herself, had encountered difficulty with multiple institutions in registering the birth of her baby born outside a hospital. No help was provided and no hospital staff was willing to recognize her baby or provide initial medical care. The GOR representatives maintained their position that there are conduits for Roma to obtain assistance, through the health mediators and other programs. 6. (SBU) Separately, on the margins of the conference, one senior Roma leader lamented that until recently the National Agency for Roma (NAR) had been "understaffed and ineffective," sometimes even damaging to Roma interests. Nonetheless, he expressed hope that the NAR might have reached a turning point with an upcoming leadership change. He informed PolOff that Maria Ionescu, the up-and-coming Roma leader and Head of the Phare Implementation program, has been nominated to be the next head of the NAR. Ionescu receives high marks from the Roma community. Hope is that under her leadership the NAR will have more muscle going forward. But Some Improvements at the Local Level ---------------------------------------- 7. (U) The third and last panel of NGOs and academia indicated that civil society organizations are gaining respect within the Roma community and have made some progress in addressing social problems. Lesley Hawke of Ovidiu Rom (www.ovid.ro) stated that her organization is getting the funding and cooperation needed from local governments to provide education to the disenfranchised in areas in which the NGO works. The representative of Romani CRISS, one of the top ROMA NGOs in Romania, expressed satisfaction with a recently negotiated cooperative partnership with the Health Ministry. Through the project, Romani CRISS and the ministry will jointly provide and support 170 mediators to improve access to healthcare for Roma communities. Fulbright scholar Michelle Kelso showed to the audience a trailer of her film documentary "Hidden Sorrows: the Persecution of Romanian Gypsies During WWII." The documentary depicts the Roma-holocaust, a subject rarely researched and still unacknowledged by the GOR. She has already shown the film throughout Romania to heighten awareness of Roma persecution during the Holocaust and seeks to do more. Congressman Smith: "U.S. Committed to Ethnic Rights" --------------------------------------------- -------- 8. (U) Visiting Congressman and Helsinki Commission Co- Chair Chris Smith (R-NJ) also addressed the conference and met briefly with reporters. He reaffirmed a U.S. commitment to ethnic rights in Balkans and globally, noting that Roma and "travelers" are particularly vulnerable. He congratulated the civil society groups for the work achieved thus far. He urged the Romanian government to give full support to and expedite its current programs in order to achieve the same standards as in the U.S. Roma participants expressed solid appreciation for his interest and engagement, with multiple invitations to visit local Roma communities and see programs in action. 9. (U) Comment: All in all, participants expressed the conference was a success, achieving the goal of bringing government together with civil society to discuss progress thus far under the center-right government, as well as many continued concerns. The Embassy -- including PD, USAID, and POL -- is discussing potential follow-up events with groups concerned. We are also examining ways to support Romania as it assumes its year-long leadership of the international "Decade of Roma Inclusion." End comment. 10. (U) AmEmbassy Bucharest's Reporting telegrams, as well as daily press summaries, are available on the Bucharest SIPRNet website: www.state.sgov/gov/p/eur/bucharest DELARE
34506 2005-06-13 08:59:00 05BUCHAREST1347 Embassy Bucharest UNCLASSIFIED UNCLAS SECTION 01 OF 03 BUCHAREST 001347 SIPDIS STATE DEPT FOR EUR/NCE - WILLIAM SILKWORTH AND ALSO FOR NP SECDEF FOR ISP - EURASIA, ISP-NPP DOE/NNSA FOR NA-211, NA HOMELAND SECURITY FOR NAP E.O. 12958: N/A TAGS: PREL, ETTC, KNNP, RO, MD, GG, UP, BU SUBJECT: BLACK SEA BORDER SECURITY INITIATIVE EXPERTS GROUP "STYX 2005" BUCHAREST PLANNING CONFERENCE READ-OUT REF: A. A) STATE 90931 B. B) STATE 90564 C) 04 STATE 253728 1. Summary. Under the auspices of the Black Sea Border Security Initiative (BSBSI), USG representatives attended a first planning conference to consider Romania,s proposal to hold a tabletop simulation of a WMD incident. The other states represented at the conference were Georgia, Moldova, Bulgaria, and Ukraine. The delegations agreed in principle to send representatives to the forthcoming &STYX 20058 tabletop exercise, scheduled for June 23 in Bucharest. Further coordination between the BSBSI participant states and the Romanian organizers will take place with Romanian MFA nonproliferation chief Dan Neculaescu via fax and e-mail. End Summary. INTRODUCING THE BLACK SEA BORDER SECURITY INITIATIVE --------------------------------------------- ------- 2. Romanian MFA Nonproliferation and Arms Control Division Director Dan Neculaescu opened the May 27-28 planning conference for the Black Sea Border Security Initiative (BSBSI) held at the Southeast European Cooperative Initiative (SECI) Regional Center Headquarters in Bucharest. Neculaescu stated that BSBSI's goals consist of: - enhancing regional cooperation in the field of counterproliferation of WMD, and identifying mechanisms for increasing that cooperation; and, - establishing confidence between the Black Sea littoral states and generally increasing the Black Sea,s security posture. Neculaescu stated that while the BSBSI states agreed in principle to projects in accordance with these goals during a high-level policy discussion in May 2004, the Romanians, &STYX 20058 proposal represented the first concrete proposal under the BSBSI rubric. (Note: During the May 2004 meeting, BSBSI was referred to by its prior name, the &Border Defense Initiative (BDI)8. For further background on BSBSI, see Reftels. End Note.) PRESENTATION OF &STYX 20058 --------------------------- 3. Following Neculaescu's introduction, Romanian National Commission for Nuclear Activities Control (&CNCAN8) officer Florian Baciu presented the proposed &STYX 20058 tabletop exercise. STYX 2005 is a fictional scenario in which the five BSBSI states cooperate to prevent the central European front-companies STYX, and the Precision Tool Company, from trafficking a truck-borne radiological dispersal device (i.e. a dirty bomb) and a quantity of WMD chemical precursors to the EMANON terrorist organization. In the Romanian draft, the countries were listed solely by colors (i.e. the RED LAND,). Romania proposed to hold the tabletop simulation in Bucharest on June 23. Baciu advised the national delegations that they are looking into the possibility of off-setting travel expenditures for three participants from each BSBSI government ) one to serve in a five-member control group, that will run the exercise, and two to serve in a ten-member working group,, which will simulate the responses of the BSBSI national governments to events that unfold in the STYX 2005 scenario. During the simulation, the control group will provide the working group with (fictional) real-time developments within the scenario, and the working group will attempt to effectively respond on behalf of their governments. 4. All national delegations agreed to participate in the June 23 tabletop simulation. They also agreed to the Romanians proposal regarding which colors (i.e. roles) their respective countries would play in the scenario (GREEN LAND - Bulgaria; BLACK LAND ) Georgia; YELLOW LAND ) Ukraine; BLUE LAND ) Romania; GRAY LAND ) Moldova). During the discussion of the ideal composition of the control and working groups, Bulgarian MOD official Lecev Lecezar opined that the control groups would ideally be comprised of MFA officials, as the MFA is best placed to know how to effectively conduct international dialogues. For their working group delegation, Lecezar said that he would recommend to his government one Ministry of Internal Affairs (MOIA) officer and one intelligence officer. Most delegations agreed with the Bulgarian-proposed structure, although Romanian CNCAN official Baciu cautioned that the MFA may not have sufficient technical expertise in dealing with radiological materials to serve as effective control group officers. Lecezar responded that no delegation is perfect, but the MFA nevertheless has the best available expertise. 5. Baciu also advised all delegations that in order to maximize the possibility of success for the tabletop exercise, national delegations should be thoroughly versed in STYX 2005 during the June 23 simulation, keeping in mind that the control group will be privy to simulation information that will be withheld from the working group until the day of the exercise. Questions that the control group should be prepared to answer include: -Who are your national decision-makers in the event of a WMD incident? -What information does your intelligence community require in the event of a trafficking incident? -To what extent do your national institutions coordinate? What points are critical for effective inter-institutional coordination? -Do you coordinate at the international level in the event of a WMD incident? Through what channels? Police channels? Diplomatic channels? How are such channels established? -What capabilities exist to assist other countries in either interdicting WMD or in disaster response should they request it? -What about jurisdiction in international waters? -How do you work with the media? At what point are announcements made in the event of a WMD incident? How much information is publicly disseminated? How much international cooperation is appropriate regarding public liaison? FOLLOW-UP ACTIVITIES -------------------- 6. Neculaescu requested national delegations that they inform him of their representatives to the June 23 simulation by June 10. Neculaescu also stated that he would disseminate the minutes of the STYX 2005 first planning conference to the local Embassies of the BSBSI participant states, and the Romanian Embassies in the other BSBSI capitals would do the same directly to their host government contacts. He also collected the contact information of the conference participants, and advised the conference that he would further coordinate with BSBSI states via fax and e-mail. Following the conclusion of the tabletop simulation, Neculaescu proposed that experts from the BSBSI participant states again meet to evaluate the relative success of &STYX 20058. At such a meeting, the BSBSI experts would evaluate the strengths and weaknesses of their respective nonproliferation infrastructures, as well as evaluate their current legal and institutional capacity to cooperate internationally in responding to a WMD incident. Neculaescu further suggested that &STYX 20058 be run as a field operation in Fall 2005. PARTICIPANTS ------------ 7. Delegation lists for the STYX 2005 first planning conference follows: BULGARIA: Mr. Tonev Dimov, Ministry of Internal Affairs Mr. Nikolay Kolev, Bulgarian Embassy to Romania Mr. Lecev Lecezar, Ministry of Defense GEORGIA: Mr. Guram Rogava, Ministry of Internal Affairs Mr. Mindia Janelidze, Foreign Intelligence Service MOLDOVA: Mr. Igor Goredetki, Service of Intelligence and Security Mr. Victor Nichifor, Ministry of Internal Affairs ROMANIA: Mr. Augustin Aculai, Nuclear Agency Mr. Florian Baciu, National Commission for Nuclear Activities Control Mr. Nicolae Comanescu, Ministry of Foreign Affairs Ms. Codruta Dima, Ministry of Foreign Affairs Lt. Cmdr. Cristian Gadei, Ministry of Defense Mr. Horatiu Grigorescu, Romanian Intelligence Service Ms. Daniela Marca, Ministry of Foreign Affairs Mr. Dan Neculaescu, Ministry of Foreign Affairs Mr. Nicolae Neferoiu, Foreign Intelligence Service Mr. Alin Tanase, Ministry of the Interior Mr. Dragos Tocae, National Agency for Export Controls UKRAINE: Mr. Ivan Zaitev, Interior Ministry Attache, Ukrainian Embassy to Romania UNITED STATES (observer): Mr. John Conlon, EUR/PRA, State Department Mr. Christopher Palmer, Political-Military Affairs Officer, U.S. Embassy to Romania Mr. Milan Sturgis, Department of State SECI Coordinator 8. Amembassy Bucharest's reporting telegrams are available on the Bucharest SIPRNet website: www.state.sgov.gov/p/eur/bucharest . DELARE
34512 2005-06-13 09:35:00 05BUCHAREST1348 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 03 BUCHAREST 001348 SIPDIS DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: DECL: 06/13/2015 TAGS: PGOV, PREL, KDEM, SOCI, RO, political assessment, biographic information SUBJECT: DAMAGED EGOS, DIVIDED PARTIES -- FISSURES IN ROMANIA'S OPPOSITION REF: A. A) BUCHAREST 1245 B. B) BUCHAREST 1003 Classified By: POLITICAL SECTION CHIEF ROBERT GILCHRIST FOR REASONS 1.4 B AND D 1. (C) Summary. Six months after national elections, Romania,s parliamentary opposition has been shaken by public squabbling and some political defections that may precipitate more fundamental changes. Ex-President Ion Iliescu has threatened to resign from the former ruling Social Democratic Party (PSD), potentially taking with him key PSD stalwarts and the strong electoral support he still enjoys among some voting groups. Separately, Corneliu Vadim Tudor has formally returned to the helm of the extreme nationalist Greater Romania Party (PRM), provoking a schism within that movement. The beneficiary is the center right Liberal-Democratic alliance-led government, which will likely receive support from newly independent MPs. End Summary. 2. (SBU) Several developments among Romania,s opposition parties in recent weeks have produced some realignments in the parliament, with potentially more change. The primary motivator thus far has been the damaged egos of former President and PSD founder Ion Iliescu; and, Greater Romania Party (PRM) leader and founder Corneliu Vadim Tudor. The opposition Liberal-Democratic alliance has remained largely mute on the sidelines, benefiting from the opposition,s internal squabbles and even increasing its support in the parliament though &political migration.8 HELL HATH NO FURY LIKE ILIESCU SCORNED -------------------------------------- 3. (SBU) Immediately after his failure to win the PSD presidency at the April 21 party congress, many political insiders predicted that Iliescu would never graciously accept second class status within the party he had founded (Ref A). The defeat initially came as a personal shock to him -- in fact, he was hospitalized for several weeks due to heart problems precipitated by stress. Shortly after his release and following the advice of some of his closest advisors, he announced on June 3 that he was &seriously considering8 quitting the party. He asserted that he was disgusted by &corruption8 within the PSD, claiming that his loss to ex-FM Mircea Geoana in his bid for the party,s presidency was the result of behind-the-scenes maneuvering. He also stated that his presence in the party might block &new forces8 (Geoana and his team) from &moving forward with their agenda.8 4. (SBU) A few weeks before, Ioan Talpes, PSD senator and Iliescu,s former security counselor, resigned from the party, accusing the current leadership of &treating Iliescu unfairly.8 The same day, Talpes met with Romanian President Traian Basescu at the presidential palace. Many political insiders speculate that Talpes provided information to Basescu on corruption within the PSD, including that related to jailed Syrian-Romanian businessman Omar Hayssam - now credibly implicated in the kidnapping of 3 Romanian journalists in Iraq. Four other less-prominent MPs and a number of local leaders also resigned from the PSD as an expression of their disagreement with the party,s new &leadership policies8 and in support of Iliescu. Some in the media predicted the emergence of a new political party surrounding Iliescu that would divide Romania,s left. 4. (SBU) The new leadership of the PSD, however, quickly rallied to smooth feelings and prevent what they feared could be a meltdown within the party. Although to many, Iliescu represents a remnant of Romania,s communist past, local political analysts point out that he still commands a loyal following, especially among rural, older, and less-educated voters. He can also count on the support of numerous local leaders. PSD Executive President and ex-PM Adrian Nastase admitted June 5 that Iliescu,s departure from the PSD would &greatly damage8 the party. He urged Iliescu to remain within the fold and accept the party,s decision to elect Geoana as president. 5. (C) On June 6, a delegation of PSD elder statesmen called on Iliescu and urged him to remain in the PSD, for the sake of the party,s unity. Following that meeting, Iliescu backed off from his earlier remarks, promising in a joint press conference with Geoana that he would remain as head of the PSD Senators in Parliament until September. Analysts viewed the joint appearance, especially given Iliescu,s recent criticisms of Geoana as an opportunist, as a sign of restored party unity - at least for now. Nonetheless, many analysts continue to opine that it is &only a matter of time8 before Iliescu leaves the PSD. Much also depends on the impact of a recent announcement of criminal charges against Iliescu for inciting miners, riots in the early 1990,s (septel). Although it is the common belief among many Romanians that Iliescu was behind the deadly riots, a drawn out debate over his role could further erode his popular support. TUDOR RETURNS TO PRM,S HELM (HE NEVER REALLY LEFT) --------------------------------------------- ----- 6. (SBU) As PSD,s troubles simmered, those within the extreme nationalist Greater Romanian Party (PRM) came to a full boil. The party,s core membership June 4 voted to restore the movement,s founder Corneliu Vadim Tudor as the party,s president. The decision followed days of publicized infighting culminating in the PRM Standing Bureau,s June 2 decision to expel from the party former president Corneliu Ciontu and PRM vice-president Anghel Stanciu. The Convention accused both men, handpicked by Tudor in March to lead the party when he stepped down as the party,s titular leader, of &plotting8 against Tudor. 7. (C) The June 4 convention also voted to drop the word &popular8 from the party,s name ) effectively ending the PRM,s bid to affiliate itself with the center-right European Popular Party (EPP)(Ref B). The PRM,s decision to return to its original name followed the decision of a delegation of the European Popular Party (EPP), which visited Bucharest June 2-3, not to open negotiations with PRM. According to independent Embassy contacts, Ciontu had attempted to present a credible application to the EPP, but Tudor sabotaged his efforts from behind the scenes, remaining the party,s de facto, if not de jure, leader. PRM leaders have also observed that the party,s core electorate (mostly aging, rural, and nationalist) was confused by Tudor,s replacement in March by the little known Ciontu and Tudor,s superficial attempts to transform the PRM into a mainstream center-right party. For most Romanians, including the PRM,s supporters, Tudor and the PRM are one in the same, with the party inextricably linked to Tudor,s ultranationalist message. Party insiders loyal to Tudor were also vexed that Ciontu,s temporary accession to the party,s presidency meant that their influence within the party had diminished. 8. (SBU) Erstwhile PRM president Ciontu subsequently declared that he and six other PRM Chamber deputies plus five independent deputies (who resigned from the PRM group of deputies in February) will form a separate parliamentary group with the goal of establishing a &modern Christian-Democratic party.8 In a June 2 interview, Ciontu excluded any compromise with Tudor and said that his PRM colleagues had to choose between &nationalism and euro-popular identity,8 between &isolation and responsible government.8 Two regional PRM branches have already publicly vowed to join Ciontu,s movement. Ex-PRM member and Iasi vice-mayor Constantin Neculau echoed their sentiments when he stated that Vadim,s comeback and Ciontu,s expulsion make it impossible for the PRM to enter the political mainstream, either within Romania or as part of the EPP. Indeed, recent polls show the PRM,s level of popular support as steadily declining, with one sounding showing only seven percent of voters supporting the PRM (which gained 13 percent in fall,s parliamentary elections). 9. (U) The two major parties of the center-right governing coalition, the National Liberal Party (PNL) and the Democratic Party (PD), have been the main beneficiaries of the PSD,s and PRM,s internal struggles. Four of the PSD and PRM defectors have already joined one of the governing parties and those who have remained independent have voted, so far, with the center-right coalition. In February three PD deputies left the party after a falling out between former PD senior leader and deputy Cosmin Gusa and President Basescu. Gusa and two other deputies now call their small bloc in the Chamber the National Initiative Party (PIN). WHAT THE PARLIAMENT LOOKS LIKE NOW ---------------------------------- 10. (SBU) The net effect of changes in the Parliament thus far appears to be a better standing for the PNL-PD led coalition. Embassy contacts within the Parliament tell us the new bloc of renegade PRM members led by Ciontu plans to support the governing coalition, in an attempt to appear like a mainstream Christian Democratic movement. The governing coalition will still be challenged in the Senate, where its majority remains relatively slim and few changes have occurred. 11. (U) The composition of the Parliament, compared to December 2004, is as follows: CHAMBER OF DEPUTIES (seats) Dec. 2004 June 2005 PNL* 64 66 PD* 48 45 PSD 113 111 PC* 19 20 PRM 48 34 UDMR* 22 22 Minorities* 18 18 Independent 0 1 Ex-PRM(Ciontu Group) 0 12 PIN (Gusa Group) 0 3 Total 332 332 *Ruling coalition SENATE (seats) Dec. 2004 June 2005 PNL* 29 30 PD* 20 20 PSD 46 44 PC* 11 11 PRM 21 20 UDMR* 10 10 Minorities* - Independents - 2 Total 137 137 *Ruling coalition 12. (SBU) Comment: Romania,s proportional &party list8 system in place since 1990 has historically been characterized by party splintering and changes in party affiliation in periods following national elections. From 2000-2004, such fluctuation benefited the then ruling PSD, which greatly increased its ranks at both the national and local level. The current trend appears to be moving towards the center-right. Bucharest analysts are split as to what a departure of Iliescu from PSD would mean for the party. Some say it would be a serious blow, splitting the socialist left. Others say it would present an opportunity for Geoana and others to refit the party with a modern Social Democratic image. The extreme nationalist and xenophobic PRM faces greater challenges, with some pundits asserting the movement may be diminishing in both influence and ultimately popular support. Until the 2000 elections, the PRM typically counted on roughly 7-8 percent of the vote. Recent polling suggests the party may be returning to that level after winning an historically high 26 percent of parliamentary seats in the 2000 election. We anticipate further defections from the PRM in the parliament toward the political mainstream. End Summary. 13. (U) Amembassy Bucharest,s reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest . DELARE
34524 2005-06-13 11:08:00 05BUCHAREST1349 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS SECTION 01 OF 02 BUCHAREST 001349 SIPDIS STATE FOR EUR/NCE - WSILKWORTH, EB/IFD STATE PASS USTR USTR FOR LERRION TREASURY FOR STUART USDOC FOR 4232/ITA/MAC/EUR/OEERIS/CEEB/BURGESS/KIMBALL STATE PASS USAID SENSITIVE E.O. 12958: N/A TAGS: ECON, ETRD, EIND, EFIN, RO, Economic Assessment SUBJECT: IMF'S VIEW OF THE ROMANIAN ECONOMY: THE GLASS IS HALF EMPTY AND LEAKING REF: A) BUCHAREST 0189, B) BUCHAREST 1205 SENSITIVE BUT UNCLASSIFIED - NOT FOR INTERNET DISTRIBUTION SUMMARY ------- 1. (SBU) According to the IMF's Resident Representative in Romania, the Romanian economy shows signs of overheating this year and Romania's economic situation weakened in 2005. Inflation and the current account deficit are two leading indicators that will likely fail to meet targets by year's end. The IMF will likely continue to press the GOR to implement unpopular tax increases, including Value Added Tax (VAT) raises. IMF pessimism extends to the GOR's proposed Property Investment Fund project, as well as to the management and organization of the GOR and Ministry of Finance. END SUMMARRY. IMF STILL NEGATIVE ON ROMANIAN ECONOMIC PERFORMANCE --------------------------------------------- ------ 2. (SBU) Econoffs on June 9 met with IMF Resident Representative Graeme Justice for his perspective on Romania's economic prospects prior to the IMF technical assessment team's arrival June 14. He continues to be pessimistic about the overall health of the Romanian economy (see Ref. A for a report on our last meeting with him) and sees strong signs of over-heating in the Romanian economy. In particular, he points to the 12.1 percent higher household consumption posted in the first quarter. Justice also predicts annual inflation of approximately ten percent this year, compared with the GOR's seven percent target. Justice's projections are based on the relatively high inflation numbers posted in March and April, as well as the strong growth in business and consumer credit. Additionally, Justice worries about the current account deficit which he expects to reach 8 percent of GDP by year's end, compared with the official target range of 6.5 to 7.0 percent. He bases this revised projection on the current account deficit's unexpected growth in the first quarter (up 96.2% in USD compared with 1Q04). In spite of this bad news, Justice admitted that revenue numbers were strong for the first four months of 2005, up six percent from last year, although May's numbers were a little weak. These strong revenue figures give the GOR additional budget maneuvering room. 3. (SBU) Other big budget items that concern Justice include arrears owed by Romania to the health care sector, the upward adjustment in pensions, public sector wage increases promised by the former government and unexpected emergency aid costs for flood victims. Preliminary flood cost estimates approximate ROL four trillion ($135.44 million), although only one trillion has been requested to date. Medical arrears top the ROL seven trillion mark($237 million), and could increase. Possible demands for compensation for damages related to the Resita steel plant failed privatization (Noble Ventures case now in adjudication at the ICSID) would also represent another large liability for the GOR. 4. (SBU) In spite of these demands, Justice stated that the IMF and the GOR are reaching a budget rectification agreement which includes a deficit target of 0.744 percent of GDP, as well as cuts in material expenditures. Justice refers to the budget as "tight, but manageable", yet points to the demanding schedule of natural gas price hikes, which will raise prices by 30 percent next year, as potentially destabilizing if the GOR bows to social pressures. IMF PRESSES FOR FUTURE TAX HIKES -------------------------------- 5. (SBU) Justice believes that tax hikes are the answer to Romania's woes. The GOR will propose a new tax package next year which will seek to recover the two percent lost by this year's tax changes. Justice stated that the GOR must increase the current 19 percent VAT next year unless it wants to meddle with the heralded 16 percent flat tax, a politically unpopular move. Although he stated that VAT collection has been strong due to high consumption since January, excise tax collection was weaker due to the ROL's appreciation. He continues to lack confidence in the ability of the flat tax to generate additional revenues, and felt that the tax cut would affect the economy by June at the earliest. NOSTALGIA FOR THE PSD --------------------- 6. (SBU) Justice opines that several Ministries in the current GOR show enormous capacity constraints. He also assesses many of the current Finance Ministry (MOF) officials to perform less well than their predecessors in the previous Social Democratic (PSD) government. For example, he believes that Ministry of Finance Secretary of State Doina Dascalu in charge of budget issues has little authority, compared with PSD predecessor Gheorghe Gherghina. In addition, he views MOF Secretary of State Dragos Neacsu as a "glamour seeker" who desires to tap into the capital markets for the exhilaration of money raising. In Justice's opinion, Neacsu's efforts to extend maturities on Romania's old Eurobond issues are misguided, and should be postponed. Justice further believes that Minister of Finance Ionut Popescu and Neacsu have developed an overall unhealthy obsession with the capital markets. Justice cited the great difficulty in obtaining information from the Ministry of Finance on sensitive topics including heating subsidies as proof of the government's disorganization. A JAUNDICED VIEW OF THE PROPERTY INVESTMENT FUND --------------------------------------------- --- 7. (SBU) The Tariceanu Government has proposed the creation of a real estate investment fund to address the property restitution issue without drawing from government funds (see Ref. B). Justice feels strongly that the proposed fund, which would compensate owners whose property was confiscated during Communism, would engender corruption. He views the fund's model as providing too many opportunities for malfeasance, as decisions such as valuations of property are subjective and may be influenced by bribery. However, Justice lauds the idea of the fund in itself, as it avoids a negative budget impact while seeking a way out of a challenging political problem. Justice remains concerned about the GOR's haste in presenting the draft to the Parliament and the intention of voting on it before recess in a few weeks. COMMENT ------- 8. (SBU) The glass is not only half empty for the IMF in Romania, but it is a bit leaky at this time. Post is not as certain as the IMF that the Romanian economy is overheating in a manner that cannot be controlled. Post will be sending a cable on this year's first quarter macroeconomic data for Romania via Septel. 9. (SBU) Post is frankly a bit concerned that Mr. Justice appears to exhibit nostalgia for the previous PSD government, which Post believes to have contained far more corrupt officials than the current GOR. His frustration with dealing with a chaotic new GOR may explain this. In Post's experience, however, several of the new MOF officials have shown themselves to be eager, innovative, pro-American and honest. 10. (SBU) Post finally notes, that although Graeme Justice began the most recent meeting by emphasizing the Romanian economy's negatives, he did not indicate that there was a "show stopper" that would prohibit the Standby Arrangement from moving forward. He also seemed heartened by the MOF's desire to come to the table and seriously negotiate a budget rectification in spite of his complaints about GOR disorganization. Justice's use of the phrase "tight, but manageable" is an indication of the direction the review may take. However, as noted, any sudden shock to the economy that places substantial demands on the GOR budget could quickly reverse this encouraging picture. DELARE
34525 2005-06-13 11:12:00 05BUCHAREST1350 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS SECTION 01 OF 02 BUCHAREST 001350 SIPDIS SENSITIVE DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958, AS AMENDED: N/A TAGS: PGOV, PREL, PARM, MOPS, MD, RO, NATO SUBJECT: ROMANIA SEEKS FINANCIAL SUPPORT FOR PFP PROJECT IN MOLDOVA REF: USNATO 394 SENSITIVE BUT UNCLASSIFIED - PLEASE HANDLE ACCORDINGLY 1. (SBU) Summary. The GOR seeks financial support from the USG for participation as a "co-lead country" in a NATO Partnership for Peace (PfP) trust fund project in the Republic of Moldova to destroy chemicals and pesticides. Post includes a nonpaper that outlines the GOR request. End Summary. 2. (SBU) MFA Strategic Policy Director General Cristian Istrate and NATO Division Director Mirela Maghiar told PolChief and PolOff June 9 that the GOR is close to making a positive decision to assume the role of a "co-lead nation," along with Belgium, for the first phase of a Partnership for Peace (PfP) trust fund project aimed at destroying obsolete pesticides and dangerous chemicals stored on military bases in Moldova. The MFA interlocutors expressed strong support for this project, but stated that severe financial limitations compel the GOR to seek funding support for the project. They asked if the USG would be willing to provide "some financial support" for GOR engagement in the PfP. We promised to raise this matter through appropriate USG channels and also urged the MFA to discuss their request with USMISSION NATO. 3. (SBU) Maghiar provided a nonpaper (set forth in paragraph 4) that outlines the GOR position. When asked for clarification about the potential level of GOR support as well as the level of support sought by the GOR, Maghiar replied, in an email, that the GOR is "considering" a "contribution of 150,000 euros and this proposal has been submitted to the Prime Minister for approval. It does not depend on other allies' contribution, but will not be enough to start the first phase. All allied contributions so far (including ours) do not match the total sum needed for the first phase and that is why additional pledges would be beneficial. Unfortunately, due to different budgetary constraints, including the floods, will not allow us to contribute more." (Note: Catastrophic flooding causing extensive losses of housing and major infrastructure damages this spring in western Romania has severely stretched the GOR's already-limited resources. End Note.) 4. (U) The text of the GOR nonpaper follows: PfP TRUST FUND FOR R. MOLDOVA - Romania is very much interested in the preservation of the only PfP Trust Fund project in R. Moldova. The PfP project aims at destroying over 2000 tons of obsolete pesticides and dangerous chemicals improperly deposited in over 350 military bases, under military supervision, some of them in the proximity of our common border. - Guarding and monitoring these storage facilities place an additional burden to the R. Moldova's military forces as it requires a considerable number of military personnel. At least 800 military personnel out of a total of 6,800 are engaged in this undertaking. This commitment has a negative impact both on the speed of the military reforms and the limited financial resources of R. Moldova's Ministry of Defense. - Seen in the wider context of Moldova's defense reform, the re-packing and centralization of the stockpile and the subsequent release of military personnel currently engaged in guarding the excess sites, would have an encouraging effect with regard to the eventual reduction and restructuring of the armed forces in R. Moldova. - Moreover, as a result of their improper storage these dangerous substances can leak at any time in the ground or in the water flows in their proximity, presenting a clear thereat to the health of the local communities and their economic activities and last but not least, serious environmental problems. - The authorities in Chisinau are paying a special attention to this project. The issue was high on President Voronin's agenda during his recent talks with Mr. Jean Fournet, Assistant to the Secretary General for Public Diplomacy, on April 4, 2005 in Chisinau. Also, the leadership in Chisinau addressed Mr. Guenther Altenburg, Assistant Secretary General for Political Affairs in writing several times on this issue. - The feasibility study made by the NATO Maintenance and Supply Agency, with the financial support provided by the United Kingdom, Belgium, Denmark, Netherlands and Norway- proposes a step-by-step approach - re-packing, centralization and destruction of Moldova's stockpile. The proposed project would be executed in four phases. The first phase of the project involves repacking and centralization of the stockpile in 28 centralized sites and amounts to 962,850 EUROS. Up to now, the total pledges of the allies amounts to 195,000 euros. - According to the NAMSA regulations, unless all the money required by the launching of the first phase is gathered, the project will be abandoned, and reopened only when all financial conditions are met. - Romania is in a very advanced process of generating a political decision on taking over the role of co-lead nation country, along with Belgium, for the first phase of the project, and in committing a financial contribution. We are also trying to identify financial ways to finance the next phases of the project through UN and the OSCE, although, from the research we did so far, it seems that the chances for positive results are really slim. - Through its broad positive implications - not only on the military reform but also on the health and the economic activities of the local communities - the implementation of the project could have a great impact on the NATO's image (also by dismissing the "bad guy" image of NATO, which was promoted by the old Soviet propaganda) and the level of support within the public opinion in the Republic of Moldova. - Abandoning of the project would not be advisable, especially now, when the R. Moldova is being imposed economic sanctions by Moscow, who wants to punish the current leadership in Chisinau for its new orientation towards the West. - In this context of an increased interest of R. Moldova for cooperation with NATO (R. Moldova has officially requested the IPAP on June 7), we have also to avoid the feelings of marginalization by the Alliance which might arise in Chisinau, if the only PfP Trust Fund project in Moldova is cancelled, while Ukraine and Georgia will continue to benefit from consistent contributions by NATO allies for their PfP Trust Funds projects. Therefore, any additional contributions by allies to the PfP Trust Fund for R. Moldova would be critical for launching the first phase of this project. End Text of GOR Nonpaper 5. (SBU) Comment. The GOR's enthusiasm for this project reflects, in part, President Traian Basescu's increased foreign policy focus on Moldova since he took office late last year. It also reflects the GOR's ongoing efforts to, in the words of several MFA interlocutors, serve as a "motor" for regional stability and development of democratic institutions. Finally, the GOR's proposed engagement in this project reflects Romania's longstanding commitment to supporting NATO programs and activities, including the Partnership for Peace. End Comment. 6. (U) Amembassy Bucharest's reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest . DELARE
34912 2005-06-17 12:14:00 05BUCHAREST1372 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 03 BUCHAREST 001372 SIPDIS DEPT FOR EUR/NCE WILLIAM SILKWORTH E.O. 12958: DECL: 06/17/2015 TAGS: PGOV, PREL, PHUM, KDEM, SOCI, RO, biographic information, History, political assessment SUBJECT: ROMANIA CONFRONTS ITS PAST 15 YEARS AFTER MINERS' RAMPAGE; EX-PRESIDENT ILIESCU FACES INDICTMENT REF: A. A) O4 BUCHAREST 3478 B. B) BUCHAREST 1348 Classified By: POLITICAL SECTION CHIEF ROBERT GILCHRIST FOR REASONS 1.4 B AND D 1. (C) Summary: Events of recent days have focused renewed attention on violence caused by rioting miners in the 1990's that slowed Romanian democratic development and Romanian progress toward market reform . As Romanians commemorated the 15th anniversary of the riots, a court ordered the miners' former leader released from jail. Meanwhile, the press revealed that ex-President Ion Iliescu is under criminal investigation for inciting the riots as well as for his alleged role in violence during Romania's 1989 revolution. Few Romanians believe the former executive will ever serve time. However, many hope there will now be a true accounting of the country's early post-communist history, with culpability for the violence and extra-constitutional measures clearly attributed to those responsible. End Summary. 2. (SBU) On June 14, Romanians solemnly commemorated the anniversary of the notorious 1990 miner's riots, which brought terror and bloodshed to the capital in the months after Romania's anti-communist revolution. Victims of the riots -- as well as family members of those who were killed -- assembled peacefully in Bucharest's central University Square holding signs calling for justice and prosecution of those responsible. For years, they have assembled on this anniversary and have pressed unsuccessfully for the truth to be officially revealed. Recent events, however, indicate there may finally be progress. ILIESCU IN THE SPOTLIGHT ------------------------ 3. (C) Following weeks of speculation, former President Ion Iliescu's lawyer announced June 9 that Iliescu is under criminal investigation, with charges pending for his alleged role in the riots. This was confirmed in the press by the Public Prosecutor. Iliescu has long been the central focus of accusations that the riots were sponsored, incited, and organized by top officials. The charges reportedly pending against him, but still subject to final approval, include genocide, undermining state authority, undermining the national economy, inhuman treatment, war propaganda, abusive investigation and illegal arrest. Separately, Embassy contacts have said that Iliescu is also under investigation for his alleged role in violence surrounding the December 1989 revolution. 4. (SBU) Iliescu initially downplayed the criminal investigation and pending charges related to the riots, asserting that he had merely been named as a "witness" to the events. Shortly thereafter, however, he dismissed his lawyer for revealing the initial news to the press and hired criminal defense lawyer and Social Democratic Party (PSD) Senator Antonie Iorgovan to lead his legal team. Iorgovan -- who has offered to take on the case pro-bono -- is known as one of the top criminal defense attorneys in the country. According to Embassy contacts and press reports, charges related to the riots are also pending against other prominent political figures, including former Prime Minister Petre Roman, former Deputy Prime Minister Gelu Voican Voiculescu, and current Transportation Minister Gheorghe Dobre. The latter, who was a mid-level transportation official at the time, allegedly facilitated the movement of the miners' trains into Bucharest. 5. (C) Lawyer Iorgovan has publicly declared that "there is a clear risk" Iliescu could spend the rest of his life in prison. However, many Romanians remain skeptical that Iliescu will ever serve time. Given the complexity of the case and the staleness of the evidence, the trial could take years. Iliescu's advanced age and recently-manifested heart condition could also pose impediments. Additionally, the PSD and Iliescu personally continue to exercise continued influence -- if not outright control -- of much of the court system at multiple levels. More fundamentally, legal experts point out that the case will be difficult to prosecute given that Iliescu was acting at the time as head of state and was obligated to ensure security and preserve institutions. The press and some Embassy contacts have indicated the PSD is already planning to take every step necessary to protect Iliescu. There is some speculation that the current PSD leadership will use this as a tradeoff to prevent Iliescu from forming a new party following his unsuccessful bid for the PSD presidency in April. (Ref B) RIOT LEADER RELEASED FROM PRISON -------------------------------- 6. (SBU) Coincidentally, a local court in Craiova June 14 ordered the release from prison of Miron Cozma, former miners' union chief and the most visible instigator of the riots. Cozma walked free the same day. In December 2004, Iliescu pardoned Cozma in one of the most controversial moves of his presidency (ref a). In response to widespread public outrage at the time, Iliescu quickly "revoked" the pardon and Cozma was then put back in jail after only two days. The Craiova court determined that Iliescu had no legal basis for revoking the pardon. 7. (SBU) As in December, Cozma's release sparked public outrage, with local television stations replaying video footage of the 1990 violence and newspaper headlines expressing alarm that "a killer had been freed." The Association of Miners, Riot Victims (AVM) called Cozma a "terrorist" and asked the General Prosecutor to reverse the decision. Nonetheless, despite these strong emotions, most analysts acknowledged that the Craiova court acted correctly and cast the blame on Iliescu for initially issuing the pardon. Minister of Justice Monica Macovei called the Craiova court decision "predicable," as there are no constitutional grounds for revoking a presidential pardon. Cozma reportedly "thanked" Macovei for his release. She replied publicly that the Ministry had played no part in the decision and the Cozma could only thank Iliescu. Since his release, Cozma has vowed to establish his own political party and fingered Iliescu as the primary culprit for the violence. BACKGROUND: THE MINERS' BLOODY RAMPAGE -------------------------------------- 8. (C) Few events in post-communist Romania evoke as much emotion as the deadly violence perpetrated by the miners in the 1990's. Coming largely from the state-owned mines in the coal-rich southwest of the country, the miners faithfully supported Iliescu in exchange for his assurances of their job security and continued high salaries. Iliescu relied on their electoral support and -- at key junctures -- their willingness to use intimidation and violence in support of his objectives. In short, in the words of one Embassy contact, for a period of several years Iliescu used the burly and club wielding miners as his "personal shock troops." 9. (SBU) In 1990, the miners rampaged through Bucharest three times. The worst was the third riot, in June. Hundreds of students, intellectuals, and other anti-communists were encamped in central Bucharest to call for meaningful democratic reform and the ouster of the former communist nomenclatura whom they believed had derailed the revolution. On June 13, Iliescu and his government used police and other measures to try to dissipate the protesters, sparking violence and disorder throughout the city. Iliescu then called for "responsible forces" (i.e., the miners) to "help" authorities restore order. On June 14, thousands of miners -- abetted by government officials at multiple levels -- boarded trains for central Bucharest. The ensuing violence was unprecedented in the capital, resulting in reportedly dozens of dead and hundreds wounded. On June 15, Iliescu thanked the miners for their actions and their &attitude of high civic spirit.8 The miners returned to Bucharest in September 1991 in response to government plans to cut mining jobs. After a repeat of earlier violence, then Prime Minister Petre Roman was forced to resign. In 1999, the miners twice attempted to return to Bucharest but were impeded by security forces under orders from the then center-right government of former President Emil Constantinescu. 10. (SBU) As president of the largest miners' union, Miron Cozma was the most visible and vocal figure in the movement and -- in the eyes of many -- held responsibility for much of the violence. In 1999, he was sentenced to eighteen years in prison for events related to the 1991 riot. Cozma is currently appealing another conviction for his role in instigating unrest in January 1999. The appellate court's decision is expected as early as next week, leaving open the possibility that Cozma could return prison. 11. (C) Comment: Although few believe there will ever be prosecutions, the pending charges against Iliescu and others offer hope that an accurate history of the miners' riots may finally come to light. Many Romanians see this -- as well as a true accounting of the 1989 revolution -- as a central mandate for President Traian Basescu and his center-right government. Indeed, it is no coincidence that cheering crowds on December 12 spontaneously convened at University Square to celebrate Basescu's presidential victory. They viewed this location as an embodiment of the ideals of the 1989 revolution and the anti-communist protesters beaten there by miners in 1990. And they viewed Basescu as the political figure most capable of bringing closure to events that still haunt post-communist Romania's political psyche. 12. (C) Comment continued: Also in the past week, several key center-right Members of Parliament introduced a bill that would forbid former communist nomenclatura from holding public office for ten years. Embassy contacts have expressed pessimism the measure will pass in its current form. Nonetheless, it demonstrates a more general commitment by the center-right to purge the vestiges of communism from official life. End Comment. 13. (U) Amembassy Bucharest's reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest. DELARE
34924 2005-06-17 13:22:00 05BUCHAREST1378 Embassy Bucharest UNCLASSIFIED UNCLAS SECTION 01 OF 03 BUCHAREST 001378 SIPDIS STATE DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: N/A TAGS: PGOV, PHUM, SOCI, KDEM, ECON, RO, political assessment, poll SUBJECT: POLLS SHOW STRONG SUPPORT FOR BASESCU, CENTER- RIGHT ALLIANCE REF: BUCHAREST 001084 1. Summary: Opinion polls conducted in May and June indicate continued strong support for President Traian Basescu, particularly after the release of three Romanian hostages from Iraq on May 22. A poll of June 14 showed Basescu with an approval rating of 71 percent while his center-right Liberal-Democratic (PNL-PD) Alliance also received high marks. Another major poll, conducted during the recently concluded hostage crisis, showed continued concern about corruption, and a lack of faith in the parliament and political parties. End Summary. CURS POLL: BASESCU AND PNL-PD RIDING HIGH ------------------------------------------ 2. The June 14 CURS poll was conducted June 3-10 among 1005 respondents over 18 years-old throughout the country. Margin of error is 3.1 percent. Key questions and responses are as follows: -- How do you feel about the following political personalities in Romania? Bad/ Good/ Don't Know Very Bad Very Good Traian Basescu 27 percent 71 2 Mircea Geoana 29 60 11 C.Popescu-Tariceanu 33 57 10 Emil Boc 30 44 26 C.V. Tudor 60 32 8 Gheorghe Ciuhandu 27 27 46 Cozmin Gusa 31 24 45 Dan Voiculescu 41 20 39 Marko Bela 60 18 22 (Note: The question did not include PSD former President Ion Iliescu or former Prime Minister Adrian Nastase. End note). -- If elections were held this Sunday, which party would you vote for? (Percentage is of respondents who expressed an opinion.) DA Alliance(PNL-PD) 50 percent PSD 28 PRM 8 UDMR 5 PC (former PUR) 3 PNG 2 PIN 1 PPCD (former PNTCD) 1 Other 2 -- For those who would have voted for the PNL-PD, which of the two party components has your support? PD 44 percent PNL 38 No preference 17 Don't know/No resp. 1 -- For those who would have voted for the PNL-PD, do you think that these two parties should: Unite into one party 49 percent Remain in alliance, but separate 33 Break the alliance, keep two parties 11 Don't Know/No response 7 GALLUP: BASESCU WOULD WIN IF NEW ELECTIONS HELD --------------------------------------------- -- 3. Gallup Romania and the Open Society Foundation conducted their poll May 6-19 among 1800 respondents over 18 years- old. The margin of error is 2.3%. The following are highlights of key election questions asked: -- If elections were to be held next Sunday, who would you choose as president of Romania? (Percentage is of respondents who expressed an opinion.) PNL-PD Traian Basescu 65 Percent PSD Adrian Nastase 15 PSD Mircea Geoana 6 PRM Valim Tudor 6 PSD Ion Iliescu 3 Others 5 -- If elections were to be held next Sunday, which party would you choose? (Percentage is of respondents who expressed an opinion.) DA Alliance (PNL-PD) 59 Percent PSD 24 UDMR 7 PRM 7 Others 3 -- How much confidence do you have in: Little/Very Positive/ Don't know Little/None Lots him/No resp Traian Basescu 42 Percent 59 4 C.Popescu-Tariceanu 57 34 11 Mircea Geoana 56 31 13 Theodor Stolojan 60 31 10 Adrian Nastase 75 20 5 Emil Boc 57 20 23 Ion Iliescu 78 16 6 Valim Tudor 79 13 8 Marko Bela 80 9 10 Dan Voiculescu 72 6 22 -- Can you tell me the name of Romania's president? Traian Basescu 96 Percent Don't know 4 -- How about Romania's Prime Minister? C.Popescu-Tariceanu 74 Percent Adrian Nastase 1 Don't know 25 -- And Romania's Minister of Foreign Affairs? Mihai R. Ungureanu 23 Percent Mircea Geoana 2 Don't know 75 ... BUT DON'T HAVE MUCH FAITH IN PARLIAMENT, PARTIES --------------------------------------------- ------- 4. The Gallup survey also included extensive polling on the economic status of respondents, feelings about their personal future and the future of Romania, and continued concern about corruption. Notable questions included: -- How much confidence do you have in: Positive Great Deal of Confidence Confidence the Church 44 Percent 39 military 49 13 mass media 50 12 EU 38 10 NATO 37 11 the president 38 8 your local mayor 36 7 the police 31 5 financial institutions29 4 the government 26 4 NGOs 24 4 the judicial system 22 3 the Parliament 19 3 political parties 11 2 -- In your opinion, corruption in Romania: is prevalent and exists at all levels 78 Percent exists only at higher levels 10 exists only at lower levels 1 does not exist 1 don't know/no response 10 -- How do you think most wealthy people in Romania became successful? breaking the law 56 Percent who you know 13 hard work and self-merit 10 luck 8 others 4 don't know 9 -- In your opinion, in the fight against corruption the present government has taken: Very many measures 4 percent Many measures 25 Few measures 35 Very few measures 12 No measures 7 Undecided/don't know 17 -- How much monthly income is necessary for your family to live a decent life? (Responses only from families of four) Urban Lei 22 mn (USD730) Rural Lei 15 mn (USD500) -- How much money did your family earn last month? (Responses only from families of four) Urban Lei 12 mn (USD400) Rural Lei 7 mn (USD230) -- In four years' time, do you think your economic situation will be better, the same, or worse? Better 40 Percent The same 28 Worse 14 Don't know 17 -- In four years' time, do you think Romania' economy will be better, the same, or worse? Better 42 Percent The same 24 Worse 16 Don't know 18 -- Is Romania heading in the right direction? 44% yes 43% no 13% don't know 5. Comment: The results of these two recent polls confirm that Basescu and the PNL-PD Alliance still remain popular after six months in office. No doubt, Basescu's successful resolution in bringing home the three Romanian hostages from Iraq contributes to this continued buoyancy. Interestingly, Gallup also noted that this was the first time since 1997 that more respondents expressed belief that the country is headed in the right direction than not. Former FM Geoana's strong showing in the CURS poll followed his election as PSD president at the April 21 party conference. End Comment. 6. AmEmbassy Bucharest's Reporting telegrams, as well as daily press summaries, are available on the Bucharest SIPRNet website: www.state.sgov/gov/p/eur/bucharest DELARE
35084 2005-06-21 07:48:00 05BUCHAREST1402 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L BUCHAREST 001402 SIPDIS STATE DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: DECL: 06/21/2015 TAGS: MARR, MOPS, PGOV, PREL, AF, RO, NATO, regional organization SUBJECT: ROMANIA'S CONTINUED SUPPORT FOR SEEBRIG DEPLOYMENT TO AFGHANISTAN REF: STATE 110073 Classified By: POLITICAL SECTION CHIEF ROBERT GILCHRIST FOR REASONS 1.4 B AND D 1. (C) MFA NATO Division Director Mirela Maghiar told PolOff in a June 16 discussion regarding Romanian support for the South East Europe Brigade (SEEBRIG) that a U.S. contribution to SEEBRIG of USD 1 million this year as part of the Global Peace Operations Initiative (GPOI), would constitute "useful and instrumental support for SEEBRIG." (Reftel) Underscoring Romanian support for the Southeast Europe Defense Ministerial (SEDM) and SEEBRIG, Maghiar stated that Romania has "invested a lot" in SEDM/SEEBRIG and would like SEEBRIG to become "an operational force." She continued that the GOR will continue to support SEEBRIG's deployment to Afghanistan, "subject to financial limitations." Noting that in early 2006 Romania will "assume coordination of Kabul International Airport," she added that Romania's budgetary constraints mean that it "can only do so much." 2. (C) MOD Strategic Affairs Directorate Head Mihaela Matei underscored in a June 17 meeting with PolOff Romania's "clear commitment" to support a SEEBRIG deployment to Afghanistan. Echoing Maghiar's observations, Matei observed that "Romania's budget is really stretched" and a SEEBRIG deployment "financially might raise some problems...not just with Romania but also with other SEEBRIG member states." Matei characterized the USG provision of USD 1 million to SEEBRIG as "very good news." She also observed that Romania is one of the "very few NATO countries that has kept forces in both Afghanistan and Iraq" without withdrawing or reducing troop levels. 3. (C) Comment. Romanian expressions of concern about budgetary limitations and deployment capacity reflect bona fide resource restraints. Our interlocutors clearly appreciated likely GPOI support (subject to Congressional approval) for SEEBRIG. Romanian officials have consistently told us that they recognize SEDM/SEEBRIG's value as a "regional confidence building measure" but would like to see SEEBRIG become operational. End Comment. 4. (U) Amembassy Bucharest's reporting telegrams are available on the Bucharest SIPRNet website: www.state.sgov.gov/p/eur/bucharest DELARE
35119 2005-06-21 13:12:00 05BUCHAREST1405 Embassy Bucharest SECRET S E C R E T BUCHAREST 001405 SIPDIS STATE FOR PM/ISO, PM/RSAT, PM/PMAT, NEA/I, AND EUR E.O. 12958: DECL: 06/21/2015 TAGS: MARR, MOPS, PREL, IZ, UK, RO, military cooperation SUBJECT: IRAQ: ROMANIA OPEN TO CHANGES IN ITS MISSION RESPONSE TO DEMARCHE ON ENGAGING THE IRAQ COALITION REF: STATE 111082 Classified By: POLITICAL SECTION CHIEF ROBERT GILCHRIST FOR REASONS 1.4 A, B AND D 1. (S) On June 15, PolChief and DATT, along with British DCM delivered talking points on the U.S. Iraq strategy after Iraq elections to Stelian Stoian, MFA Director General for the Middle East and Global Affairs; Mihaela Matei, MOD Strategic Affairs Directorate Head; and Andreea Pastarnac, Director of the MFA Middle East and Africa Division. 2. (S) Stoian underscored that Romania -- at the highest political levels -- remains committed to maintaining troops in Iraq "until the job is done." This has been stated repeatedly by President Train Basescu, Prime Minister Calin Popescu-Tariceanu, and other senior officials. Stoian said Romania remains "very open" to a discussion on a potential change of mission or an adjustment to its current mission and would like to hear more specific ideas from the U.S. on this. He noted given that Romania has recently committed additional troops to Afghanistan, the GOR would have to consider carefully the costs of changes to the mission in Iraq -- "we are already stretched financially." 3. (S) Stoian said Romania remains committed to contributing to the coalition in the most effective manner possible and looks forward to a renewed dialogue with the U.S. on this. He said the GOR would also begin an internal discussion on what kind of contribution it should make to the new coalition strategy in Iraq. 4. (S) Matei raised during the June 15 meeting, and again with PolMil Officer during a June 17 meeting, several issues regarding the MNF-I's concept of embedding teams within the Iraqi military, and in some cases, special police and border units. She underscored that "there must be a single concept and coordination of rules of engagement regarding embedded teams and operational adjustments." She added that there should be coordination with SHAPE regarding both adjustments and embedded teams. Matei continued that a number of questions need to be answered regarding ROE and embedded teams, including whether embedded teams "are organized the same way throughout the coalition." Matei noted that Romanian troops currently serve in the Italian brigade under UK command. "How will the UK and Italians deal with embedded teams?" She concluded by stressing the importance of "harmonizing" ROE. 5. (U) Amembassy Bucharest's reporting telegrams are available on the Bucharest SIPRNet website: www.state.sgov.gov/p/eur/bucharest DELARE
35238 2005-06-23 13:03:00 05BUCHAREST1426 Embassy Bucharest UNCLASSIFIED UNCLAS SECTION 01 OF 02 BUCHAREST 001426 SIPDIS DEPT FOR INL/C/CJ ANTHONY GRESKO E.O. 12958: N/A TAGS: KCRM, SNAR, ASEC, RO, MD, MK, biographic information SUBJECT: ROMANIA NOMINATIONS - ILEA ROSWELL - ADVANCED MANAGEMENT COURSE SESSION 36 - JULY 18 TO AUGUST 5, 2005 Ref: State 89853 1. U.S. Embassy Bucharest provides the following nominations for ILEA Roswell Session 36. 2. Full Name: Chief Commissioner DAN Calin Vicentiu, Position/Institution: Chief of Department, Financial Investigations, Economic-Financial Directorate, Bucharest Police, DOB: June 27, 1959, POB: Bucharest, Romania, Contact: +(40)744-568692, Passport No.: 029055, Expiration Date: June 13, 2007; Official head of the Romanian Delegation; 3. Rank/Full Name: Sub-Commissioner RUSU Dumitru, Position/Institution: specialist officer, Countering Organized Crime and Anti-Drug Directorate, DOB: July 26, 1970, POB: Bucharest, Romania, Contact: +(40)744-362794, Passport No.: 025879, Expiration Date: July 6, 2006; 4. Rank/Full Name: Commissioner IRIMIA Ciprian, Position/Institution: Chief of Department, Countering Organized Crime and Anti-Drug Squad Bucharest, DOB: May 2, 1961, POB: Poiana Campina, Prahova county, Romania, Contact: +(40)740-848358, Passport No.: 022324, Expiration Date: to be extended by 2010; 5. Full Name: Commissioner HEREA Stefan, Position/Institution: specialist officer, Countering Organized Crime and Anti-Drug Directorate, DOB: February 27, 1961, POB: Girbovi commune, Ialomita county, Romania, Contact: +(40)744-364302, Passport No.: 019902, Expiration Date: to be extended by 2010; 6. Full Name: Sub-Commissioner SIMION Alexandru, Position/Institution: Chief of Department, Countering Organized Crime and Anti-Drug Squad Bucharest, DOB: October 20, 1963, POB: Bucharest, Romania, Contact: +(40)744-291081, Passport No.: 033556, Expiration Date: May 15, 2008; 7. Full Name: Commissioner AGAPOV Valentin, Position/Institution: Chief of Department, Surveillance and Investigations Directorate, County Police Inspectorate Constanta, DOB: June 1, 1962, POB: Constanta, Romania, Contact: +(40)745-697777, Passport No.: 012633, Expiration Date: September 25, 2006; 8. Full Name: Sub-Commissioner NICHITOI Andrei, Position/Institution: Chief of Department, Suceava Countering Organized Crime and Anti-Drug Office, DOB: October 18, 1968, POB: Botosani, Suceava, Romania, Contact: +(40)745-938022, Passport No.:035543, Expiration Date: September 26, 2008; 9. Full Name: Sub-Commissioner BIRLA Dan, Position/Institution: specialist officer, Countering Organized Crime and Anti-Drug Directorate, DOB: July 04, 1965, POB: Vernesti commune, Buzau county, Romania, Contact: +(40)21-3100521, Passport No.: 022323, Expiration Date: March 07, 2010; 10. Full Name: Commissioner TOADER Liviu, Position/Institution: Chief of Department, Countering Organized Crime and Anti-Drug Directorate, DOB: June 14, 1961, POB: Chiliile commune, Buzau county, Romania, Contact: +(40)742-201105, Passport No.: 022328, Expiration Date: to be extended by 2010; 11. Full Name: Sub-Commissioner IONITA Sorin, Position/Institution: specialist officer, Countering Organized Crime and Anti-Drug Directorate, DOB: October 9, 1963, POB: Bucharest, Romania, Contact:, Passport No.: 042393, Expiration Date: October 20, 2009; 12. Full Name: Sub-Commissioner OLTEAN Horea Florin, Position/Institution: Chief of Department, Cluj Countering Organized Crime and Anti-Drug Office, DOB: April 15, 1969, POB: Cluj, Romania, Contact: +(40)745- 358234, Passport No.: 025468, Expiration Date: May 23, 2006; 13. Full Name: Commissioner TIRON Gheorghe, Position/Institution: Director, Countering Illegal Migration Directorate, General Inspectorate of Border Police, DOB: February 1, 1962, POB: Borzesti, Vaslui county, Romania, Contact: +(40)741-265504, +(40)722- 367602, Passport No.: 046260, Expiration Date: May 10, 2010; 14. Full Name: First Inspector VISENESCU Marius Mihai, Position/Institution: specialist officer, General Inspectorate of Border Police, DOB: February 13, 1976, POB: Bucharest, Romania, Contact: +(40)722-825694, Passport No.: 033411, Expiration Date: May 12, 2008; 15. Full Name: First Inspector MATASARU Mihai, Position/Institution: specialist officer, Countering Trans-border Crimes Department, General Inspectorate of Border Police, DOB: November 18, 1970, POB: Belcesti, Iasi county, Romania, Contact: +(40)722-194175, Passport No.: 045125, Expiration Date: March 8, 2010; 16. Full Name: First Inspector SIRCU Gelu Catalin, Position/Institution: specialist officer, Iasi Border Police, DOB: April 25, 1973, POB: Vaslui, Romania, Contact: +(40)742-018150, Passport No.: 028096, Expiration Date: March 12, 2007; 17. Full Name: Sub-Inspector BUDEANU Razvan, Position/Institution: specialist officer, Countering Trans-border Crimes Department, General Inspectorate of Border Police, DOB: November 14, 1977, POB: Iasi, Romania, Contact: +(40)722-213665, Passport No.: 045126, Expiration Date: March 8, 2010. 18. Full Name: First Inspector IONITA Catalin Marian, Position/Institution: specialist officer, General Inspectorate of Border Police, DOB: October 11, 1975, POB: Brasov, Romania, Contact: +(40)723-330801, Passport: 033412, Expiration Date: May 12, 2008; 19. Alternate: Full Name: Sub-Commissioner COSTEA Vasile, Position/Institution: specialist officer, Countering Organized Crime and Anti-Drug Directorate DOB: July 27, 1973, POB: Moinesti, Bacau Romania, Contact: +(40)740-104926, Passport: 028062, Expiration Date: March 13, 2007; DELARE
35239 2005-06-23 13:04:00 05BUCHAREST1427 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS BUCHAREST 001427 SIPDIS SENSITIVE DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958, AS AMENDED: N/A TAGS: PARM, MARR, MOPS, PGOV, PREL, MD, GG, RO, NATO, CFE SUBJECT: ROMANIA RAISES CONCERNS ABOUT CFE TREATY ISSUES SENSITIVE BUT UNCLASSIFIED - PLEASE HANDLE ACCORDINGLY 1. (SBU) MFA Strategic Policy Director General Cristian Istrate and NATO Division Director Mirela Maghiar discussed with PolChief and PolOff June 9 Romanian concerns regarding the Conventional Armed Forces in Europe (CFE) Treaty. Subsequent to the June 9 meeting, Maghiar provided a nonpaper (set forth in full below) that outlines the GOR position and states, in part, that the GOR would "highly appreciate more in-depth US-Romania consultations on the CFE issues, with particular focus on: the implications of the Russian-Georgian declaration of 30 May 2005 for the NATO policy on CFE issues; the US approach on the CFE Adapted Treaty in the perspective of the 2006 CFE Review Conference." 2. (SBU) The text of the GOR nonpaper follows: ROMANIA'S COMMENTS ON THE RECENT DISCUSSION IN NATO/NRC ON THE CFE ADAPTED TREATY --The recent negotiations on the Statement of the NRC meeting of Defence Ministers triggered a very controversial debate among the NATO allies on the CFE issues and on how to reflect, in an NRC ministerial statement, the significance of the Russian - Georgian political declaration on the Russian military basis in Georgia. --From the beginning, Romania stated its preference that a CFE-related paragraph not be included in the above-mentioned statement, in the absence of an in-depth analysis in NATO of the implications of the Russian-Georgia political agreement over the CFE Adapted Treaty and the agreed NATO language on CFE issues. --Moreover, up to now, the CFE topic has never been addressed in the NRC meetings of Defence Ministers and the topic was not even included on the agenda of the 9th of June defence ministerial meeting of the NATO-Russia Council. --However, Romania understood the interest of some allies to highlight the relevance of the Russian - Georgian declaration and accepted, therefore, the negotiations in HLTF over a pre-coordinated allied language. The text proposed by the United States was widely accepted and ensured reference both to general NATO language on the CFE Adapted Treaty and explicit mentioning of the remaining Istanbul commitment on R. Moldova. --For Romania, this explicit mentioning of the Russian CFE commitments regarding R. Moldova in the context of a positive message of NATO on the Russian-Georgian declaration was extremely important, in order to highlight that the Russian CFE commitments are not yet entirely fulfilled. --In our view, the absence or indirect reference to the remaining CFE commitments, in an official high-level NATO statement, could have led to the interpretation that the withdrawal of the Russian military and ammunition from Transnistria is no longer linked with the fulfillment of the Russian Istanbul commitments. This would favour the Russian position that its CFE-commitments are already achieved. --The divergent views among Allies on these aspects and the tendency of most Allies to divert from the agreed HLTF language and to nuance Allied position on such a sensitive issue without prior debate in NATO is of concern for Romania. --In our evaluation, the position of some Allied States on CFE issues clearly signals the tendency to promote a more flexible approach regarding NATO's policy of conditionality between the ratification of CFE Adapted Treaty and the complete fulfillment of the Russian Istanbul commitments. --We believe that no explicit or implicit altering of the NATO common policy on the CFE Adapted Treaty should be made through negotiations over statements, without serious analysis and debate in NATO. --In this context, we would highly appreciate more in-depth US-Romania consultations on the CFE issues, with particular focus on: - the implications of the Russian-Georgian declaration of 30 May 2005 for the NATO policy on CFE issues; - the US approach on the CFE Adapted Treaty in the perspective of the 2006 CFE Review Conference. End Text of GOR Nonpaper 3. (U) Amembassy Bucharest's reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest. DELARE
35315 2005-06-24 11:45:00 05BUCHAREST1430 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 02 BUCHAREST 001430 SIPDIS STATE FOR EUR/NCE - WSILKWORTH COMMERCE FOR JBURGESS AND JKIMBALL LONDON ALSO FOR US EBRD REP GBIERY E.O. 12958: DECL: 06/24/2015 TAGS: ECON, EFIN, AA, RO, EBRD, Loan, corruption SUBJECT: ECON, EBRD, EFIN, RO REF: BUCHAREST 1304 Classified By: ECONOMIC SECTION CHIEF JOHN RODGERS FOR REASONS 1.4 B AN D D 1. (C) Summary: A meeting with the EBRD Director in Romania failed to change the Embassy's stance that a proposed loan to a local company of dubious business ethics is a good use of the American taxpayers' money. An attempt at fencemending on EBRD's part does not make up for the EBRD Director's lack of clarity on the chronology events linked to the loan and seeming intent to carry on with the project despite our strong protests. END SUMMARY. 2. (C) Charge and Econoffs met with EBRD Romania Country Director Gacek at her request on June 23, following earlier meetings between local EBRD representatives and the Economic Section regarding Embassy's strong opposition to the EBRD's proposed loan to European Drinks Group (EDG). Embassy assumed that the purpose of the meeting was to discuss the EDG loan and intended to reinforce the message that post does not support the USG's EBRD contributions flowing to Romanian companies that operate with a disrespect for the rule of law and an even, competitive playing field (see REFTEL). However, much to our surprise, Ms. Gacek claimed that she wanted only to discuss the impending visit to Romania of the President of the EBRD and to find out if post would be getting a new ambassador soon. She only raised the loan issue seemingly out of hand at the end of the discussion. 3. (C) Despite Gacek's disinclination to discuss the EDG problem, Charge reiterated post's disappointment at not being included in the EBRD's deliberations and research regarding the company, since the Embassy has a long history of observing EDG's dishonest and corrupt business practices in Romania. He emphasized the importance of including the USG early in the due diligence process. 4. (C) In her reply, Gacek sought to deflect the Charge's concerns with the company's past bad practices by countering that the EBRD,s goals contain, in part at U.S. insistence, "building corporate good-governance," and that this would be a part of any activities conducted with EDG. She stated that the EBRD is "forward-looking" and concerned with future behavior more than past. Objectives of the bank do not always correspond with the objectives of its contributing partners, she said, but each contributor,s views would have to be taken into account in the final Board decision. The Charge in turn emphasized our strong opposition to rewarding bad corporate governance with very large loans that, in ED's instance, could see a bad company through difficult times. 5. (C) On the issue of the proper time to inform the Embassy about the proposed loan, Gacek's replies were unclear: At one point she stated that the Bank was "finishing up the job," then later implied that the loan was nowhere near final. When pressed on the issue of including the Embassy in due diligence, she stated that the EBRD was just now conducting the "credibility" stage of its investigations, and as such was approaching the US Embassy at the appropriate time. She apologized for any misunderstandings regarding timing. 6. (C) In addition, on the question of Coca-Cola's stance on this loan, Gacek's understanding differed from the Embassy's. She stated that, while Coca-Cola shared negative press information, it had no hard evidence of improper activities, and had not conveyed to the EBRD a strong opposition or even interest in the loan. According to Gacek, Coca-Cola even indicated that EDG,s non-transparent activities would be corrected with Romania,s entrance into the EU. 7. (C) The Charge conveyed our conflicting understanding of Coca-Cola,s strong opposition to the loan, and moreover, even stronger Embassy opposition based on our desire not to reward Romanian companies whose asset acquisition and business practices do not comply with standard Western business ethics. For this reason, and as a principle Bank contributor, he re-emphasized the importance of consulting with the USG, through the Embassy, early in the due diligence process, to which Gacek agreed. 8. (C) Comment: While Gacek may be making an effort to mend fences here, her comments lead us to believe that she is also trying to practice damage control for lapses in due diligence on this particular loan. We also have the sense that she is still very much behind the project, although she did concede that it could be put off if major opposition to the project were still evident. 9. (C) Comment, cont'd: This post continues to believe strongly that a loan approval for EDG would send entirely the wrong message to the GOR and the Romanian business community, and would serve to reward a company and its owners for what has been described as mafia-like business practices. We urge strong opposition to the loan in London, and will continue to share our knowledge with EBRD's Bucharest office. End Comment. DELARE
35317 2005-06-24 12:06:00 05BUCHAREST1431 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L BUCHAREST 001431 SIPDIS STATE FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: DECL: 06/23/2015 TAGS: KUNR, PHUM, PREL, RO, UNCHR-1 SUBJECT: UN REFORM -- ROMANIAN RESPONSE TO DEMARCHES ON U.S. PRIORITIES REF: A. A) STATE 111657 B. B) STATE 111637 Classified By: POLITICAL SECTION CHIEF ROBERT GILCHRIST FOR REASONS 1.4 A, B AND D 1. (C) PolChief delivered on June 22 demarches on UN reform to Stelian Stoian, MFA Director General for Global Affairs (refs). Stoian expressed great appreciation for the points, noting that they provide a far more comprehensive picture than Romania had previously seen of the U.S. vision for UN reform. He said Romania does not yet have a position on UNSC reform and is watching closely to see what comes from the meeting of P-5 Deputy Foreign Ministers in London. He underscored that Romania shares the U.S. commitment to reforming UN institutions and pledged to consult closely with us on all issues. DELARE
35323 2005-06-24 12:40:00 05BUCHAREST1432 Embassy Bucharest UNCLASSIFIED UNCLAS BUCHAREST 001432 SIPDIS STATE FOR EUR/NCE WSILKWORTH ALSO FOR INL/AAE, EUR/ACE, EUR/SCE, EUR/SE, INR/EUR INR/REA E.O. 12958: N/A TAGS: ASEC, PREL, ECON, EU, RO, MD, NATO SUBJECT: TURKISH ADMIRAL REAFFIRMS GO IT ALONE POLICY IN THE BLACK SEA REF: BUCHAREST IIR 6 883 0153 05 1. (SBU) Summary. During a June 7-10 Black Sea Security Conference held in Chisinau, Moldova, the Turkish delegate repeated previous GOT comments that Turkey alone has the capacity to ensure security within the Black Sea region. Regarding future NATO activities in the region, he stated that with the assistance of Russia, Black Sea security has been and will continue to be ensured without further NATO involvement. Embassy Bucharest officer participated in the conference and cleared this message with Embassy Chisinau End Summary. NATO Need Not Apply ------------------- 2. (SBU) Turkish Admiral Kadir Sagdic (Head, Strategy Department, Turkish Navy Headquarters) stated at Harvard,s Black Sea Security Conference in Chisinau, Moldova that Turkey was capable of ensuring Black Sea regional security without involving other NATO powers. Admiral Sagdic stated further that NATO,s &dictatorial policies regarding PFP and other programs were not contributing to security in the region.8 In a conversation with DOS Bucharest-based SECI Coordinator, he claimed that Turkey has the capacity to &go it alone8 in the Black Sea without further &outside interference.8 When asked to clarify what he meant by outside interference, he referred explicitly to current Romanian government Black Sea security initiatives and corresponding USG dialogue with the GOR on regional security. He also criticized recent NATO references to the important Black Sea security. Admiral Sagdic described any Operation Active Endeavor-like activity in the Black Sea as &unnecessary8 and &duplicative,8 given the centrality of Turkish-led Black Sea Harmony. He insisted, however, that Turkey would provide &reporting8 to NATO on all Black Sea issues (Ref A). Admiral Sagdic further stated that the Black Sea Economic Cooperative Organization (BSEC) presently has the capacity to meet regional challenges and characterized &expansion8 of BSEC as ¬ in the interest of Black Sea security.8 Back to the Future: Turkish-Russian Black Sea Cooperation --------------------------------------------- ------------- 3. (SBU/NF) Admiral Sagdic made it clear to the conference attendees and in private conversations that NATO involvement in the Black Sea was a hindrance for overall regional security. He further pointed out that both Turkey and Russia were &insiders8 when it came to Black Sea policy and security concerns, &as they have been for over one-hundred years.8 Although Major General Nicolai Bushuev, Russian Defense Attach to Moldova and the Russian delegate to the conference, did not engage in any public discussions during the conference, he privately observed that he &doesn,t disagree8 with the Turkish positions stated during the two day conference. Oh, Those Talkative Romanians! ------------------------------ 4. (SBU/NF) Both during the conference and in private conversations, Sagdic claimed there is a perception in &NATO capitals8 that Turkey does not have the capacity of taking the lead on Black Sea security issues. He pointedly criticized those that believe that &other countries8 in the region could fill such a role. When asked &which other countries?8 he archly replied &those that speak the most about it.8 Most conference participants interpreted Sagdic,s remarks as a not-so-veiled reproach of Romanian efforts to develop a regional security strategy. 5. (SBU/NF) Comment. "The Turkish "go it alone" policy articulated by Admiral Sagdic gibes with recent Romanian reports that Turkey, in tandem with Russia, intends to dominate Black Sea security and "non-littoral states8 need not apply. At best, the Turks seem willing to share information with other NATO states. The Romanians, for their part, continue to call for a more engaged U.S., NATO and EU role in the region. End Comment. 6. (U) AmEmbassy Bucharest's Reporting telegrams, as well as daily press summaries, are available on the Bucharest SIPRNet website: www.state.sgov/gov/p/eur/bucharest DELARE
35326 2005-06-24 12:59:00 05BUCHAREST1433 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 03 BUCHAREST 001433 SIPDIS DEPT FOR EUR/NCE WILLILAM SILKWORTH E.O. 12958: DECL: 06/24/2015 TAGS: PGOV, PREL, KDEM, SOCI, ECON, RO, political assessment, Constitutional Law, biographic information SUBJECT: NEW ROMANIAN PARLIAMENTARY ELECTIONS? MAYBE... REF: BUCHAREST 1378 Classified By: POLITICAL SECTION CHIEF ROBERT GILCHRIST FOR REASONS 1.4 B AND D 1. (C) Summary: President Traian Basescu continues to push for early parliamentary elections, asserting that they would allow the center-right government to gain a clear majority. The National Liberal-Democratic (PNL-PD) party alliance is divided over the issue, with the PNL and Prime Minister Calin Popescu-Tariceanu especially chary of new elections. The two junior members of the coalition, the ethnic Hungarian party (UDMR) and the Conservative Party (PC), fear new elections might eliminate their parties from parliament. While new elections may not occur anytime soon, Basescu may continue to invoke their possibility as a strategy to keep the fragile center-right coalition in line. Given that the Romanian constitution does not outline a clear formula for the dissolution of parliament and new elections, post provides an overview of the constitutional obstacles faced by Basescu should he desire to go in that direction. End Summary. Basescu,s Repeated Call for New Elections ----------------------------------------- 2. (SBU) President Traian Basescu,s surprise victory in the fall 2004 presidential elections was the catalyst permitting the PNL and PD to cobble together a fragile center-right coalition which included the UDMR and the PC, both erstwhile Social Democratic Party (PSD) allies. Barely a week after the PNL-PD-led government took office December 29, 2004, Basescu sent shock waves through the political class when he declared himself in favor of new parliamentary elections. True to form, Basescu did not pull his punches, asserting that Romania needed new elections to permit the center-right to gain a clear majority in Parliament and carry out their reform oriented agenda. Basescu characterized the presence of former PSD ally PC, as &immoral,8 implying that the PC was a Trojan horse in the coalition. Basescu continued his campaign in February when he described the four party coalition as &too broad8 and &lacking coherence8 necessary to carry out the PNL-PD,s campaign pledges. He has also remained perpetually irritated that the two top positions in the Parliament -- the presidents of each Chamber -- remain in the hands of former PSD prime ministers Adrian Nastase and Nicolae Vacaroiu. The parliamentary vote for these positions was held in December 2004 before PNL-PD sealed its coalition with the UDMR and PC. 3. (C) The safe return to Romania last month of three Romanian journalists kidnapped in Iraq boosted Basescu,s approval ratings, with one recent poll result showing that the president enjoys a roughly 70 percent approval rating (ref). Sources close to Basescu have told the Embassy that the successful conclusion of the hostage crisis has emboldened the president and provides him the time and energy to focus on domestic issues; he continues to want "snap" elections. PM Tariceanu says &NO8 to Snap Elections. . . --------------------------------------------- 4. (C) PM Tariceanu and other National Liberal Party (PNL) leaders have publicly and privately expressed reservations about early parliamentary elections. Shortly after the May 29 French referendum on the European constitution, Tariceanu publicly stated that early elections could &call into question8 Romania's slated EU accession in January 2007, and senior EU officials based in Bucharest have confirmed to us that the EU looks dimly on snap elections. PNL parliamentarians have privately told Embassy Officers that new elections would probably weaken the overall parliamentary position of the PNL, while strengthening an emboldened and increasingly popular PD riding Basescu,s coattails. There remains an assumption that if the PNL and PD ran again on a common list, as they did in November 2004, PD would seek to renegotiate the terms of the alliance. This would no doubt mean a significantly larger percentage for the PD of seats won in Parliament for the alliance. It would also mean more PD representation in the Cabinet. 5. (C) One senior PNL deputy went so far as to &pencil out8 for PolOff possible configurations of a new parliament, finally concluding: &No matter what happens, PNL won,t gain, and could lose seats.8 In fact, the constitution provides that dissolving parliament and holding new elections requires the active support of the PM, a point Basescu acknowledged when he publicly stated June 22 that early elections can be organized only if PM Tariceanu agrees. Basescu also conceded June 13 that &because PNL does not want early elections, it is impossible to organize them.8 ... Junior Coalition Partners Balk ----------------------------------- 6. (C) An almost certain loser in new elections would be media magnate Dan Voiculescu,s PC, which, based on current poll soundings, would be unlikely to obtain the five percent of the vote required nationwide to enter parliament. The UDMR, which has traditionally been able to count on a disciplined ethnic electorate, would probably cross the five percent threshold for parliamentary admission, but fears that new elections that would strengthen the PNL-PD would, ipso facto, significantly diminish the UDMR,s influence within the coalition. And Opposition Prefers Status Quo --------------------------------- 7. (C) The two parliamentary opposition parties, the center-left PSD and extreme nationalist Greater Romania Party (PRM), have been preoccupied by internal squabbles and the threat of schism since last fall,s elections. According to recent polls, if new parliamentary elections were held now, the PNL-PD alliance would get a comfortable absolute majority ) at the expense of both the PSD and PRM ) which explains why both parties are content with the status quo. One PSD insider recently told us that PSD officials have been meeting privately with discontented members of the PNL, PC and UDMR. While acknowledging that the imminent split up of the center-right coalition is highly unlikely, he underscored that many members of the center-right are discomfited at Basescu,s repeated calls for new elections. Although PRM leader Corneliu Vadim Tudor has publicly stated he supports new elections, some political contacts tell us that PRM rank-and-file are concerned about the party's poor showing in recent polls. 8. (SBU) Many parliamentarians across the political spectrum are also leery of new elections, given the personal cost associated with running a successful campaign and the fact that, as one operative told us, &many are tired and broke after a year of local, parliamentary and presidential elections.8 Additionally, political appointees at all levels would risk losing their posts if the cabinet were dissolved as a precursor to new elections. How To Organize New Elections: A Constitutional Primer --------------------------------------------- --------- 9. (C) A Bucharest-based political analyst recently observed that &the new constitution (as amended in 2003) was designed to increase political stability, not diminish it.8 Besides the strong resistance of key political players, Basescu recognizes that his quest for new elections requires him to leap a series of constitutional hurdles. Political operatives across the spectrum have underscored to us, however, that if Basescu pushes hard enough for new elections and wins over PM Tariceanu he could, in essence, use constitutional mechanisms to force new elections. Post provides below a brief outline of the constitutional provisions and accompanying circumstances that could lead to new elections. 10. (SBU) The first step, under the Constitution, to permit new elections is the removal of the incumbent PM. Although the Constitution explicitly prevents the President from firing the PM (Article 107.2), the PM can voluntarily resign (Article 106). Constitutional scholars and political analysts point to the precedent of PM Radu Vasile,s resignation under pressure in December 1999 as a prime example of how an incumbent PM can be removed at the initiative of the president. The Constitution also envisages circumstances in which the PM is unable to fulfill his duties, e.g. because of health reasons or because most of his cabinet resigns. 11. (SBU) A second scenario that would permit dissolution of the government would be a parliamentary motion of censure supported by a majority of MPs (Articles 113 and 114). The government is dismissed by law if parliament also refuses to accept proposed organic changes in the new government, i.e. refuses to grant a new vote of confidence to a structurally reformed government (Article 85.3). In any of the above situations, the government is &dismissed8 and the process of naming a new PM and forming a government begins from scratch (Article 110). 12. (SBU) Removal of the PM and consequent dissolution of the government does not immediately lead to the dissolution of the parliament. Initially, the president, after consultations with the leaders of the parliamentary parties, picks a candidate for PM (Articles 85 and 103.1). The new PM candidate (who might even be the outgoing PM) has ten days to put together a new governing team and to draft a new governing program, appear before parliament and request its vote of confidence. If the PM candidate fails to do so within the constitutional limit of ten days or the parliament refuses to grant its confidence to the new government, the whole procedure starts again with the selection of a new PM candidate. 13. (SBU) The Constitution provides that if successive PM candidates are unable to form a government or the Parliament refuses on at least two consecutive occasions to grant its confidence to the proposed government over a period that could last up to sixty days, then ) and only then - the President can dissolve the Parliament (Article 89.1), after consultation with the presidents of the two chambers of the Parliament and with the leaders of the parliamentary parties. The dissolution of parliament would permit new elections. 14. (C) Comment. The only almost certain winner in new elections would be Basescu,s PD, which has been energized by his popularity. His ultimately successful handling of the hostage crisis coupled with his insistence that the government should aggressively attack corruption have boosted his standing with ordinary Romanians. At the same time, the PD, which holds its national convention June 25, has matured as a party in the past few years and can claim several prominent and effective national leaders, including Bucharest Mayor Adriean Videanu, Cluj Mayor Emil Boc and Interior Minister Vasile Blaga. New elections may not happen soon, and the path to getting them is fraught with constitutional hurdles, but the savvy Basescu may eventually get what he wants. At the very least, his repeated call for new elections is a not-so-subtle reminder to wavering coalition partners to stay in line. End Comment. 15. (U) Amembassy Bucharest,s reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest . DELARE
35425 2005-06-27 12:59:00 05BUCHAREST1445 Embassy Bucharest UNCLASSIFIED UNCLAS SECTION 01 OF 04 BUCHAREST 001445 SIPDIS STATE FOR EUR/NCE - WSILKWORTH, EB/IFD STATE PASS USTR USTR FOR LERRION TREASURY FOR STUART USDOC FOR 4232/ITA/MAC/EUR/OEERIS/CEEB/BURGESS/KIMBALL STATE PASS USAID E.O. 12958: N/A TAGS: ECON, ETRD, EIND, EFIN, RO, Credit SUBJECT: CONSUMER CREDIT BOOM FUELS ECONOMIC GROWTH IN ROMANIA SUMMARY ------- 1. The consumer credit market is booming in Romania, with lending institutions offering a wide and growing range of products reaching a total volume of $4.7 billion in 2004. The resulting shopping frenzy has contributed to an increase in retailers' profits, as well as a jump in the country's foreign trade deficit as consumers rush to buy foreign goods. So far, in spite of consumer protection groups' fears to the contrary, delinquency rates are low. However, loan recovery firms are doing brisk business as the number of the over-extended grows. Romania's first fully- functioning private credit rating agency began providing consumer data to lenders in April, and credit scoring will begin in the short term. Rural consumers, considered high- risk by lenders, have been left on the sidelines, unable to qualify for most loans. Banks Drive Credit Boom in Romania. ----------------------------------- 2. Consumer credit has been available in Romania since the fall of communism, although hyper-inflation, high interest rates, substantial collateral demands and economic uncertainty limited the growth of this market. It was not until 2002 when basic consumer loans and home mortgages became commonplace, with the total loan portfolio for that year in the low hundreds of millions of dollars. Consumer lending momentum soared over the next two years in tandem with Romania's increasingly rosy economic indicators. By year-end 2004, total consumer lending reached $4.7 billion, an increase of 6.5 times over 2002. This boom is indicative of the pent-up consumer demand characterizing the product- poor Romanian marketplace in the late 1990s and early 2000s. Increasing competition among financial institutions has lowered annualized interest rates from more than 100 percent in the mid-1990s to as low as 17 percent today. 3. Loan products have grown in breadth and sophistication over the past three years and today banks offer not only basic loans, such as home mortgages, but also loans for cars, home appliances, vacations and "personal needs". Real estate developers expect approximately 80 percent of home residences to be financed this year by mortgage loans. Home lending is further expected to expand once the secondary mortgage market opens allowing banks to offload risk. Use of credit cards is also on the rise; by year-end 2004 total credit card transaction volume reached $6.5 billion (up 46 percent from 2003), generated by 117.6 million transactions. Slightly more than five percent of consumers currently use credit cards, and a fifth of the population regularly pays with debit cards. Consumers like the new product selection, and surveys show that high numbers expect to enter into credit agreements by year-end 2005. Loans for household goods lead the pack in popularity with 5.3 percent of all consumers planning to borrow. 4. The fast pace of lending has contributed to Romania's impressive GDP growth, which stood at 8.3 percent last year. The construction and retailing sectors have benefited in particular. In the first quarter of 2005 retail sales jumped 18.7 percent over 2004, demonstrating this trend. However, some analysts fear short-term overheating. The IMF points to a growing current account deficit linked to high imports from abroad. .While Non-bank Financial Institutions Follow Close Behind --------------------------------------------- ------------ 5. Although slightly more than fifty percent of all consumer loans continue to be generated by banks, non-bank financial institutions (NBFIs), many of which operate in close partnership with Romania's retailing giants, have gained substantial market share within the last three years. These institutions' high profit margins on electronics and home appliance loans have made them popular take-over targets, and several were recently acquired by Western European and American investors. The rapid growth of NBFIs prompted the GOR to pass law 289/2004 "Concerning Credit Agreements", which requires them to acquire licenses and observe consumer credit rules including pre-contractual disclosure, annual percentage rate calculation, and agreement to advance repayment. Previous to this law, NBFIs were completely unregulated. NBFI's still operate outside of Romania's banking regulations which limit total loan amounts. 6. Applying for credit in-store can take as little as 15 minutes and retailers are quick to encourage this extra source of revenue. Romanian hypermarkets and home appliance retailers currently average 60 to 70 percent of their sales volume on credit, depending on seasonality and customer base. Household goods, electronics and furniture see the largest growth with an average purchase amount of 500 Euros. Romania's comparatively low incomes require loan maturities on consumer goods up to five times as long as those in the Czech and Polish marketplaces. 7. Romanians have an overall cultural aversion to owing money, and approximately seventy percent of borrowers pre- pay their loans, an unusually high number. Many, in particular the elderly, avoid credit due to their lingering fear of financial institutions and distrust of contractual agreements. Romanians tend to pay on time and delinquency rates hover around three to five percent, which both NBFIs and traditional banks consider low for a developing market. Banks which carefully screen applicants according to income level and credit history claim non-payment rates as low as 0.5 percent. Debt Collectors Rush to Cash In ------------------------------- 8. The credit boom has benefited debt collectors who saw a 300 percent growth in their consumer business in 2003. As consumers take on more debt and are unable to pay, both banks and NBFIs offload these delinquent payers to debt collectors. The main market players use generally accepted business practices, first attempting contact by phone and mail which generates a success rate of around 40 percent. If demands for payment are unsuccessful, the debt collector brings the case to court. The vast majority of loans in arrears, around 85 to 90 percent, are less than $1700. Personal needs loans see the highest level of default, followed by loans for consumer goods. Mortgages and car loans have the lowest default rates, of around two percent. Rural Dwellers Snubbed as High Risk ------------------------------------ 9. Rural residents have been left out of the lending boom for a variety of reasons, including a lack of banking branches and department stores in Romanian villages, income from undocumented sources, such as farming; and greater reliance upon foreign remittances transferred by relatives abroad. State-owned Banca Commerciala Romana (BCR) claims that it services ninety percent of the market, although the bank's total rural market portfolio is merely $10 million. Most NBFIs target cities with populations exceeding 50,000; they view investment in poor, rural areas as unlikely to generate required returns. The GOR has investigated programs to promote crop receipts as collateral for bank loans, but so far this initiative has made little progress. Uneven Legislation To Conform with the EU ----------------------------------------- 10. Legislation in the consumer credit sector is a mixed bag; most laws are geared towards consumer protection, while financial institutions remain frustrated by the absence of strong penalties for non-payment of debt. There is no expedited process within the legal system for financial companies and cases typically take six months to a year to be heard by a court. In addition to the Law Concerning Credit Agreements, which protects consumers who enter into credit agreements, the Romanian Parliament has passed laws on data protection conforming to EU legislation. Commercial banking norms have also been passed which stipulate that down payments on goods must represent at least 25 percent of the item's respective value. Additionally, total monthly payments can not exceed 30 percent of the customer's net monthly income, or 35 percent for home mortgages. Interestingly, these income constraints have resulted in employers bowing to pressure from workers to report full income to the state, rather than paying under the table to avoid payroll taxes. 11. However, gaps in legislation remain; NBFI's are not subject to the same lending caps as banks, nor subordinate to banking regulations or supervision. Commercial banks are frustrated by this uneven playing field and seek to convince the Central Bank to relax the lending restrictions, although a change is unlikely. Clarification on laws pertaining to overextended borrowers are also needed - no bankruptcy law exists, nor is there any way for lenders to "fast-track" cases of non-payment through the court system. Consumer Credit Bureau to Track and Score Consumers. --------------------------------------------- -------- 12. Until very recently, only the National Bank of Romania tracked consumer credit, although only bad debts exceeding approximately $6,800 were recorded. The Bank began collecting this data in 2000 upon request of the IMF, which was concerned about a dearth of statistics on outstanding loans. In response to the growing demand for customer data, last year a group of 27 financial institutions, representing 95 percent of the credit market, founded a first-of-its-kind private credit rating agency. As of April 2005, this group succeeded in compiling a comprehensive database of both positive and negative customer information from financial companies, insurers, leasing firms, telecommunications companies, and debt collectors. 13. Credit providers who are members of the agency and have agreed to its system of reciprocity can now request information on potential customers categorized into three groups: "good payment history", "bad payment history" and "overextended". The agency is now working with foreign scoring specialists to hone the current data base and develop a scoring system based on three years of positive and negative data. The success of this agency, as well as announcements of competitors that may enter the market, have prompted the National Bank to begin scaling down its credit tracking operations. The credit bureau's initiative has brought cries of protest from consumer protection groups concerned about data privacy. In response, the Romanian Parliament established a National Supervisory Authority to oversee the proper use of personal data and passed legislation conforming to EU data privacy norms. .While Consumer Protection Concerns Grow ---------------------------------------- 14. Econoff met with representatives of the Romanian Consumer Protection Agency (ANPC) who expressed concern about a lack of consumer credit education and need for data protection. They fear consumers falling prey to predatory lenders who sprinkle their contracts with unfamiliar legalistic terminology and pressure clients to sign. The agency also cited examples of unscrupulous lenders stipulating penalties of up to thirty percent of the total value of a loan for delinquent payers. Consumers are generally uninformed about the pros and cons of credit products and the elderly and young are particularly at risk. Bankruptcy laws do not currently exist for the overextended, although the agency was unaware of debtors being sent to prison for nonpayment. Another concern of the ANPC is the possible inappropriate use of and access to credit rating scores. With this in mind, the agency is now focusing on supervision of NBCI's and citizen education via television and press. The ANPC pointed out the general lack of consumer education on lending and admitted that their 42 offices have just begun to understand and appreciate this problem. 15. To assist the process of consumer education, Econoff organized a digital video conference (DVC) in May between the RCPA and representatives from the Federal Trade Commission to address consumer credit issues and explain how the Fair Debt Collection Practices Act operates in the United States. The RCPA greatly appreciated the session, and US Embassy Bucharest plans to request additional funds for a speaker program to target RCPA branch offices throughout the country. Comment ------- 16. Romania is developing a thriving consumer lending market which is so far remarkably stable in spite of the country's dearth of clear legislation and consumer education in this area. This market has fueled job growth in the retail and construction industries and allowed relatively low income Romanians to acquire needed housing and automobiles, further fueling the economy. To date, Romanians have handled debt prudently overall, partially due to their cultural aversion to owing money, as well as a fear of unforeseen future financial instabilities. The creation of the credit rating agency will assist lenders identify the overextended and steer them away from high risk individuals. 17. More troubling is the uneven legislation which caps the amount of total loans extended by banks, but places no restrictions on NBFI's, creating an uneven playing field. Data privacy is also a concern, as is the lack of education for young consumers on the healthy use of credit. Data is currently being collected for credit scoring purposes, unbeknownst to the general public, although the Consumer Protection Agency has recently taken an interest in this issue. DELARE
35555 2005-06-29 10:52:00 05BUCHAREST1456 Embassy Bucharest UNCLASSIFIED UNCLAS SECTION 01 OF 02 BUCHAREST 001456 SIPDIS STATE FOR EUR/NCE - WSILKWORTH, EB/IFD STATE PASS USTR USTR FOR LERRION TREASURY FOR STUART USDOC FOR 4232/ITA/MAC/EUR/OEERIS/CEEB/BURGESS/KIMBALL STATE PASS USAID E.O. 12958: N/A TAGS: ECON, ETRD, EIND, EFIN, RO, Economic Assessment, Financial program SUBJECT: ROMANIA'S REDENOMINATED CURRENCY PREMIERS JULY FIRST SUMMARY ------- 1. Romania officially and hopefully marks the end of its period of high inflation by introducing its redenominated currency, the "heavy" Leu, on July 1, 2005. Redenomination will slash four zeros off the existing currency, making one leu worth approximately 0.30 cents (U.S.). Although the upcoming move has provoked little anxiety among the public, press and banking communities, Embassy experience to date raises some concern about the switch. END SUMMARY Romania's Heavier Lion Charges Ahead ------------------------------------ 2. The GOR decided in early 2003 to redenominate and reconfigure the Leu (which means "lion" in Romanian) to make it approximate the value and appearance of the Euro (in anticipation of Romania's eventual inclusion in the Eurozone). In addition, the new Leu will be listed on currency markets as the "RON" (which means "Romanian New") to distinguish it from the "ROL" (which means "Romanian Leu"). And for the first time in many years, fractional coinage, the "Ban" (100 Bani equal one RON) will also circulate for making change. 3. In practical terms, the old currency's face value will be divided by 10,000. For example, a one million ROL note, currently the largest bill (worth approximately $30), will be converted into 100 RON, which will also be smaller in format, more like the size of the Euro notes. One Euro equals about 3.6 RON and one dollar equals about 3.0 RON at the current rate of exchange. 4. Officially, the new currency debuts July 1, but the GOR plans an extended phase-in of the RON and will circulate it in parallel with the ROL for 18 months. This period will permit customers to acquaint themselves with the new notes, allowing businesses such as vending machine manufacturers to make adjustments for the new coins and notes. The GOR has advised all commercial banks to cease public operations on Thursday and Friday, June 30 and July 1, although a few banks will remain open for limited transactions. Credit cards will be unusable Thursday, June 30, and most ATMs will not function until Saturday, July 2. Ostensibly, the RON will lower transaction and production costs for both commercial banks and Romania's Central Bank and will also allow banks to use cheaper standardized software. 5. The Romanian Central Bank delivered the RON to banks by June 15; retailers are scheduled to receive the new currency no later than July 1. Bankers are recommending that clients make scheduled end-of-month payments before June 29, to avoid the potentially chaotic period between June 30 and July 4. Banks will likely not begin dispersing the RON until Monday, July 4, when bank branches reopen for business. Public Education Campaign ------------------------- 6. The Central Bank created a public education campaign including seminars, advertisements and distribution of materials that describe the changes. Additionally, since March 2005, all businesses have been required to post all prices in both old and new Leu. The GOR has distributed more than 1,720,000 pamphlets edited in Romanian, English and Hungarian describing the design and safety features of the new Leu, as well as 600,000 posters and even 5,000 pamphlets in the Braille alphabet. The Central Bank has also organized more than 100 technical meetings and seminars, with commercial banks, private companies and local authorities to help spread the word. The GOR gave special attention to those working in the financial world by distributing 10,000 technical booklets geared towards commercial bank employees. Comment ------- 7. The Central Bank has created a comprehensive plan for the RON roll-out, based partially on its previous experience replacing paper currency with plastic notes. Both the RON and ROL display the same color and design for equivalent values, making it easier for consumers to adapt to the change. However, it remains to be seen whether the redenomination will cause disruption in the marketplace, due to the extensive software alterations required by both local and international banking systems. In May, US Embassy Bucharest discovered that one international ATM machine clearinghouse had incorrectly pre-set its systems to account for the heavy Leu, instead of the current Leu, hindering withdrawals from certain U.S. banks for almost a week. Another concern lies with the reaction of the elderly and rural population, whom many observers credit as being distrustful of any new change of this magnitude - particularly after the economic battering many experienced in the past 15 years. Delare
35572 2005-06-29 13:05:00 05BUCHAREST1459 Embassy Bucharest UNCLASSIFIED UNCLAS BUCHAREST 001459 SIPDIS DEPT FOR EUR/NCE - WSILKWORTH DEPT FOR EB/CIP - TFINTON USDOC FOR 4232/ITA/MAC/AUR/OEERIS/CEED/JBURGESS/JKIMBAL L USTR FOR JONATHAN MCHALE/PAUL NEUREITER E.O. 12958: N/A TAGS: ECPS, ETRD, ECON, EU, RO, Telecommunication Agreement SUBJECT: ROMANIA: LICENSING CONDITIONS IN TELECOM SECTOR REF: STATE 114687 1. Embassy's Economic Section contacted Alexandrina Hirtan, Vice President of the Romanian National Regulatory Agency for Communications (ANRC), in connection with licensing fees for fixed telephony. Embassy has received the following responses to Reftel questionnaire: 2. Regarding fees charged for licensing fixed line services in excess of what is necessary to cover administrative costs: Romanian Government (GOR) Emergency Ordinance no.79/2002 on the general regulatory framework for communications, approved, with amendments and completions, by Law no.591/2002, established the general authorization regime, which replaced the former procedure requiring every provider of electronic communications to obtain an individual licence. The current general authorization procedure, under which the interested companies are granted the right to enter the Romanian market as providers of electronic communications services or networks, is free of charge. Therefore, ANRC does not charge a tariff for the authorization of the providers of electronic communications services or networks, including fixed telephony services. 3. Providers of electronic communications services, however, must pay an annual monitoring tariff to ANRC. According to the provisions of art.47 par.(1) of the GOR's Emergency Ordinance (E.O.) Number 79/2002, "the providers of electronic communications networks and services authorized pursuant to this Emergency Ordinance must pay to ANRC an annual monitoring tariff, calculated as a percentage from the turnover of each provider." By way of exception, art.47 par.(8) sets out that "the persons authorised pursuant to Art.4 to provide exclusively for their own needs electronic communications networks and services using radio-electric frequencies shall be exempted from paying the annual monitoring tariff." 4. The annual monitoring tariff is calculated as a percentage of each provider's turnover. This percent is determined each year, without exceeding 0.5%, as the ratio between (a) the expenses estimated for the current year, provided for in the ANRC's budget, approved according to art.42 of Government Emergency Ordinance no.79/2002, amount from which the revenues provisioned from other sources, as provided for in the approved budget, shall be deducted; and (b) the cumulative turnover for the previous year of all providers of electronic communications networks and services who owe the annual monitoring tariff. 5. The monitoring tariff owed by each provider is calculated using (a) the percentage determined according to the provisions mentioned above, and (b) the revenue of the provider concerned for the previous year. 6. Regarding licenses for the use of numbering resources, ANRC can grant the right to use certain numbers from the National Numbering Plan, upon request, to any provider of publicly available electronic communications services authorized under art.4 of GOR's E.O. no.79/2002. ANRC may ask the holders of licenses to pay a certain tariff for the use of numbering resources. At this moment, the use of numbering resources is free of charge. 7. ANRC neither imposes any capitalization or bonding requirements nor any build-out investment requirements. DELARE
35573 2005-06-29 13:06:00 05BUCHAREST1461 Embassy Bucharest UNCLASSIFIED UNCLAS SECTION 01 OF 02 BUCHAREST 001461 SIPDIS FOR OPIC/SMEF: DERB E.O. 12958: N/A TAGS: EAID, OTRA, EINV, EFIN, RO, Credit, Economic Assessment SUBJECT: APPLICATION FOR OPIC FINANCE: DOMENIA CREDIT REF: OPIC/SMEF E-MAILED CABLE (06/16/2005) 1. This is the Embassy-USAID/Romania's response to OPIC Action Request dated June 16, 2005. 2. Summary: The Mission believes the addition of resources to expand mortgage lending in the country is essential for long- term sustainable growth in the industry. Currently, the legal framework for the primary market is strong on fundamentals. Reform of administration and registration is slow but proceeding and non-judicial foreclosure is an accepted principle, which was tested by the micro-lending activity and found to work reasonably well. The creation of the secondary mortgage market is in an incipient phase. With USAID technical assistance, a Mortgage Legislative Package has been developed waiting for Parliament's approval. It may be concluded that from the legal/regulatory point of view, no real barriers impede Domenia Credit's growth, and the development of the secondary mortgage market will create new opportunities in the longer term. End Summary. Establishment of Domenia Credit ------------------------------- 3. In 2000, USAID proposed to establish a sustainable finance company that would increase the access to mortgage loans to Romanian citizens. In September 2001 the Romanian Mortgage and SME Program was launched as a joint effort between Shorebank Advisory Services (SAS) and the Romanian-American Enterprise Fund (RAEF) with grant funding from USAID in the amount of $1.5 million for start-up costs. SAS provided management support and staffing, while RAEF provided the initial SEED capital of $3 million to the new company. During the start-up phase, RAEF, SAS, and USAID acted as anchor investors that provided the needed credibility for other investors that came later-on and invested in this company, as well as mitigated the start-up risk. This allowed the company to further develop by attracting new sources of capital by itself. Current Status of Housing and Mortgages in Romania --------------------------------------------- ------ 4. A successful middle class is emerging, comprised of business owners, professionals and entrepreneurs, who have relatively high and stable sources of income, from $400 to $800 a month. Many of these people wished to build, buy a house or an apartment, or upgrade their current residences. The mortgage market is a relatively new industry, but is very attractive to investors as it is rapidly expanding and providing high profit margins. Moreover, the Romanian market displays tremendous growth potential. Based on the experience of the other transition economies, we may infer that the potential growth of the market within the next 5 years is over 7% of the GDP (which would imply a $7 billion over the next 5 years). The risk of mortgage loans is very low, as it has both strong collateral - the house itself - and strong morale value, as Romanians always have traditionally valued homeownership. 5. High entry barriers, however, make this sector difficult for smaller finance companies to enter and compete in the market. The competition has continued to increase. With the exception of two mortgage companies, only banks offer mortgage loan products, which vary in terms of interest rate, procedures, paper work, documents required, and time to process and approve the credit, utilization fees, initial payment, and conditions to be met by borrowers. One element that delayed mortgage market growth was limited access to long-term resources. The situation has been improved beginning in 2003, when banks had access to longer-term financing from EBRD and outside financing from international financial markets. The other issue faced by the banking system that impedes mortgage lending growth is the bureaucratic procedures required by the National Bank of Romania's requirements. 6. After a slow start in 2001, the mortgage portfolio of banking system doubled in the following two years, to around $200 million in 2002, and $400 million in 2003. Based on the latest National Bank of Romania's report, the mortgage market at the end of April 2005 reached $1.34 billion. It is believed that growth might have been even higher if existing lenders would have had greater access to long term capital. Domenia Credit -------------- 7. Domenia Credit's vision is to become a leader on the mortgage market and the first company to offer secondary mortgage market services to banks by issuing mortgage-backed securities and bonds, therefore differentiating its services from its very strong competitors, the banks, which offer mortgage products, among other banking services. 8. The loan products, underwriting and processing procedures, and technology that were developed by Domenia Credit, were made available to other mortgage lenders in Romania in an effort to standardize the mortgage products and prepare the basis for the secondary mortgage market's development. Due to its top management active involvement in legislation improvement for both primary and secondary mortgage markets, the company has obtained its recognition as having a professional and knowledgeable team. Domenia's lending products cover all surface related to residential property finance: home acquisition, home improvement and home finishing, home construction and acquisition of land for construction purposes. The size of its outstanding portfolio was $15.7 million at the end of April 2005; the weighed average term to maturity was 11.09 years; and the average loan size was $26,600. By the end of April, 2005, Domenia's lending portfolio was arrears free, with a 0% default rate. 9. Until 2003, Domenia was active only in Bucharest. In 2004 it opened branches in Timisoara and Cluj, and early 2005 in Iasi. Currently, Domenia is considering opening a branch in Constanta. The only factor that impeded more rapid geographic expansion is the capital available for lending. On March 2005 Domenia Credit moved its headquarters to a new, larger location in Bucharest. The company has a strong team of professionals, young, dynamic, very well trained, offering professional financial services. Currently, Domenia Credit employs 46 people, out of which 15 are loan officers. Domenia Credit knows that its human resources are a key competitive advantage, therefore, twice per year, devotes to its young loan officers thorough training programs. 10. The company has not yet reached the break-even point. Based on its projections, this will be attained by the end of calendar year 2006 at $77 million. Domenia also projects that in October or November of this year, it will need new funds to keep up with the strong demand. Therefore, it is critical to assure funds for Domenia's expansion plans. 11. Domenia Credit is well positioned on the mortgage market due to its two key elements that differentiate its services from its competitors: speed and excellent financial consulting. Because of these factors, the company succeeded to maintain a higher interest rate than the market's average. Its experts are known throughout the industry to provide excellent services to potential clients and they continue to assist them, even if they are not eligible for Domenia's mortgage products. However, this advantage will eventually be eliminated as more competition enters the market. The company faces the following threats: (i) Increased competition in the market that forces the company to differentiate its services from its competition; and (ii) Limited resources that will be completely lent by November 2005. Romanian-American Enterprise Fund --------------------------------- 12. The Romanian-American Enterprise Fund (RAEF) is a private U.S. corporation whose mission is to promote free enterprise and entrepreneurship in Romania through investments in and loans to small and medium size enterprises. Established by the President and the U.S. Congress in 1994, RAEF is capitalized by a $61 million grant from USAID. RAEF was actively involved in seeking additional capital for Domenia, it has a seat on Domenia's Board, and it is the main engine pushing Domenia's development, its expansion of operations in new regions of Romania, and actively supporting its growth. DELARE
35638 2005-06-30 09:15:00 05BUCHAREST1467 Embassy Bucharest UNCLASSIFIED UNCLAS SECTION 01 OF 02 BUCHAREST 001467 SIPDIS STATE FOR EUR/NCE/BILL SILKWORTH, EB/JACK BOBO USDA PASS FAS/AUDREY TALLEY USDC PASS ITA/HILL SOFIA FOR AGRICULTURAL ATTACHE E.O. 12958: N/A TAGS: EAGR, ECON, TBIO, RO, trade relations SUBJECT: CODEX ALIMENTARIUS COMMISSION (CAC) SESSION: ROMANIAN RESPONSES TO USG CONCERNS REGARDING NEXT SESSION REF: State 113408 1. FAS Bucharest passed Reftel demarche to the following government officials in the Romanian Veterinary and Food Safety National Authority (VFSNA): Dr. Liviu Rusu, General Director of the General Food Safety Directorate; Monica Neagu, Director, Division for Standards, Marks and Food Quality, National Codex Contact Point; Dr. Paul Piscoi, Director, Hygiene and Public Health Directorate. 2. GOR officials submitted comments to a number of USG concerns as follows: -- Rules-based decision making/geographic indicators (e.g., parmesan cheese): VFSNA considers that all issues related to commercial brands/geographic indicators and other intellectual property should be debated within WHO (World Health Organization) and World Intellectual Property Organization (WIPO) meetings. New work to elaborate a codex standard for parmesan cheese is justified to the extent to which it would eliminate trade barriers and/or for consumer safety considerations. In accordance with the requirements laid down by CAC Procedural Manual fourteenth edition, the proposal to develop a Codex standard should be accompanied by a Project comprising the justification, the purpose and the objectives. In VFSNA's opinion, it is advisable that, considering the latest technological and scientific developments, the Codex standard for "Extra Hard Granting Cheese" adopted in 1978 (Stand C-35-1978) to be considered for updating. -- New work on animal feeding: Romania is currently adopting guides of practice for animal feeding. In order to be able to accurately assess the recently adopted Codex Code of Practice on Good Animal Feeding, VFSNA supports the view of the United States that undertaking new work at this time is not appropriate and member countries should be allowed more time to investigate their current situation relative to the Code of Practice. -- Antimicrobial resistance: Romania believes that the appropriateness of the United States proposal on the formation of a working group comprised of delegates from Codex Committee on Food Hygiene and Codex Committee on Residues from Veterinary Drugs should be discussed with the World Animal Health Organization (OIE). -- FAO (Food and Agriculture Organization)/WHO Project and Trust Fund for Enhanced Participation in Codex: VFSNA also considers that, rather than simply using economic criteria, other considerations should be taken into account to support those countries that would most benefit from participation in Codex. The United States' initiative to organize workshops prior to the working sessions is beneficial in explaining what is expected of delegates, what are the Codex mechanisms, as well as in structuring common opinions over different items on the agenda. -- Cadmium: Romania also supports adoption of the maximum levels for cadmium in wheat grain; potato; stem and root vegetables; leafy vegetables; and other vegetables, as per the proposed Codex standard, as these are also in accordance with the domestic legislation. Romania adopted as maximum levels for cadmium of 0.2 mg/kg in polished rice, respectively 1 mg/kg for marine bivalve mollusks and in cephalopods (without viscera), in the process of adopting national standards to the EU requirements. Romania's official position is that maximum levels for cadmium in polished rice should be set up should take into consideration the specific production and processing conditions of each country, as well as the extent to which each country plays a part in international trade. Discussions on a possible acceptance of maximum levels for cadmium set up higher that the current provisions should be based on a complex risk assessment conducted by independent bodies and in consultation with WHO and UNICEF regarding special rice-based food for infants, as well as with world consumer protection NGOs. -- Aflatoxin in tree nuts: Romania supports the United States' stance on brazil nuts. For setting the maximum aflatoxins level in unprocessed almonds, hazelnuts and pistachios, the admissible limit for human consumption should be taken into consideration, based on science-based independent research work. -- Possible U.S. candidate for Vice Chair of Codex: Romania's representative to CAC meeting welcomes the opportunity to consult with the U.S. delegation prior to the session. Items raised by the United States in Reftel talking points are of interest to Romania. 3. Ms. Monica Neagu, National Codex Contact Point, will represent Romania at the upcoming session of the Codex Alimentarius Commission. Delare
35665 2005-06-30 13:24:00 05BUCHAREST1472 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 04 BUCHAREST 001472 SIPDIS STATE FOR EUR/NCE, EUR/PRA, EUR/ACE, EUR/PGI, EUR/RPM, NP/ECC, NP/RA SECDEF FOR ISP-EURASIA, ISP-NPP USDOE FOR NNSA:NA-20 DHS FOR NAP E.O. 12958: DECL: 06/30/2030 TAGS: ETTC, KNNP, PREL, RO, GG, UP, BU, MD, SECI, law enforcement SUBJECT: BSBSI "STYX 2005" TABLETOP EXERCISE GOES WELL Classified By: POLCHIEF ROBERT GILCHRIST FOR REASON 1.4 (B,D) 1. (C) SUMMARY. Department TDY PolOff officially observed the Romanian-organized Black Sea Border Security Initiative (BSBSI) tabletop exercise, held at the Southeast European Cooperative Initiative (SECI) Center in Bucharest from June 22-24. During the exercise, representatives from Romania, Bulgaria, Ukraine, Georgia, and Moldova exchanged information regarding how their respective nonproliferation infrastructures would respond to a mock WMD incident as described in a fictitious scenario, entitled "STYX 2005". The Romanians propose to follow-up "STYX 2005" with a real-time exercise in October. All delegations except Ukraine broadly participated - GOR officials advised PolOff in on-the-margins discussions that they viewed the Ukrainian role in BSBSI as problematic. Romania will concentrate its senior level outreach on Bulgaria, given that the strength of Sofia's commitment to BSBSI is uncertain. End Summary. EXERCISE SUMMARY AND CONFERENCE RESULTS --------------------------------------- 2. (U) The (fictitious) "STYX 2005" scenario involved the transit of two suspicious vehicles - a truck carrying Cesium which was conspicuously avoiding border crossings with radiation detection capabilities, and a boat rumored to carry nuclear material. Significantly, Interior Ministry official Dorin Grasu served as overall coordinator, indicating greater Interior Ministry ownership of BSBSI activities. Participants in the exercise were divided between a control group, responsible for governing scenario developments, and a working group, responsible for formulating governmental responses to scenario developments. Over the course of the exercise, the control group posed a total of eight events for the working groups to develop answers to. While all but one of the prepared responses were from national governments, there was a great deal of coordination between different governments represented in the working groups. On one occasion the Georgians and Bulgarians delivered a joint response. 3. (C) The one exception was the Ukrainian representative, Ivan Zaitsev, Interior Attache of the Ukrainian Embassy to Romania. In a private meeting with the Romanians prior to the beginning of the conference, Zaitsev made clear that he had no mandate from his government to answer questions put to him by the working group. The Romanians nevertheless granted him permission to ask questions of other delegations. EXERCISE WRAP-UP ---------------- 4. (U) Following the conclusion of the tabletop exercise, Romanian MFA nonproliferation chief Dan Neculaescu stated that the Romanians were proposing a follow-up exercise in October. In the follow-on exercise, they would run "STYX 2005" as a real-time operation. They proposed that a control group in Bucharest would govern scenario events and communicate them via e-mail to capitals, and that capitals would coordinate interagency responses to return to Bucharest. After this received preliminary agreement from the other BSBSI states, the Romanians pledged to forward further information regarding this concept to the other states in August. They further proposed that, following the October exercise, they convene a higher-level policy meeting to a.) incorporate lessons learned from "STYX 2005" into their respective governmental standard operating procedures, b.) evaluate the overall usefulness of "STYX 2005", and c.) propose future BSBSI activities. Romanian Interior Ministry official Dorin Grasu added that the purpose of the real-time operation and "STYX 2005" generally is to promote a new wave of regional nonproliferation cooperation, and expressed his hope that BSBSI could be a channel to develop cooperation between regional crisis centers. 5. (U) Ukrainian Embassy Interior Attache Zaitsev thanked the Romanians for allowing Ukraine to observe the tabletop exercise, and noted that, in order to ensure comprehensive Black Sea representation, Russia and Turkey should be invited to participate in the October exercise. Zaitsev also stated that he will write to the Ukrainian MFA, urging Ukraine to fully participate in October. Bulgarian MFA official Iasen Tomov agreed that it was useful, and stated that other regional states could be invited as well - particularly other Balkan states. Georgian Interior Ministry official Archil Pavlenishvili stated that joint training under BSBSI would also be a positive development. Moldovan Interior Ministry official Victor Nichifor agreed that it was useful, but noted that, for future conferences, more time should be allotted to allow the participants to prepare. ROMANIAN ASSESSMENT OF BSBSI, BULGARIA -------------------------------------- 6. (C) TDY PolOff met separately with MFA Director General for Global Issues Stelian Stoian and MFA nonproliferation chief Dan Neculaescu. (COMMENT: While it has substantially evolved over its course, BSBSI was originally Stoian's concept. END COMMENT.) Stoian emphasized to PolOff that he understands the U.S. desire to maintain a low profile, but the importance of the U.S.-Romanian partnership needs to be underscored as well. He also pointed out that, despite USG urging to depoliticize BSBSI to the extent possible, it is occurring within a regional context. TDY PolOff responded that he also agreed that the U.S.-Romanian partnership has been critical to BSBSI's successes, but the U.S. viewed it as very important that the regional character of the initiative be preserved (i.e. it not be seen as directed by the U.S.) The U.S. provides technical support and assistance, but this needs to be organized by the region itself. In responding to Stoian's second point, TDY PolOff stated that he was familiar with other security issues in the Black Sea region (e.g. BlackSeaFor, Operation Black Sea Harmony, etc.) but the crucial difference between those initiatives and BSBSI is that regional MODs were largely peripheral to BSBSI. There is, for all intents and purposes, no military component. Unlike those initiatives, BSBSI is predominantly directed towards the region's Interior Ministries. 7. (C) TDY PolOff also noted that, given the apparent Ukrainian skepticism balanced with Moldovan and Georgian enthusiasm, Bulgarian support is crucial to the success of the initiative. While TDY PolOff noted that Romanian efforts to organize the "STYX 2005" tabletop exercise were quite good, the prospect of BSBSI success would be greatly enhanced should the Bulgarians organize a BSBSI activity as well. The decision by the Bulgarian Interior Ministry to cancel their participation in the exercise at the last minute raised questions regarding Bulgarian commitment. (NOTE: The Bulgarian representative, MFA security official Iasen Tomov, cited a deluge of last-minute taskings as the reason behind the Bulgarian cancellations. He also participated constructively, and to all appearances wholeheartedly, in conference proceedings. END NOTE.) Stoian agreed in principle to request Sofia to host a BSBSI activity, and possibly the evaluation meeting itself. Neculaescu also agreed to concentrate Romania's diplomatic outreach efforts to Bulgaria. TDY PolOff also met with Tomov privately, and asked Bulgaria TO consider organizing a BSBSI activity for 2006, as Bulgaria and Romania are the participant states with the most advanced nonproliferation infrastructure (i.e. legal, regulatory, and operational capability). TDY PolOff said the U.S. is willing to look at assisting if the Bulgarians provide us with concrete proposals. ROMANIAN ASSESSMENT OF UKRAINE ------------------------------ 8. (C) Neculaescu raised serious doubts regarding the Ukrainians. In a private meeting with TDY PolOff, Neculaescu expressed the GOR's assessment that, contrary to President Yushchenko's apparent political commitment to 'Westernize', the old-guard in the Ukrainian Civil Service is at best indifferent to and at worst actively sabotaging BSBSI. Neculaescu characterized Ukrainian Interior Ministry Attache as a "liar", and opined that when Zaitsev declared Ukraine would "100 percent" participate in the tabletop exercise in the May Preparatory Meeting, he was, in fact, lying. Neculaescu also expressed skepticism regarding Zaitsev's pledge to urge the Ukrainian MFA to fully participate in the October real-time exercise. TDY PolOff commented that it was curious that Zaitsev was alone in consistently asking the other delegations what the MOD role would be in conducting nonproliferation exercise activities, considering Zaitsev is allegedly the Interior Attache. Neculaescu replied that he thought it likely that Zaitsev was not who he claimed to be (i.e. Neculaescu implied Zaitsev is an intelligence officer.) 9. (C) Despite scanty Ukrainian participation in the tabletop exercise, Neculaescu opined that Zaitsev's call for full Turkish and Russian participation in the October real-time operation was in bad faith, and should be viewed as a solicitation of the Turkish and Russian interest rather than an interest in extending positive BSBSI cooperation. PolOff responded that, while he welcomed Turkey and Russia as observers, it would be best to delay full Turkish and Russian participation until at least the conclusion and evaluation of "STYX 2005". Neither Turkey nor Russia had been to the prior meetings, and organizing the logistics for five countries is sufficiently challenging for now. TDY PolOff said that, in principle, he saw no problem with Turkey and Russia becoming full participants should there be a follow-on BSBSI activity in 2006. TDY PolOff further commented that it might be useful having them as silent observers for the October exercise, in order to provide transparency (i.e. allay any doubts Turkey and Russia may have that BSBSI has a malign agenda) and to gauge their willingness to be constructive vice obstructive BSBSI participants. COMMENT: BSBSI MOVING FORWARD, BUT FACES NEW CHALLENGES --------------------------------------------- ---------- 10. (C) All-in-all, the BSBSI "STYX 2005" tabletop exercise was a success. With the exception of Ukraine, the participant states seemed sincere in their desire to cooperate with each other in the field of nonproliferation, and seemed enthused by the conference. While the delegations could have coordinated their answers during the exercise itself more, the answers they gave were comprehensive and well-intentioned. This bodes well for the October real-time operation. It must be noted that the tabletop exercise was the dress rehearsal for October's main event - if four out of five BSBSI states (Ukraine excepted) are genuinely interested in incorporating the contacts and procedures derived from October into their national systems, BSBSI can be judged a success. Given Georgia's and Moldova's unremitting enthusiasm, the Romanians have to ensure that Bulgaria is a constructive participant in October. As BSBSI progresses, the question of whether and how to positively incorporate Turkey, Russia, and other Balkan states into BSBSI activities will move increasingly to the forefront. PARTICIPANT LIST ---------------- 11. (U) Participant list follows: BULGARIA Mr. Iasen Tomov, MFA GEORGIA Mr. Archil Pavlenishvili, Interior Ministry Mr. Lasha Vashakmadze, Interior Ministry Mr. Nicolos Iashvili, Georgian Embassy to Romania MOLDOVA Mr. Alexandru Caraman, Intelligence and Security Service Mr. Igor Gorodetki, Special Intelligence Service Mr. Victor Nichifor, Interior Ministry ROMANIA Mr. Dorin Grosu, Interior Ministry Mr. Dan Neculaescu, MFA Mr. Florian Baciu, National Commission for Nuclear Activity Control Ms. Dana Marca, MFA Mr. Victor Mircescu, MFA Mr. Alin Tanase, Interior Ministry Mr. Lucian Ivan, Interior Ministry Mr. Cristian Gandei Ms. Mirela Nenea, Special Intelligence Service Mr. Nicolae Neferoiu, Foreign Intelligence Service Mr. Aurel Stancu, National Authority for Border Customs Ms. Maria Andrei, Nuclear Agency Mr. Bogdan Dumitriu, Nuclear Agency Mr. Dragos Tocae, ANCEX Mr. Roman Ioan Fitera, ANCEX UKRAINE Mr. Ivan Zaitsev, Ukrainian Embassy to Georgia UNITED STATES (observer) Mr. John Conlon, U.S. Dept. of State 12. (U) TDY PolOff has copies of answers given by Georgian, Romanian, Moldovan, and Bulgarian representatives regarding the implementation of their national export control infrastructure. For USG personnel interested in copies of the "STYX 2005" tabletop exercise documentation, please contact EUR/PRA:John Conlon, Ph. (202) 647-6746, Fax: (202) 647-6039, E-Mail:conlonj"at"state.gov. DELARE
35723 2005-07-01 11:51:00 05BUCHAREST1478 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS SECTION 01 OF 02 BUCHAREST 001478 SIPDIS DEPT FOR EUR/NCE - BSILKWORTH, TERATH SENSITIVE E.O. 12958: N/A TAGS: ELAB, PGOV, ECON, RO, finacial control, Strike SUBJECT: ROMANIAN RAILWAY STRIKE FAILS IN FACE OF NEW GOVERNMENT'S PROMISES OF BUDGET AUSTERITY THIS CABLE IS SENSITIVE BUT UNCLASSIFIED. NOT FOR DISTRIBUTION OUTSIDE OF USG CHANNELS 1. (SBU) SUMMARY: Following 80 days of negotiations, railway workers went on a general strike on June 8 which lasted for 23 days. The GOR, with IMF-monitored fiscal restraints this year, had little flexibility in meeting the strikers' demands. The strike ended with the unions obtaining only additional funds to improve working conditions, but no salary increase. END SUMMARY. GOR: No Salary Increase, But How About Free Meals? --------------------------------------------- ----- 2. (U) The collective labor contract with the railway unions expired on March 17. In setting the stage for negotiations, Transportation Minister Gheorghe Dobre insisted to the railway unions that since the Romanian railway companies are on IMF's monitored company list, the unions' demands for salary increases cannot be met without the Fund's consent 3. (U) The Transportation Ministry (MTCT) rejected demands for a salary increase, but proposed increasing the number of meal vouchers from 5 per month to 15, a proposal which only one of the union federations accepted. (The last salary increase paid to railway workers was 12% in March 2004.) The Ministry then opted out of negotiations, leaving the unions to negotiate with the National Railway Administration. 4. (U) The railway unions and the National Railway Administration failed to make any progress after eighty days of negotiations. Following a two-hour warning strike, three railway union federations began a general strike on June 8, demanding a 10.7% salary increase on the an average monthly wage of 7 million lei (about $235), 20 meal vouchers per month (meal vouchers are non-taxable, and can be used to purchase items in food stores) and better working conditions. According to law, one third of the trains must remain in operation during a strike. Court Declares Strike Legal --------------------------- 5. (U) The railway administration took the unions to court, requesting a 30 day postponement of the strike on the premises that the Romanian infrastructure is affected by floods and the union's actions jeopardizes travelers. On June 8 the Bucharest Court of Appeals rejected the request and, in an unprecedented move on June 13, the Bucharest Court of Justice ruled the strike legal, the first time this has happened in the history of the Romanian labor movement. 6. (U) Encouraged by the court's ruling, railway workers from the infrastructure union joined the strike, announcing that beginning June 20, all railway activity would cease between the hours of 7:00 and 11:00 A.M. Transportation Minister Dobre warned the stoppage risked the strike being declared illegal, given that the mandatory one third of trains would no longer remain operational. He further declared that the Ministry would sue the unions for damages. Nevertheless, on the morning of June 20, all railway employees went on general strike and train traffic ceased between these hours. 7. (U) Railways management and the MTCT appealed the court's decision. On June 22, a Bucharest tribunal affirmed the strike was legal, provided the unions ensured the compulsory one third of trains remained operational. On the same day, the Bucharest Appellate Court suspended the railway infrastructure union's strike for 30 days, which resulted in the resumption of train traffic between 7 and 11 A.M. However, under Romanian law, the union can resume its protest after one month. For the rest of the railway unions, the strike continued. Unions Request High-Level GOR Intervention ------------------------------------------ 8. (U) Union leaders requested the intervention of the Prime Minister and/or President Basescu. Prime Minister Tariceanu explained that the only way the Government could accept the unions' salary demand was for passengers to accept a tariff increase "without criticizing it." The union responded that using the strike to justify an increase in train fares distorts the truth, as the Government had already decided to raise ticket prices prior to the strike. Estimated Losses: $1.3 million Per Day --------------------------------------- 9. (U) On a normal work day, the railroads transport approximately 250,000 passengers. With only one third of trains in circulation, the MTCT estimated nearly 150,000 people daily were affected. The Railway Administration estimated losses of ROL 500 billion ($16 million) due to suspension of operations during the 23 day strike. 10. (U) Besides this announced loss, other economic effects included delays in deliveries of products in general. Thermal power plants awaited deliveries of thousands of tons of coal from the National Brown Coal Company in Petrosani. A Jiu Valley mining union leader informed that before the strike 12-13 trains of coal departed every day, while during the strike, only three trains per day transported coal. Tourism was also affected, as out of the 20 seasonal trains scheduled to operate this summer to the Black Sea Coast, only six were in circulation. Media reported increased road traffic due to businesses shifting freight to trucks and passengers using the ubiquitous long-haul passenger vans know as "Maxi-Taxis." The proprietors of the passenger vans also reportedly increased fares. Court Action Ends Strike ----------------------- 11. (U) In a final ruling on June 30, the Bucharest Court of Appeals declared the railway strike illegal, as it endangered railway safety and did not observe the legal requirement of insuring one third of trains remain operational. The court's decision ended the strike, and train traffic returned to near normal in the evening. The strikers obtained only some additional funds to improve their working conditions, but no salary increase. Whether or not the unions will receive the ten additional meal vouchers initially offered by the MTCT is uncertain. Transportation Minister Dobre stated he would sue the unions to recover losses incurred from suspension of service, while union leaders responded that no damages could be recovered, as the losses occurred while the strike was declared legal. COMMENT -------- 12. (SBU) The majority of Romanians were very unhappy with the strike, with many irritated over long train schedule delays and resentful of having their vacation plans disrupted. Nightly news programs showed thousand of commuters waiting for hours in railway stations across the country. The Prime Minister's smart move in advising the public that the only way the Government can agree to the unions' demand for higher salaries is to increase train fares created a new wave of discontent and virtually eroded any popular support the unions may have had. 13. (SBU) Early in the dispute, the GOR recognized that wage increases, if granted in one sector of the economy, could possibly cause a ripple effect and lead to demands for wage increases in other sectors. With the IMF team in town reviewing Romania's standby agreement during most of the strike and adamant that public sector salaries be frozen, the GOR was more or less required to "hold the line," a strategy which proved successful, at least for now. 14. (U) AmEmbassy Bucharest's reporting telegrams are available on the Bucharest SIPRNET website: www.state.sgov/p/eur/bucharest. Delare
36062 2005-07-07 13:38:00 05BUCHAREST1510 Embassy Bucharest UNCLASSIFIED UNCLAS SECTION 01 OF 03 BUCHAREST 001510 SIPDIS STATE FOR NP/ECC - JMCCLELLAN/AMAGOULIS STATE ALSO FOR EUR/CACEN; EUR/ACE FOR DMARTIN USCBP INA FOR JGOUGE/PWARKER DTRA ALEX WASHDC FOR RVITKOVITSKY USDOE FOR TMUSTIN/EMELAMED/KGARNER VIENNA FOR CUSTOMS ATTACHE E.O. 12958: N/A TAGS: ETTC, MNUC, PARM, PREL, KSTC, KNNP, BU, RO, Border Control SUBJECT: EXBS: ROMANIA & BULGARIA MONTHLY REPORTING CABLE - JUNE 2005 I. BROAD ITEMS OF INTEREST TO ADVISORS AND AGENCY MANAGERS No points of interest on which to report this period. II. COMPLETED ACTIONS FOR THE REPORTING PERIOD - ROMANIA SUMMARY: -- June 9 Advisor and Staff Assistant met with Nelu Pop, Frontier Police Inspector General, for the formal donation of EXBS provided equipment made over the past several months. At the conclusion, an additional 30 Radiation Detection Pagers were donated to the Frontier Police. -- June 16 Advisor met with Vasile Soiman, Customs Chief, Bacau Inland Clearing Station, as a follow-up to the May 13, 2005, EXBS review. There have been no improvements to the facility's NBC detection capabilities. In addition, Bacau has no x-ray systems for international airport, cargo, and mail operations. This issue will be discussed with the National Customs Authority. (NFM) -- June 20 - 24 DTRA conducted a "Crime Scene Management" course that was presented to law enforcement organizations responsible for responding to NBC incidents. -- June 24 Advisor met with John Conlon, DOS, to discuss the outcome of the Black Sea Border Security Initiative (BSBSI) Tabletop exercise held in Bucharest June 22 - 24, 2005. -- June 26 - July 1 EXBS team (Advisor and Staff Assistant) traveled to Bulgaria to meet with Embassy officials at Sofia and Bulgarian Government contacts at Kapitan Andreevo and Balchik. -- July 1 Advisor met with Richard Meehan, DOE NNSA, and his team to discuss the outcome of the Search and Secure Training held in Bucharest June 27 - July 1. A. SITE ASSESSMENTS AND MEETINGS DURING REPORTING PERIOD 1. June 9 Advisor and Staff Assistant met with Nelu Pop, Frontier Police Inspector General, for the formal donation of EXBS provided equipment made for the past several months. Frontier Police requested this so that signatures could be witnessed by a notary public. 2. June 24 Advisor met with John Conlon, DOS, to discuss the outcome of the BSBSI Tabletop exercise. This exercise was hosted by Romania and included Bulgaria, Moldova, Georgia and Ukraine. There is concern that some of the participants are not fully involved in the exercise giving mixed results. When the next BSBSI Tabletop is scheduled John Conlon requests that the EXBS Advisors from the participating countries solicit their cooperation. B. TRAINING CONDUCTED DURING REPORTING PERIOD 1. June 20 - 24 DTRA conducted "Crime Scene Management" course to members of the NBC Unit within the General Directorate for Combating Organized Crime and Anti-Drug; Frontier Police; Intelligence Service; Police Academy; and Protection Service. This is a companion course to the "Crime Scene Operations" course presented in March 2005. 2. June 27 - July 1 DOE NNSA conducted "Search and Secure Training" held in Bucharest. Attendees came from Albania, Georgia, Moldova, and Romania. The training focused on familiarizing the attendees with an overall orphan source search program to include practical field exercises. C. EQUIPMENT DELIVERED DURING REPORTING PERIOD 1. June 9 Donation of 30 radiation detection pagers to the Frontier Police. D. IMMINENT TRAINING OR EQUIPMENT STATUS UPDATE 1. July 18 - 22 Seaport IBIT for Customs and Frontier Police to be held in Charleston, SC. 2. Aug 1 - 5 RoBIT conducted by Frontier Police in Timisoara. (Tentatively scheduled) E. PORTAL MONITOR ALERTS 1. No significant alerts occurred during this reporting period and, as noted in past cables, a listing of those alerts can be supplied by advisor if desired. III. RED FLAG ISSUES - None to report. SUMMARY - BULGARIA: -- June 17 A new point of entry in Lesovo was opened at the Bulgarian/Turkish border. EXBS support: the Sofia mobile x- ray van was used to support the Customs entry process. One CTKit (Customs) and two radiation pagers (Border Police) were transferred there to support the officers. (NFM) -- June 20 - 22 Staff Assistant attended the Southeastern Europe Seminar towards NATO and EU Accession: Effective Export Control Legislation - Lessons Learned. -- June 26 - July 1 EXBS team (Advisor and Staff Assistants from Bulgaria and Romania) met with Embassy officials at Sofia and Bulgarian Government contacts at Kapitan Andreevo and Balchik. A. SITE ASSESSMENTS AND MEETINGS DURING REPORTING PERIOD 1. June 20 - 24 Bulgaria hosted the "Southeastern Europe Seminar towards NATO and EU Accession: Effective Export Control Legislation - Lessons Learned." This seminar built on the 2002 regional seminar aimed at contributing to the process of harmonization of the export control legislation and strengthening the mechanisms for its implementation. Albania, Bulgaria; Bosnia and Herzegovina; Croatia; Macedonia; Moldova; Romania; and Serbia and Montenegro participated. 2. June 26 - July 1 EXBS team (Advisor and Staff Assistants from Bulgaria and Romania) traveled to Kapitan Andreevo to review the port operation and discuss the portal monitor operation and location. Currently, the portal monitor at is still giving false alarms. In addition, the vehicles queues at the exit point continue to disrupt the portal monitor operation. TTFSE Advisor Ivan Taborsky is attempting to improve the exit queuing but the placement of the portal monitor interferes with these changes. The DOE after action report from their May 2005 site visit recommends that the portal monitor be moved to a new location within the port. By a separate action requests have been made to DOE to accelerate this process. --EXBS also visited the Customs Canine Training Center at Balchik to observe their training procedures in preparation for the Bulgarian Customs exchange in Sep 2005. As a result of this visit the director of the training center is being included in the group participating in the Customs exchange so that he can observe the U.S. Canines program in training and in action. B. TRAINING CONDUCTED DURING REPORTING PERIOD 1. No training conducted during reporting period. C. EQUIPMENT DELIVERED DURING REPORTING PERIOD 1. June 26 One CTKit donated to Customs and Kapitan Andreevo. D. IMMINENT TRAINING OR EQUIPMENT STATUS UPDATE 1. Aug 8 - 12 DTRA Cyber Crimes Training. E. PORTAL MONITOR ALERTS 1. Follow-up to May cable. On May 3 Border Police reported that the portal monitor at Ruse detected radioactive material in a load of scrap material. Open source information from the Nuclear Regulatory Agency reports that the radiation source was a piece of metal used in mining. It was contaminated with uranium related natural radionuclides. The detained ionizing source was not hazardous. At a distance of 10cm the dose rate measured 6.2 milli Sv/h. III. RED FLAG ISSUES - None to report. TAPLIN
36100 2005-07-07 16:38:00 05BUCHAREST1511 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 02 BUCHAREST 001511 SIPDIS SIPDIS STATE DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: DECL: 07/07/2015 TAGS: PGOV, PREL, ECON, KDEM, SOCI, RO SUBJECT: GOVERNMENT RESIGNS; ROMANIA HEADS TOWARDS SNAP ELECTIONS REF: A. BUCHAREST 1433 B. BUCHAREST 1205 BUCHAREST 00001511 001.2 OF 002 Classified By: Political Section Chief Robert S. Gilchrist for Reasons 1.4 B and D 1. (C) Summary: Prime Minister Calin Popescu-Tariceanu announced the resignation of his cabinet July 7, pending acceptance by President Traian Basescu. The move, ostensibly in response to a Constitutional Court decision against a judicial reform package, will likely spark new parliamentary elections sought by Basescu to increase his government's majority. Many observers also believe new elections raise the odds of a delay by a year of Romania's EU accession now slated for 2007. Although the macroeconomic impact of new elections would likely be slight, businesses may defer investments until certainty is restored. End Summary. A Surprise Announcement ----------------------- 2. (C) In a surprise announcement July 7, PM Tariceanu stated in a hastily called press conference that he and his cabinet were submitting resignations, effective immediately, precipitating likely snap parliamentary elections by early fall. President Traian Basescu was expected to accept the resignations in a planned televised speech later the same evening. Basescu is bound by the constitution to appoint a caretaker cabinet, which will likely include many of the members of the current government led by the center-right Liberal-Democratic (PNL-PD) alliance. 3. (SBU) Tariceanu's announcement followed a Constitutional Court decision on July 6 that annulled key elements of a judicial reform package passed in Parliament on June 22. The court decision was interpreted as largely political, as the court is comprised largely of members closely associated with the opposition Social Democratic Party (PSD). Tariceanu told the press that once he received word of the court's decision, he immediately began to contact key party leaders and members of the government to consult on next steps. New elections appeared to be the "only way forward" and the Cabinet convened at noon on July 7 effectively to vote itself out. Tariceanu communicated the decision to President Basescu. He also vowed to enact by emergency ordinance elements in the judicial reform package that the Court did not strike down, including the organization of a fund to compensate individuals for properties seized under communism (Ref B). Between Now and Elections ------------------------- 4. (C) There now remain several procedures the governing alliance must pass through before new elections can actually be held (Ref A). According to the Constitution, upon the resignation of a cabinet, the President should designate a new prime ministerial candidate who must present a new team and governing program to the Parliament within ten days. If that fails, the process must be repeated again, and if the second attempt fails the President is empowered to call new elections. Romania has never held snap parliamentary elections in the 15 years since the restoration of democratic government. Constitutional vagueries allow much leeway, and political contacts tell post that requirements will likely be followed only in form but without any intention of preventing a new vote. Presidential Advisor Claudiu Saftoiu told PolChief "Romania is clearly headed towards new elections." 5. (C) The Government is couching the decision by the Constitutional Court as an impediment to Romania's ability to enact reforms necessary for EU accession. The measures the Court struck down would implement a mandatory retirement age for judges and prosecutors; allow the Supreme Council of Magistrates (the managing body for the courts) to dismiss or transfer senior judges and prosecutors; and strengthen and professionalize court management. In sum, the reforms were intended to remove older judges and prosecutors in place before the end of communism, many of whom remain associated with the PSD. The latter is widely regarded as the inheritor party to the former communist party led by Nicolae Ceausescu. Implications for EU Accession ----------------------------- 6. (SBU) Some local pundits have opined that snap elections would lead to a delay in Romania's EU accession from 2007 to 2008. EU officials have repeatedly expressed public concern that elections would distract officials charged with BUCHAREST 00001511 002.2 OF 002 implementing accession requirements. Romania's Accession treaty signed in Brussels in April provides for such a delay if Romania lags in implementing key reforms required for membership. Nonetheless, in recent days there have been indications that the government had become increasingly resigned to such a delay regardless of whether there were new elections. Tariceanu himself said 2008 appeared more likely and would not be debilitating. 7. (C) Comment: Embassy contacts point out that the Government made no effort to call the Parliament back into session to work out compromise legislation with the opposition PSD. Many opined that the events of recent days merely provided a pretext for moving to new elections, which President Basescu seeks to increase the currently narrow majority of the PNL-PD led government. Post agrees with that assessment. Interestingly, as recently as July 5, Basescu said he had given up interest in new elections for the time being and that the country should focus on implementing EU accession requirements. With those comments -- and Parliament in recess and many Romanians on vacation -- it appeared that the political leadership would stick with the status quo. However, Tariceanu's announcement has completely reversed the course. 8. (C) Comment Continued: The macroeconomic fallout from the GOR's resignation will probably be slight. The currency will probably not suffer a major jolt, given the relative overall financial stability of the country at this time. However, businesses may defer key investments. Post is aware of two potential U.S. investments that government chaos, or even uncertainty, could hinder, if not fully torpedo. It will also be more difficult for Post to press ahead on major investment problems and disputes. In particular, Bechtel's ongoing struggle with the GOR to get paid for work already done on the Transylvanian Motorway has probably just gotten harder. Oher, more low-key investment and business climate issues might become more difficult to work throug a bureaucracy waiting to see what happens in the fall elections, but Post thinks it is still manaeable. End Comment. 9. (U) Amembassy Bucharst,s reporting telegrams are available on the Buharest SIPRNET Website: www.state.sgov.gov/p/eurbucharest TAPLIN
36171 2005-07-08 13:25:00 05BUCHAREST1518 Embassy Bucharest SECRET S E C R E T BUCHAREST 001518 SIPDIS VISAS DEPT FOR CA/VO/L/C AND INR/TIPOFF STATE PLEASE PASS TO NCTC WASHDC/TIG AND DSH/HQINT WASHDC E.O. 12958: DECL: 07/08/2015 TAGS: ASEC, CMGT, CVIS, KVPR, LE, PINR, PTER, RO(KANSOU TALAL MOHAMAD), Visa SUBJECT: VISAS VIPER: JUNE 2005 MONTHLY ACTIVITY REPORT REF: A. A) STATE 124726 B. B) BUCHAREST 01341 C. C) DONKEY BCH 000038Q00 D. 15 JUNE 2005 E. D) 2003 STATE 055649 Classified By: CONSUL GENERAL BRYAN DALTON FOR REASONS 1.5 B, C AND D 1. (U) Visas Viper 2. (U) Embassy Bucharest's Visas Viper Committee met on 28 June 2005. Consul General Bryan Dalton chaired the meeting. No new names were submitted to the committee at the meeting. Since May,s Visas Viper Report (Ref B), post submitted no additional names for consideration by the Department. After the 28 June meeting, the committee received a name for consideration by the Department (see below). 3. (U) KANSOU, Talal Mohamad; Male; Married; 20 August 1968; Mazeraa, Lebanon or El Mazraa, Lebanon or Beirut, Lebanon; Father,s name: Kansou, Mohammed; Mother,s name: Jbeily, Samirah; Passport data: Lebanese passport no. 0721319, issued 08 April 1993, expires 04 October 2007; Physical description: black hair, 180 cm, weight 110 kg; Current occupation: Business owner (restaurant). 4. (S) Post has uncorroborated information indicating that subject has connections to Lebanese Hizballah and may in fact have provided support to active Hizballah members in Romania. Subject has ongoing business connections with Lebanon. Further, the Romanian Ministry of Justice has implicated subject in drug trafficking. On 18 February 2005, the Romanian government rejected subject's request for permanent resident status in Romania. 5. (U) Subject was born in Lebanon, lived in Qatar with his family for several years in the late 1980s, and moved to Romania in 1991. He is a part-owner of a popular upscale Lebanese restaurant in Bucharest. From 1984-89, he had LPR status and was living in Orlando, Florida. He continued to maintain his LPR status through regular travel to and from the U.S. until early 2004. Because he has now been outside the U.S. for more than one year, his AmCit wife recently filed a new I-130 immigrant visa petition for him at post. 6. (U) Post submitted Visas Donkey (Ref C) on subject because it was interested in a DPT 00 hit that for some reason no longer shows up when doing a namecheck on this subject (but did show up a couple of months ago when the first namecheck was done, and is still in CLASS if you enter the name exactly as it appears in the hit). The hit post was interested in is: NAME: KANSOU, JALAL DOB: -- POB: LEBN REF SITE: DPT 00 REF DATE: 27-FEB-1997 UID: TSC 37255 REF COMMENT: NONE 32291 LONG COMMENTS: NONE 32291DOSVODPT19970228000352800 This hit differs from subject only by the first letter of the first name (J instead of T). Given the very close similarity between subject's name and DPOB and that of the hit, post is concerned in general that the most recent revision of the namecheck algorithm may prevent applicable hits from showing up during a CLASS namecheck. Post requested that the Department review the hit. 7. (U) This fulfills Embassy Bucharest's Visas Viper reporting requirement for the month of June 2005. TAPLIN
36189 2005-07-08 15:09:00 05BUCHAREST1521 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 02 BUCHAREST 001521 SIPDIS SIPDIS STATE DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: DECL: 07/08/2015 TAGS: PGOV, PREL, ECON, KDEM, SOCI, RO SUBJECT: RULING ALLIANCE MOVES TOWARD ELECTIONS; OPPOSITION IN DISARAY, SEEKS COMPROMISE REF: A. BUCHAREST 1511 B. BUCHAREST 1433 C. BUCHAREST 1348 BUCHAREST 00001521 001.2 OF 002 Classified By: Political Section Chief Robert S. Gilchrist for Reasons 1.4 B and D 1. (C) Summary: The governing Liberal-Democratic (PNL-PD) alliance on July 8 continued to send out strong messages that the country is headed for early parliamentary elections, following the surprise July 7 resignation of the cabinet. President Basescu is expected to accept the resignations and appoint an interim prime minister by July 14. The likely date for the vote will be late September or early October. Meanwhile, the opposition Social Democratic Party (PSD), concerned about a possible severe electoral loss, is seeking negotiations to prevent an early vote. Tariceanu is expected to remain in place in the interim government, along with other key cabinet members. End Summary. 2. (SBU) Romanian media entered a frenzy of speculation July 8 over the prospects of new parliamentary elections, following the announced resignation on July 7 of Prime Minister Calin Popescu-Tariceanu and his center right cabinet (ref a). Embassy contacts said the political parties were taken by surprise by the resignations, even those within the ruling coalition. Meanwhile, party leaders entered discussions to determine the course of events for the coming months and to forge backroom deals. PNL-PD Committed to Elections ----------------------------- 3. (C) Multiple PNL-PD insiders confirmed to Post that the alliance is committed to elections and is making plans for a vote in late September or early October; the most likely date would be October 2. The two parties have also agreed on electoral arrangements between themselves -- primarily that the Prime Minister will come from PNL, and that the electoral list and seats in parliament will be divided evenly between each party (Note: PNL outnumbers PD in the current parliament by a previously agreed ratio of 1.3 to one). Foreign Minister Mihai Razvan Ungureanu told Charge that the PNL-PD led government is committed to continuing its activities as "closely to business-as-usual as possible." Ungureanu said this applies particularly to issues related to EU accession. Presidential Counselor Claudiu Saftoiu told PolChief that Basescu would likely reappoint Tariceanu as interim Prime Minister and that many ministers would remain in place, even after elections. 4. (C) Although President Basescu was reportedly slated to make a press statement on July 7, thus far he has remained publicly quiet on the Cabinet resignations. Until he formally names an interim prime minister and accepts the Cabinet's resignation, the current government continues to operate as previously. Saftiou confided that Presidential advisors hoped for an announcement soon, but that the PNL-PD would need to work out details of timing on elections and pass electoral legislation. Other PNL-PD insiders expected this to happen by July 14. The Opposition Panics --------------------- 5. (C) Embassy contacts within the PSD have confessed that the party was taken by complete surprise by the government's resignation. One contact characterized the PSD leadership as being "in total disarray." Meanwhile, senior PSD members publicly accused the PNL-PD of putting partisan interests above the interests of the country. PSD President Mircea Geoana publicly called the Tariceanu government the "worst the country had had in the last 15 years" and accused President Basescu of being behind the resignations. (Note: Under the Romanian constitution, the President is obliged to refrain from participation in partisan politics. End note). Geoana further asserted that the "unprecedented political and constitutional crisis," was artificially created to give Basescu "absolute power." Nonetheless, he noted that the PSD had already entered discussions with other parliamentary parties about potential electoral pacts. 6. (C) PSD senior parliamentary leader Viorel Hrebenciuc reaffirmed to PolChief that the PSD had entered one of the most heated days of internal discussions the party had ever had. Hrebenciuc confessed privately that the PSD was not prepared for Tariceanu's surprise resignation or for BUCHAREST 00001521 002.2 OF 002 elections, which the party feared it would lose. Hrebenciuc said that PSD had offered a compromise deal with the PNL-PD to carry out a vote in Parliament to override the Constitutional Court decision that precipitated the government's resignation. He confided that some in the PNL rank-and-file were ready to accept such a deal, but had little hope that Tariceanu or other senior PNL-PD leaders would agree to it. Hrebenciuc described Romanian national politics as being "in total chaos." He said he had heard many scenarios of how events may unfold in coming weeks, including the "tragic" possibility that PSD would be forced to forge a parliamentary coalition to vote in favor of a PNL-PD government and program. At mid-day he had placed odds of early elections at 50-50; however, Post understands he had adjusted those odds to 75-25 in favor of elections by later the same day. 7. (C) The extreme nationalist Greater Romania Party (PRM) publicly supported new elections, with leader Corneliu Vadim Tudor calling for presidential elections in addition to those for parliament. Internally, according to contacts who know the PRM, many members dread the idea of returning to the polls and have begged Tudor to oppose them. However, Tudor is interested in taking out of Parliament a large group of former members who have defected from the party in recent months (ref c). According to recent polls, support for the party has dropped from roughly 13 to 10 percent since November 2004 elections. Nonetheless, according to one counselor in the prime minister's office, Tudor would "prefer the smaller representation than to having to deal with his renegades in Parliament." 8. (C) Although the small Conservative Party (PC) is formally a member of the governing coalition, for the purposes of new elections it would likely fall on the side of the opposition. Saftoiu claimed to PolChief that the PNL-PD will "refuse to negotiate" with the PC, which Basescu has referred to even publicly as an "immoral" or "parasitic" party. The leader of the PC is media magnate Dan Voiculescu, who is alleged to have had links with the former Securitate internal intelligence service. Nonetheless, some PNL-PD insiders believe PNL-PD will have to negotiate with some members of the PC to secure a continued parliamentary majority capable of forcing elections. This may come in the form of offering some PC members places on the new PNL-PD electoral list for the next parliament. Ethnic Hungarians Reluctantly Agree ----------------------------------- 9. (SBU) Members of the ethnic Hungarian party (UDMR) have long confessed to Post concerns that new elections risk wiping the party off the map, as there is always a possibility that it will not meet the required 5 percent electoral threshold for entering Parliament. Nonetheless, some contacts admitted that the party felt it "had no choice" but to join the PNL-PD in supporting early elections if the UDMR hopes to remain in government following the vote. Mid-afternoon July 8, UDMR president Marko Bela publicly announced support for snap elections as "a means for strengthening the parliamentary majority." He acknowledged that elections could be avoided, but said that the UDMR still felt compelled to join the government in pressing for the vote. 10. (C) Comment: Rumors abound in Bucharest that the call for new elections is merely PNL-PD brinksmanship to bring about concessions from the PSD on key reform legislation and on issues such as parliamentary leadership. However, every PNL-PD contact with whom we have spoken in recent days has underscored that elections "are not in doubt." As reported in reftels, Basescu has repeatedly called for new elections to capitalize on his popularity and increase the PNL-PD majority. While there are still a few constitutional hurdles and negotiations continue with potential electoral allies, it is increasingly clear he will get what he wants. 11. (U) Amembassy Bucharest's reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest TAPLIN
36309 2005-07-11 14:17:00 05BUCHAREST1529 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 02 BUCHAREST 001529 SIPDIS STATE DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: DECL: 07/11/2015 TAGS: PGOV, PREL, ECON, KDEM, SOCI, RO, Election, adoption, military cooperation SUBJECT: PRESIDENT BASESCU ON ELECTIONS, SECURITY RELATIONSHIP, ADOPTIONS REF: A. A) BUCHAREST 1521 B. B) BUCHAREST 1511 C. C) BUCHAREST 1433 Classified By: POLITICAL SECTION CHIEF ROBERT GILCHRIST FOR REASONS 1.4 B AND D 1. (C) Summary: President Traian Basescu told Charge July 11 that snap elections are not a given, as there is a chance he will mediate a solution to avoid an early return to the polls. He acknowledged that earlier he had expressed support for new elections and that his Liberal-Democratic (PNL-PD) Alliance would likely do well. However, he questioned the wisdom of the cabinet's July 7 resignation just months before an important EU report on Romania. Basescu reaffirmed the central importance of Romania's strategic relationship with the U.S., seeing no incompatibility with Romania's EU aspirations. On international adoptions, Basescu expressed hope that Romania could find a unilateral solution that would not cause problems with the EU. End Summary. 2. (C) Incoming Charge d'Affaires Mark Taplin paid an introductory call July 11 on President Traian Basescu. Reiterating the importance of a frank and open dialogue with the U.S., Basescu focused on projected early elections, strategic ties to the U.S., and pending international adoptions. Following the meeting, Charge also met as a group with Presidential Advisors Renate Weber, Claudiu Saftoiu, Teodor Stolojan, and Adriana Saftoiu; and State Counselors Constantin Degeratu and Anca Ilinoiu. PolChief also participated in the meetings. Elections? Maybe not.... ------------------------- 3. (C) In response to Charge's question about early elections, Basescu said that he was "honestly caught by surprise" by the announced resignation of Prime Minister Calin Popescu-Tariceanu and his government with the goal of holding early elections. He acknowledged that he himself had sought elections throughout the spring. However, he said that only a week before the announcement of Tariceanu's resignation, he had expressed publicly his view that it was "too late" given that the EU will be releasing a key report in September on Romania's progress towards implementing EU requirements. He said because of his doubts on the wisdom of elections at this time, he had made no public statement yet. He said he had met with the PM early after the decision by the cabinet. During that meeting he acknowledged his earlier support for elections, but said he had doubts the governing Liberal-Democratic (PNL-PD) alliance could reliably secure the necessary majority in the parliament to force new elections. At the same time, he acknowledged that in the event of early elections, the PNL-PD would "clearly improve" its representation in the Parliament, where the government's majority remains narrow. 4. (C) Basescu added that he had engaged that very morning in a dialogue with the Constitutional Court to determine if it could revise its decision (on the judicial reform package) that sparked the cabinet's resignation. He said he was obligated to "try to find a solution" regardless of whether the European Union was reconciled to early elections. He added that if he could get an acceptable agreement from the Constitutional Court, he might encourage the cabinet to stay in place. He labeled "speculation by some journalists" that he was behind the cabinet resignation "completely false." 5. (C) Note: In a subsequent conversation with key presidential advisors, Pol Chief asked again whether or not there would be elections. The initial response was an incredulous "of course!", particularly from Advisor for Judicial Issues Renate Weber. Mid-way through Weber's response, however, Foreign Affairs advisor Anca Ilenoiu whispered within our earshot that Basescu had just told Charge the outcome remains unclear. At that point, Weber and others fell silent, stating simply that only President Basescu knew the real odds of an early poll. End Note. The Security Relationship ------------------------- 6. (C) Basescu reiterated that one of the primary objectives of his presidency is to strengthen Romania's relationship with the U.S. He viewed this relationship not only as important for national security but also as a reflection of our two countries' "honest partnership" in Afghanistan and Iraq. He underscored that Romania sought to be not simply a "consumer" but also a "provider" of security. He expressed appreciation for the substantial military assistance the U.S. had provided over the years and emphasized that Romania was committed to transforming its military in the near future. Basescu said a Black Sea security strategy involving Romania's partners remains a central focus for his government. Romania would "never accept" having to choose between the U.S. and Europe, and Basescu noted that he had worked to convince EU member states that strong transatlantic ties were not incompatible with EU membership. Europe "cannot provide for its own security" and that "even a united EU" cannot stand up to future competition with China and India. 7. (C) Charge underscored the importance with which the U.S. views the security relationship with Romania. He noted that Ambassador Richard Jones would be leading a team to Bucharest on July 21 for a frank dialogue with Romania on the Coalition in Iraq and requested that Basescu meet with the team. Basescu responded positively. Charge also acknowledged the request from Romania over the weekend for access to detained Romanian-American dual national Munaf Mohammad for an interview in the Romanian Embassy in Baghdad. Charge said the U.S. did not yet have a response, but remained committed to work with Romania as constructively as possible on this sensitive issue. Adoptions --------- 8. (C) After Charge asked for Basescu's support in positively resolving adoptions issue, Basescu noted that two weeks ago he had raised again with EU Enlargement Commissioner Ollie Rehn the issue of resolving pending international adoptions. He said he had also discussed the issue with EU Parliament "Shadow Rapporteur for Romania" Baroness Nicholson, President Chirac, Chancellor Schroeder, and President Zapatero. He underscored that the U.S. was not alone on the issue -- France, Germany, Spain, and Israel had also come under domestic pressure to resolve international adoption cases registered before Romania implemented its de facto ban on international adoptions. He noted that Romania had recently developed a plan for reviewing pending adoptions, to include the organization of a special working group on the issue. At the same time he expressed hope that Romania could do "something unilateral" that would "not cause trouble" with the next EU report on Romania in September. He also talked about the need to communicate with prospective families about the steps Romania is taking to resolve the issue. He lamented that the entire problem had been caused by the previous government, which oversaw the "massive export of children." This led to a strong response from the EU, which forced the inclusion of the de facto ban in Romania's adoption law. 9. (C) Comment: The fact that Basescu's closest advisors were out of sync with his latest views on elections demonstrates again his strong tendency to make key decisions alone. Basescu may be concerned that the PNL-PD will not succeed in obtaining a clear parliamentary majority required to force new elections as required by the constitution (refs). He may also be seeking to deflect criticism for producing potential political instability or jeopardizing Romania's EU accession in January 2007. His comments on security underscore his unflagging support for operations in Iraq and Afghanistan and a committment to a close partnership with the U.S. His statements on adoption offer some hope that he may seek a unilateral solution to the problem, although his advisors in our subsequent discussion lamented the fact the issue had been raised to the "political level" rather then handled as a "technical matter." In coming days, we will follow up with key GOR interlocutors on this sensitive issue. End Comment. 10. (U) Amembassy Bucharest,s reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest TAPLIN
25526 2005-01-18 14:30:00 05BUCHAREST153 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 03 BUCHAREST 000153 SIPDIS STATE DEPT FOR EUR/NCE WILLIAM SILKWORTH STATE ALSO FOR INR/B STATE PASS TO USAID E.O. 12958: DECL: 01/18/2015 TAGS: PGOV, PREL, KDEM, SOCI, ECON, PINR, RO SUBJECT: THE NEW GOVERNMENT'S FIRST WEEKS - BASESCU COMES OUT STRONG REF: BUCHAREST 130 Classified By: POLITCAL SECTION CHIEF ROBERT GILCHRIST FOR REASON 1.4 A , B AND D 1. (C) Summary: During his first several weeks in office, President Traian Basescu has been outspoken on the fight against corruption, foreign policy priorities and the status of the center right National Liberal Party -Democratic Party (PNL-PD) political alliance with the small Humanist Party (PUR). Meanwhile, much of the PNL-PD led government has focused internally on filling sub-ministerial jobs and appointing new prefects to represent the national government at the county level. End Summary. ACTIVIST PRESIDENT ------------------ 2. (C) Despite a constitutional provision restricting the partisan political activities of the head of state, President Traian Basescu's blunt public comments on a range of issues have grabbed headlines since his December 20 inauguration. Indeed, many political analysts and ordinary Romanians have remarked that Basescu, so far, is Romania's most outspoken, visibly "hands on" president since the 1989 overthrow of communism. Few Romanians are troubled by Basescu's forays into partisan politics, notwithstanding the constitutional ban on this kind of activity, recalling that ex-President Iliescu overtly supported the PSD and PM Adrian Nastase during 2004 local and national elections. BASESCU ON FOREIGN POLICY AND CORRUPTION ---------------------------------------- 3. (C) Since his inauguration, Basescu has been particularly outspoken about Romania's foreign policy priorities and the fight against corruption. In a January 10 television interview, he chided previous governments, complaining that Romania has had only two foreign policy priorities for the past decade - accession into NATO and the EU. Basescu highlighted the Black Sea as a region where Romania should play an important role, opining that the U.S. is the only country willing and able to help "consolidate Romania's strategic position in the Black Sea region." Since his inauguration, Basescu has also publicly restated the importance of strengthening what he described during the campaign as the "Bucharest-Washington-London axis," a theme he recently repeated in private meetings with USG interlocutors. Basescu also has stressed that Romania should play a more active role in helping to resolve the frozen conflict in Transnistria, criticizing previous governments for insufficient engagement on this issue. Finally, to underscore Romanian commitment to the anti-terror fight and to the U.S., during the past week Basescu told both the Ambassador and NATO Supreme Commander Jones that the "last Romanian troops would leave Iraq only with the last American troops." 4. (C) Basescu has reminded citizens of his campaign pledge to treat the fight against corruption as a national security issue. He has promised to pursue cases against individuals allegedly protected by the previous government, a direct allusion to a pending criminal fraud investigation against several senior managers of the Rafo Onesti oil refinery and the government's recent action to block the departure from Romania of two senior Rafo officials. Basescu has also asserted that the government should pursue "mafia clans" and major corruption cases. PM Tariceanu, for his part, has declared that fighting "corporate fraud" will be among the government's key priorities, and that his government may ask for help from the U.K., Germany or France to assist with the investigation of several high profile cases. 5. (C) On New Year's Eve, Basescu matched his candid public comments with behavior that his admirers describe as "spontaneous" and his detractors decry as "unpresidential." Eschewing the traditional custom of delivering a staid, televised presidential address a few minutes before midnight, Basescu took the stage before several thousand revelers at a downtown Bucharest celebration where he toasted Romania and drank champagne from a bottle. For many, Basescu's hoisting of the bubbly - which was caught by the TV cameras - was emblematic of his unconventional style. INTERNAL POLITICKING IN THE RULING COALITION -------------------------------------------- 6. (SBU) In a newspaper interview published January 6, Basescu described the small Humanist Party's (PUR) presence in the National Liberal Party-Democratic Party (PNL-PD)- led government as an "immoral solution" to the PNL-PD's relatively weak parliamentary support. The PUR had aligned itself closely with the PSD during the elections. The solution, opined Basescu, is new parliamentary elections that would permit the PNL-PD to capture a clear parliamentary majority. In the same interview, Basescu also said that PNL and PD should move ahead with a planned merger and that PNL-PD should take steps to oust the presidents of the Chamber of Deputies and Senate -- ex-ruling Social Democratic Party (PSD) PM Adrian Nastase and Nicolae Vacaroiu, respectively. Finally, in a statement that enraged some PSD leaders, Basescu opined that neither Nastase nor former President Ion Iliescu is fit to head the PSD. (Comment: Basescu's tough attitude toward his new allies in the Humanist Party (PUR) seems to have been a well calculated step to call the bluff of these defectors from the PSD-led opposition. While the PUR threatened to withdraw their support or make it conditional, Basescu's answering shot - possible new elections and extinction of the PUR clearly carried the day. End Comment.) 7. (C) PM Calin Popescu-Tariceanu subsequently declared in a newspaper interview published January 14 that "no political party" wants parliamentary elections soon, and characterized the brouhaha surrounding Basescu's remarks about the PUR as "perhaps a clash of egos, but not a political crisis." Nonetheless, Tariceanu defended Basescu's outspokenness and characterized the bruited PNL-PD merger as "the most important and necessary thing at this moment." Other PNL and PD leaders have expressed support for a merger - but not just yet. Bucharest Vice-Mayor Ludovic Orban, a PNL member, perhaps best captured the spirit of many mid and senior level PNL and PD leaders when he commented publicly that the merger should take place, but only "when the fruit is ripe." GOVERNMENT GETTING ITS SEA LEGS ------------------------------- 8. (C) Leaders of the PNL-PD, their ethnic Hungarian party (UDMR) allies and the PUR also used the initial weeks of their turn at the helm to discuss allocation of prefect positions among the parties. The prefects are the national government's appointed local representative in each of Romania's 41 counties, and Bucharest. Except for the PUR, which ultimately opted not to request a share of prefectures, the final tally reflects the relative parliamentary strength of the governing coalition: 22 prefects are PNL members, 16 are PD, and 4 are UDMR. 9. (C) Media commentators observed that many of the prefects are "young and rich," with the youngest only 27 years old. For the first time, two prefects are women. The prefects' youth and gender breakthrough reflect Basescu's and Tariceanu's campaign promises to bring "new faces" into government. One appointment of an "old face" provoked controversy - the designated Bucharest prefect, a PD member, was an officer in the "foreign intelligence division" of the infamous communist-era "Securitate." President Basescu expressed "huge disappointment" at his being named prefect, and he resigned from the position after only several days in office. The government also held fast to its decision to appoint several ethnic Hungarians in areas with large Magyar populations, despite protests from nationalists. 10. (C) The next important administrative task facing Tariceanu's government is the appointment of state secretaries, de facto "deputy ministers." Until the SIPDIS positions are filled, many Ministries are relying on the services of the state secretaries from the previous government. The slots also fall into the political appointee category, so PNL-PD, UDMR and PUR functionaries are discussing their allocation among the parties. According to recent reports, the appointments will occur sometime in February and will be allocated as follows: PNL-25; PD-19; UDMR-10; PUR-9. The government has already named several state secretaries, but more than 50 positions are still vacant. The new government is also hampered by logistic problems. Many incoming ministers complained, and the press has confirmed, that departing cabinet members and their staffs emptied many offices of furniture and files and disconnected phone lines. 11. (C) Practical difficulties notwithstanding, however, several new ministers, including the PM, have used their positions as bully pulpits, outlining their goals and strategies. PM Tariceanu promised that his government will examine contracts awarded by the previous government, including a major highway construction contract awarded to American corporation Bechtel. Justice Minister Monica Macovei stressed that she would focus on taking steps to keep Romania's EU accession on track, including implementation of regulations aimed at regulating conflicts of interests by public officials and governing immunity of former officials. PARLIAMENTARY DEFECTORS TO STRENGTHEN RULING BLOC? --------------------------------------------- ----- 12. (C) PNL spokesman Eugen Nicolaescu claimed January 10 that 30 legislators from the PSD and the extreme nationalist Greater Romania Party (PRM) are poised to leave their parties and join an "independent group" that would support the government. PNL-PD sources have not revealed the identities of the possible defectors, and Nicolaescu's announcement may be principally a PNL-PD attempt to destabilize and demoralize the PSD and PRM. However, the 30 possible defectors could include five deputies from the National Democratic Bloc (BND), unionists elected on the PRM parliamentary list, and a PRM senator who have already broken with the party. PSD insiders also confirm that the former ruling party is internally divided and in the midst of a leadership struggle - a situation which could encourage some fainthearted PSD parliamentarians to jump ship. 13. (C) Comment: Most Romanians appear to welcome Basescu's plainspoken candor and apparent commitment to follow through on campaign promises to combat corruption and implement reform. The new Government's early approval of flat tax legislation also added credence to a perception that this government plans to move quickly (Reftel). Basescu's persona as President has differed relatively little from his behavior as candidate - although his preferred public attire of polo shirt or loosened tie and rolled up shirtsleeves appears to have been mostly replaced by sober business suits. At the same time, Basescu's outspokenness may serve to deflect some public scrutiny from the fact that PM Tariceanu's government remains a work in progress, requiring competent state secretaries and prefects to function efficiently. Early "glitches" - such as naming a communist-era intelligence officer as Bucharest prefect - reflect the new government's growing pains. However, his speedy departure seemed to indicate a decisiveness lacking in the former government. End Comment. 14. (U) Amembassy Bucharest,s reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest . DELARE
36310 2005-07-11 14:20:00 05BUCHAREST1530 Embassy Bucharest UNCLASSIFIED UNCLAS BUCHAREST 001530 SIPDIS DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: N/A TAGS: MASS, PARM, PREL, MOPS, MARR, RO, Military Assistance SUBJECT: ROMANIA: PROPOSED FY2005 SOLIDARITY FUND ALLOCATIONS REF: STATE 120737 1. PolChief discussed Coalition Solidarity Fund (CSF) allocation of $17,000,000 to Romania with MFA NATO Division Director Mirela Maghiar and other MFA interlocutors on June 30. Embassy Office of Defense Cooperation (ODC) also discussed the allocation July 1 with Ion-Mircea Plangu, MOD State Secretary and Chief of the Department for Euro- Atlantic Integration and Defense Policy. In both meetings, GOR interlocutors expressed appreciation for the allocation and promised to provide further details about intended uses for the funds. 2. ODC received July 7 a letter from the Ministry of Defense outlining the MOD's policy priorities and providing a breakdown of how it proposes to spend the $17,000,000 allocation. The complete text of the letter follows. BEGIN TEXT: Ministry of National Defense Department for EuroAtlantic Integration and Defense Policy Bucharest, Romania July 07, 2005 Office of Defense Cooperation US Embassy, Bucharest The Department for EuroAtlantic Integration and Defense Policy presents its compliments to the U.S. Office of Defense Cooperation. The purpose of this letter is to give you an update on MoND's policy priorities about the military capabilities to be strengthened, for the near and medium term future. These are the following: 1. Military Intelligence 2. Black Sea Surveillance 3. Airlift - C-130 logistic support 4. Special Forces 5. Defense Reform The Spending Plan for the $17 million supplement from the Coalition Solidarity Fund, reflecting the here above priorities, is estimated as follows: - UAV SHADOW 200 $ 8.00 M - HUMINT Training and Equipment $ 1.40 M - SCOMAR $ 1.00 M - C130 Support $ 3.00 M - Special Forces: HMMWVs $ 2.60 M - Defense Reform $ 1.00 M TOTAL $17.00 M The Department for EuroAtlantic Integration and Defense Policy avails itself of this opportunity to renew to the Embassy of the United States of America the assurances of its highest consideration. [signed] Ion Mircea Plangu State Secretary for Defense Policy and EuroAtlantic Integration END TEXT TAPLIN
36312 2005-07-11 14:22:00 05BUCHAREST1533 Embassy Bucharest UNCLASSIFIED UNCLAS BUCHAREST 001533 SIPDIS DEPT FOR EUR/NCE - WILLIAM SILKWORTH USDA PASS FAS FOR ITP/ROBERT CURTIS/BETTYANN GONZALES SOFIA FOR AGRICULTURAL ATTACHE E.O. 12958: N/A TAGS: EAGR, RO, BU, Trade Agreement SUBJECT: ROMANIA AGREES TO GLOBALIZE THE ITALIAN CHEESE TARIFF RATE QUOTA 1. Bucharest's Agricultural Office received consent of Romanian Government to globalize the remaining Italian cheese Tariff Rate Quota (TRQ) granted to Romania. 2. Romania was granted a tariff-rate quota (TRQ) allocation for Italian-type cheese in the Uruguay Round for 500 tons. Under the U.S. Department of Agriculture (USDA) import licensing regulation, licenses were issued to U.S. importers to enter this allocation amount. The regulation also provides that if the licensing authority determines that imports from a country are likely to fall short of its TRQ allocations, the remaining license balances may be globalized for the remainder of the year. 3. To date, zero kilograms of Italian-type cheese has entered from Romania. The GOR's consent to globalize its quota will permit exports from other countries to fulfill the amount of Romania's Italian-cheese 500 MT TRQ. If supplies were to become available domestically, Romania could still export to the United States under a globalized TRQ allocation as long as the allocation remains unfilled. TAPLIN
36413 2005-07-12 14:50:00 05BUCHAREST1557 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 02 BUCHAREST 001557 SIPDIS DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: DECL: 07/12/2015 TAGS: PGOV, PREL, KDEM, SOCI, RO, Election SUBJECT: EARLY ELECTIONS? BASESCU CONVENES SENIOR POLITICAL LEADERS REF: A. A) BUCHAREST 1529 B. B) BUCHAREST 1521 C. C) BUCHAREST 1511 D. D) BUCHAREST 1433 Classified By: POLITICAL SECTION CHIEF ROBERT GILCHRIST FOR REASONS 1.4 B AND D 1. (C) Summary. President Traian Basescu convened senior politicians from both the opposition and governing parties late July 12 to discuss options following the July 7 announced resignation of Prime Minister Calin Popescu-Tariceanu and his cabinet. Although some Embassy contacts hold out the possibility that new elections will not take place, the majority continues to place odds in favor of an early poll. Tariceanu has announced that his decision to resign is "firm and irrevocable." Although clearly unenthusiastic, the EU has sent signals that snap elections would not necessarily be incompatible with Romania's hopes to accede in 2007. End Summary. President Convenes Key Players ------------------------------ 2. (C) President Basescu called a meeting of senior political leaders at 1700 on July 12 to fulfill his constitutional role as "mediator" between state powers. This follows the July 7 announcement by Prime Minister Calin Popescu-Tariceanu and his government that they would resign, ostensibly in response to a Constitutional Court decision negating several key components of the government's judicial reform package (refs a and b). According to Embassy contacts, Basescu convened at the meeting the Prime Minister and other key cabinet members, the presidents of both chambers of parliament, the leaders of the political party parliamentary factions, and representatives from the Constitutional Court. The meeting was expected to continue throughout the evening. 3. (C) Basescu's intentions for the meeting remain unclear, although Presidential Advisor Bogdan Chiritoiu told PolChief that Basescu was merely fulfilling what he saw as his constitutional obligation to consult with key powers. With so many big players in one room, Chiritoiu expressed his personal opinion that it was unlikely there would be any definitive answer on elections. Nonetheless, he opined, elections still appear to be "the likely option." Chiritoiu pointed out -- as many contacts have in recent days -- that the key issue is whether the PNL-PD can secure a voting majority to force an early vote. Tariceanu Firm on Resignation, PNL-PD Barges Ahead --------------------------------------------- ----- 4. (C) In an attempt to quell press reports that he was reconsidering his decision to resign, PM Tariceanu's office issued a press release July 11 asserting that his decision to quit is "firm and irrevocable." The actual date of his departure from office is uncertain but many GOR contacts believe it will occur Monday, July 18 after Tariceanu returns from a trip to Brussels to conduct meetings related to Romania's EU accession. 5. (C) Meanwhile, leaders of the National Liberal-Democratic Party (PNL-PD) center-right Alliance are resolved to move ahead with snap elections, several PNL-PD sources told PolOffs. Most insiders concur that a likely date for new elections would be mid-October, with Tariceanu publicly stating that the elections would take place prior to the October 23 release of the EU Country Report on Romania -- this would point most squarely toward Sunday, October 16. 6. (C) Over the next several days, the government is resolved to pass emergency legislation to reform Romanian electoral law. Proposed changes would include limiting the electoral campaign period to two weeks, establishing a mandatory voter i.d. card, and increasing the number of locations overseas where expatriate Romanians could vote. The voter identity card provision reflects PNL-PD allegations that the former ruling center-left Social Democratic Party (PSD) organized widespread fraud in which single voters voted in multiple locations (so called "electoral tourism") in last fall's parliamentary and presidential elections. The PNL-PD also favors expanding opportunities for overseas voters since a sizeable majority of expatriate Romanians tends to favor the center-right. Another possible change under discussion would be to reduce the parliamentary access percentage from five to four or three percent, making it easier for smaller parties to enter parliament. Who Wants New Elections and Why -------------------------------- 7. (C) Influential PNL deputy Cristian Boureanu told PolOff July 12 that until last week many within the PNL's leadership opposed or had major reservations about new elections, fearing in part that PNL's overall "weight" within the Alliance would diminish compared with the PD. However, PNL's leaders held a lengthy debate early July 7, in which they agreed to join PD leaders (who had already agreed to back new elections) in supporting new elections. According to other opposition sources, PNL and PD leaders have grown increasingly frustrated in the past several months by PSD attempts to block PNL-PD initiatives. As Boureanu observed, without new elections that would provide the Alliance a clear parliamentary majority "we won't be able to do what we promised" during the campaign "even though we will try to move ahead with reforms, especially economic reforms." 8. (C) Boreanu confirmed that the PNL and PD have agreed to divide deputies equally between the two parties within a new parliament, observing that PD "has the leader (Basescu) and we don't have the national leader" who can attract votes. He also noted that PNL-PD are entering this period of political uncertainty with "much confidence" -- "we have 65 percent approval ratings but only 35 percent of parliament." 9. (C) Numerous contacts have commented to post that the PSD remains "disorganized and divided by internal dissent." According to media sources, PSD leader Mircea Geoana favors new elections as an opportunity to weed out PSD deputies who remain loyal to former President Ion Iliescu and the party's "old guard." However, UK Ambassador told Charge that Chamber of Deputy president and former PM Adrian Nastase told him the PSD would very much to avoid elections. (Note: Nastase stands to lose much with early elections, including his key position within the parliamentary leadership. End Note.) What about the Hungarians? --------------------------- 10. (C) The ethnic Hungarian party (UDMR) leadership, meanwhile, is debating whether to urge the PNL-PD to move ahead with plans to adopt emergency legislation to lower the threshold for entrance into Parliament. Privately, UDMR leaders are worried that the party may not be able to garner five percent in elections, especially if the campaign lasts only two weeks, vice one month as in past elections. UDMR Senator Peter Eckstein-Kovacs told EmbOff that the UDMR does not like the idea of new elections but must "go along with the tide" since the opinions of small parties like the UDMR and Conservative Party (PC) "no longer matter." 11. (C) Comment. Following an initial flurry of excitement after the government's announced resignation on July 7, the political parties and many in the media are now wondering what comes next. Basescu's recently expressed reservations about the desirability of new elections have cast some doubts (ref D). However, he is on record repeatedly and strongly calling for an early poll. As one senior journalist told Poloff, "elections are likely, but nothing is certain in Romanian politics." 12. Comment Continued: The UK Ambassador signaled to Charge that while the EU is "not thrilled" with the prospect of new elections, it will "not stand in the way." Meanwhile, local press reported that head of the EU Commission Enlargement Department Fabrizio Barbaso told Tariceanu July 11 that the EU "does not interfere in internal politics of member countries," stressing that Romania's EU accession in 2007 is "still possible." End Comment. 13. (U) Amembassy Bucharest,s reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest TAPLIN
36516 2005-07-13 14:59:00 05BUCHAREST1563 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 02 BUCHAREST 001563 SIPDIS DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: DECL: 07/13/2015 TAGS: PGOV, PREL, KDEM, SOCI, RO, Election SUBJECT: PRIME MINISTER CONFIRMS RESIGNATION; COMMITS TO NEW ELECTIONS REF: A. BUCHAREST 1557 B. BUCHAREST 1521 C. BUCHAREST 1511 D. BUCHAREST 1433 E. BUCHAREST 1529 Classified By: Political Section Chief Robert S. Gilchrist for Reasons 1.4 B and D 1. (C) Summary: Prime Minister Calin Popescu-Tariceanu July 13 announced he would officially step down from office early next week and that the government has begun plans for snap parliamentary elections. The announcement followed a special joint session of parliament and a July 12 meeting among senior political leaders meant to iron out differences over stalled judicial reform legislation. Ruling Liberal-Democratic (PNL-PD) contacts continue to stress that the alliance is committed to move forward with new elections. However, the PNL-PD must still secure a majority of votes in parliament to force an early poll. End Summary. 2. (SBU) In the latest turn in what Romanian media now call the "Electoral Crisis," PM Tariceanu reaffirmed July 13 that he would officially step down following a planned trip to Brussels on July 18. Tariceanu stated that procedures for early elections would also begin at that time. In explaining the rationale for his decision, the PM stressed that the PNL-PD does not have a sufficient majority to "permit it to make necessary reforms." He pointed to "insufficient will in the Parliament" to foster judicial reform, the issue on which his government is basing its decision to move toward new elections. 3. (C) Tariceanu also asserted that none of the conditions were met that he had set the night before during the meeting of senior political leaders convened by President Traian Basescu (Ref A). These conditions included meaningful judicial reform, amendment of the law governing the Constitutional Court, and a national referendum to modify the constitution to allow the Parliament to overrule the Court. According to Embassy contacts, Tariceanu's commitment to forcing new elections had never wavered. Sources in both the presidential palace and prime minister's office tell us that snap elections are "more likely than ever." Where There's a Will, There's a Way? ------------------------------------- 4. (C) Tariceanu's statement followed 24-hours of intense political negotiations, many of which were ostensibly intended to resolve the impasse precipitating calls for elections. According to Embassy contacts, the meeting convened by President Basescu late July 12 did not address core concerns in any substantial way. According to senior Democratic Party (PD) deputy Cristian Radulescu, the lawmakers merely agreed to devise new legislation that would pass constitutional muster. Other individuals present said that Basescu urged parliament to "find a way" to pass justice reform legislation. Indeed, Basescu declared at the beginning of the meeting "solutions can be found if there is political will" to do so. One Embassy contact cynically noted there was "no will on either side." The PNL-PD "clearly wanted new elections;" the PSD was unwilling, if not incapable, of overriding the Constitutional Court decision and meeting all of the PNL-PD's demands. 5. (C) According to PNL senator Nicolae Popa and other contacts, PNL and PD leaders caucused "all night" July 12 to devise ways to pass justice reform legislation - and to discuss the overall political situation. By early morning, they were "even more convinced of the need for new elections." The morning of July 13, senior Presidential Advisor Claudiu Saftoiu stated matter-of-factly to PolChief that the President will announce the interim cabinet following Tariceanu's July 18 resignation. He said Basescu would offer his "fullest support" to the caretaker government and that there would be "absolutely no interruption" in meeting obligations for EU accession or for providing what he characterized as "a stable environment for international investors." 6. (C) The afternoon of July 13, Parliament voted in joint session to adopt a "re-phrased" version of the justice reform legislation. Delegate Minister and PNL-PD deputy Cristian David told PolChief that none of the revisions adequately addressed the government's concerns, but that it was better than nothing. In any event, David said the PNL-PD is "still intent on elections." Iliescu Reemerges ------------------ 7. (C) Press commentators and Embassy contacts continued to note internal divisions within the PSD, with competing factions in the party supporting or opposing new elections. Most notably, however, former President Ion Iliescu has reemerged publicly to a degree not seen since his unsuccessful bid for the party leadership in April. His primary tack has been to criticize the PNL-PD and Basescu for focusing on partisan politics at a time when the country is beset by torrential flooding in several areas. Iliescu publicly urged Tariceanu to renounce his decision to resign - and called on Basescu, in coordination with the Supreme Council for National Defense (CSAT), to declare a "state of emergency" in response to the flooding. Iliescu noted that the Constitution forbids dissolution of parliament during a state of emergency. Nastase also told journalists that he opposed early elections. PSD President Mircea Geoana, however, reaffirmed that the party is "ready" for early elections. 8. (C) Comment: Tariceanu's confirmation of his resignation moves Romania closer to new elections. However, neither he nor his alliance have charted a clear path for overcoming the constitutional hurdles that must be crossed in coming weeks. This will require creative politicking, with risk at any juncture of being derailed by small parties opposed to elections, fatigued legislators, last minute dealmaking, or a public backlash against what may appear to be cynical political maneuvering. End Comment. 9. (U) Amembassy Bucharest,s reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest. TAPLIN
36606 2005-07-15 04:12:00 05BUCHAREST1567 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS BUCHAREST 001567 SIPDIS SENSITIVE DEPT FOR EUR/NCE - WILLIAM SILKWORTH EUR/0HI - JOHN BECKER E.O. 12958: N/A TAGS: PGOV, PREL, PHUM, KDEM, SOCI, RO, biographic information, Press Summary, Jews SUBJECT: ROMANIAN EXTREME NATIONALIST PARTY NEWSPAPER PRAISES WWII DICTATOR FOR "SAVING" JEWS REF: BUCHAREST 1348 (AND PREVIOUS) 1. (SBU) The headline of a first page article in the July 12 "Tricolurul," a daily newspaper controlled by extreme nationalist and Greater Romania Party (PRM) leader Corneliu Vadim Tudor, declares that World War II-era fascist dictator Ion Antonescu "saved the lives of at least 600,000 Romanian Jews." The brief article, accompanied by a color photograph of Marshall Antonescu in a uniform that apparently includes a German Iron Cross decoration, purports to cite distinguished Romanian writer and philosopher Emil Cioran. The article quotes Cioran as writing that "Perhaps Antonescu was crazy, but...he saved the lives of at least 600,000 Romanian Jews. Not a word of recognition, no monument, no street in Israel mentions his name." (Note: Cioran was associated with the ultra-nationalist Iron Guard in his youth but later renounced the organization and apologized for his engagement in extremist politics. End Note.) 2. (SBU) Comment. Antonescu's signing of deportation orders and active collaboration with the Nazis during World War II directly contributed to the deaths of hundreds of thousands of Romanian Jews and Roma. Although Tudor has mounted a superficial attempt over the past two years to portray the PRM as a mainstream center-right party and himself as a "philo-Semite" (Ref), "Tricolorul's" front-page paean to fascist dictator Antonescu illustrates the viewpoints of what many view as the "real" Vadim Tudor. The article may also reflect a conscious attempt by Tudor, whose party faces declining poll ratings and recent defections, to shore up his support with extreme nationalists, the PRM's most hardcore supporters. In December 2004, former President Ion Iliescu awarded Tudor the "Star of Romania," one of the country's highest accolades. The current government has not revoked the award, although an independent commission has been set up to review all recipients of the medal in past years and, according to sources in the Romanian president,s office, has authority to revoke awards. End Comment. 3. (U) Amembassy Bucharest,s reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest. TAPLIN
36632 2005-07-15 09:57:00 05BUCHAREST1573 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L BUCHAREST 001573 SIPDIS STATE DEPT FOR EUR/NCE - WILLIAM SILKWORTH NSC FOR KURT VOLKER E.O. 12958: DECL: 07/15/2015 TAGS: PREL, PGOV, RO, VE SUBJECT: CHAVEZ - NO INVITATION TO ROMANIA REF: A. BUCHAREST 1477 B. STATE 117165 Classified By: Political Section Chief Robert S. Gilchrist for Reasons 1.4 (B) and (D) (C) MFA Director General for Global Affairs Stelian Stoian told Charge July 17 that the MFA recommended to President Basescu that Romania not/not invite Venezuelan President Hugo Chavez to Romania, as was under discussion for August. Presidential State Counselor for International Relations Anca Ilinoiu subsequently confirmed to PolChief that the presidency agrees with this recommendation and Chavez "will not be coming to Bucharest." TAPLIN
36642 2005-07-15 11:02:00 05BUCHAREST1577 Embassy Bucharest UNCLASSIFIED UNCLAS SECTION 01 OF 02 BUCHAREST 001577 SIPDIS FOR INL/AAE - JEFF HARTSHORN, EUR/ACE E.O. 12958: N/A TAGS: AMGT, ASEC, BU, KCRM, SNAR, RO, law enforcement SUBJECT: PROJECT ACCOMPLISHMENTS ROMANIA - SEED FUNDED, INL ADMINISTERED LAW ENFORCEMENT AND CRIMINAL JUSTICE SECTOR PROGRAM REF: STATE 123946 1. The project accomplishments listed below apply for the Counter-narcotics, Cyber-Crime, Police Academies, and ICITAP Advisor projects coordinated by the RSO. RLA/OPDAT will report separately. 2. The major accomplishments for the last 18 months are: - RSO provided specialized audio-video and surveillance equipment to the Organized Crime and Anti-Drug Police. DEA and ICE provided training on undercover operations and intelligence analysis. Up-to-date information and modern equipment increased the success rate and officers' safety in over 100 police operations, which resulted in concluded with significant drug and counterfeit seizures and arrests. In addition, the provision of audio-video equipment enabled the Romanian police Police to record the operations and present evidence in court, as well as to create a library of videotapes for debriefing and on- the- job training. - RSO provided computer and network equipment to the Cluj Organized Crime and Anti-Drug Office, the second largest in the country. This enabled the connectivity of the local criminal databases to be connected with the central network, leading to an efficient exchange of information. - RSO provided drug lab equipment and drug testing kits to the Organized Crime and Anti-Drug Police, which have been instrumental in the initiation of the second drug lab in Romania. - The new lab opened in the city of Cluj runs drug tests for the north-western part of Romania. According to the provisions of the new penal procedure code, police can only hold a suspect in custody for 24h. This lab takes the work- load off the central lab and provides more timely results for this area of Romania. RSO provided equipment, training by ICE, and a U.S. field trip to the Border Police Drug Dog School. The school set up a new training classroom, and instructors and dog handlers have been exposed to presented the U.S. model. As a result, Romanian authorities The school implemented several changes in the daily operations, such as: building a new training range for dogs, replacing old training materials such as rubber balls with textile towels, sselectinged a pilot group of 17 dogs to be trained according to by the concepts and methods taught at the Canine Center in Front Royal. - In addition, RSO provided a variety of computer, networking equipment, and software. ICE and USSS provided training, while the . FBI provided advisory assistance. Up- to-date information, modern equipment and work on cases led to an increase in joint operations, and an increase in the number of successful search warrants, seizures, and indictments in cases involving U.S. citizens. - RSO provided specialized analysis software to the Border Police which hasve been instrumental in the creation of a Risk Analysis Unit within the Border Police. - RSO and ICITAP provided computers and software to the Guard and Protection Training Center. They set up a local area network. - ICITAP Advisor provided advisory assistance on Instructor Development which was incorporated into the instructor development course curriculum and institutionalized in the Post-University Center's Instructor Development Process. - RSO and ICITAP provided U.S. field trips fields to the officials and trainers of the Law Enforcement Academies to introduce them to contemporary academy management instruction, curriculum development and evaluation strategy. - The Academies started to implement several changes in the curriculum, uniforms and administration.RRSO and ICITAP provided crime scene processing forensics supplies for the new laboratory of the Police Academy. The equipment is used to train over 400 police cadets per year. - RSO provided a computer to the Police Record Checks Department. This enabled the transfer of all paper records into an electronic database for easy search and retrieval of information. This department processes approximately. 500 records checks per year for the Embassy. The response time has been shortened byto half. 3. The projects and funding for the FY2006 cycle that Post Bucharest intends to support will follow by COB July 20. TAPLIN
36643 2005-07-15 11:03:00 05BUCHAREST1578 Embassy Bucharest UNCLASSIFIED UNCLAS SECTION 01 OF 03 BUCHAREST 001578 SIPDIS DEPARTMENT FOR EUR/PPD (WALKER AND HARTLEY); IIP/G/EUR (ELLISON) AND IIP/T/SV (SEBSOW); EUR/ACE (CERIALE/ FROMAN) E.O. 12958: N/A TAGS: OIIP, KPAO, RO, museum SUBJECT: PD BUCHAREST'S CONFERENCE ON MUSEUM MANAGEMENT AND PROMOTING REGIONAL COOPERATION, JUNE 22-25 1. SUMMARY: FROM JUNE 22-25, PD BUCHAREST HOSTED A SOUTHEAST EUROPEAN REGIONAL CONFERENCE FOR MORE THAN 90 MUSEUM DIRECTORS THAT PROMOTED REGIONAL COOPERATION AND GAVE THEM PRACTICAL IDEAS ON HOW TO THRIVE AS CIVIC INSTITUTIONS IN A MARKET ECONOMY. THE SEMINAR DIRECTOR, DR. MARC PACHTER, ENSURED THAT PRESENTATIONS AND INFORMAL DISCUSSIONS REMAINED FOCUSED ON THE THEMES. HE USED TO GREAT EFFECT THE EXPERIENCE OF THE DEPARTMENT-FUNDED SPEAKERS AS WELL AS THOSE SUPPORTED BY OUR CO-SPONSOR, THE FUND FOR ARTS AND CULTURE TO EDUCATE THE MUSEUM REPRESENTATIVES AND GOVERNMENT OFFICIALS ON STRATEGIES AND TECHNIQUES ON FUNCTIONING IN A MARKET ECONOMY. THE SUCCESS OF THE SEMINAR WAS EVIDENT FROM THE FEEDBACK RECEIVED FROM THE PARTICIPANTS - 90 PERCENT OF THEM INDICATED THAT THE INFORMATION PROVIDED WAS VERY USEFUL AND ADDRESSED THEIR PROBLEMS/NEEDS. SECONDLY, THE ROMANIAN MINISTRY OF CULTURE'S STATE SECRETARY FOR MUSEUMS AND MONUMENTS CAME TO BOTH THE EMBASSY AND TO THE FUND FOR ARTS AND CULTURE WITH A PROPOSAL TO REPEAT THE SEMINAR IN MINISTRY FACILITIES NEXT SPRING (2006). FINALLY, MEDIA COVERAGE HELPED GET IMAGES AND MESSAGES OUT TO ROMANIA'S MAJOR CITIES AS WELL AS TO NATIONAL AUDIENCES FROM BUCHAREST-BASED OUTLETS, GENERATING ADDITIONAL INTEREST AMONG THOSE WHO WERE NOT INVITED OR UNABLE TO ATTEND THE PROGRAM. PD BUCHAREST THANKS BOTH IIP AND PD SECTIONS IN THE REGION FOR THEIR OUTSTANDING SUPPORT OF THIS PROGRAM. END SUMMARY. 90 PARTICIPANTS FROM 12 COUNTRIES 2. From June 22-25, PD Bucharest hosted a regional seminar with the provocative title "Do Museums Matter: Making the Case, Finding the Means." We sought to advance MPP goals in civic institution building, economic development in a free market, and promotion of regional stability. Our strategy was to help museums become more relevant to their communities and better equipped from a management standpoint to thrive in a market economy. The seminar drew a total of forty museum directors from twelve countries in the region, as well as more than fifty Romanian museum managers and GOR representatives from across the country -- many more than we expected when invitations first went out. STRUCTURING THE SEMINAR FOR PRACTICAL RESULTS 3. Dr. Marc Pachter, the Director of the National Portrait Gallery and Acting Director of the National Museum of American History, gave the keynote address. He spoke with practiced ease and verve. He briefly outlined changes in the mission of museums from the nineteenth century until today, and ended with the current challenge: how to make museums not simply better warehouses of artifacts, but better civic institutions, capable of engaging families and other target audiences with exhibits and programming. Pachter, a SEED-funded and IIP-supported speaker, worked previously for USIA as a senior cultural advisor. He clearly understood the need for the seminar to produce practical, measurable results. Consequently, he had all the speakers share best practices and quickly get down to brass tacks on how participants might share resources and programming to better serve their communities. INFORMAL DISCUSSION GROUPS EXPLORE SPEAKER TOPICS 4. The seminar's format had speakers deliver talks on their area of expertise, and then lead informal discussion groups where participants could air specific problems, brainstorm solutions, and explore joint activities. An excellent speaker/group leader was Dr. Graham Beal, the Director of the Detroit Institute of Art, and our second IIP-supported, SEED-funded, speaker. Participant exchanges in Beal's group focused on finding new sources of funding and other resources (e.g., free utilities, in-kind contributions) as well as on several other issues. ADDITIONAL SPEAKERS PROVIDED BY THE FUND FOR ARTS AND CULTURE 5. The Fund for Arts and Culture which co-funded this event brought three additional speakers at its own expense. They also provided high quality contributions to the program. The first, Mr. Patrick Gallagher, is the president of a leading U.S. design firm with long experience in mounting permanent and temporary exhibits. He spoke fluently on everything from structuring visitor evaluation forms to creatively reusing aging display and exhibition equipment to maximize cost savings. Gallagher, together with a second Fund-supported speaker, Mr. Klaus Muller, a museum designer and architect from Amsterdam, gave an outstanding demonstration of how museums can engage an audience that is indifferent or possibly hostile to a given exhibition theme. Muller is currently at work on a Dutch museum memorializing gays and lesbians persecuted during the Nazi era. The museum's target audience -- high school students - includes many Muslims who are generally unsympathetic to homosexuals. Between Muller's architectural expertise, and Gallagher's knowledge of design, they walked the audience through conceptualization of the exhibit - from the venue, to the way the story of these people was told so as to universalize their experiences of betrayal, arrest, escape, survival, or dehumanization and death - and helped the speakers themselves conceptualize the exhibit. The seminar participants, many of whom were not favorably disposed to this theme, were nevertheless impressed with the effort and left with food for thought on how they might mount politically difficult exhibits that would nevertheless draw crowds. STATE-SPONSORED INSTITUTIONS SUCCEEDING IN SPITE OF BURDENSOME RESTRICTIONS 6. Miguel Fernandez, Director of Mexico's Museum of the Viceroyalty, was the final Fund-supported speaker. His topic was how to mobilize and motivate museum staff to produce exhibits that draw larger audiences without new objects or significant new funds. Fernandez has had notable success in revitalizing his state-supported museum despite flat budgets, restrictive labor laws, and a bureaucracy that is often part of the problem. His presentation resonated with many of the seminar participants who face similar difficulties in their home countries where state financing comes with a raft of unhelpful regulations and limitations. Fernandez pursued potential solutions to these problems in his discussion group, overcoming limitations in his command of English with the help of Marc Pachter. RESULTS 7. PD Bucharest ran the overall program, but our co- sponsor, The Fund for Arts and Culture, supplied the talent for the substantive elements for this highly successful seminar. We found the presentations of these consultants to be uniformly outstanding. The seminar leaders demonstrated that, at least in the seminar's structured environment, this region's museums can work together to solve mutual problems, share success formulas, and brainstorm joint projects of mutual benefit. The participants got right to work, little time was lost "ice-breaking," and many wanted a follow-up conference to focus in greater depth on specifics such as fund-raising and grant writing. After hearing of the success of "Friends of the Museum Associations" from Romanians who developed such groups under a previous grant from PD Bucharest, most participants agreed that this was one concrete step they would pursue upon return to their home countries. 8. The Romanian Ministry of Culture offered its unconditional support from the very beginning for this colloquium. The Ministry of Culture's Secretary of State, Virgil Nitulescu, who spoke at the opening session, had invited his counterparts to participate in the conference, and several accepted his invitation. The Ministry of Culture also put at the conference's disposal its main conference room for the presentation of an IT project called "Ethnography on Line", which was created by Romanian Village Museum for local use. The colloquium only strengthened the initiative and will to transform this IT project into a regional IT tool of cooperation in this domain. The enthusiasm of participants and the success of the seminar, which was obvious even before the end of its debates, also lead to the idea, proposed by the Ministry of Culture, that a similar event be held next year. 9. In Romania, PD was able to generate much press for the conference. The cultural TV station TVRM, a major financial daily Ziarul Financiar (cir.35, 000), the cultural magazine Flacara, and Romanian state television RTV all extensively featured the conference in their reporting. The correspondent to Romania for the South- East European Times is working from the material dedicated to the event for an article that will run regionally. And, the Dow-Jones correspondent to Romania also interviewed PAO Mark Wentworth and speaker Marc Pachter and we are expecting an article to run on their service in the near future. 10. COMMENT: -- PD Bucharest highly recommends IIP-supported speakers Marc Pachter and Graham Beal to the Department and other posts for any museum-related programming. Both are easy- going, practiced, engaging presenters, who are readily approachable and concerned to fit their presentations to the needs of seminar participants. -- PD Bucharest would be pleased to share in greater detail the planning and organizational details, as well as other materials produced for the conference with interested posts. Please contact Cultural Assistant Isabella Alexandrescu ([email protected]) or PAO Mark Wentworth ([email protected]) if interested. -- We greatly appreciate cooperation from staff of posts which sent participants and made this such a success. We would also welcome posts' feedback once they have a chance to debrief conference participants. END COMMENT. Taplin
36644 2005-07-15 11:07:00 05BUCHAREST1580 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS BUCHAREST 001580 SIPDIS SENSITIVE DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: N/A TAGS: PGOV, PREL, MOPS, MARR, SOCI, RO, Consription SUBJECT: ROMANIA MOVES AHEAD WITH PLANS TO ABOLISH DRAFT REF: BUCHAREST 1563 SENSITIVE BUT UNCLASSIFIED. PLEASE PROTECT ACCORDINGLY. 1. (U) The GOR decided July 11 to abolish the draft for the Romanian Armed Forces effective January 1, 2007. The decision reflects Romania's ongoing defense modernization program, which includes the goal of an all-professional MOD, consisting of 75,000 soldiers and 15,000 civilians, by 2007. (Note: The MOD presently consists of about 100,000 civilian and military personnel. End Note.) 2. (SBU) A senior MOD official told PolOff July 14 that the GOR has submitted a bill to parliament abolishing the draft. The official added that there is broad bipartisan support for the abolition of mandatory military service, but stated that parliament would not approve the bill until this fall given that it is currently in summer recess. The likelihood of the PM's imminent resignation and early parliamentary elections also reduces the likelihood of swift action. (Ref) 3. (U) Other provisions of the government's decision and draft law include a requirement that male citizens must register at "military centers" once they have reached the age of 20. According to a July 12 GOR press communique, the draft's "suspension" will permit a voluntary military except in the case of "war, mobilization or siege." The draft will be phased out gradually, with the last batch of conscripts called up in October 2006 for a "reduced term" of service. 4. (SBU) Comment: The MOD official we spoke with confirmed that the Ministry of Interior will continue - for the time being - to use conscripts for certain positions, e.g. as guards. The 1700 Romanian troops currently deployed overseas, including the about 1400 in Afghanistan and Iraq, are all volunteers. Despite the clear advantages of an all- professional armed forces, especially given the GOR's commitment to developing NATO niche capabilities and supporting NATO operations, some Romanians we have spoken with have expressed nostalgia at the passing of the draft, which they describe as a sort of "rite of passage" for many young men. Many, however, bitterly remember the lugubrious political indoctrination and what one contact described as the "futility" of mandatory military service during the communist era. End Comment. 5. (U) Amembassy Bucharest's reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest. TAPLIN
36651 2005-07-15 13:13:00 05BUCHAREST1581 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L BUCHAREST 001581 SIPDIS STATE DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: DECL: 07/15/2015 TAGS: OPDC, PARM, PBTS, PHUM, PREL, PGOV, MD, RO, EUN, OSCE SUBJECT: ROMANIAN COMMENTS ON MOLDOVA AND MULTILATERAL CONFERENCE ON TRANSNISTRIA CONFLICT REF: A. STATE 120606 B. STATE 125824 C. STEWART-TAPLIN E-MAIL 7/14/05 Classified By: POLITICAL SECTION CHIEF ROBERT S. GILCHRIST FOR REASONS 1.4 (B) AND (D) 1. (C) During the course of an initial call by Charge at the MFA on July 17, Director General for Global Affairs Stelian Stoian specifically raised "very strong" GOR disappointment that it had not been consulted by the U.S. prior to the U.S. approach to EU member capitals, Moscow, Kiev, and Chisinau on the proposed Multilateral Conference on the Transnistria Conflict (refs). Stoian said Romania had received from another unnamed government the points the U.S. had raised. He added that Romania had proven itself as a "constant and reliable partner" on Moldova/Transnistria and that our two governments are "essentially on the same page" on the issue. 2. (C) Charge expressed appreciation for the important role Romania can play in Moldova and expressed continued commitment to maintaining a strong and productive dialogue on the issue. Per ref C instructions, Charge raised with Stoian the U.S. position on the conference and the message we delivered to Chisinau. He underscored our belief that such a conference could potentially serve as an impetus for reinvigorating the dialogue on Transnistria and that the U.S. and EU should have a role in the conference, a view that Stoian said Romania solidly shared. Charge told Stoian that the U.S. told Chisinau that the U.S. would support including the Romanians in the conference. Stoian thanked the Charge for informing Romania that the U.S. had raised this "important element" with Chisinau. 3. (C) When queried about Romania's relationship with the EU on Moldova, Stoian lamented that individual EU member states treat the issue with varying degrees of interest. He also regretted that the EU still does not have a permanent presence in Chisinau. Stoian took note of the fact that since the signing of Romania's EU accession treaty in April, Romania now has observer status in all EU proceedings including on foreign policy. In that capacity, Romania has already worked to try to elevate Moldova as an issue on the EU foreign policy agenda and he said the EU commission and individual members have increasingly consulted Romania on the issue. When asked whether the EU or member states had pushed back on Romania to take a lower profile on Moldova, he said "absolutely not." Again, Stoian underscored the importance of Moldova to Romania and stressed the importance of close consultation, particularly before new initiatives such as the proposed conference. "Our national interests are involved," he stressed. "No one can deny that." 4. (U) Amembassy Bucharest's reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest. TAPLIN
36653 2005-07-15 13:46:00 05BUCHAREST1582 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS BUCHAREST 001582 SIPDIS SENSITIVE STATE FOR EUR/NCE - WILLIAM SILKWORTH GENEVA FOR RMA USEU FOR MEZNAR E.O. 12958: N/A TAGS: PGOV, PHUM, PREF, PREL, RO, Asylum Policy SUBJECT: ROMANIAN RESPONSE TO URGENT NEED TO TEMPORARILY RELOCATE UZBEK ASYLUM SEEKERS PRESENTLY IN THE KYRGYZ REPUBLIC REF: SECSTATE 131485 (SBU) PolChief raised urgent need for temporary relocation of Uzbek asylum seekers with UN Division Director Adrian Ligor July 15, stressing the humanitarian urgency of this matter. Ligor said that he was unable to provide an initial substantive response, but committed to share the points with the MFA Human Rights Division and the Romanian delegation in Geneva. In a subsequent conversation with PolOff, Andreea Chiriac, Deputy Director of the MFA Human Rights, OSCE and Council of Europe Division, stated that the MFA would need to discuss the "viability" of possible relocation of asylum seekers in Romania with Interior Ministry officials. She added that current torrential flooding and its humanitarian aftermath in Romania would likely limit the GOR's "capacity" to offer assistance to the asylum seekers. TAPLIN
36654 2005-07-15 13:58:00 05BUCHAREST1584 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS SECTION 01 OF 03 BUCHAREST 001584 SIPDIS STATE FOR EUR/NCE - WSILKWORTH, EB/IFD STATE PASS USTR USTR FOR LERRION TREASURY FOR STUART USDOC FOR 4232/ITA/MAC/EUR/OEERIS/CEEB/BURGESS/KIMBALL STATE PASS USAID SENSITIVE E.O. 12958: N/A TAGS: ECON, EAID, EIND, EFIN, RO, flood, disaster relief SUBJECT: ROMANIA STRUGGLES TO OVERCOME EFFECTS OF FLOODS, FORECAST CALLS FOR MORE RAIN - AND TURMOIL REF: Bucharest 1563 Sensitive but Unclassified. Not for circulation outside USG Channels. 1. (SBU) SUMMARY: Recent flooding in Romania's eastern regions have caused extensive damage to roads, suspended electricity and gas networks, submerged prime agricultural land and affected more than 14,000 households. This comes on the heels of prior spring floods in the southwestern areas that, taken together, have hit a large swath of Romania. In a country with poor infrastructure and subsistence agriculture, the damage will certainly hit the economy, as the GOR and individuals struggle to rebuild. The full effects of the floods on the budget and macroeconomic growth will only reveal themselves in the coming months, but will probably cause the Romanian budget to exceed the IMF- imposed budget deficit ceiling. Many Romanians have criticized the government for slow and inadequate response to the flooding and for focusing on partisan political concerns. END SUMMARY. Flooding Causes Widespread Damage --------------------------------- 2. (U) Damage estimates from the previous, less widespread, flooding in May surpassed one billion Euros. The most recent flooding has affected more localities (500 in 31 counties throughout Romania), according to provisional GOR reports released by the Ministry of Administration and Interior. The floods have luckily taken only a minor toll on life, resulting in at least seven deaths and several cases of missing people. Thousands of people, however, have been left homeless and more than 10,000 homes were evacuated and 250 were destroyed. Emergency workers and volunteers rescued stranded residents from rooftops as water rose as high as nine feet in some villages. 3. (U) The road infrastructure was heavily affected, with 17 national roads, 327 county roads and 54 communal roads submerged, according to the Ministry of Transportation, Construction and Tourism. Hundreds of bridges and footbridges have collapsed. The three most affected counties include Bacau, Arges and Vrancea, areas known for farming, livestock and wood manufacturing. Economic Impact Still Undetermined ---------------------------------- 4. (U) The flood's affect on the economy is difficult to estimate at this time, as flash floods continue and new waves of heavy rain are expected for next week. However, according to preliminary estimates from the Ministry of Agriculture, approximately 450,000 hectares of agricultural land have been affected by floods (nearly five percent of total agricultural land) with total damages reaching 130 to 140 million Euros, approximately $160 million. 5. (U) According to some estimates, crop losses will cause wheat prices to soar by 22 percent, as 150,000 hectares of land cultivated with wheat are affected. Fifteen percent of land cultivated with sunflower and five percent of land cultivated with corn are also inundated, although the GOR has produced no damage estimate in this sector at this time. Livestock losses, however, are estimated at almost half a million USD. 6. (U) Nor will the losses be confined to the agricultural sector. Transporters are still assessing the damage caused by delays in freight shipment. Many factories in the area were also inundated, with many uninsured. The transport of petroleum from southern Moldova to refineries was also affected. GOR Worried About Impact ------------------------ 7. (U) After surveying the heavy flooding in Bacau county, Prime Minister Calin Popescu Tariceanu on July 14 stated that "the budget deficit no longer matters." Tariceanu further stated that after six months of bargaining between the GOR and the IMF, the macro-economic targets negotiated for this year - a budget deficit of 0.7% of GDP, a 7.5% inflation rate, and 5.5% economic growth - no longer hold significance due to the natural disaster that has devastated 31 counties throughout the country. 8. (U) President Traian Basescu also on July 14 requested the support of the European Commission for channeling twenty million Euros from PHARE EU funds for emergency re- construction of roads and bridges. The World Bank will reallocate $33 million from existing projects to complement state budget resources for the immediate reconstruction of infrastructure and homes damaged by the floods. The GOR yesterday announced a financial assistance package including $344,000,000 for reconstruction, $507,900 for social assistance, and approximately $1,000,000 for thirteen tons of food to be sent to the affected areas. .While the IMF Stands Firm -------------------------- 9. (SBU) Econoff spoke with an economic assistant in the local IMF staff, who stated that the IMF will not easily abandon its deficit target. Graham Justice, resident IMF representative, is expected to meet shortly with the GOR State Secretary responsible for the budget to review government plans on cost control associated with the flooding. The IMF staffer emphasized that because flooding is expected to continue, it is too early to assess the overall economic impact. She expects the GOR will request a softer budget deficit target, but strongly prefers that they look for cost savings on either the expenditure or revenue sides. Since revenues have been much stronger than forecast, she believes the GOR may have maneuvering room. EU Still Assessing the Damage ----------------------------- 10. (SBU) Econoff spoke with an economic analyst from the European Commission's Bucharest office who was noncommittal about the flood's economic impact due to a lack of data. He stated that any damage that requires repair work could be viewed as positive for the economy, while situations that boost operating costs, such as higher transportation fees, will have a negative affect on GDP. The analyst was dismissive about the overall affect on total agricultural output, and felt that in general the floods would likely not be a "big deal" for the macro economy. He doubted the flooding would impact EU accession and felt that if anything, the situation may attract more sympathy from EU member states. GOR Response Perceived to be Slow --------------------------------- 11. (SBU) Many Romanians have expressed anger at what they perceive as the GOR's slow and inadequate reaction to the flooding and the humanitarian crises that have followed in its wake. Both media analysts and ordinary citizens have criticized political leaders for focusing on PM Tariceanu's expected resignation and the possibility of snap parliamentary elections (see Reftel) rather than addressing what most Romanians view as a major economic and humanitarian catastrophe. Romania's best selling daily newspaper, "Libertatea," observed July 15 that flooding has turned Romania into an "ocean" in which "more than half of the country's territory is covered with water," provoking an "exodus of Romanians from their own country." Against this backdrop, former President Iliescu called on President Basescu earlier this week to convoke the Supreme Council of National Defense (CSAT) in order to declare a state of emergency, condemning the current government's insistence on playing political games rather than focus on a natural disaster of national proportions. (Ref) PM Tariceanu publicly rejoined that "the necessary measures have already been taken. We cannot make water no longer flow, but the authorities had and will have a prompt reaction, so I believe there is no need to declare an emergency." Media commentators observed that declaration of a state of emergency could imply calling in the armed forces to provide humanitarian assistance. U.S. Mission Assistance ----------------------- 12. (U) Even before this latest outbreak of flooding, labeled in press reports as one of the worst of the past century, Embassy's former Charge D'Affaires had declared the flooding a disaster on July 5, 2005, after receiving a request for assistance from the GOR, which enabled the USAID Office of Foreign Disaster Assistance to provide $50,000 for immediate humanitarian relief. This assistance will target one of the hardest hit areas, and will provide emergency commodities including water sterilization tablets, household assistance kits (blankets, mattresses, clothing, flashlights, dishes, rubber boots and gloves, basic food items including oil, sugar, canned food, fruits and vegetables), and individual hygiene kits (soap, detergent, toothbrush, toothpaste, sanitary alcohol). AmCham in Romania Announces Relief Efforts ------------------------------------------ 13. (U) The American Chamber of Commerce in Romania (AmCham) has started a campaign among its members to fund relief efforts. The AmCham Board also authorized 5,000 Euros as an immediate donation and is urging all of its members that have already donated money or supplies to inform AmCham so that it can keep track of the efforts. Comment ------- 14. (SBU) The floods may have made already tight IMF budget targets virtually impossible to meet, as Romania prepares for lower productivity and increased costs relating to damages. Continuing flooding, which is predicted at least into next week, will likely further drive the budget off- target and lead Romania into an increasingly challenging budget situation unless IMF targets are relaxed. With Prime Minister Tariceanu's admission that spending on flood assistance will occur regardless of the current budget plans, he is admitting that Romania is unlikely to meet its fiscal targets. 15. (SBU) It is still too early to assess the overall impact of the floods on the Romanian economy. However, the presence in the hard-hit rural areas of many subsistence farmers suggests that the real humanitarian and financial impact will be more serious than EU and IMF observers are willing to admit at this time. 16. (SBU) This latest episode of flooding, judged by some to be one of the worst of the past century, also seems to have complicated the current convoluted political picture still further, and threatens to erode the current government's popularity if the GOR is not seen to address the latest economic and humanitarian challenges adequately. One of President Basescu's advisors told Charge on July 14 that the GOR is likely to reach out to us again to see what resources we can make available to alleviate the suffering. End comment. Taplin
36777 2005-07-18 13:07:00 05BUCHAREST1592 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L BUCHAREST 001592 SIPDIS STATE DEPT FOR EUR/NCE - JANE MESSENGER E.O. 12958: DECL: 07/18/2015 TAGS: PREL, RO, UNSC SUBJECT: UNSC REFORM: ROMANIA STILL UNDECIDED, UNDER PRESSURE FROM "ALL SIDES" REF: A. STATE 128670 B. STATE 132429 Classified By: POLITICAL SECTION CHIEF ROBERT S. GILCHRIST FOR REASONS 1.4 (B) AND (D) 1. (SBU) Charge presented ref A points July 8 to Minister of Foreign Affairs Mihai Razvan Ungureanu, underscoring the importance of UNSC reform to the U.S. as well as our concern with the flawed proposal expected to be tabled soon by the G-4. Ungureanu pledged that the MFA would provide the Embassy with its response after it had a chance to review the points. Charge and PolChief again raised the issue July 14 with MFA Director General for Global Affairs Stelian Stoian. The latter said that Romania is "still deliberating" over the issue. 2. (SBU) On July 18, PolChief again discussed UNSC reform with Stoian, presenting ref B points urging Romania to oppose the G-4 resolution and to press for a delay in any vote on UNSC reform or expansion. Stoian said that Romania is still considering its position, which will ultimately be decided by President Traian Basescu. 3. (C) Stoian added that weighing particularly heavy on Romania's ultimate decision will be Romania's relations with key-EU member states. In April, Romania signed an accession treaty with the EU that provides for membership in 2007, with the possibility of a delay by one year if Romania fails to meet criteria. Over the next year and a half, EU member country parliaments will be ratifying the treaty. Stoian said Romania will be "treading carefully" to avoid a potentially lethal rejection by "even one parliament." Stoian confided that Romania had received numerous demarches and approaches from "a wide range of governments," including a joint demarche by the G-4 on July 14. At that meeting, the German Ambassador told MFA State Secretary Baconschi -- the de facto number two at the Ministry -- that Germany would view Romania's position on UNSC reform as a "key indicator of the level of bilateral relations." 4. (U) Amembassy Bucharest's reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest TAPLIN
36882 2005-07-19 14:22:00 05BUCHAREST1606 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 02 BUCHAREST 001606 SIPDIS STATE DEPT FOR EUR/NCE - JANE MESSENGER E.O. 12958: DECL: 07/19/2015 TAGS: PGOV, PREL, KDEM, SOCI, RO, Election, biographic information, flood SUBJECT: NO NEW ELECTIONS -- PRIME MINISTER RETREATS ON RESIGNATION PLANS REF: A. BUCHAREST 1584 B. BUCHAREST 1557 Classified By: POLITICAL SECTION CHIEF ROBERT S. GILCHRIST FOR REASONS 1.4 (B) AND (D) 1. (C) Summary: Prime Minister Calin Popescu-Tariceanu announced July 19 that he would not follow through with his earlier intention to resign and press for snap elections. The decision follows days of vacillation and what appeared to be a firm decision to step down as late as July 13. President Traian Basescu met with Tariceanu earlier in the day and was reportedly irritated with Tariceanu's indecision. Meanwhile, much of the country remains preoccupied with widespread flooding, with the political opposition accusing the government of focusing on political bickering at a time of crisis. While Tariceanu may have preserved his position in the short term, his vacillation has raised new doubts about his abilities to lead. End Summary. 2. (C) PM Tariceanu announced in a hastily called press conference late afternoon July 19 his intention to remain in office, characterizing resignation at this time as "an act of cowardice." He underscored that given the current humanitarian crisis related to widespread flooding, "now is not the time to abandon the people" or to engage in "politicking or party infighting." Tariceanu said that he had initially announced his intention to resign at a time when "we did not have floods." He also claimed that during his recent trip to Brussels he had "received a message" to avoid political instability. 3. (C) The announcement followed a morning of speculation by Embassy contacts that Tariceanu was retreating on his earlier commitment to step down. One contact from Tariceanu's Liberal-Democratic (PNL-PD) Alliance said to PolChief that the decision "finally puts to rest" uncertainty as to whether the country would hold early elections. However, the same contact added, many in the PNL-PD are "now disappointed" that the Alliance may have missed its "only opportunity" to widen its narrow parliamentary majority. Basescu Irritated ------------------ 4. (C) Tariceanu met with President Basescu earlier July 19 for what was initially intended to be his formal resignation. However, according to key presidential advisors, the PM confirmed to Basescu that he had changed his mind about resigning and pressing forward with new elections. This decision was reportedly cemented by Basescu's reluctance to reappoint Tariceanu as interim prime minister. The constitution stipulates that the position of interim PM must be filled by another cabinet member. According to Presidential Advisor Claudiu Saftoiu, Basescu found deviating from this requirement or bending the rules "unacceptable." 5. (C) Basescu was also reportedly "extremely irritated" with Tariceanu's vacillation and tried to convince him to stay the course. Basescu left the meeting "disappointed" and departed Bucharest by helicopter to visit flood damaged areas, with no intention to meet Tariceanu again for the remainder of the day. Tariceanu's Trip to Brussels ---------------------------- 6. (C) Although some contacts opine that Tariceanu returned from his July 18 trip to Brussels with a belief that the EU opposed elections, sources with the most direct understanding of events say that was not the case. EU Commissioner for Enlargement Ollie Rehn publicly expressed concern over Romania's "turbulent political situation which could...delay its planned entry in 2007." However, the EU Ambassador to Romania Jonathan Scheele told Charge that Commissioners in fact gave a mixed message, with Commissioner Franco Frattini congratulating Tariceanu for taking a "courageous decision" to hold new elections and demonstrating Romania's commitment to deep reforms. 7. (C) Scheele indicated that the EU mission here was embarrassed by the whole elections episode because the signals had changed so dramatically over the weekend -- after their briefers had gone into Brussels -- and because in the public eye it appeared to some that Tariceanu had buckled under EU pressure not to hold early elections. Until this week, Scheele said, he had still rated the chances for a 2007 membership date vice 2008 as better than 50-50. After the ongoing display of dysfunction -- he claimed some European investors were reacting nervously to ongoing events -- his own personal odds had probably dropped below the 50-50 threshold. At the same time, Brussels would not make a final judgment in its October report -- that would wait until next spring. The jury was still out, for sure, and EU wanted to keep leverage as long as possible. 8. (C) In Scheele's opinion, Tariceanu was finished politically "one way or the other." Scheele further opined that Tariceanu had recovered from his vacillation a week ago over the resignation only again to retreat on what was to be his final decision to resign. Scheele commented dryly that perhaps Tariceanu should have consulted more widely before digging himself in deeper, including with the EU. Scheele expressed his opinion that the PM was a very decent man, who had been a good interlocutor and with whom one could be frank and expect frank responses. Why the Wavering? ------------------ 9. (C) In addition to supposed EU concerns and worries about whether Basescu would reappoint him as PM, Embassy sources cite several other concerns Tariceanu likely considered in making his final decision. First and foremost, the two smaller parties of his coalition -- the ethnic Hungarian party (UDMR) and the Conservative Party (PC) -- oppose a return to the polls due to concerns they will not meet the minimum threshold for returning to Parliament. Tariceanu would have needed their parliamentary support to force new elections. According to numerous sources, the PNL-PD was having "little success" in picking up sufficient votes from parliamentary independents to compensate for potential lack of PC or UDMR support. In addition, some within the PNL-PD quietly opposed new elections, reluctant to return to the polls after a grueling year of elections in 2004. Recently released opinion polls also showed a majority of the public opposed new elections. 10. (C) Many PNL-PD politicians also worried about the optics of pressing for new elections against the backdrop of widespread flooding, the worse humanitarian disaster since the 1989 return to democracy. The opposition was already using the situation to its political advantage. Most recently, on July 18, PSD Executive President and former PM Adrian Nastase criticized Basescu for refusing to declare a state of emergency, observing that a state of emergency is not limited only to instances in which the security of the state is under threat. He directly criticized PNL-PD politicians for focusing on the possibility of snap elections, insisting that responding to the floods and achieving EU integration are Romania's key priorities. 11. (C) Many Embassy contacts, however, ascribe the wavering to what appears to be Tariceanu's personal style of leadership, which they say increasingly appears to be "indecisive and unfocused." Saftoiu said that many in the political majority now felt "embarrassed." He expressed few doubts that over time these sentiments would be expressed more broadly and even publicly by many in the PNL-PD. 12. (C) Comment: While Tariceanu may have preserved his position in the short term, his vacillation has raised new doubts in the minds of many Romanians about his abilities to lead. His stature within his coalition has undoubtedly declined tremendously over the past 12 days, with prospects for a diminished and demoralized government facing a reenergized opposition PSD. Basescu's clear irritation and disappointment may also herald more overt tension between the president and the prime minister that may ultimately contribute to Tariceanu's premature ouster. This could be magnified by a lukewarm EU country report on Romania scheduled to be released in October. One local analyst opined to PolChief that Tariceanu had an opportunity to "show genuine leadership" through his daring move to call for new elections. He squandered that opportunity, and his ability to revive his previously high approval rating has now been cast into doubt. For the most part these wounds were self-inflicted by Tariceanu and represent a somewhat discouraging commentary on prospects for the PNL-PD to govern effectively and push forward on needed reforms. End Comment. 13. (U) AmEmbassy Bucharest's Reporting telegrams, as well as daily press summaries, are available on the Bucharest SIPRNet website: www.state.sgov.gov/p/eur/bucharest. TAPLIN
36974 2005-07-20 15:24:00 05BUCHAREST1609 Embassy Bucharest UNCLASSIFIED UNCLAS SECTION 01 OF 02 BUCHAREST 001609 SIPDIS STATE FOR EUR/NCE - JMESSENGER, EUR/PPD - WALKER, EB/IFD STATE PASS USTR FOR LERRION TREASURY FOR STUART USDOC FOR 4232/ITA/MAC/EUR/OEERIS/CEEB/BURGESS/KIMBALL STATE PASS USAID/OFDA FOR CHRISTINE GOTTSCHALK GENEVA FOR UN/OCHA, IFRCS USEUCOM FOR ECJ4-ID E.O. 12958: N/A TAGS: EAID, ECON, EIND, EFIN, RO, flood SUBJECT: ROMANIAN FLOOD UPDATE REF: A. BUCHAREST 01031 B. BUCHAREST 01505 C. BUCHAREST 01584 1) SUMMARY: Romania's summer of flood disasters has resulted in 30 deaths, left thousands homeless, caused extensive damage to roads and bridges, interrupted electricity and gas networks, submerged prime agricultural land, and produced approximately $2 billion in damage. The GOR has reacted to the latest round, allocating $85.8 million in assistance to the affected counties. International aid has also begun to roll in, with the European Commission seeking to reprogram several existing funds and bilateral assistance already arriving from other countries. We responded with assistance to the earlier affected areas in the west and south, and are examining ways to respond to the latest disaster in the east. END SUMMARY. ---------------- SUMMER OF FLOODS ---------------- 2) Three separate floods have hit Romania since April 21, 2005, leaving 34 of 42 counties under water at one point or another. The first disaster was declared on April 28, 2005 (reftel A). Rural communities in the affected region in western Romania near the Serbian border, which was visited by the former Charge d'Affaires, ECON and USAID five weeks ago, are still overwhelmed by the flooding. This first emergency produced one death and an estimated $600 million in damage in the seven most severely affected counties: Arad, Bihor, Caras-Severin, Hunedoara, Mehedinti, Suceava and Timis. OFDA ($50,000) and USAID/Romania ($500,000) assistance targeted the hardest hit counties of Timis and Arad. 3) During July 1-4, 2005, heavy rains struck fourteen counties in the southern part of Romania: Arad, Arges, Bistrita-Nasaud, Constanta, Dolj, Giurgiu, Gorj, Hunedoara, Olt, Prahova, Teleorman, Tulcea, Valcea and Vrancea. The floods resulted in six deaths, and damages are still being calculated. Following the chief of mission's disaster declaration on July 5(reftel B), OFDA approved a second $50,000 in humanitarian assistance and relief supplies to Olt County, the hardest hit. 4) Heavy rains in Moldavia in the eastern part of the country from July 9 through the present have generated serious flooding in 32 counties: Alba, Arad, Arges, Bacau, Bihor, Bistrita-Nasaud, Braila, Brasov, Calarasi, Cluj, Constanta, Covasna, Dolj, Galati, Giurgiu, Gorj, Harghati, Hunedoara, Ialomita, Mehedinti, Neamt, Olt, Prahova, Salaj, Sibiu, Suceava, Teleorman, Tulcea, Valcea and Vrancea. To date, 23 people have died and early estimates of damages amount to $1.2 billion. The most recent floods have brought the total number of dead to 30 and total flood damage to around $2 billion. With more rain on the way, flooding will continue to cause humanitarian disasters throughout the summer. Already, 450,000 hectares of agricultural land, representing nearly five percent of the total, have been affected, amounting to damages of 130 to 140 million Euro. ----------------- RAINS UNRELENTING ----------------- 5) The latest statistics on the currently affected counties are: -- Alba County: 42 localities affected, 415 houses damaged or destroyed, 1,528 ha of agricultural land inundated, 343 people evacuated, 1 dead; -- Bacau County: 33 localities affected, 6,134 houses damaged or destroyed, 4,448 ha of agricultural land inundated, 1,360 people evacuated, 3 dead; -- Braila: 3 localities affected and 500 houses damaged or destroyed; -- Galati: 18 localities affected, 1,622 houses damaged or destroyed, 8,642 ha of agricultural land inundated, 5,286 people evacuated, 2 dead; -- Mehedinti: 20 localities affected, 340 houses damaged or destroyed, 2,660 ha of agricultural land inundated; -- Suceava: 12 localities affected, 39 houses damaged or destroyed, 388 ha of agricultural land inundated, 1 person missing. -- Teleorman: 19 localities affected, 820 houses damaged or destroyed, 2 dead; -- Vrancea: 41 localities affected, 1,798 houses damaged or destroyed, 2,395 ha of agricultural land inundated, 1 person missing, 12 deceased. Most of the affected areas are rural with an older and poor population. Forty percent of the rural population is over the age of fifty and thirty-eight percent of the rural population lives below the poverty line on less than $1 a day. The local authorities are not prepared to respond to the flood disaster and have very little equipment necessary to assist the affected population. 6) The scope of the disaster is placing great pressure on the GOR to loosen its IMF-imposed budgetary constraints. The GOR already plans to allocate $85.8 million for all affected counties, with an additional $15 million in a special reserve fund as necessary. Additionally, $336.6 million will be allocated to rebuild infrastructure and public buildings destroyed by flooding. This amount includes a pledge to affected farmers of $57.2 per ha. All families of deceased will receive $1,009 per family in assistance. 7) Other donors are also responding. The UNDP has pledged $130,000 in financial assistance to the affected areas to purchase 14 motorboats. They are expected to offer another $100,000 in the near future. The European Commission has agreed to reprogram some existing funds for the redevelopment of infrastructure affected by the floods. According to the GOR, Hungary, Poland, Switzerland, Israel and Canada have also pledged assistance. Neither has the private sector remained silent, with the American Chamber of Commerce spearheading an assistance drive among its members. -------------------- THE EMBASSY RESPONSE -------------------- 8) USAID/OFDA has already targeted humanitarian assistance and relief supplies to victims of the first two floods in Timis and Olt Counties in the amount of $100,000. In addition USAID Romania is providing $500,000 in micro-lending assistance in Timis and Arad Counties. However, Embassy Bucharest believes the most recent wave of floods in the eastern regions necessitates a new response. As the timing of the latest disaster will make it impossible to re-seed affected cropland, relief requirements may continue into the winter. Romania is likely to experience more flooding over the course of the summer, and Embassy Bucharest is considering ways to re-allocate our resources to respond to the pressing need (septel to follow). TAPLIN
36980 2005-07-20 15:41:00 05BUCHAREST1610 Embassy Bucharest UNCLASSIFIED UNCLAS BUCHAREST 001610 SIPDIS STATE FOR EUR/ACE - DROSENBLUM USAID FOR AID/OFDA - RANDREW, CGOTTSCHALK, AMAHONEY AID/EE/ECA - NSTUDZINSKI, MLOPES RSC/DIR - JKIRKLAND E.O. 12958: N/A TAGS: EAID, ECON, RO, flood, disaster relief SUBJECT: FLOOD RELIEF REQUEST - ROMANIA REF: A. BUCHAREST 1031 B. BUCHAREST 1505 C. BUCHAREST 1584 D. BUCHAREST 1609 1. SUMMARY: Embassy Bucharest recommends an increase in USG humanitarian assistance to respond to continuing flooding in Romania. Heavy rains and floods that began in western Romania in April have been followed by other, more serious flooding in the south and east in recent weeks. Some 70 percent of Romania's territory has now been affected since this spring. With cumulative damage estimates exceeding one billion euros, the Embassy recommends that the USG increase our humanitarian assistance program to demonstrate our support for this important coalition partner. State, USAID/W, OFDA and DOD are asked to approve additional contributions to this effort as outlined below. END SUMMARY. 2. BACKGROUND: Heavy rains in April caused flooding that was concentrated in western Romania around Timisoara and Arad. The Embassy declared a disaster in reftel A to which OFDA quickly responded with $50,000. In addition, Embassy asked existing SEED-funded implementing partners to redirect $500,000 to provide immediate assistance to flood victims. These actions allowed the USG to be the first international donor to respond to the spring floods, receiving praise from both President Basescu and Prime Minister Tariceanu. Unfortunately, the heavy rains next caused havoc in the southeast, setting off additional flooding in the counties of Olt, Dolj and Teleorman. The Embassy declared an emergency (reftel B) and OFDA again responded quickly with $50,000. The latest round of flooding caused heavy damage in the eastern counties of Bacau, Braila and Galati. With damage estimates reaching one billion euros from the latest floods, the Embassy firmly believes the USG must do more to respond. More details on damages and other donor plans are provided in reftel C and today's flood update cable (reftel D). END BACKGROUND. 3. Embassy recommends a cumulative total USG humanitarian response of approximately $3 million as detailed below. 4. OFDA $600,000. Embassy thanks OFDA for the $100,000 provided in response to disaster declarations to date. World Vision, a US non-governmental organization, has been the OFDA-funded partner to date. Former DCM Delare toured Timis County in June to review World Vision's program. World Vision is preparing a proposal to OFDA for an additional $500,000 to expand their work in all flood-affected areas. Embassy and USAID will review this proposal and send OFDA recommendations. However, based upon excellent past performance and close collaboration with Embassy, we expect our recommendation to be positive. 5. SEED funds $2 million. In May, Embassy and SEED-funded implementing organizations redirected $500,000 in existing SEED resources to address immediate needs of flood victims in western Romania. Loans were made for families to reconstruct homes, businesses and farms. Both Pioneer and Monsanto donated seeds for farmers to replant crops. (Note: it is too late in the season now to replant and get a harvest before winter.) Flood victims were trained how to purify drinking water and prevent the spread of disease. Wells were drained and purified. Embassy recommends another $500,000 in current SEED funds be redirected using existing partners. In addition, EUR/ACE is asked to provide post with an additional $1 million in SEED funds to be programmed through existing implementing partners for similar activities in all three major flood areas. TAPLIN
37117 2005-07-22 12:30:00 05BUCHAREST1623 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 06 BUCHAREST 001623 SIPDIS STATE DEPT FOR EUR/NCE - WILLIAM SILKWORTH; JANE MESSENGER E.O. 12958: DECL: 07/23/2015 TAGS: PGOV, PREL, PHUM, PINR, RO, biographic information, political assessment SUBJECT: ROMANIA'S ETHNIC HUNGARIANS: BIOGRAPHICAL INFORMATION ON KEY LEADERS AND POLITICIANS Classified By: POLITICAL SECTION CHIEF ROBERT GILCHRIST FOR REASONS 1.4 B AND D 1. (U) Summary: Romania's ethnic Hungarian party, the Democratic Alliance of Hungarians in Romania, (UDMR) has supported or participated in governing coalitions in Romania since 1996. Post provides below updated biographical information on a dozen key ethnic Hungarians, inside and outside the UDMR, who have an impact on political life and who regularly appear in the press or Embassy reporting. End Summary. 2. (C) Post divides the ethnic Hungarian political class roughly into two groupings: the Moderates, who have taken a gradualist approach toward greater ethnic rights and autonomy for Romania's ethnic Hungarians; and the so-called "Radicals", who seek more rapid reform. Since 1993, the Moderates, led by Bela Marko, have dominated UDMR politics and achieved their goals via cooperative dialogue with incumbent Romanian parties and leaders. The Radicals are divided into many factions, and include many former UDMR members disenchanted with the slow pace of change or lack of opportunities for younger members. Some also seek changes such as nearly complete autonomy for the Szekler land region in Central Transylvania, and a completely segregated education system. Key Radical groups include the National Council of Hungarians in Transylvania (CNMT), the Hungarian Civic Union (UCM), and the National Szeklers' Council (CNS). 3. (U) Post also provides biographic information on two young up-and-coming ethnic Hungarian politicians as well as biographic information on two prominent local leaders in Cluj-Napoca and Maramures County. ------------- THE MODERATES ------------- BELA MARKO: UDMR President and Minister of State --------------------------------------------- --- 4. (SBU) Bela Marko remains the UDMR's most prominent politician. He has led the party as president since 1993 and served in Parliament since 1990. In December 2004, he was tapped by incoming National Liberal Party (PNL) Prime Minister Calin Popescu-Tariceanu to serve as a Minister of State, one of the three senior "Vice Premier" positions in the government. Marko's official responsibilities as Minister of State are for Culture, Education, and European Integration. In real terms, however, his placement in this senior slot was intended to reinforce politically the UDMR's position within the ruling coalition. 5. (C) Known for his seemingly perpetually calm demeanor, Marko has focused the UDMR's efforts on working with the established political parties rather than against them. Indeed, when he was first elected as president of UDMR, he stated in an interview that moderates such as himself have the "same goals" as more radical ethnic Hungarians. The difference, he said, lay only in the means used to pursue those goals. He subsequently led his UDMR on a path toward greater cooperation with other Romanian parties, effectively defining the UDMR's role as a centrist "dealmaker" party tipping coalition majorities to the left or right. Over time, this strategy has paid off, on issues such as the creation of separate Hungarian language schools, the restitution of important Hungarian religious properties, and the use of native languages other than Romanian in courts and other official settings. 6. (C) Marko has also thus far kept more radical factions of the ethnic Hungarian movement in check, although not without strong dissent from vocal opponents such as Reformed Bishop Laszlo Tokes or Zsolt Silagyi (see below). He has refused to enter a dialogue with the Hungarian Civil Union (UCM), a Radical fraction within UDMR. He and those around him have repeatedly expressed concern that by seeking to run its own candidates against the UDMR, the UCM risks dividing the ethnic Hungarians vote. Such a division would make it difficult for any ethnic Hungarian party to meet the five percent threshold necessary for entering Parliament. Marko's grouping in the UDMR has repeatedly taken measures to prevent the UCM from running as a party, such as successfully challenging the validity of a petition the UCM circulated in order to run as a party in June 2004 elections. UDMR contested that some of the over 40,000 signatures on the UCM's petition were not valid. The constitutional court ruled in UDMR's favor. 7. (C) Personal relations between Marko and Tariceanu are good, according to Embassy contacts. This is despite the fact that -- as is the case with many in UDMR -- Marko is known to prefer working with PSD-led governments. Prior to the November/December 2004 national elections, the UDMR under Marko's leadership had negotiated a planned coalition with the PSD. However, after PNL-PD presidential candidate Traian Basescu's surprise victory in the fall 2004 elections, and the latter's appointment of Tariceanu as PM, UDMR insiders tell us Marko saw no other option than to enter new negotiations with the PNL-PD. This fit squarely with his philosophy that the party can achieve success best through incremental change and through cooperating with both political blocs. 8. (U) Prior to assuming the leadership of the UDMR, Marko was a writer, poet, and the Editor-in-Chief of a Hungarian language literary magazine. He was born on September 8, 1951 in Targul Secuiesc, Romania. He is married with three children. He speaks Hungarian, French and Romanian, and has basic knowledge of English and Russian. (An interpreter is required for English.) LASZLO BORBELY: --------------- Minister Delegate for Public Administration ------------------------------------------- 9. (C) Lazlo Borbely is one of the three powerful, behind-the-scenes moderates within UDMR, commonly called "the Neptun Three." Together with Gyorgy Frunda (see below), and Gyorgy Tokay, he held a secret meeting in the seaside town of Neptun in 1993 with the PDSR party, the current day Social Democratic Party (PSD). At that meeting, he negotiated the UDMR's first cooperate dialogue with a mainstream Romanian political party. Leaders of the Radical movements (see below) frequently point to this initial cooperation with the PSD as a form of betrayal. 10. (C) Borbely is known for his affinity with PSD leaders, and for his strong organizational and negotiating skills. He was the key ethnic Hungarian architect of the UDMR-PSD cooperation protocols, signed annually between 2000 and 2004 while PSD was in power. During this period, the UDMR supported in Parliament the minority PSD government in parliament in exchange for incremental concessions provided in the protocols. Borbely was outspokenly disappointed with the surprise victory of Basescu's presidential election in November 2004. He did not hesitate to inform Embassy staff the day following Basescu's victory that UDMR would continue its cooperation with the PSD party, although just a few weeks later the UDMR would join the coalition led by the Liberal-Democratic (PNL-PD) Alliance. 11. (SBU) Borbely has been a Chamber of Deputies member of Mures County since 1990. In addition to being a Cabinet member, Borbely also serves as Executive Chairman of UDMR, the second most position within the party. 12. (U) Borbely was born on March 26, 1954, in Targu Mures. He graduated from the Institute of Economic Sciences in Timisoara followed by post-graduate studies at the Academy of Economic Studies in Bucharest. He is married with one daughter. He speaks English, Romanian, and Hungarian. GYORGY FRUNDA: Senator, Moderate UDMR Leader -------------------------------------------- 13. (SBU) Many would consider Gyorgy Frunda "the most European" among UDMR leaders. He was a prominent member of Romania's parliamentary delegation to the Council of Europe (COE) and has strong ties with EU Parliamentarians. He is charismatic and many UDMR members characterize him as the best speaker within the party. His primary professed goal has been to "ensure Western European rights for ethnic Hungarians, and other minorities." He is currently the chair of the Senate Human Rights Commission. His background as a human rights lawyer has also aided the UDMR on a number of occasions. 14. (SBU) Frunda was a member of the parliamentary commission that drafted Romania,s Constitution in 1992. One of the original "Neptun Three" who first negotiated with the mainstream PSD, he supports Bela Marko's "policy of small steps." Frunda ran as the UDMR presidential candidate in the 1996 and 2000 elections. Within the UDMR, he chairs the Council of Representatives, a so-called "mini-Parliament" for setting policy within the movement. 15. (U) Frunda has been an MP since 1990, first as a Deputy, and from 1992 onwards, as a Senator representing Mures county. He was born on July 22, 1951 in Targu Mures. He graduated from the University of Babes-Bolyai, Faculty of Law and also attended post-graduate studies at the Salzburg Seminar. He is married with two daughters. He speaks fluent English and French, and has basic knowledge of German. ATTILA VERESTOY: Senator, Leader ) UDMR Senate Group --------------------------------------------- ------- 16. (SBU) Verestoy represents the rare UDMR politician who became a multi-millionaire businessman. Weekly Romanian economic magazine, Capital, recently named him one of Romania's 300 richest people, estimating his fortune to be between USD 38 to 40 million, ranking him as the 60th wealthiest Romanian. He has a PhD in chemistry and was a researcher by profession during the Communist period. He earned his wealth in the timber and food industries after the fall of Communism. Since 2003, his wife and son have largely managed his businesses. 17. (SBU) Verestoy reputedly had close business ties in the early 1990s with representatives of the anti-Hungarian party, National Union of Romanians (PUNR). He is also known to have close ties with PSD leaders, having been one of the architects of the signed protocols of cooperation with PSD between 2000 and 2004. Thanks to his economic influence, Verestoy is one of the most powerful members within UDMR. He is the UDMR's faction leader within the Senate group. 18. (U) Verestoy is the Senator representing Harghita County. He was born on March 1, 1954 in Odorheiul Secuiesc. He attended the Polytechnic School of Bucharest in the Faculty of Chemistry. He is married with one child and speaks English, French, Hungarian, and Romanian. IULIU WINKLER: Minister Delegate for Commerce --------------------------------------------- 19. (C) Appointed Minister Delegate for Commerce in December 2004, Winkler has been active in ethnic Hungarian politics for more than a decade. A thoughtful, soft-spoken interlocutor, Winkler is well-liked within and without the UDMR. In private conversations with Embassy staff, he has articulated pro-US, pro-business points of view that reflect considerable insight and reflection. 20. (SBU) An electronic engineer by training, Winkler has risen through the ranks of the UDMR since he first joined in 1991. From 2000 to 2001, he was Vice-president of the UDMR-Hunedoara Organization and in 2001 he became its President, re-elected in 2003. As an MP from 2000-2004, he was a member of the Chamber of Deputies Budget and Finance Commission and of the EU Integration Commission. 21. (SBU) Winkler speaks fluent English, as well as Hungarian, Romanian, and German. He holds two bachelors degrees and is a 2003 graduate of the Bucharest-based National Defense College. He has also attended several postgraduate courses in Romania and abroad. He took business courses in Germany, Hungary and France and studied civic and political action at a US-affiliated school in Timisoara. PETER ECKSTEIN-KOVACS: ---------------------- Senator, Human Rights Advocate ------------------------------ 22. (SBU) A lawyer with expertise in human rights and local public administration, Eckstein-Kovacs remains a staunch advocate for minority rights in the Human Rights and Legal Affairs Commissions of the Senate. During a one-year period in 1999, he was also the Minister for Ethnic Minorities. In this role, he repeatedly criticized and opposed the actions of the former extreme nationalist mayor of Cluj. 23. (SBU) Eckstein-Kovacs is a founding member and President of the Liberal Club Union within UDMR, which advocates economic liberalization and aligns itself more closely with the National Liberal Party (PNL) than with other mainstream parties. He is also a founding member of several local human rights NGOs and a strong advocate for the restitution of Hungarian churches and other religious properties seized under communism. 24. (SBU) During the campaign for 2004 local elections, Eckstein-Kovacs outwardly supported a DA alliance candidate rather than a PSD one. This was despite the fact that the UDMR supported the PSD government at the time. He was also outspoken in expressing dissatisfaction with the UDMR-PSD cooperation protocols. He voiced strong support for PNL-PD presidential candidate Traian Basescu during the December 12, 2004 presidential election run-offs, although the UDMR had already arranged an electoral pact with the PSD. With his free market economic views, his outlook contrasts greatly with the larger number of UDMR politicians who espouse social democratic views. 25. (U) Eckstein-Kovacs has represented Cluj county in the Senate since 1996. He was born on July 5, 1956, in Cluj-Napoca to parents of both Jewish and Hungarian descent. He graduated from the University of Babes-Bolyai, Faculty of Law. He attended post-graduate studies at the Academy of Economic Studies in Bucharest. He is married with one daughter. He speaks English, German, French, Hungarian, and Romanian. ------------ THE RADICALS ------------ LASLO TOKES: Protestant Reformed Bishop --------------------------------------- 26. (SBU) Tokes is commonly known in Romania and internationally as the priest who sparked Romania's revolution. After Tokes criticized publicly the Ceaucescu regime in December 1989, hundreds of Romanians surrounded his house to protect him from threatened internal deportation by the former secret police. This was the first large-scale public protest against Ceaucescu's regime and produced the first bloodshed. In return for his important role at the outset of the so-called "Revolution," the UDMR awarded Tokes the title of Honorary Chairman. In the initial post-Revolution years, Tokes was an important face for the UDMR internationally and among the most influential members within the movement 27. (C) However, his radical agenda of pressing the UDMR to demand full autonomy for ethnic Hungarians has isolated him over time, particularly as other UDMR leaders took on a moderate approach. At the same time, his prestige has diminished domestically and internationally, as accusations surfaced of embezzlement and collaboration with the former internal intelligence service. Between 1996 and 2000, when UDMR was part of the then center-right ruling coalition, Tokes continuously pressured the UDMR to withdraw from the government. 28. (SBU) In 2003, the UDMR revoked Tokes' position as Honorary Chairman. He left the party and has since become one of the fiercest critics of UDMR leadership and policies. During the 2004 electoral campaign for mayor of Cluj, for example, he asserted that he would prefer "an extremist Romanian" to a "a treacherous Hungarian," casting his support behind extreme nationalist Gheorge Funar over the moderate UDMR candidate. 29. (C) Tokes is presently the Chairman of the National Council of Magyars from Transylvania (CNMT), an ethnic-Hungarian faction. UDMR leaders have repeatedly expressed that Tokes' opinions do not remotely represent the party's majority views. Many lament that it is unfortunate that Tokes, who once was the symbol of Romania's "Revolution," is now viewed more as a marginalized radical. 30. (U) Bishop Tokes was born on April 1, 1952, in Cluj. He attended the Theological Institute of Cluj. He is married with two children. He speaks English, Hungarian, and Romanian. ZSOLT SZILAGYI, Former UDMR Deputy ---------------------------------- 31. (SBU) Zsolt Szilagyi became the youngest Deputy in the Chamber of Deputies when he entered Parliament in 1990 at the age of 21. He was known as the protege of Bela Marko early in his career. Their ideologies diverged over the years, however, and by 2004 Szilagyi had become the most vocal Radical. In 2004, together with 17 other members, he walked out of the UDMR. His attempts to create a rival ethnic Hungarian party -- the Hungarian Civil Union (UCM) -- have been unsuccessful to date. But he has vowed to continue trying to form an electoral alternative to the UDMR. His efforts have gained the support of Hungary's Opposition Party, FIDEZS. 32. (SBU) No longer in Parliament, Szilagyi now resides in Oradea. He is a strong supporter for both Bishop Tokes and the latter's push for autonomy in the Szekler Land region. In addition to his leadership of the UCM, he is also Vice Chairman of the Transylvanian Hungarian National Council, led by Tokes. 33. (SBU) Szilagyi was born on July 29, 1968 in Oradea. He graduated from the Polytechnic School of Timisoara in Construction Management. He is married and speaks English, German, Hungarian, and Romanian. ----------------- TWO UP-AND-COMERS ----------------- ATTILA MARKO: State Secretary for Inter-Ethnic --------------------------------------------- - Relations --------- 34. (SBU) Human-rights expert Attila Marko is an up-and-coming UDMR politician currently serving in the politically appointed position of State Secretary in the Department of Inter-ethnic Relations. He began his political career as the founding member of the city of Brasov's UDMR branch. With a solid background in legal issues, he soon became human rights advisor to UDMR president Bela Marko. 35. (SBU) In 1997, Attila Marko began his career with the department which he presently heads. He witnessed de facto the development of the department, then named the Department for the Protection of National Minorities. He has served in various positions in the Department, becoming State Secretary in January 2005. Besides being an expert on human rights, Marko is also a specialist on property restitution issues. He has been Vice President of the commission in charge of the restitution of religious property ) formed by the so-called Law 501/2002 - since 2002. Like his contemporary, Anton Niculescu, Marko is more of a technocrat and not involved in party infighting. 36. (U) Marko was born on September 27, 1968, in Brasov. He attended the Law School of Budapest. He is married and speaks English, Hungarian, and Romanian. ANTON NICULESCU, State Secretary -------------------------------- 37. (SBU) Anton Niculescu was appointed State Secretary at the Ministry of Foreign Affairs in spring 2004. From 2003 until his appointment, Niculescu was UDMR's Executive Vice President, heading the party's EU Integration Department. Before 2000, he worked for the rightist coalition government, first as Deputy Secretary General and then as State Secretary for European Integration. In between the governmental positions, he also worked as a Political Specialist for the U.S. Embassy. 38. (SBU) A young and dynamic politician, Niculescu has been involved in a broad range of activities since his student days. In the early 1990s, he was a journalist at a Hungarian-language publication and a contributor to Radio-Free Europe. He later became political counselor to the Freidrich Naumann Foundation, Foreign Affairs advisor to the UDMR President Bela Marko, and Parliamentary Expert in the Senate. During the electoral campaign in 1996, he was the spokesperson for UDMR presidential candidate Gyorgy Frunda. 39. (SBU) In more recent years, Niculescu has specialized in EU integration issues, working as Director of the Open Society Foundation and advisor to other EU-funded programs. He is known to dislike squabbling within his party, and known to Embassy Officers to be even more moderate than the moderates of the UDMR. He may possibly follow in Frunda's footsteps and pursue a career focused on EU integration. Although Niculescu lacks Frunda's legal background, he is highly knowledgeable in EU issues and well connected to the EU Parliament. 40. (U) Niculescu was born on May 6, 1964, in Targu Mures. He graduated from the Polytechnic School of Bucharest, Faculty of Chemistry. He also has a Masters in International Relations. He is divorced. He speaks English, German, French, Hungarian, and Romanian. --------------------------- Two Prominent Local Leaders --------------------------- GYONGYIKE BONDI: PREFECT, MARAMURES COUNTY ------------------------------------------ 41. (SBU) Gyongyike Bondi represents the rare female ethnic Hungarian who has risen to a position of significance within the UDMR. A Communist Party member during the Ceausescu period, Bondi was a founding member of UDMR and held her first important position within UDMR as the party's Secretary in 1998. Between 1996 and 2004, she represented Maramures County in the Chamber of Deputies for two terms. In 2004, she left Parliament and was appointed to Prefect of Maramures County, holding also the title of Executive President within UDMR's branch in Maramures. Bondi's focus as Prefect has been on the economic, industrial, and tourism development of her county. During a visit by an Embassy Political Officer, Bondi expressed tremendous interest in the flow of U.S. direct investments and the possibility of tourism development targeted at foreigners in her county of high potential. 42. (C) At present, no UDMR female members are present in the Parliament or in State Secretary positions. Indeed, several ethnic-Hungarian politicians have lamented to Post "the apparent lack of equal opportunity" within the UDMR leadership. Bondi currently represents the exception to the rule to this barrier. 43. (U) Bondi was born on October 2, 1952, in Cluj. She graduated from Babes-Bolyai University, Faculty of Economics. She is married with two children and she speaks English, French, Romanian, and Hungarian. JANOS BOROS: VICE-MAYOR, CITY OF CLUJ-NAPOCA -------------------------------------------- 44. (SBU) Boros has been Vice-Mayor of Cluj-Napoca since 2000 and is known to have a close working relationship with influential PD Mayor, Emil Boc. In his second term as Vice-Mayor, he is closely involved with the Mayor in city renewal projects such as the development of new housing for young families, the restoration of the city center, and the creation of more parking spaces within the city limits. Separately, he also oversees the provision of basic infrastructure for the whole city. Boros has held positions of increasing responsibility in the Cluj County branch of the UDMR. Prior to being elected Vice Mayor, he was Secretary of the City Council and City Councilman of the UDMR from 1995 to 2000. 45. (C) During several meetings with an Embassy Political Officer, Boros repeatedly indicated his strong support of U.S. investments in Cluj-Napoca. He recently partnered with an American investor in the opening of "Justin's," an upscale caf-bar named after his American partner. 46. (U) Boros was born on January 24, 1948 in Cluj-Napoca. He received a B.A. in Engineering from the Technical University of Cluj. He also studied four years of theology at the Roman-Catholic Institute of Theology in Alba-Iulia. He is married with one daughter; his wife is currently a physics professor in Budapest. He speaks some English, Romanian, and Hungarian. 47. (U) Amembassy Bucharest,s reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest. TAPLIN
37243 2005-07-25 13:20:00 05BUCHAREST1636 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS SECTION 01 OF 02 BUCHAREST 001636 SIPDIS SENSITIVE DEPT FOR EUR/NCE - JANE MESSENGER E.O. 12958: N/A TAGS: PGOV, PREL, EAID, ECON, EIND, IZ, RO, military cooperation SUBJECT: OUTLINE OF ROMANIAN SUPPORT FOR THE "INSTITUTIONAL RECONSTRUCTION" OF IRAQ SENSITIVE BUT UNCLASSIFIED. PLEASE HANDLE ACCORDINGLY 1. (SBU) During a July 18 discussion with PolOff regarding Romanian constitutional support for Iraq (Septel), MFA Director for the Middle East, Asia and Africa, Andreea Pastarnac, told PolOff that the GOR currently envisages a number of projects aimed at the "institutional reconstruction" of Iraq. Shortly after that conversation, she emailed to Poloff a document titled "Romanian Contribution for the Reconstruction Process in Iraq." The document, reproduced below, outlines proposed contributions through programs coordinated by the MOD (representing, at USD 626,000, the lion's share of proposed assistance) as well as smaller programs administered by the Ministries of Public Finance; Labor, Social Solidarity and Family; Economy and Trade; Foreign Affairs; and, Justice. 2. (SBU) Begin Text (edited slightly for spelling, grammar and consistency): ROMANIAN CONTRIBUTION FOR THE RECONSTRUCTION PROCESS IN IRAQ Domain: Institutional Reconstruction Institution: Ministry of Public Finances (total value 46,296 USD) Contribution Proposals: Training stages on following domains 1. Presentation of the functioning and organizing of the Ministry of Public Finances. - 6 persons, 5 days, September, 2005 - Costs of the programs: 6,722 USD 2. Presentation of the budgetary mechanism in Romania - legal framework, elaboration, fundamentation [sic] and implementation of the state budget. - 6 persons, 5 days, October, 2005 - Costs of the programs: 6,722 USD 3. Making up and implementing of the Governmental fiscal strategy in order to assure the financial resources for functioning of the public institutions and the economy framework in concordance with the demanding of the market economy. - 6 persons, 5 days, November, 2005 - Costs of the programs: 6,722 USD 4. Making up and implementing of the legislation in the direct taxes domain. - 6 persons, 10 days, October, 2005 - Costs of the programs: 10,204 USD 5. Negotiating and implementing of the Conventions to avoid double taxation and the aspects regarding changes of information - 6 persons, 10 days, November, 2005 - cost program: 10,204 USD 6. Direct Taxes - 6 persons, 5 days, December 2005 - Costs of the programs: 6,722 USD Institution: Ministry of Labor, Social Solidarity and Family (total value 15,000 USD) Contributions Proposals: 1. Training stage in pensions domain and other social insurances rights - 4 persons, 2 days - Costs: 5,000 USD 2. Training stage in the labor area - 4 persons, 2 days - Costs: 5,000 USD 3. Training stage in social assistance area - 4 persons, 2 days - Costs: 5,000 USD Institution: Ministry of Economy and Trade (total value 13,000 USD) Five scholarships for academic training, academic year 2005- 2006 Institution: Ministry of Foreign Affairs (estimated cost: 60,000 USD) Contributions: Training and improvement for Iraqi diplomats. Due to the Iraqi Ministry of Foreign Affairs request, Romanian side sends its approval for signing an understanding between the Romanian Diplomatic Academy and Iraqi corresponding institution. The terms of this understanding will be agreed through the negotiation. Institution: Ministry of Justice (total value: 4,000 USD) Contributions: 1. Assistance - 2-3 Iraqi experts from the Ministry of Justice for 4-5 days, November, 2005 2. Signing of the Cooperation Protocol with the Iraqi corresponding institution which could have: legislation exchange, set up of the Romanian-Iraqi Commission (human rights, combating and preventing terrorism and organized criminality), assistance, cooperation in reintegration social of the offenders, penitentiary management etc. Institution: Ministry of National Defense (estimated value: 626,000 USD) Contributions: 1. Participation to constitution of the evaluation and training teams for the forces and crises commandments in Iraq - Participation of the Romanian personal allocated to have high ranking in the NATO commandments (40 persons in 2005 and 50 persons in 2006) 2. Participation with trainers to the NATO Training Mission in Iraq (NTM-I) - 3 trainers 3. Courses in Romania for Iraqi military personal, accepted by NATO Training and Co-ordination Group (NTECG) a. "Reconnaissance trainers" (4 persons and a translator) between June 08-18, 2005 b. "Training courses in armored vehicles systems" (8 military personal and 2 translators), between May 30, 2005- June 17, 2005. c. "Staff officers - brigade level" (21 officers), between June 20, 2005-July 20, 2005. 4. Proposals for training courses: a. Research domain - 4 weeks in Iraq - 80 USD/day/ Romanian trainer - 2 weeks in Iraq - 80 USD/day/ Romanian trainer. b. NBC protection - Courses for 18 Iraqi 2 weeks; Total costs: 6,300 USD c. Training staff in logistic domain: - 4 course 3 month x 2000 USD/person x 10 persons = 80.000 USD; - 1 course 2 month: 1.250 USD/person x 6 persons = 7.500 USD ; - 1 course 4 years: 10.000 USD/person/year x 10 students = 400.000 USD; - 3 course 12 weeks x 2.400 USD/person x 12 persons = 28.800 USD; - 2 courses 8 weeks x 1.200 USD/person x 10 persons = 12.000 USD; - 3 courses 2 weeks x 400 UDS/person x 15 persons = 6.000 USD; d. Special Training for techniques categories - 1 course 4 weeks: 19 seats x 1.300 USD/person = 24.700 USD; - 1 course programming WEB : 12 seats x 1.800 USD/person = 21.600 USD; - 1 course LINUX: 12 seats x 1.300 USD/person = 15.600 USD; - 1 course operators for numerical communication center: 19 seats x 1.300 USD/person = 24.700 USD. END TEXT 3. (SBU) Comment: The envisaged Romanian contributions to institutional development in Iraq - constituting diverse efforts by a total of six different ministries - reflect the GOR's genuine commitment to playing a constructive role in the development of a secure, prosperous and democratic Iraq. These contributions are especially significant at the present time given that the GOR's resources (limited at the best of times) are stretched thin as it copes with the financial, logistic and humanitarian impact of widespread, devastating flooding that has destroyed infrastructure and rendered thousands of Romanians temporarily homeless. Romania's support for "institutional reconstruction," together with President Basescu's pledge to maintain troops in Iraq "as long as necessary," underscore the depth of Romania's commitment to staying the course in Iraq. End Comment. 4. (U) Amembassy Bucharest's reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest . TAPLIN
37244 2005-07-25 13:21:00 05BUCHAREST1638 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS BUCHAREST 001638 SIPDIS SENSITIVE DEPT FOR EUR/NCE - JANE MESSENGER E.O. 12958: N/A TAGS: PGOV, PREL, EAID, ECON, EIND, IZ, RO, Demarche SUBJECT: ROMANIAN RESPONSE TO DEMARCHE REGARDING SUPPORT FOR CONSTITUTIONAL ASSISTANCE TO IRAQ REF: SECSTATE 124857 SENSITIVE BUT UNCLASSIFIED. PLEASE HANDLE ACCORDINGLY (SBU) Poloff discussed coordination of constitutional assistance to Iraq July 15 with MFA Director for the Middle East, Asia and Africa, Andreea Pastarnac, providing her a nonpaper that stressed the importance of the international community's support for Iraq's constitutional process (Ref). During a July 18 follow-up conversation, Pastarnac told PolOff that Romania remains committed to tangibly assisting the development of democratic institutions in Iraq. She noted that Romania had, indeed, committed to providing support for constitutional reform, although there are no programs currently underway. She added, however, that Romania plans "institutional reconstruction" support for the Iraqi justice sector, as well as other areas (Septel). She also stated that the GOR would welcome further suggestions from the U.S. in regard to possible support it could provide to further of Iraq's constitutional process. TAPLIN
37252 2005-07-25 13:57:00 05BUCHAREST1641 Embassy Bucharest UNCLASSIFIED UNCLAS SECTION 01 OF 02 BUCHAREST 001641 SIPDIS STATE DEPT FOR EUR/NCE - WILLIAM SILKWORTH, JANE MESSENGER E.O. 12958: N/A TAGS: PGOV, PHUM, SOCI, KDEM, ECON, RO, biographic information, poll, political assessment SUBJECT: LATEST ROMANIAN POLLS - PRESIDENT BASESCU STILL POPULAR, BUT NUMBERS DROPPING REF: A. BUCHAREST 01378, B. BUCHAREST 01084 SENSITIVE BUT UNCLASSIFIED - PLEASE HANDLE ACCORDINGLY 1. (SBU) Summary. Opinion polls conducted in July indicated a slight decline in support for both President Basescu and his center-right Liberal-Democratic (PNL-PD) Alliance. Support for Prime Minister Calin Popescu-Tariceanu dropped more dramatically, coinciding with his recent vacillation over whether to resign and force new elections. At the same time, few Romanians want new elections, with roughly 60 percent opposing an early vote. Minister of Culture and Religion Mona Musca remains the most popular cabinet member, with the ministers of Justice and Foreign Affairs close behind. End Summary. 2. (U) Two recent opinion polls carried out by respected pollsters provide a snapshot of evolving political attitudes, coinciding with recent controversy surrounding the PM's vacillation whether to resign and force snap elections. The independent Center for Urban Center for Urban and Regional Studies (CURS) conducted an omnibus poll between July 10 and 17 among 1050 respondents over the age of 18, with a margin of error of 3 percent. The opposition center-left Social Democratic Party-leaning Marketing and Public Opinion Poll Institute (IMAS) conducted its poll between July 7 and 15 among 1252 respondents, with a margin of error of 3 percent. CURS: A MAJORITY OPPOSES NEW ELECTIONS --------------------------------------- 3. (U) The CURS poll, focusing on a range of political issues, produced the following results: - Do you think early elections would be good or bad for Romania? - Good 29 percent - Bad 59 - Don't know, no response 12 - If early elections were to be held this Sunday, which party would you choose? (Of those respondents who expressed an opinion.) - PNL-PD 45 percent - PSD 30 - PRM (Great Romanian Party) 10 - UDMR (Ethnic Hungarian Party) 6 - PC (Conservative Party, former PUR) 3 - Others 6 - How satisfied are you with the following Cabinet Ministers? (Note: The titles/portfolios of each minister were not included in the question. End Note.) (Very) Satisfied Not Satisfied Don't Know - Mona Musca 56 percent 29 15 Religion/Culture - Monica Macovei 39 35 26 Justice - Mihai Ungureanu 37 23 40 External Affairs - Gheorghe Flutur 29 33 38 Agriculture - Marko Bella 25 47 28 Minister of State - Codruts Seres 25 44 21 Minister of State - Ionut Popescu 24 39 37 Finance - Teodor Atansiu 23 29 48 Defense - Vasile Blaga 23 26 51 Interior and Administration - George Copos 19 32 49 Minister of State - Mircea Cinteza 15 49 36 Health - Sulfina Barbu 15 42 43 Environment - Mircea Miclea 14 31 55 Education - Gheorghe Dobre 14 29 57 Transport - Gheorghe Barbu 11 27 62 Labor - Gheorghe Seculici 10 24 66 Minister of State - Zsolt Nagy 10 20 70 Communications and IT - Mihai Voicu 9 18 73 Minister Delegate of Coordination - Bogdan Olteanu 8 20 72 Minister Delegate of Parliament Relations - Ene Dinga 6 18 76 EU Integration - Cristian David 5 19 76 Minister Delegate International Finances 4. (SBU) In a separate question, 57 percent of respondents believed that Presidential Counselor and former PNL leader Teodor Stolojan would be the best Prime Minister, as opposed to 20 percent who favored incumbent Calin Popescu-Tariceanu. IMAS: PNL-PD SUPPORT DECLINING ------------------------------ 5. (U) The IMAS poll provides an indication of relative trends during the first seven months of PNL-PD government. Results are compared to responses to the same question asked in January, March, June, and July 2005. Most striking is the significant drop in support for PM Tariceanu, with similar erosion for Basescu. - Which party would you vote for if elections were to be held this Sunday? Jan 2005 March June July PNL-PD 66 percent 54 55 47 PSD 19 28 23 32 PRM 7 9 10 12 UDMR 5 5 6 5 Others 3 5 5 4 - How much confidence do you have in the following public figures? Jan 2005 March June July Traian Basescu 73 percent 58 58 50 Mircea Geoana 44 40 41 38 C. Tariceanu 65 48 42 34 Adrian Nastase 27 31 26 30 Emil Boc 39 27 26 27 C. Vadim Tudor 21 19 17 22 Marko Bela 15 11 15 11 Cozmin Gusa - - 11 10 Dan Voiculescu 9 8 6 7 6. (SBU) Comment: Both polls were completed before PM Tariceanu's July 19 announcement that he would not resign. Given the general public disapproval of his vacillation before that announcement and his initial lack of focus on flood relief, his standing would likely be lower in polling conducted today. Interestingly, the two most popular cabinet members were both women, perhaps positively indicating a hairline crack in Romania's historic "glass ceiling" that has impeded women political figures from moving forward in the past. End Comment. 7. (U) Amembassy Bucharest's reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest. TAPLIN
37290 2005-07-26 07:00:00 05BUCHAREST1644 Embassy Bucharest SECRET S E C R E T SECTION 01 OF 04 BUCHAREST 001644 SIPDIS STATE DEPARTMENT FOR EUR/NCE WSILKWORTH E.O. 12958: DECL: 07/25/2015 TAGS: PGOV, PREL, MOPS, MARR, EFIN, OVIP, RO, IZ, military cooperation, flood SUBJECT: ROMANIA REAFFIRMS STRONG CONTINUED SUPPORT FOR CONTINUED TROOP PRESENCE IN IRAQ DESPITE FINANCIAL CONSTRAINTS REF: A. SECSTATE 131524 B. BUCHAREST 1609 C. BAGHDAD 3010 Classified By: POLITICAL SECTION CHIEF ROBERT S. GILCHRIST FOR REASONS 1.4 A, B AND D 1. (S) Summary. President Traian Basescu told an interagency team led by Ambassador Richard Jones, Senior Advisor to the Secretary and Coordinator for Iraq Policy, July 21 that SIPDIS Romania is "unconditionally committed" to a continued troop presence in Iraq. Basescu highlighted the armed forces' financial burdens in light of recent massive domestic flood relief efforts and stated that additional USG financial support for defense reform might permit Romania to increase its contribution in Iraq. Though not a member of the Paris Club, Basescu confirmed that Romania has agreed to Paris Club terms and will forgive 80 percent of Iraq's debts, which total USD 2.6 billion. President Basescu also raised Romania's request to interview security detainee and Iraqi-American citizen Mohammed Munaf, who is a criminal suspect in Romania. Defense Minister Atanasiu reaffirmed the GOR's commitment in Iraq but provided insights into cost saving measures under consideration by the MOD, including possible reductions of overseas deployments in 2006. Senior MFA interlocutors also underscored the GOR's support for a continued GOR presence in Iraq, stressing the importance of a renewed UNSC mandate as well as an Iraqi government request for a Multinational Force (MNF) presence. End Summary. President Basescu: Unconditional Commitment to Iraq --------------------------------------------- ------ 2. (C) Ambassador Jones initiated the meeting with President Basescu, accompanied by State Counselor for National Security General Constantin Degeratu and State Counselor for International Relations Anca Ilinoiu, by expressing gratitude for Romania's steadfast commitment in Iraq. Ambassador Jones singled out Romania's contribution to UN force protection in Basra as particularly significant, given that an abiding international civilian presence in Iraq, such as the UN mission, remains a high priority and constitutes a bellwether for other international organizations of improved security conditions. 3. (C) Basescu stated that the GOR faces deep budgetary problems in the wake of recent severe flooding across Romania (Ref B). He characterized the flood-affected areas as covering a "small surface but having a huge impact," with bridges, railroads and villages destroyed and thousands rendered temporarily homeless. He noted that the GOR has incurred mammoth costs operating an "air bridge" between Bucharest and flood ravaged zones. Naturally, he continued, Romania's armed forces have played a key role in providing relief and organizing cleanup and repair. So far, the Romanian military has spent about USD 60 million and anticipates spending USD 100 million on flood related activities. Flood relief costs have placed tremendous pressures on the armed forces' budget. In addition to limits imposed by fiscal constraints, Basescu said that despite the absence of "signals from the population" opposing Romania's overseas deployments, some journalists could begin to ask "Why not use our troops here?" given the urgency of the flood crisis. 4. (C) Basescu explained that the armed forces face another "major problem" - delays in planned MOD modernization and reform this year and in 2004. "I am really disappointed that reform is not going fast enough, there are still too many conscripts," the President observed. (Note: The MOD's goal is an all-professional armed forces by 2007. End Note.) Basescu asked if it would be possible for the USG to increase support for defense reform. 5. (C) Basescu immediately added, however, "we will not put any condition on participation in Iraq and Afghanistan if support cannot be increased." He promised that Romania will "remain an ally until the end of the mission, we won't play politically." Romania will not put a "question mark" around its participation and "will not in any event diminish participation in Afghanistan and Iraq." Nonetheless, he continued, financial support could permit the GOR to consider increasing its contribution in Iraq. Basescu stated that, in any event, troop withdrawal by the end of 2006 is "optimistic" and "we are mentally prepared for the extension of our presence in Iraq." 6. (C) Ambassador Jones expressed appreciation for Basescu's realistic assessment of the need for a continued Multinational Force (MNF) presence beyond 2006. Both the Ambassador and team member Brigadier General Mark Kimmitt, US Army CENTCOM, discussed ongoing efforts to increase the quality of Iraqi security forces, such as embedding MNF teams in Iraqi units, with the ultimate goal of enabling the Iraqis to take over the fight against terrorists and insurgents. BG Kimmitt underscored that on-the-ground conditions rather than an artificial calendar must drive MNF force contributions. Basescu Proposes Possible Gendarme Training ------------------------------------------- 7. (C) Basescu stated he had spoken with the Romanian Interior Minister Vasile Blaga regarding possible additional contributions Romania could make to strengthen Iraqi institutions. He said that Romania "could send trainers to train the gendarmerie in Iraq." BG Kimmitt described the enduring need for a well-trained Iraqi gendarmerie and outlined possible training modalities. Basescu affirmed that although Romania is a small country with "limited resources" it will remain a "solid partner" and contribute in areas where it can, such as gendarme training. Debt Reduction Pledge --------------------- 8. (C) President Basescu stated that following a recent Paris Club agreement Romania has decided to reduce its Iraq debt (which totals USD 2.6 billion) by 80 percent. He noted that Romania is not a member of the Paris Club but voluntarily complied with its debt reduction Recommendation. Ambassador Jones expressed appreciation for Romania's decision to substantially forgive its Iraqi debt, observing that among the three prongs of international support for Iraq - military, political and economic - economic assistance has been the weakest prong. Ambassador Jones noted that Romania is a good example for other creditors, especially non-Paris Club members and nations like Romania that face financial constraints. Romanian Access to Security Detainee Munaf ------------------------------------------ 9. (S) Basescu raised the subject of Iraqi-American national Mohammed Munaf, now held as a security internee by Coalition Forces in Iraq under the authority of UNSCR 1546, asserting that Romanian "prosecutors need to have a discussion with him" because of his suspected involvement in the kidnapping of three Romanian journalists earlier this year. He stated that the GOR continues to seek the approval of American authorities to meet with Munaf for a "four hour discussion." He continued that the GOR believes Munaf can provide key information about the ongoing prosecution of alleged kidnapping mastermind, Syrian-Romanian businessman Omar Hayssam, whom Basescu asserted is suspected of providing "financial resources to terrorists." Basescu promised that the GOR would "respect all procedures" during the interview and would conduct the interview in any location designated by the USG, given that he is a security detainee. He added that, pursuant to Romanian law, his lawyer would "probably like to attend" the interview. In response to a direct query from Ambassador Jones, Basescu said that the interview did not need to take place in the Romanian Embassy as a previous diplomatic note had indicated. Ambassador Jones promised to help facilitate appropriate GOR access to Munaf. Regarding Munaf's final disposition, Ambassador Jones encouraged Romania to engage in a close dialogue with Iraq. Basescu replied that Romania already has an "extremely close" dialogue with Iraq on Munaf and other issues. Committed - But Cautious - Defense Ministry ------------------------------------------- 10. (C) In a separate meeting at the MOD, Defense Minister Teodor Atanasiu, accompanied by State Secretary for Euro-Atlantic Integration and Defense Policy Ion Mircea Plangu and CHOD General Eugen Badalan, began his comments by noting that the GOR has "the commitment to remain until the Iraqi armed forces can take over." Atanasiu asserted that costs related to the recent flooding compel Romania to consider either reducing its overseas deployments or seeking "cofinancing." Absent "substantial financing," Atanasiu continued, Romania "should consider reduction of its troops overseas by 300" in 2006. (Note: According to MOD statistics, about 1700 Romanian troops are currently deployed overseas, with more than 850 in Iraq and 540 in Afghanistan. End Note.) 11. (C) Atanasiu iterated that "we will maintain our forces in Iraq until the Iraqi forces can take over" but Romania must consider various options for its 2006 overseas deployments including "proportional reductions" or "equal reductions." In the latter alternative, Romania would withdraw a total of three companies (i.e. about one hundred troops in each company) from the Western Balkans, Afghanistan and Iraq. Atanasiu added that the GOR is currently weighing whether to withdraw its frigate from participation in Operation Active Endeavor in Mediterranean, with a decision likely this month or in August. Atanasiu and CHOD Badalan outlined several possible cost saving measures, including overseas deployment reductions, "delay in equipment modernization," and cancellation of exercises, before concluding that the MOD will consider a "mixture of options" for cost saving. Badalan interjected that the bottom line is that the MOD must seek a solution to save the 60 million dollars it has already spent on flood relief efforts. Atanasiu explained that the GOR also faces "budgetary concerns" related to anticipated EU accession in 2007, which limit excessive deficits. BG Kimmitt encouraged the MOD and MFA to consult closely with the U.S. before making any changes in Romania's force presence overseas. He emphasized that maintaining the force protection unit for the UN at Basra is and should remain a top priority. 12. (C) The CHOD added that the MOD needs to justify its activities in a post flood environment, which means telling the Romanian people either that money earmarked for overseas deployments comes from external sources (read: donors) or the MOD is reducing its overseas commitments. The Charge noted that the USG is exploring ways to assist with flood relief. The Centrality of a UN Mandate ------------------------------ 13. (SBU) Following a working lunch with MFA officials, MFA Director General for Global Affairs Stelian Stoian chaired an interagency working group that discussed the GOR's continued commitment to a troop presence in Iraq. Key GOR participants were MOD Director General Claudiu Degeratu, External Intelligence Service (SIE) Director General Silviu Predoiu, Internal Intelligence Service (SRI) Colonel Mihai Munteanu, MFA NATO Division Director Mirela Maghiar, and MFA Middle East Division Deputy Director Laura Mircea. 14. (C) MFA State Secretary for Global Affairs Teodor Baconschi, the de facto number two Foreign Ministry official, joined the interagency meeting in progress and reaffirmed the GOR's commitment to a continued presence in Iraq as expressed earlier in the day by President Basescu's "message." He underscored that the GOR supports the "extension of the mandate" authorizing the presence of the MNF, as provided by United Nations Security Council Resolution 1546. MFA DG Stoian stressed that a new UN mandate should be "comprehensive, so that the MNF can defend itself and the people, covering all possibilities." Stoian also asked whether the Iraqi government "is ready to request officially that the UN authorize a military presence in Iraq post-elections?" Ambassador Jones observed that Iraq recognizes that a continued MNF presence there is essential and the USG will engage in "close consultations" with the Iraqis. (Note: UNSC 1546, Articles 9 and 10, provide that the "presence of the MNF is at the request of the incoming Interim Government of Iraq and that the MNF will have the authority "to take all necessary measures to contribute to the maintenance of security and stability in Iraq." Senior GOR leaders strongly seek a continued UN mandate and explicit Iraqi government request for an MNF presence. Additionally, they recognize the importance of robust ROE for MNF participants. End Note.) Engaging Reluctant Europeans ---------------------------- 15. (C) Baconschi asked about the possible impact on USG relations with "new" European states that have "announced their intention to withdraw," opining that Romania and Poland are the United States' "strongest" Eastern European allies in Iraq. BG Kimmitt noted that the coalition remains solid; with the exception of Spain, no other nation in the 62-member coalition has formally announced that it is concluding its activities in Iraq, although some states have reduced or modified their contribution or already carried out their pledged contribution. He continued that the leadership of Romania and Poland has been significant in maintaining the coalition's solidarity. Ambassador Jones pointed out that after nearly two and one half years the coalition remains alive and well. 16. (C) DG Stoian stressed that the GOR, an EU aspirant, now participates in the EU working group addressing the development of an EU common foreign policy. The GOR is working to "generate support" from EU countries for engagement in Iraq and "EU reluctance is not as strong as it was one year ago." Stoian cited the possible engagement of gendarme units in training Iraqi forces as one example of how the U.S. "can count on Romania to try to get more Europeans involved." Baconschi underscored these remarks by promising that the GOR will remain "proactive in the EU and seek a new climate among member states." UN Force Protection ------------------- 17. (C) During the interagency meeting, Ambassador Jones highlighted the importance of Romania's contributions to UN force protection, noting that a successful UN presence encourages the presence of other international organization. DG Stoian praised UN "experience and expertise" in preparing for Iraqi elections and observed that the UN presence boosts the electoral process' credibility. Stoian also solicited the team's views about NATO's role in Iraq. BG Kimmitt responded that NATO provides "value added" in Iraq and that the MNF and NATO complement each other's activities. 18. (C) Comment. The GOR has demonstrated steady progress on its defense modernization efforts notwithstanding Basescu's expressed concerns about the slow pace of reforms. According to a close presidential advisor, Basescu raised the topic in order to suggest a possible source of USG funding support that would, ultimately, allow the GOR to continue, possibly even increase, its impressive troop commitment in Iraq. The Romanians' worries about funding sources in the wake of this summer's flooding are well founded. Over the past several weeks, Romania has faced its most serious humanitarian crisis since the fall of communism in 1989. Humanitarian concerns aside, the financial impact has been devastating, not just in the MOD but throughout the GOR, which is cash strapped at the best of times. Against this backdrop, overseas deployments could "backfire" against the GOR as ordinary Romanians question the presence of Romanian troops overseas when their manpower, know how and equipment are needed to clean up and reconstruct in the wake of the flooding. Under these circumstances, Romania's unequivocal promise to maintain troops in Iraq, its pledge to forgive the lion's share of its Iraq debt and its willingness to help train Iraqi gendarmes even if additional funding support is not available, demonstrate the depth of its engagement to building democracy and fighting terrorism in Iraq. End Comment. 19. (U) Amembassy Bucharest's reporting telegrams are available on the Bucharest SIPRNet website: www.state.sgov.gov/p/eur/bucharest 20. (U) Ambassador Jones cleared this cable. TAPLIN
25672 2005-01-20 15:46:00 05BUCHAREST175 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS SECTION 01 OF 02 BUCHAREST 000175 SIPDIS SENSITIVE DEPT FOR EUR/NCE - WILLIAM SILKWORTH DEPT PLEASE PASS TO USAID E.O. 12958: N/A TAGS: PGOV, PREL, KDEM, RO SUBJECT: PRESIDENT BASESCU OUTLINES FOREIGN POLICY OBJECTIVES REF: BUCHAREST 153 SENSITIVE BUT UNCLASSIFIED. PLEASE PROTECT ACCORDINGLY. 1. (SBU) Summary. President Basescu's first major foreign policy address, delivered to Romania's diplomatic corps on January 18, set benchmarks for an active foreign policy agenda during his first term. Tackling corruption, continuing progress toward EU accession and strengthening Romania's strategic partnership with the U.S. and secondarily, the U.K. were singled out as top priorities. Basescu devoted special attention to Romania's role in bolstering stability and security in the Black Sea region and the Western Balkans. He also pledged to maintain Romania's military commitments to NATO operations and in Iraq. Strengthening Romania's unique relationship with neighboring Moldova, while developing more cooperative relations with Ukraine and a more "pragmatic" relationship with Russia also were highlighted as top priorities for the new administration. End Summary. European Union Accession 2007: Full Steam Ahead --------------------------------------------- -- 2. (SBU) President Basescu delivered his first major foreign policy address to Bucharest's diplomatic corps on January 18, accompanied by his foreign policy advisors, Prime Minister Calin Popescu Tariceanu, and former Liberal-Democratic (PNL-PD) alliance presidential candidate Teodor Stolojan. The well-polished and characteristically forthright address touched on key themes from the PNL-PD alliance electoral campaign, while also signaling Basescu's energetic approach to Romanian foreign policy. Characterizing 2005 as a "decisive" year, Basescu reiterated his support for Romania's anticipated 2007 accession to the European Union, while pledging to tackle the country's rampant corruption as a matter of national security. He also voiced his desire for a "strong Romania," complete with economic and social reform and modernization, "inside a strong Europe." 3. (SBU) Basescu highlighted Romania's future position along the EU's easternmost border, calling for Romania to serve as a "pillar of stability and security in and between the Black Sea region and the Western Balkans." According to Basescu, Romania will seek to attract Western investment in regional infrastructure, energy, communications and trade projects. Characterizing recent political developments in Georgia and Ukraine as positive, Basescu pledged to build new regional "bridges of cooperation" in political, economic, and security spheres, while also working to "anchor" Moldova, Serbia and Montenegro, Ukraine and Georgia to Europe. Romanian-Moldovan Relations Receive Top Billing --------------------------------------------- -- 4. (SBU) Basescu bluntly stated that Moldova's "European future" was a "moral obligation" of Romania. As such, he outlined the Moldovan-Romanian relationship as a top priority for his presidential mandate. He pledged Romania's support for Moldova's path to EU integration and greater social and economic stability. Basescu directly addressed Romania's stake in resolving the Transnistria conflict, urging observance of the OSCE Istanbul commitments on Transnistria and calling for a more active EU and U.S. role in resolving the conflict. Taking a more nationalistic tone, he also alluded to the need to protect Romanian language, culture and traditions within Moldova while emphasizing the need to bring stability to Moldova, a critical area lying at both Romania's eastern border and the future border of the EU. While urging the development of more cooperative relations with Ukraine, Basescu called for developing a more pragmatic relationship, especially in the economic field, with Russia. Transatlantic Ties: NATO, U.S. and U.K. ---------------------------------------- 5. (SBU) A hallmark of his presidential campaign, Basescu again singled out the strategic U.S.-Romanian relationship as a benchmark of Romania's foreign policy. Basescu urged an intense dialogue with the U.S. and praised U.S. support for Romania's political, economic, military and administrative reform. Basescu defined Romania's ongoing commitment to the global war on terror, full participation in NATO, adherence to "common democratic values", pursuit of enhanced economic relations, and future cooperation on the "Greater Black Sea projects" as key pillars of the U.S.-Romanian strategic partnership. 6. (SBU) Basescu described Romania's partnership with European states as the cornerstone of the country's successful European integration. Within that rubric, Basescu highlighted a desire to further develop a privileged Romanian-U.K. relationship, evidenced by his statement that he will pay his first official visit to the United Kingdom by the end of January. Minorities and Human Rights --------------------------- 7. (SBU) Basescu took a step back from the foreign policy focus of his address to voice support for minority rights within Romania, while dismissing the possibility of "autonomy on ethnic grounds," a proposal often raised by some in Romania's more radical ethnic Hungarian community. In sharp contrast to the occasional anti-Semitic statements and actions of former President Iliescu, Basescu flatly stated that he would "be intransigent with any kind of extremist, xenophobic or ant-Semitic manifestation." He further pledged to support the work of the International Commission on the Holocaust in Romania (Wiesel Commission) and to advance Holocaust education initiatives. Employment and educational opportunities for the Roma community also were outlined along with his support for "genuine public-private partnerships" in developing Romania's foreign policy, especially regarding Romania's European integration. Ongoing Commitment to Iraq -------------------------- 8. (SBU) Basescu pledged to fulfill Romania's commitments alongside coalition partners in Iraq and voiced the GOR's support for Iraqi reconstruction and rehabilitation projects. With Romania's position as a non-permanent member on the UN Security Council, Basescu characterized Romania as a "responsible and predictable partner" while calling for a "new consensus on global security." 9. (SBU) Comment: Basescu's first major foreign policy address outlined a vigorous agenda, especially in regional affairs, including Moldova and Ukraine. His continued emphasis on strong relations with the U.S. and U.K. tracks with what he has said repeatedly during and after his presidential campaign. Romanians are now watching to see how Basescu matches his broad vision on foreign policy and other issues with concrete steps, as the government prepares to appoint officials to the roughly sixty senior sub-ministerial positions key in implementing the new government's plan. End Comment. 10. (U) AmEmbassy Bucharest's reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest. DELARE
25702 2005-01-21 12:22:00 05BUCHAREST189 Embassy Bucharest UNCLASSIFIED UNCLAS SECTION 01 OF 02 BUCHAREST 000189 SIPDIS STATE FOR EUR/NCE - WSILKWORTH, EB/IFD STATE PASS USTR - LISA ERRION TREASURY FOR STUART USDOC FOR 4232/ITA/MAC/EUR/OEERIS/CEEB/BURGESS/KIMBALL STATE PASS USAID E.O. 12958: N/A TAGS: ECON, ETRD, EIND, EFIN, PGOV, RO SUBJECT: THE GLASS HALF EMPTY: INTERNATIONAL MONETARY FUND PERSPECTIVES ON THE NEW ROMANIAN GOVERNMENT Ref: A) 04 BUCHAREST 03446, B) BUCHAREST 00130 THIS CABLE IS SENSITIVE BUT UNCLASSIFIED. NOT FOR INTERNET DISTRIBUTION. 1. (SBU) Summary: The International Monetary Fund's (IMF) representative in Romania is pessimistic about the country's short-term future prospects for macroeconomic stability and progress on economic reforms. The new government, in his view, is inexperienced and will lose valuable time understanding the levers of power, thus perhaps squandering some of the positive gains from last year. Post sees this negative assessment as bleak, although it agrees that the new government faces macroeconomic challenges and a challenging introduction to power. End Summary. 2. (SBU) Econoffs met on January 12 with Graeme Justice, IMF's Resident Representative, regarding his perspectives on the new Romanian government's (GOR) economic policies and prospects. Justice began by emphasizing the inexperience of the new cabinet and expressed doubt whether they have the ability and understanding to make necessary reforms. The previous administration required a six-month learning curve before substantive discussions were possible according to Justice, who noted that a longer time period will likely be required for the new team. All ministers and most state secretaries have been eliminated and the loss of SIPDIS institutional knowledge will be a burden this year. He noted that mistakes have already been made during the administrations first twenty days, including firings of critical ministerial staff members and retention of weak players. He fears that the GOR's honeymoon period will soon end and scrutiny on its actions by the press will be relentless. LATEST FISCAL MOVES COMPOUND WOES FROM INHERITED BILLS --------------------------------------------- --------- 3. (SBU) Justice's main concerns centered on the convergence of election-driven salary and pension increases that the previous government pushed through last year and the new government's financial promises, including the new flat tax of 16 percent (Ref B). 4. (SBU) Regarding the flat tax, Justice discussed the recent case of Slovakia, which implemented a similar flat tax rate as an incentive for tax evaders to join the legitimate economy. Justice claimed that the Slovak flat tax, structurally similar to the Romanian one, resulted in lower government revenues and little shift of the gray economy to the normal, tax-paying economy. Justice agreed that enforcement of tax collection is key for the Romanian government to meet its promises, but did not seem optimistic about this prospect. 5. (SBU) Justice predicted that the government will, in the months ahead, have to begin making tough, unpopular decisions, including repealing the increases of government salaries, as the government realizes that its budget is unrealistic and the deficit widens. Justice returned to the subject of Romania's unworkable budget several times, emphasizing that expenditures will far exceed revenue. 6. (U) Justice also expressed concern about capital account liberalization. He worries that once the government lifts restrictions on foreigners who wish to invest in Romanian lei (ROL) bank accounts, an influx of speculative investment will occur (Ref A). When asked why Romanians feel pressure to liberalize the account at this time, Justice stated that account liberalization is viewed as an indication of a developed economy, and Romania wants to portray itself as up to Western economic standards. 7. (SBU) Justice mentioned that the International Monetary Fund plans to send a group to Bucharest at the end of January and that they intend to meet with the administration. Although the group intends to give Basescu encouragement as he faces difficult economic restructuring ahead, Justice is already pondering how to break the news in February that the budget is in bad shape. COMMENT: THE GLASS IS HALF FULL ------------------------------- 8. (SBU) Post agrees with the IMF representative's observations about the GOR's need to balance bold fiscal policy with continued attention to macroeconomic stability. The new GOR government will, indeed, soon face hard decisions about laying off workers in the loss-making mining sector as well as finding sources of funds to offset the (presumably temporary) dip in government revenue due to the flat tax's introduction. 9. (SBU) Post, however, assesses that Romania's economy continues to be in a growth mode and revenues to the state coffers should also increase, helping to make the flat tax revenue dip less severe. Aggressive action against prominent tax cheats has already occurred and additional steps in this direction in coming months should encourage more companies and individuals to pay their lawful share of taxes. Finally, the local currency's (leu) increasing strength on the foreign exchange markets at this time will make imports cheaper and, at least in the short term, help alleviate the danger of increased inflation. DELARE
25719 2005-01-21 15:41:00 05BUCHAREST199 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 02 BUCHAREST 000199 SIPDIS STATE DEPT FOR EUR/NCE - WILLIAM SILKWORTH STATE ALSO FOR INR/B E.O. 12958: DECL: 01/21/2015 TAGS: PGOV, PREL, KDEM, SOCI, ECON, PINR, RO SUBJECT: FORMER ROMANIAN RULING PARTY FACES LEADERSHIP STRUGGLE, CONFRONTS INTERNAL DIVISIONS REF: 04 BUCHAREST 3478 Classified By: POLITICAL SECTION CHIEF ROBERT GILCHRIST FOR REASONS 1.4 B AND D 1. (C) Summary. The formerly ruling center-left Social Democratic Party (PSD) is roiled by internal divisions and faces a leadership struggle, with former President Ion Iliescu and ex-PM Adrian Nastase the principle contenders to lead the party. The PSD recently reestablished its "Permanent Delegation," most of whose members are long-standing Iliescu allies. After four years in power, the PSD faces an identity crisis as it attempts to redefine itself as an opposition party. End Summary. Jockeying for Position in Former Ruling Party --------------------------------------------- 2. (C) The PSD first tried to take stock of itself after it suffered surprising losses in major urban centers in June municipal elections. Arguably, the attempt to reinvent itself as a more vigorous, younger, less arrogant and less corrupt party failed. The voters' verdict in parliamentary elections in November gave a slight majority of Senate and chamber seats to non-PSD parties, and with Bucharest mayor Basescu soundly defeating ex-PM Nastase in the race for the Presidency. The knives have been out ever since and the number of explanations for the PSD's loss of power are numerous. According to PSD insiders, the party will likely hold a congress in April to elect the party's leaders and restore a semblance of unity. PSD members paint a picture of a party divided into several factions, with the principal contenders for the party's leadership being former President Ion Iliescu and ex-PM (and losing 2004 presidential candidate) Adrian Nastase. 3. (C) Iliescu has publicly declared that he offers the party "experience and credibility." Rather less believably he also claimed to represent "new thinking," since his presidency over the past four years supposedly kept him above the party fray. Iliescu's supporters include many influential, long-standing PSD local politicians - referred to derisively by ordinary Romanians and the independent media as the PSD's "barons." A senior PSD politician told PolOff, however, that many rank and file PSD members are furious at Iliescu for his decision just before the expiration of his mandate to pardon notorious miners' leader Miron Cozma (Ref). Another commonly heard criticism of Iliescu, both within and without the PSD, is that he represents the "old face" of PSD, attracting mainly older and rural voters and not appealing to younger, urban citizens. Iliescu recently publicly called efforts to reform the party "crude" and "primitive," while offering no obvious alternate vision. 4. (C) The loose faction clustering around Chamber of Deputies President and ex-PM Nastase probably has less influence within the party than the pro-Iliescu group; some PSD members opine that his loss to Basescu in the presidential contest disqualifies him from leading the party. Many Embassy interlocutors have also noted that Nastase lacks the personal appeal that Iliescu has with voters in the rural portion of the country -- one contact asserted that Iliescu has an image as "Romania's collective grandpa," while Nastase's alleged possession of multiple homes and luxury cars, together with habitually prickly reactions to criticisms, contributed to his image as "aloof and corrupt." Although Nastase has attempted to keep his hat in the political ring by launching a steady stream of criticism against President Traian Basescu and PM Calin Popescu-Tariceanu, recent press reports have mocked Nastase for reportedly maintaining a staff of 46 "assistants," noting that such a large contingent is more suitable for a PM than the President of the Chamber of Deputies. Incoming PM Tariceanu also complained that Nastase and his staff prior to their departure had basically cleaned out much of the prime ministerial palace of furniture and equipment, even removing telephones and canceling service in many offices. PSD Reform Movement? -------------------- 5. (C) Meanwhile, a January 10 gathering of fourteen party leaders from Transylvania, coordinated by ex-Interior Minister Ioan Rus, called for internal reforms and democratization of decision-making processes within the PSD. Party activists have told us that many PSD leaders, especially those from Transylvania, are dissatisfied with the choice of either Iliescu or Nastase to lead the party and would welcome a "reform" leader. Names bruited include Rus, former FM Mircea Geoana, and ex-Justice Minister Cristian Diaconescu. One PSD insider described Rus, despite his popularity among PSD members in Transylvania, as lacking the political will to mount a leadership struggle against Iliescu and Nastase. 6. (C) Although both Diaconescu and Geoana are personally popular within the party, especially among younger members, neither man has the backing of a powerful local machine. Nor do they have noticeable support from those in the party with access to resources or influence outside of Bucharest. Additionally, the party's senior leaders will insist on an open ballot leadership vote at the April party congress, in lieu of a secret ballot, and few rank and file members will dare to publicly challenge the barons' "recommendations." Finally, PSD sources tell us that Iliescu and Nastase are discussing a possible compromise under which Iliescu would be elected PSD "Founder and President" and Nastase would be elected PSD "President." Leadership questions aside, local PSD activists are impatient with the PSD's "top-down" management style. One bone of contention among the rank and file was the party's "primaries" last year, derided as a sham process in which senior leaders selected the PSD's parliamentary candidates, despite public proclamations that the process would be transparent and democratic. This dissatisfaction could spill over into the party congress. Return of the Barons (They Never Really Left) --------------------------------------------- 7. (C) According to reliable reports, PSD's senior leaders have decided to reestablish the party's so-called "Permanent Delegation," essentially a steering committee of the party's most senior leaders. In an attempt to whitewash the party's image following the PSD's surprisingly poor results in June 2004 local elections, party elders replaced the Permanent Delegation with a "Coordinating Bureau" that excluded some of the PSD's most notorious local leaders (although they continued to play key behind the scene roles). The new Permanent Bureau comprises 23 prominent PSD members. Most are long-standing Iliescu allies (read: barons) and many cut their political teeth during the communist era. The Permanent Delegation's members include reputedly corrupt figures, such as former Transport Minister Miron Mitrea and former Tourism Minister Dan Matei Agathon. Other key Iliescu allies among the 17 member Bureau include respected former Defense Minister Ioan Mircea Pascu and former Trade and Economy Minister Dan Ioan Popescu. The minority of non-Iliescu supporters includes ex-FM Geoana, ex-Interior Minister Rus, and ex-FM Mihai Tanasescu. Most analysts conclude that the re-establishment of the Permanent Delegation and its majority make up of Iliescu hands amounts to a tactical victory for Iliescu in his ongoing struggle with Nastase for control of the party. 8. (C) Comment. The former ruling PSD faces an identity crisis as it comes to grips with the unpleasant reality that after four years of governing it must now decide who will lead it in opposition. Many rank and file PSD members have expressed hope that the party would reinvent itself as a more modern social democratic movement. However, the persistence at the core of the party of local barons and former senior communist officials, including in the reestablished permanent delegation, gives little hope for real reform in the short term. One Basescu advisor told PolChief that the PSD is banking on eventual failure by the Basescu and Tariceanu-run government and in a few years hopes to return to power, as in 2000, as the voters' "only option." The advisor said Basescu is "absolutely committed" to preventing this scenario. Over time, the PSD has attracted modernizers or technocrats such as Geoana, Rus, and Diaconescu. However, despite popular support, thus far such members have failed to capture control of critical levers of power within the party. Therefore, true reform will likely be delayed. End Comment. 9. (U) Amembassy Bucharest,s reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest Delare DELARE
25788 2005-01-24 14:34:00 05BUCHAREST212 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 03 BUCHAREST 000212 SIPDIS STATE FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: DECL: 01/24/2015 TAGS: MARR, MASS, PGOV, PREL, RS, RO, NATO SUBJECT: ROMANIA PROPOSES "INTEGRATED APPROACH" FOR BLACK SEA REGION SECURITY COOPERATION REF: A. A) 04 STATE 253728 B. B) 04 BUCHAREST 2700 C. C) 04 BUCHAREST 1832 Classified By: POLITICAL SECTION CHIEF ROBERT GILCHRIST FOR REASONS 1.4 A, B, AND D 1. (C) Summary. Foreign Ministry and Defense Ministry officials met with Embassy officers January 19 to discuss the GOR's proposals for an "integrated approach for security cooperation in the Black Sea region." Romania envisages an expanded NATO role in the region and mirrors its proposed strategy for maritime security on the "four pillar" approach under discussion at USEUCOM. At the same time, the GOR counts on the U.S. to convince Turkey to "go along" with Romania's ideas. Romania will host a meeting with Turkey and Bulgaria January 24 to discuss possible joint strategies for Black Sea security. The GOR would also like a meeting between GOR and US officials in Washington, possibly in March, to discuss Black Sea issues. End Summary. Seeking an "Integrated Approach" to Black Sea Security --------------------------------------------- --------- 2. (C) MFA Director General of the Strategic Policies Directorate Cristian Istrate, MFA NATO Division Director Mirela Maghiar and two MOD representatives met with PolChief, Naval Attache and PolMilOff January 19 to discuss the GOR's views on enhancing security in the Black Sea region. Istrate began the discussion by remarking that President Traian Basescu emphasized in a January 18 speech (septel) the importance of the Black Sea region. Istrate stressed that the GOR seeks to help develop an "integrated approach to security in the Black Sea region" which will encompass "as much Western involvement as possible...with NATO and the EU taking a more prominent profile in the region." "Three Dimensions" ------------------ 3. (C) Istrate delivered an outline titled "A Basis for an Integrated Approach for Security Cooperation in the Black Sea Region. Building Synergy Among Various Initiatives," which the Romanians classified as confidential. Using the outline as a template for discussion, Istrate underscored that the GOR seeks U.S. input and feedback on how best to develop an integrated security approach in the Black Sea region. The GOR proposes an "integrated approach" that focuses on three "dimensions" in the following sequence: the "political dimension," the "operational dimension," and "security sector reform." Istrate said that the paper had been approved "at the highest levels" in the new Romanian government and would also be shared by Romanian ambassadors with U.S. interlocutors in Washington and at USNATO. Istrate emphasized that the paper represented "only the security" angle of the new government's emerging approach towards the Black Sea, which would "also address political and economic angles." Post will transmit the full text of the paper to Department, DOD, and USNATO septel. "Four Pillars" and "Three Allies" --------------------------------- 4. (C) The operational dimension - the area to which the outline devotes the most attention - comprises four focal points that mirror USEUCOM's discussions of a possible "four pillar" approach to the Black Sea: "maritime security," "land and air security," "border defense," and "civil emergency planning." Within the rubric of "maritime security," the GOR proposes the establishment of a "Black Sea Task Force" comprising "three allies," Turkey, Bulgaria and Romania. Istrate stated that Turkey and Bulgaria had been invited to participate in a meeting in Bucharest January 14 to discuss possible task force cooperation in connection with NATO command and information exchange structures. Turkey was unable to participate in the meeting because severe fog January 14 prevented the Turks from arriving in Bucharest; the meeting has been rescheduled for January 24. 5. (C) Addressing expected Turkish reticence to participate fully in the proposed Black Sea Task Force, Istrate stated that U.S. "encouragement" of Turkey could overcome their objections, opining that the "Turks do not want to be perceived as opposing NATO's role in the Black Sea." Istrate continued that the Turk's "cautious approach" reflects their desire to not "upset" Russia or "create stress with France and Germany." 6. (C) In addition to creation of a Black Sea Task Force to increase maritime security, the GOR's outline also proposes a heightened role for NATO in the region, including "information exchange and command support for the Black Sea Task Force" and joint patrolling in the Black Sea. The outline envisages a relatively limited role for BLACKSEAFOR "in preventing terrorism and WMD trafficking through the scope of the current agreement." 7. (C) Under the "pillar" of land and air security, the GOR proposes the establishment of a "Joint Interagency Task Force" (JIATF) modeled on the USG's JIATF. The JIATF would integrate law enforcement, customs and defense assets from participating states. The GOR's proposed border defense "pillar" envisages using the "Border Defense Initiative" (the "Black Sea Border Security Initiative" (BSBSI)) proposed by the GOR (Ref C). The "pillar" dealing with civil emergency planning proposes establishment of "common procedures and mechanisms of civil emergency planning." Political and Security Sector Dimensions ---------------------------------------- 8. (C) The GOR characterizes the "political dimension" as an area in which NATO can and should play a central role. Romania's specific proposals include "enhancing political debates in NATO on the security situation in the region" and establishment of a "Black Sea caucus" to build NATO awareness of and interest in the Black Sea region. Under the rubric of "security sector reform," the GOR proposes "full use" of Partnership for Peace (PfP) instruments. The GOR's suggested strategies include "providing assistance" to Black Sea partners that have launched or plan to launch Individual NATO Partnership Action Plans and encouraging Moldova to develop an Individual Partnership Action Plan. According to Istrate, the GOR would like to see Moldova move closer to NATO. Romania Will "Resist Temptation" to Expand BLACKSEAFOR --------------------------------------------- --------- 9. (C) When pressed for details about the relation, if not potential overlap, between Romania's proposed "integrated approach" and BLACKSEAFOR, Istrate acknowledged that both BLACKSEAFOR and Romania's Black Sea Border Security Initiative (BSBSI) could play a role in "preventing terrorism and WMD." In the GOR's view, BLACKSEAFOR must "stay within its limits" although an "anti-terrorism aspect, such as information exchange," detecting and monitoring could be appropriate. He stressed, however, that the BSBSI would, by definition, address law enforcement issues whereas BLACKSEAFOR has a different principle focus e.g. search and rescue, humanitarian operations. Istrate stated that Turkey seeks the extension of BLACKSEAFOR to include "constabulary" functions, notably "detection and monitoring" aimed at fighting terrorism and the establishment of a BLACKSEAFOR "permanent command center." Istrate opined that significantly extending BLACKSEAFOR's role would be "against the letter and spirit of BLACKSEAFOR." Pausing for a moment, Istrate insisted that Romania "will resist the temptation to turn BLACKSEAFOR into a regional military alliance," which he characterized as NATO's role. 10. (C) When asked for details about the status of the BSBSI, Istrate conceded that Romania has made little progress toward organizing the project and moving beyond the political stage. Istrate stated that the GOR's goal is to "continue to operationalize" the BSBI, but acknowledged that little has been done in this regard since the November 5 meeting at the State Department among Romanian Ambassador Ducaru, State and DOD officials in which USG interlocutors urged the GOR to effectively organize and staff the BSBSI (Ref C). A March Meeting in Washington? ------------------------------ 11. (C) Istrate emphasized that the GOR understands the importance of the cooperation of NATO allies in the Black Sea region, but underscored again that Romania would like the U.S. to encourage Turkey to cooperate fully in developing a joint NATO strategy. He stated that the GOR would welcome continuing dialogue with the U.S. on Black Sea issues and promised to provide Embassy a readout of the January 24 Turkey-Bulgaria-Romania meeting in Bucharest. Istrate suggested a meeting between and USG and GOR interlocutors at the office director or DAS level in Washington, possibly in mid-March, to discuss development of a joint strategy in the Black Sea region. PolChief promised to stay in touch with Istrate regarding possible scheduling of such a meeting. 12. (C) Comment. President Basescu's recent public discussion of the centrality of the Black Sea region to Romania's foreign policy priorities (Septel) may reflect increased high-level attention to the region. Nonetheless, the GOR has consistently sought U.S. guidance on Black Sea issues and told us that it favors an expansion of NATO's role in the region (Refs A and B). We anticipate that Romania will continue to consult closely with us regarding its proposals for the region. Indeed, its proposed implementation of a "four pillar" approach reflects discussion points raised by Embassy officers during a meeting with MFA officials last fall. The GOR recognizes that its proposals will have little weight with Turkey (or other littoral states) without U.S. backing. Although we welcome the GOR's enthusiasm for enhancing security in the Black Sea, we note that Romania has apparently yet to follow through on its proposed BSBSI, despite strong urging last fall from USG interlocutors to move the BSBSI from the conceptual to operational phase (Ref C). End Comment. 13. (U) Amembassy Bucharest's reporting telegrams are available on the Bucharest SIPRNet website: www.state.sgov.gov/p/eur/bucharest CROUC H
25866 2005-01-25 14:54:00 05BUCHAREST228 Embassy Bucharest UNCLASSIFIED UNCLAS BUCHAREST 000228 SIPDIS DEPT FOR EUR/NCE - WSILKWORTH/TERATH DEPT FOR NP/NE - RDELABARRE DEPT PASS DOE DOE FOR SOLICH/KOHEN/RIVERS UNVIE FOR IAEA - L.HILLIARD E.O. 12958: N/A TAGS: ENRG, KNNP, TRGY, KSCA, RO, nuclear SUBJECT: EURATOM TO ROMANIA TRANSFER OF NUCLEAR MATERIAL CONFIRMED REF: STATE 011536 SENSITIVE BUT UNCLASSIFIED. PLEASE PROTECT ACCORDINGLY. 1. EconOff transmitted the Department's inquiry regarding EURATOM's shipment to Romania of nuclear material to Dr. Lucian Biro, President of the National Commission for Nuclear Activity Control (CNCAN) and Dr. Serban Valeca, President of Romanian Nuclear Agency. 2. On January 24, Dr. Biro sent a letter informing the Embassy that the Nuclear Research Institute in Pitesti, Romania received the nuclear material imported from France, with specifications as cited in Reftel. Dr. Biro confirmed that the nuclear material transferred was made subject to the terms and conditions of the bilateral U.S.-Romanian Agreement for Peaceful Nuclear Cooperation. Crouch
25870 2005-01-25 15:26:00 05BUCHAREST229 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 03 BUCHAREST 000229 SIPDIS STATE FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958: DECL: 01/25/2015 TAGS: MARR, MASS, PGOV, PREL, RS, RO, NATO SUBJECT: TEXT OF ROMANIA'S "INTEGRATED APPROACH" PROPOSAL FOR BLACK SEA REGION SECURITY COOPERATION REF: BUCHAREST 212 Classified By: POLITICAL SECTION CHIEF ROBERT GILCHRIST FOR REASONS 1.4 A, B AND D 1. (C) The Foreign Ministry delivered to Embassy officers January 19 an outline classified by the Romanians as "confidential" and titled "A Basis for an Integrated Approach for Security Cooperation in the Black Sea Region. Building Synergy Among Various Initiatives." Post reproduces below the text of this outline. As discussed in reftel, the Romanians view the proposal as a basis for further consultation with U.S. on coordination on Black Sea security. 2. (C) BEGIN TEXT OF OUTLINE: Basis for an Integrated Approach for Security Cooperation in the Black Sea Region. Building synergy among various initiatives -1. Principles: -Enhancing regional security is part of a wider effort to consolidate stability and democracy, as well as to ensure economic development in the Black Sea region and to anchor it to the Euro-Atlantic community. -The variety of security risks and their cross-border nature require combined actions on the following dimensions: maritime, air, land security, border security and civil emergency planning. -While the security in the Black Sea region is a responsibility of the littoral states, cooperation with and involvement of other international organizations, in particular NATO, can optimize the existing regional cooperation efforts. Several arguments support this approach: The trans-national character of the risks in the Black Sea; The main targets of the illegal activities in the Black Sea are our allies in the Western Europe, not only the riparian states, and therefore, we cannot exclude cooperation with them in support of Black Sea security; The inclusive approach we all three have claimed, as non-EU members, from the ESOP development should be applied to the Black Sea security, indivisibly linked to the Euro-Atlantic security. -Security cooperation in the Black Sea region should be construed in such a manner that would benefit all regional states ("win-win solution"); -Any initiative aimed at strengthening security in the Black Sea region has to be pursued in full observance with international law and national legislation. -2. Components of an integrated approach we could explore: --Political dimension: -Enhancing political debates in NATO on the security situation in the Black Se region. The developments in Georgia, Ukraine, and R. Moldova are discussed in NATO but an integrated debate could be useful in streamlining NATO ties with its Partners in the Black Sea region; -Building awareness and interest for the Black Sea security issues in NATO ("a Black Sea caucus"); -Developing NATO individual political dialogue with the Partners in the Black Sea region. The Individual Partnership Action Plans offer a very good framework in this regard; -Generating debate on the Black Sea region in the NATO Parliamentary Assembly which can be a link for the parliaments in the Partner countries. -Building awareness on the Black Sea region through public diplomacy instruments (joint events, seminars, etc.) --Operational dimension: a) Maritime Security: -- An integrated project for the Black Sea could be explored in the following manner: - A Black Sea Task Force of the three NATO allies, built upon Turkey's operation Black Sea Harmony, and connected with NATO command and information exchange structures. The mission of this Task Force would be to help complete data regarding the naval situation in the Black Sea (Recognized Maritime Picture) and potentially to ensure escort for commercial vessels. Non-Black Sea allies could be invited to patrol with the Black Sea Task Force within the limitations of the Montreux Convention; this would help alleviate the costs of the Black Sea Task Force for the three Black Sea allies. The Task Force could be under Turkey's lead, but connected to NATO command structure and exchanging information with OAE; We should study the Gibraltar Task Force of OAE, comprising almost exclusively Portuguese and Spanish military vessels, which operate under NATO umbrella escorting ships through Gibraltar Straits. It could be an example for a possible future NATO mission of the Black Sea Task Force. The Task Force can be supported by the Blackseafor through a mechanism of information exchange to be established, based upon a memorandum of understanding among the littoral states; The Task Force can interact with Blackseafor during its activations. -NATO: Information exchange and command support for the Black Sea Task Force; Joint patrolling by non-Black Sea allies with the Black Sea Task Force, in accordance with the Montreux Convention. Possibility to develop a NATO operation in the Black Sea in the future, by taking over the Black Sea Task Force. BLACKSEAFOR would develop its role in preventing terrorism and WMD trafficking within the scope of the current Agreement, through: -enhancing information exchange among the participating states and with the Black Sea Task Force; -organizing thematic exercises and training, including with participation NATO or allied states; -"consequence management" missions, which can also support the Black Sea Initiative on civil defense. A possible collaboration of Blackseafor with EADRCC could be explored. -elaboration of common, inter-operable concepts, techniques and specific anti-terrorism procedures. NATO experience and the PAP - T could be used as reference. Accepting NATO allies as observers to the Blackseafor. Participation aside the Black Sea Task Force during Blackseafor activations. Openness and connection with a NATO role in the Black Sea is an essential aspect of developing Blackseafor role in preventing terrorism. b) Land and air security: BLACK SEA REGIONAL COOPERATION - the possibility of creating and operating a Joint Interagency Task Force (JIATF) -A JIATF for the Black Sea (JIATF-Black Sea) region, integrating law enforcement, customs and defense assets of the participating countries could be useful for a comprehensive response to illegal activities in the Black Sea region. -The JIATF used by the United States in Key West, Florida, could be a good model to depart from and should be carefully considered by the BSEC countries. -A possible BSEC Joint Task Force should be linked with the maritime security project envisaged above. c) Border Defense: -Using the Border Defense Initiative (BDI) as an instrument to: Establish strong export and border control systems able to detect and combat WMD proliferation; Consolidate national legal framework for countering WMD proliferation; Fostering information exchange in the field of counter-proliferation and counterterrorism. d) Civil emergency planning: -Further development of the Black Sea Initiative for civil defense, which can help establish common procedures and mechanisms of civil emergency planning in order to facilitate our cooperation and rapid response to such situations in the Black See area, in a complementary manner with Blackseafor and BSEC. The value and effectiveness of EADRCC experience in this field should be further exploited in the benefit of this initiative. --Security sector reform (making full use of the PtP instruments): -Providing assistance to the Black Sea Partner states which have launched or affirmed intention to launch an Individual Partnership Action Plan with NATO (Georgia, Azerbaijan and Armenia); -Encouraging R. Moldova to develop an Individual Partnership Action Plan with NATO; -Exploring the possibility to establish a Black Sea Partnership Action Plan (PAP) focused on defense and security sector reform, as a contribution to PAP-DIB and in support of defense reforms in the regional Partner countries. Such a PAP can make use of existing expertise of the Black Sea allies and help coordinate and multiply bilateral assistance provided by NATO allies to the Partners in the region. END TEXT OF OUTLINE 3. (U) Amembassy Bucharest's reporting telegrams are available on the Bucharest SIPRNet website: www.state.sgov.gov/p/eur/bucharest CROUC H
26002 2005-01-27 15:23:00 05BUCHAREST258 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS SECTION 01 OF 02 BUCHAREST 000258 SIPDIS SENSITIVE STATE DEPT FOR EUR/NCE - WILLIAM SILKWORTH E.O. 12958, AS AMENDED: N/A TAGS: EAID, MARR, MASS, PREL, LI, RO SUBJECT: ROMANIAN SUPPORT FOR LIBERIAN MILITARY REFORM REF: 04 STATE 244992 (AND PREVIOUS) (NOTAL) SENSITIVE BUT UNCLASSIFIED, PLEASE HANDLE ACCORDINGLY 1. (U) This cable contains an action request for State Department. See paragraph 3. 2. (SBU) Major General Alexandru Grecu delivered January 26 to DAO a letter expressing GOR willingness to provide material assistance to the Liberian armed forces (Reftel). Grecu also provided a detailed list, in both English and Romanian, of items that the MOD proposes to donate to Liberia. Grecu confirmed that the materiel is available for donation now. He requested, however, confirmation that the USG still requests this materiel for the Liberian armed forces. He also requested that the USG provide name and contact information for a working level POC whom the MOD can liaise with regarding delivery. 3. (SBU) Action Request for State Department: Post requests POC information as requested, confirmation regarding the proposed donation and specific instructions if any item(s) are not suitable for donation, such as the non- functional boats. 4. (SBU) The complete texts of the letter and list are set forth below. Post will also fax the letter and list to State Department - EUR/NCE William Silkworth. Full text of the letter follows: "Romania Ministry of National Defense General Directorate for Defense Intelligence Bucharest, 25 January, 2005 Ronald Schall Cpt. Cdr. U.S. Navy Naval Attache Dear Cpt. Cdr. Schall In response to the US request for Romania to be involved in the international effort of the reconstruction of Liberia, we would really appreciate your assistance in informing the U.S. Department of Defense about the availability of the Romanian Ministry of National Defense to provide the equipment mentioned in the table attached, with the mention that the military ship require major repair and costly work in order to be made operational. Function of your response, we shall take the necessary steps in order to initiate a Government Decision whereby Romania will provide the respective equipment. Sincerely, Maj. Gen. Alexandru Grecu Deputy Director General Annex: 1 table, 2 pages, Unclassified" End Text of Letter 5. (SBU) Full text of the list follows: "Situation with the equipment that the Ministry of National Defense can make available to the Liberian Government" Nr.Crt. Name of equipment M/C Quantity I. N.C. ROMTEHNICA Provides commercial assistance and is in charge with the exportation formalities II. ARMY GENERAL STAFF 1. Khaki duck suit pieces 20,000 2. Khaki duck caps pieces 20,000 Observation: all pieces above are new (first category) III. AIR FORCE GENERAL STAFF 1. Sub-machinegun cal. 7.62 mm, Md. 1963, with common butt pieces 500 2. Pistol cal. 7.62 mm, Md. 1933 pieces 2,066 3. Light machine gun cal. 7.62 mm, Md. 1964 with common butt pieces 100 4. Machine gun cal. 14.5 mm, with 2 modernized ZU-2 barrels pieces 264 5. Machine gun cal. 14.5 mm, with 4 MR-4 barrels pieces 100 6. AG-7, AG-7S grenade launcher pieces 50 7. Cartridge cal. 7.62 mm short bullet steel core, steel tube pieces 751,080 8. Cartridge cal. 7.62 mm short tracer bullet, steel tube pieces 150,480 9. Cartridge cal. 7.62 mm pieces 100,800 10. Cartridge cal. 14.5 mm GPI type B-32, brass tube pieces 7,280 11. Cartridge cal. 14.5 mm GPI type BZT, brass tube pieces 41,440 12. Cartridge cal. 14.5 mm GPI type B-32, brass tube pieces 496,560 13. Cartridge cal. 14.5 mm GPI type BZT, brass tube pieces 931,440 14. Cartridge cal. 14.5 mm GPI type MDZ, brass tube pieces 278,560 15. PG-7 shell for AG-7 pieces 2,742 16. Khaki summer suits pieces 1,480 17. Khaki thick cloth suit pieces 500 18. Khaki thick cloth cloaks pieces 140 19. Black belts pieces 1,000 20. Khaki blouses pieces 16,000 21. Khaki summer caps pieces 1,480 22. Khaki winter caps pieces 500 Observation: figures for items 7 to 15 are multiple of full boxes IV. NAVY GENERAL STAFF 1. Hydrofoil torpedo boat pieces 2 2. Missile carrier boat pieces 3 3. Torpedo boat pieces 3 Observation: They are not functional and require serious repair work to be used. V. JOINT LOGISTIC COMMANDMENT 1. Khaki cloth cap pieces 2,000 2. Khaki training summer shirt pieces 2,000 3. Khaki training cloth trousers pieces 2,000 4. Khaki training cloth blouse pieces 2,000 5. Light blue T-shirt pieces 5,000 6. Dark blue kitbag pieces 1,000 7. Dark blue food-stuff bag pieces 1,000 8. Metal Romanian helmet (without arms) pieces 2,000 Observation: all items are first category. END TEXT OF LIST 6. (U) Amembassy Bucharest's reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest. CROUCH
25035 2005-01-06 16:08:00 05BUCHAREST31 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L BUCHAREST 00031 SIPDIS Lasers: ACTION: POL INFO: FCS FBI RLA MGT CON ODC AID AMB DAO PD ECON DCM RAO CXBCH: ACTION: POL INFO: FCS FBI RLA MGT CON ODC AID AMB DAO PD ECON DCM RAO lpnet01: INFO: AMB DISSEMINATION: POL CHARGE: PROG APPROVED: AMB:JDCROUCH DRAFTED: POL:RG; CP CLEARED: DAO:RMCCLELLAN VZCZCBMI848 OO RUEHC RUEKJCS RHEHNSC RUCNDT RUEHZL DE RUEHBM #0031/01 0061608 ZNY CCCCC ZZH O 061608Z JAN 05 FM AMEMBASSY BUCHAREST TO RUEHC/SECSTATE WASHDC IMMEDIATE 0015 INFO RUEKJCS/SECDEF WASHINGTON DC PRIORITY RHEHNSC/NSC WASHDC PRIORITY RUCNDT/USMISSION USUN NEW YORK PRIORITY 0044 RUEHZL/EUROPEAN POLITICAL COLLECTIVE C O N F I D E N T I A L SECTION 01 OF 03 BUCHAREST 000031 SIPDIS STATE DEPT FOR EUR/NCE - WILLIAM SILKWORTH STATE DEPT ALSO FOR INR/B E.O. 12958: DECL: 01/05/2015 TAGS: PGOV, PREL, MOPS, MARR, MASS, ECON, PINR, MD, UP, IZ, RO, UNSC SUBJECT: AMBASSADOR'S MEETINGS WITH FOREIGN MINISTER UNGUREANU AND DEFENSE MINISTER ATANASIU REF: A. STATE 187 (AND PREVIOUS) B. 04 BUCHAREST 3551 Classified By: Ambassador Jack Dyer Crouch II for Reasons 1.4 B and D 1. (C) Summary. The Ambassador January 3-4 made introductory calls on new Foreign Minister Razvan Ungureanu and new Defense Minister Teodor Atanasiu. Echoing a prominent theme in President Traian Basescu's electoral campaign, both incoming ministers expressed a firm commitment to a strong relationship with the U.S. Ungureanu described the center-right governing coalition as "heterogeneous," but expected the current cabinet to remain for at least 18 months. Atanasiu said the GOR would need to examine whether to "increase or decrease" its overseas deployments, including in Iraq and Afghanistan. On the specific issue of UN Force Protection in Iraq, Atanasiu stated that an infantry company is "ready" for deployment but that UN funds available for salary support are insufficient; he promised to provide soon detailed information about Romanian needs for salary support (Refs) End Summary. 2. (C) Following the December 28 parliamentary confirmation of Romania's new government, the Ambassador met January 3-4 with Foreign Minister Mihai Razvan Ungureanu and Defense Minister Teodor Atanasiu. Both ministers noted they were still becoming acclimated to their new positions. Both also said that over the next two weeks they would be preoccupied with filling key slots at the sub-ministerial level to ensure the presence of "strong staffs" they felt confident would support the new government's direction. FM Ungureanu: "Washington-London-Bucharest" -------------------------------------------- 3. (C) FM Ungureanu emphasized to the Ambassador in his January 3 meeting that President Basescu and the new PNL-PD led government placed strong ties with Washington at the top of Romania's foreign policy priorities. Ungureanu noted that while Basescu had spoken frequently of a "Washington-London-Bucharest axis" throughout the presidential campaign, the inclusion of "London" was intended primarily to present a balanced approach to the EU. Ungureanu said the U.S. would find in him, personally, a very frank and open interlocutor. He expressed that his previous experience as a State Secretary at the MFA during the 1996-2000 center-right government and his previous experience with the Stability Pact had prepared him well for his new job. Politics of the Coalition ------------------------- 4. (C) Ungureanu also provided insight on the political mechanics of the new government, characterizing the governing coalition as "heterogeneous" but assessing that the current cabinet would remain "untouched" for at least 18 months. He boiled it down to the fact that few MPs want new elections. He similarly described what he called the new core foreign policy team -- himself, PM Calin Popescu-Tariceanu, and Presidential Counselor Andrei Plesu -- as a melting pot. "Plesu is German trained; Tariceanu is French trained; and I am British trained," but, he reiterated, one common denominator was their "commitment to strong relationship with U.S." The Ambassador asked about the role of the three new Ministers of State, de facto Vice Premiers, in this government. Ungureanu said that while each had been assigned broad portfolios and ostensibly would be responsible for sets of ministries, in reality their positions were largely for a political purpose: to tie together the coalition. The PM is from the National Liberal Party; and the Ministers of State come from the ethnic Hungarian (UDMR), Humanist (PUR), and Democratic (PD) parties. All four would be able to carry the government's program back to the parliament and ensure support. 5. (C) The Ambassador asked Ungureanu how he predicted the Social Democratic Party (PSD) would behave in opposition. Ungureanu agreed the PSD would likely be tough but he had "few doubts" there would be any major differences over foreign policy: "We both want good relations with the U.S. and EU accession in 2007." He said that this was despite the fact that the government does not have a majority on either of the foreign affairs committees in the Parliament. Ungureanu said the PSD would likely pick its differences over social or economic policies, notably health care or aspects of economic liberalization. Moldova, Ukraine, Russia ------------------------ 6. (C) On politics in the region, Ungureanu opined that Moldova "could become a problem." Romania would be watching March elections closely. Ungureanu said President Basescu had spoken with Ukrainian President-elect Yushchenko and that he, himself, knows many in Yushchenko's inner-circle. He expressed a "bit of worry" that possible PM Iulia Tymoshenko could make relations difficult -- leaders may continue to use issues with Romania like the Bystroe Canal and Snake Island to rouse nationalist sentiments. The Ambassador stressed that Romania should seek to focus relations on cooperation. Ungureanu agreed, but qualifying that Romania could not "leave room" for unwarranted concessions. He said the new Romanian government realizes the potential for Romania, on eastern edge of the EU and NATO, to play a role building possible bridges with Kiev and even Moscow. However, with regard to Russia, Ungureanu said he was "personally" concerned about Russian intentions inside and outside its borders, asserting that "few in power there are truly interested in reform." 7. (C) Ungureanu said Romania was eagerly awaiting a decision on possible U.S. military basing in Romania. "An announcement could not come too soon." He saw "absolutely no difference" on the positions of the previous government or the new one on "this fundamental issue." Defmin Atanasiu: A Strong Strategic Partnership --------------------------------------------- -- 8. (C) Ambassador met with Defense Minister Teodor Atanasiu January 4 in his office at the Defense Ministry. Speaking through an interpreter, Atanasiu began the meeting by observing that President Traian Basescu and PM Calin Popescu Tariceanu have both stressed the importance of "strengthening the U.S.-Romanian strategic partnership." Atanasiu stated that the Romanian "military will play a key role" in this process, noting that "our intention and goal is to build an all-volunteer, professional armed forces by 2007." Ambassador expressed support for Romania's ongoing defense reform and stated that he and his team are working hard to assure that cooperation between the U.S. and Romania remains solid. 9. (C) Atanasiu observed that Romania will "continue cooperation with the United States in Afghanistan, Iraq and the Balkans." He stated that discussions over the next several months should examine how Romania should proceed in regard to its overseas deployments. Romania must decide whether to "increase or decrease" its overseas deployments and also needs to explore which "partnership forums should be developed." (Note: Mihaela Matei, the head of the MOD's Strategic Affairs Directorate, told DATT in an earlier meeting that press reports had misquoted Atanasiu and erroneously quoted him as stating that when the mandate of Romanian troops in Afghanistan and Iraq expires in Summer 2005, he would prefer to send only specialized intelligence units (Ref B). Matei explained that Atanasiu had meant to express that the GOR would explore with the U.S. the appropriate "mix" of forces deployed so that Romania's resources, including intelligence units, could be best employed. End Note.) UN Force Protection in Iraq --------------------------- 10. (C) On the subject of the Romanian offer of one infantry company for UN force protection in Iraq (Refs), Atanasiu observed that the company is "ready" but that the GOR does not have "budget allocations" for 2005 to sustain salary costs for the company during an overseas deployment. Further, UN funds for salary allocations "provide about half, or less" than Romanian law requires for salary support for overseas deployments of this nature. He promised to provide an "exact calculus" soon of the funds GOR needs to cover salary costs. Ambassador observed that it would be difficult for the UN to pay more for salary support for Romanian troops than for troops from other nations, also noting that U.S. law forbids payment of salaries to foreign troops. (Note: Post will report Septel when it receives the MOD's "exact calculus." End Note.) The Black Sea and regional security ----------------------------------- 11. (C) In general terms, Atanasiu observed that the Black Sea region and Caucasus region are of key strategic importance for both Romania and the U.S. Ambassador stated that the U.S. shares the GOR's goal of enhancing Black Sea security, underscoring the importance of initially focusing on concrete projects rather than prematurely attempting to address grand regional themes. Ambassador also stressed strong U.S. support for the development of democratic institutions in Ukraine and Moldova, observing that Romania - and NATO - can play a role in this process. 12. (C) Atanasiu said he would like to meet again with the Ambassador in early February, stating also that he hopes to visit the U.S. in the latter half of 2005 "once he has learned his brief." Ambassador stated that when the visit dates have been set he would help arrange meetings with Secretary Rumsfeld and other appropriate interlocutors. SIPDIS 13. (C) Comment: Both ministers were stark contrasts to their predecessors. The straight-speaking and understated Ungureanu differed remarkably from former FM Geoana. In contrast to ebullient ex-DefMin Pascu, who conducted his meetings with Embassy interlocutors in fluent, idiomatic English and encouraged a "give and take" exchange of information, Atanasiu proceeded cautiously and spoke through a translator (although his curriculum vitae describes him as an English speaker). Atanasiu's approach may reflect the fact that he is still getting his sea legs: Although Atanasiu has been a longstanding leader of the National Liberal Party (PNL) in Transylvania, he possesses scant prior experience in central government and only limited background in the defense sector, having managed an arms factory for several years. End Comment. 14. (U) Amembassy Bucharest,s reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest CROUCH
25055 2005-01-07 06:32:00 05BUCHAREST32 Embassy Bucharest UNCLASSIFIED UNCLAS SECTION 01 OF 04 BUCHAREST 000032 SIPDIS DEPT FOR INL DEPT FOR EUR/NCE - WSILKWORTH TREASURY FOR FINCEN JUSTICE FOR OIA, AFMLS, NDDS E.O. 12958: N/A TAGS: KTFN, SNAR, KSEP, ECON, RO SUBJECT: ROMANIA: 2004-2005 INTERNATIONAL NARCOTICS CONTROL STRAGEGY REPORT (INCSR), SECTION II, FINANCIAL CRIMES AND MONEY LAUNDERING REF: STATE 254401 This report provides Embassy Bucharest's input for the International Narcotics Control Strategy Report, Part II, Financial Crimes and Money Laundering. I. Summary ---------- Romania's geographic location makes it a natural transit country for trafficking in narcotics, arms, stolen vehicles, and persons and, therefore, vulnerable to financial crimes. Romania's National Bank estimates the dollar amount of financial crimes to be between $1 - 1.5 billion per year. Tax evasion/VAT fraud constitutes about 45% ($500 - $600 million per year) of this total. Fraud in the financial- banking sector, fraudulent bankruptcy and smuggling are other principal financial crimes. Romania also has one of the highest occurrences of online credit card fraud in the world. As in several other countries in Eastern Europe, corruption and the presence of organized crime activity facilitate financial crimes. Legislation and regulation designed to combat financial crime are of recent enactment and are fairly comprehensive. Nevertheless, implementation lags, while reporting and investigations are not as timely or as effective as desired. II. Status of the Country ------------------------- Money laundering results primarily from domestic criminal activity carried out by international crime syndicates, which often launder money through limited liability companies set up for this purpose. The U.S. dollar is the preferred currency. Endemic corruption in Romania and its neighboring countries abets money laundering. The proceeds from the smuggling of cigarettes, alcohol, coffee, and other dutiable commodities are also laundered in Romania. From Romania, most of the laundered funds go to off shore financial "shelters" in locations such as the Virgin Islands, Cayman Islands and Cyprus. III. Actions Against Money Laundering -------------------------------------- Romania criminalized money laundering with the adoption of Law No. 21/99 "On the Prevention and Punishment of Money Laundering" in January 1999. The law requires customer identification, record keeping, reporting transactions of a suspicious or unusual nature and reporting of all transactions over 10,000 euros. The National Office for the Prevention and Control of Money Laundering (NOPCML), a financial intelligence unit (FIU) was established under the law, which mandated internal anti-money laundering procedures and training for all domestic financial institutions. Entities subject to money laundering controls include banks, non-bank financial institutions, attorneys, accountants, and notaries, although in practice, these controls have not been as rigorous as those imposed on banks. The National Bank of Romania introduced Norm No. 3, "Know Your Customer," in February 2002. The "Know-Your-Customer" norm was amended in December 2003 to strengthen information disclosure for external wire transfers and correspondent banking, in keeping with new international standards. Banks must include information about the originator's name, address and account in the wire transfer and to request the same information in case of incoming wires. Banks are further required to take proper due diligence before entering into international correspondent relations and are prohibited from opening correspondent accounts with shell banks. In December 2002, Law no. 656/2002 on the Prevention and Sanctioning of Money Laundering went into effect, changing the list of predicate offenses to the "all-crimes" approach and requiring that every cash operation and every external wire transfer involving a sum exceeding 10,000 euros be reported to the NOPCML and monitored. In addition, the new law expands the number and types of entities required to report to the NOPCML. Some of these new entities include art dealers, travel agents, privatization agents, postal officials, money transferors, and real estate agents. Training for these entities is necessary to ensure compliance with reporting, record keeping, recognition of suspicious transactions and development of internal controls. The new law also provides for both suspicious transaction reports (STRs) and currency transaction reports (CTR), with the CTR amounts conforming to European Union (EU) standards. The know your customer identification requirements have been honed so that identification of the client becomes necessary upon both the beginning of a relationship and upon single or multiple transactions meeting or approaching a 10,000 euro standard. The NOPCML receives and evaluates STRs as well as CTRs. The law also provides for feedback to be given, upon request, to NOPCML from the General Prosecutor's Office, and for NOPCML to participate in inspections and controls in conjunction with supervisory authorities. In 2003, the number of STR's increased to 882 and 1,241 reports were filed during the first three quarters of 2004. Out of the 1,241 suspicious transaction reports received by the NOPCML, 1,134 were filed by reporting entities and 107 by the supervision institutions. However, efforts to prosecute these cases have been hampered by delays in reporting suspicious transactions, by a lack of resources in some regions, and by insufficient training in conducting complex historical financial investigations. The Law on the Prevention and Sanctioning of Money Laundering increased the powers of NOPCML, but it did not provide for an increase in administrative capacity. NOPCML has begun a process of international cooperation to exchange information with other FIUs. In November 2004, the Department of Justice's Office of Overseas Prosecutorial Assistance and Training sponsored an assessment of the NOPCML by U.S. FINCEN and a future technical assistance project between the two FIUs is planned for 2005. NOPCML also has been working closely with Italy to improve its efficiency and effectiveness through an EU PHARE project. A US Treasury OTA advisor is assisting the National Bank of Romania in strengthening anti-money laundering (AML) and anti-terrorist financing through the introduction of improved bank examination procedures. To insure that compliance is consistent across financial sectors, the advisor in cooperation with the World Bank has also assisted in strengthening AML compliance in the securities sector, including the drafting of new AML regulations for the National Securities Commission. Plans are underway to replicate the project in the insurance industry. Romanian law has some, but limited, provisions for asset forfeiture in the Law on Combating Corruption, No. 78/2000, and the Law on Combating Tax Evasion, No. 87/1994. The Directorate of Economic and Financial Crimes of the national police also has a mandate to pursue money laundering. Despite hundreds of money laundering cases investigated since 2001, the interface with the justice system remains ineffective. On November 24, 2204, the GOR approved a draft amendment to the Anti-money laundering law, which is expected to be passed in 2005. The new law provides for a uniform approach to combating and the prevention of money laundering and terrorist financing. The purpose of the law is to achieve the standard contained in European Union Directive 2001/97/EC. The draft law provides that money laundering and terrorist financing will be regulated under the same law to ensure consistent and effective measures against these crimes. The draft recommends the inclusion of additional categories of individuals and institutions with reporting obligations to the NOPCML. These obligations include not only reports on specific suspicious transactions, but also generalized intelligence involving financial patterns and typologies. Among investigative innovations, the new law will provide for better seizure proceedings, the employment of undercover investigators and the surveillance of financial accounts and communications. The GOR announced a national anti-corruption plan in early 2003 and passed a law against organized crime, codifying the provisions of the UN Convention in January 2003, as well as a new anti-corruption law in April 2003. In the thirteen months since the September 2002 founding of the Anti- Corruption Prosecutor's Office (PNA), over 2200 cases of corruption have been investigated. Unfortunately, prosecutors have focused on low to mid-level officials and examples of the most egregious financial crimes have so far escaped serious attention. A new Criminal Procedure Code was passed and became effective on July 1, 2003. The new Code contains provisions for authorizing wiretapping, intercepting, and recording telephone calls for up to 30 days, in certain circumstances. These circumstances, as provided for within the new Code, include terrorism acts and money laundering. IV. Actions to Combat Terrorist Financing ------------------------------------------ Romania's political leadership has consistently and unequivocally condemned acts of terrorism. After the events of September 11, 2001, Romania passed a number of legislative measures designed to sanction acts contributing to terrorism. Emergency Ordinance 141, passed in October 2001, legislates that the taking of measures, or the production or acquisition of means or instruments with an intention to commit terrorist acts, are offenses of the same level as terrorist acts. These offenses are punishable with imprisonment ranging from five to 20 years. The Romanian Government and the National Bank of Romania (BNR) in particular have been fully cooperative in seeking to identify and freeze terrorist assets. Emergency Ordinance 159/2001 established guidelines to prevent the use of the financial and banking system for the purpose of financing terrorist acts. The BNR, which oversees all banking operations in the country, issued Norm No. 5 in support of Emergency Ordinance 159. Emergency Ordinance 153 was passed to strengthen the government's ability to carry out the obligations under UNSCR 1373/2001, including the identification, freezing and seizure of terrorist funds or assets. The BNR receives lists of individuals and terrorist organizations from the U.S. Embassy Bucharest, UN Sanctions Committee, and the EU and circulates these to banks and financial institutions. The new law on terrorism (Law no. 535/2004) provides that the assets used or provided to terrorist entities will be forfeited, together with finances resulting from terrorist activity. To date, in regard to terrorist financing, no arrests, seizures, or prosecutions have been carried out. In April 2002, the GOR's Supreme Defense Council of the Country (CSAT) adopted a National Security Strategy, which included a General Protocol on the Organization and Functioning of the National System on Preventing and Combating of Terrorist Acts. This system, effective July 2002 and coordinated through the Intelligence Service, brings together and coordinates a multitude of agencies, including 14 ministries, the General Prosecutor Office, the National Bank, and the National Office for the Prevention and Control of Money Laundering. The GOR has also set up an interministerial committee to investigate the potential use of the Romanian financial system by terrorist organizations. In November 2004, the Parliament adopted Law 535/2004 on preventing and combating terrorism, which abrogated some of the previous government ordinances and took over most of their provisions. The law includes a chapter on combating the financing of terrorism by prohibiting financial and banking transactions with persons included on international terrorist lists and requiring authorization for transactions conducted with entities suspected of terrorist activities in Romania. The GOR recognizes the link between organized crime and terrorism. Bucharest is the site of the Southeast European Cooperation Initiative, a regional center that provides law enforcement training and intelligence sharing on criminal activities, including terrorism, for several Balkan governments. Romania participates in a number of regional initiatives to combat terrorism. Romania has worked within SEEGROUP (a working body of the NATO Initiative for Southeast Europe) to coordinate anti-terrorist measures undertaken by the states of Southeastern Europe. The Romanian and Bulgarian Interior Ministers signed an intergovernmental agreement in July 2002 to cooperate in the fight against organized crime, drug smuggling and terrorism. V. Other International Agreements --------------------------------- The EU's Europe Agreement with Romania provides for cooperation in the fight against drug abuse and money laundering. Romania is a member of the Council of Europe (COE) and participates in the Council of Europe's Select Committee of Experts on the Evaluation of Anti-Money Laundering Measures (MONEYVAL). A mutual evaluation in April 1999 by that Committee uncovered a number of areas of concern, including the high evidence standard required for reporting suspicious transactions, a potential conflict with the bank secrecy legislation, and the lack of provisions for cases in which the reporting provisions are intentionally ignored. Romania has been working to address these concerns, bringing in legal experts from the EU to consult. In late 2003, Romania also underwent a Financial Sector Assessment Program (FSAP) by the World Bank as part of that organization's pilot program. The Mutual Legal Assistance Treaty signed in 2001 between the United States and Romania entered into force in October 2001. Romania has participated in regional and global anti- crime efforts. Romania is a party to the 1988 UN Drug Convention, the Agreement on Cooperation to Prevent and Combat Transborder Crime, and the UN Convention against Transnational Organized Crime. With Law No. 263/2002, passed in 2002, Romania ratified the Council of Europe Convention on Laundering, Search, Seizure, and Confiscation of the Proceeds from Crime. During 2002, Romania also ratified the Council of Europe's Criminal Law Convention on Corruption, and in December signed the UN Convention Against Corruption. Romania ratified the UN International Convention for the Suppression of the Financing of Terrorism in January 2003. VI. Country Vulnerabilities ---------------------------- Romania should continue addressing the concerns of the Council of Europe evaluators by making further improvements in its anti-money laundering regime, and by continuing its progress on money laundering investigations and prosecutions. The GOR needs to adopt procedures for the timely freezing, seizure and forfeiture of criminal or terrorist related assets. Finally, the GOR must initiate reporting requirements for the cross-border movement of currency and monetary instruments. To assist the GOR, in November 2004, the Department of Justice's Office of Overseas Prosecutorial Assistance and Training sponsored an assessment of NOPCML by U.S. FINCEN and a future technical assistance project between the two financial intelligence units is planned for 2005. Crouch
25084 2005-01-07 13:35:00 05BUCHAREST34 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS BUCHAREST 000034 SIPDIS SENSITIVE STATE DEPT FOR EUR/NCE - WILLIAM SILKWORTH DEPT ALSO FOR S/ES-0 E.O. 12958: N/A TAGS: PGOV, PINR, PREL, RO SUBJECT: NAMES, TITLES AND CONTACT NUMBERS FOR LEADING ROMANIAN GOVERNMENT AND POLITICAL FIGURES REF: SECSTATE 271552 SENSITIVE BUT UNCLASSIFIED - PROTECT ACCORDINGLY - NOT FOR INTERNET DISTRIBUTION 1. (SBU) The GOR contact information below should be considered "close hold" and should not be widely distributed. HEAD OF GOVERNMENT LAST NAME: Popescu-Tariceanu FIRST/MIDDLE NAMES: Calin Constantin Anton CONVENTIONAL USAGE: Calin Popescu-Tariceanu FORMAL TITLE: Prime Minister of Romania OFFICE TELEPHONE NOS.: 40-21-310-2458; 40-21-310-2459; Fax: 40-21-230-0175 AFTER-HOURS OFFICIAL NOS.: 40-21-310-2458; 40-21-310-2459; Switchboard: 40-21-314-3400 RESIDENCE TELEPHONE NOS.: Unavailable CELL PHONE NOS.: 40-0744-541785 COMMENTS: Office Chiefs: Raluca Berleanu, Carmen Rascanu, and Hermina Uta. After hours, there is an office assistant until 10:00/12:00 p.m. and a duty officer during night. PM Popescu-Tariceanu speaks fluent English. HEAD OF STATE LAST NAME: Basescu FIRST/MIDDLE NAMES: Traian CONVENTIONAL USAGE: Traian Basescu FORMAL TITLE: President of Romania OFFICE TELEPHONE NOS.: 40-21-312-1159; 40-21-430-6195; Fax: 40-21-411-3131 AFTER-HOURS OFFICIAL NOS.: 40-21-312-1159; 40-21-430-6195 RESIDENCE TELEPHONE NOS: 40-21-311-0204; Fax 40-21-314-8159 CELL PHONE NOS: 40-0788-194823 COMMENTS: Office Chiefs: Elena Ghimisi and Isabela Banu. There is a duty officer after hours. President Basescu speaks fluent English. FOREIGN MINISTER LAST NAME: Ungureanu FIRST/MIDDLE NAMES: Mihai Razvan CONVENTIONAL USAGE: Mihai Razvan Ungureanu FORMAL TITLE: Minister of Foreign Affairs OFFICE TELEPHONE NOS: 40-21-230-7570 AFTER-HOURS OFFICIAL NOS: 40-21-230-7570 RESIDENCE TELEPHONE NOS: Unavailable CELL PHONE NOS: 40-0744-337082 COMMENTS: Office Director: Cornel Saruta Counselor: Luana Dinu There is a duty officer after hours. FM Ungureanu speaks fluent English. CROUCH
26725 2005-02-09 14:32:00 05BUCHAREST353 Embassy Bucharest UNCLASSIFIED//FOR OFFICIAL USE ONLY UNCLAS SECTION 01 OF 03 BUCHAREST 000353 SIPDIS SENSITIVE DEPT FOR EUR/NCE - WILLIAM SILKWORTH DEPT PLEASE PASS TO USAID and DOJ OPDAT E.O. 12958: N/A TAGS: PGOV, PREL, KJUS, KDEM, ECON, EAID, RO, anti-corruption SUBJECT: ROMANIAN CIVIL SOCIETY GROUPS EXPRESS CAUTIOUS OPTIMISM FOR PROGRESS AGAINST CORRUPTION SENSITIVE BUT UNCLASSIFIED. PLEASE PROTECT ACCORDINGLY. 1. (SBU) Summary. Leading Romanian civil society representatives expressed cautious optimism about anti- corruption efforts under newly elected President Traian Basescu during a February 2 Embassy sponsored roundtable discussion. Corruption remains a top concern for most Romanians according to opinion polls. While acknowledging the many challenges to stamping out corruption in Romania, participants offered a variety of ideas to fight corruption, but highlighted Basescu's apparent "political will" and EU pressure as positive forces pushing anti-corruption efforts forward. Civil society representatives cited public administration reform and greater public participation in the political process as key ingredients for long-term success. End Summary. 2. (SBU) Leading Romanian civil society organizations, along with representatives from the OECD and UK and U.S. embassies discussed Romania's ongoing anti-corruption efforts during a February 2 roundtable sponsored by U.S. Embassy Bucharest's Resident Legal Advisor. Participating organizations included those at the forefront of Romanian civil society's efforts to educate the public on the impact of corruption and to press the GOR to take needed action. They included Transparency International, the Open Society Foundation, the American Chamber of Commerce, the Council of Foreign Investors and the American Bar Association Central European and Eurasian Law Initiative (ABA-CEELI). Influential Romanian think tanks included the Romanian Academic Society and the Institute for Public Policy. Leading local grassroots democracy organizations present included Pro Democracy, the Romanian Association for Democracy Implementation, and the Romanian Center for Independent Journalism. A Question of Political Will? ----------------------------- 3. (SBU) Overall, participants agreed that the new Liberal- Democratic (PNL-PD) led government, coupled with President Basescu's outspoken public stance against corruption, provides a catalyst for renewing Romania's battle against corruption. While many remarked that the previous government demonstrated little "political will" to fight corruption, most participants agreed that Basescu and his team -- at least at the beginning of their administration -- appear committed to taking serious, actionable measures to counter corruption. Some of the Government's initial steps include Basescu's designation of anti-corruption efforts as a "national security priority," plans to more strictly review dignitaries' declarations of wealth through establishment of a National Integrity Council, and the January 27 decision to scrap immunity privileges for former ministers (see paragraph 10). Participants noted that a major challenge for the new government will be to sustain this energy and focus over time and to resist the temptation to focus anti-corruption efforts solely against the opposition Social Democratic Party (PSD). Basescu has expressed a commitment to "political neutrality" in the anti- corruption battle. Civil Society representatives at the roundtable expressed an intention to hold Basescu, Prime Minister Calin Popescu-Tariceanu and others now in government accountable for keeping that promise. 4. (SBU) Transparency International and Pro Democracy also highlighted EU criticism against Romania on corruption as a powerful motivating force to spur GOR action. One UK Embassy representative noted that external pressure from the EU is now coupled with internal pressure driven by President Basescu's designation of anti-corruption efforts as a "national security priority." He opined that Basescu's government needs several "quick wins" to set the tone and improve public perception, while acknowledging that the real battle against entrenched corruption in Romania is a long- term process. GOR Anti-Corruption Strategy: More than Good Intentions? --------------------------------------------- ------------ 5. (SBU) Romania's 2005-2007 National Anti-Corruption Strategy, slated for release in March, emerged as a focal point for the discussion. This strategy, which follows up on the largely unimplemented 2001-2004 Anti-Corruption program, is designed to serve as both a framework and action plan for the government's anti-corruption policies. ABA- CELI Madeleine Crohn noted that the strategy also ties in closely with the EU accession "safeguard clause," which calls for an independent audit of the current anti- corruption strategy no later than March 2005, along with a multi-year strategy, including clearly defined benchmarks and goals. Failure to meet these requirements ostensibly could delay Romania's EU entry by one year. Critics of the National Anti-Corruption Strategy, such as the local Transparency International representative, pointed out that rolling out a new 2005-2007 strategy may create a false impression of progress, given the lack of implementation and follow through found in many of the 2001-2004 goals. 6. (SBU) Many roundtable participants viewed the strategy development process, led by the Ministry of Justice, as inadequate, given that many stakeholders were not included in the initial consultations process. A representative from the OECD Anti-corruption Office expressed concern over the MOJ's basic lack of internal capacity to develop such a wide- reaching strategy, noting that only five employees work in the department charged with developing and drafting the National Anti-Corruption Strategy. She opined that the concept of consulting with various civil society, business and government leaders to develop an effective program is a relatively new concept in Romania, complicated by the fact that communication between government agencies is often less than ideal. 7. (SBU) Other participants raised fundamental concerns about developing a National Anti-Corruption strategy, questioning its "value added." They also noted two key elements lacking in the 2001-2004 National Anti-Corruption Strategy: clear performance indicators and accountability, although many believed steps to correct these deficiencies were underway in the 2005-2007 Strategy. Participants across the board agreed that stakeholders, including government agencies, civil society and the business community, need a strong political signal from the government to push them to implement. A national anti- corruption publicity campaign also could advance these efforts, according to participants. Proposed Steps against Corruption ---------------------------------- 8. (SBU) Civil society representatives highlighted the critical need for increased public participation in the political process to improve public officials' accountability and crack down on corruption. Streamlining and increasing accountability in Romania's public administration system also emerged as a top priority. According to the Transparency International representative, weakness in the Romanian public administration system is a catalyst for corruption. The overly bureaucratic system presents numerous opportunities for bribery, while providing few checks or sanctions on official misconduct. Building on this perception, ABA-CEELI noted that a step as simple as a paper reduction act could significantly increase accountability and efficiency in the public administration system. Several participants advocated consolidating the twenty-six agencies charged with investigating compliance with government regulations into a more streamlined entity as a means to stamp out excessive bureaucracy. 9. (SBU) On the legislative front, the UK Customs advisor recommended reforming customs legislation to reduce ambiguities in penalties and fines, which open the door for negotiated payments and bribery, and establishing a code of conduct for tax officers. Several participants advocated creating a broad anti-corruption working group, comprised of government and non-government officials, to monitor implementation of the Anti-Corruption Strategy. Others, including the UK Advisor to the Ministry of Interior supported the idea of a strategic committee to monitor and report on National Anti-Corruption Prosecutor's Office (PNA) activity as means to improve effectiveness in developing and implementing Romania's anti-corruption strategy. National Integrity Council: A Step Forward? -------------------------------------------- 10. (SBU) Transparency International and other civil society organizations applauded the government's recent decision to create a National Integrity Council charged with verifying dignitaries' property and wealth declarations, as well as the January 27 decision scrapping immunity privileges protecting former cabinet members from prosecution. Participants agreed that these measures pave the way for stepped-up action against high-level corruption. The Romanian Center for Independent Journalism cited recent MOJ pledges to remove libel from the criminal code as an encouraging sign, noting that fear of prosecution often hindered journalists' ability to publish articles concerning corruption. Anti Corruption Prosecutor's Office: An Absence of Oversight --------------------------------------------- --------------- 11. (SBU) Roundtable participants agreed that the National Anti- Corruption Prosecutor's Office (PNA) could become a powerful engine for combating high-level corruption. However, several fundamental changes, including in the willingness of individual prosecutors to pursue politically sensitive cases, are needed for the PNA to meet its true potential. Civil society representatives were divided over the benefits of amending legislation to provide parliamentary oversight of the PNA. Nevertheless, a general consensus emerged that current oversight of the PNA was inadequate, and contributed to public skepticism about the PNA's commitment to impartial investigations. One participant suggested creating a review board that periodically assessed PNA actions and reported to parliament. The assessment would focus on individual cases rather than PNA efficiency generally. In conjunction with concerns about oversight, participants expressed a corresponding concern with the impact of the management procedures used in Romanian prosecutors offices generally. This concern includes two components: First, as magistrates, Romanian prosecutors are subject to the separate judicial body (the Superior Council of Magistrates or SCM) for many issues related to the evaluation and promotion of their staff; second, there is an overemphasis on jurisdictional boundaries to control what are essentially managerial decisions effecting prosecutorial policies and priorities. In short, although the management of prosecutorial institutions like the PNA can be criticized, there is a need to recognize the limitations placed on managers through legislation and governing bodies such as the SCM. 12. (SBU) The civil society representatives present summed up by stating that they would continue monitoring implementation of the National Anti-Corruption Strategy. They also urged U.S. and UK representatives to continue advocating tough anti-corruption measures with Romanian government. Comment ------- 13. (SBU) Corruption remains a top issue for the Romanian public. Indeed, a November 2004 opinion poll showed it topped the list of voter concerns, with 52 percent of respondents stating that corruption plays a role in their daily lives. The issue was one of the key contributors to Basescu's December electoral victory, as his party alliance was perceived as more committed to combating corruption and much less tainted by corruption allegations than the then ruling PSD. Post agrees with the roundtable's assessment that Basescu and the Tariceanu government have started out strong on corruption, at least in terms of expressed intentions. It is now incumbent on the new leadership to follow through by implementing key reforms, changing attitudes in an entrenched bureaucracy, and removing the battle on corruption from the sphere of partisan politics. Civil society organizations and the U.S. Embassy have played essential roles in elevating the issue of corruption as a national concern. We will continue to engage the Government and cooperate with NGOs and other interested parties on this issue. 14. (U) AmEmbassy Bucharest's reporting telegrams are available on the Bucharest SIPRNET Website: www.state.sgov.gov/p/eur/bucharest. DELARE
26798 2005-02-10 15:22:00 05BUCHAREST371 Embassy Bucharest CONFIDENTIAL C O N F I D E N T I A L SECTION 01 OF 03 BUCHAREST 000371 SIPDIS STATE FOR EUR/NCE - WILLIAM SILKWORTH STATE ALSO FOR INR/B E.O. 12958: DECL: 02/10/2015 TAGS: PGOV, PREL, KDEM, SOCI, PINR, RO SUBJECT: ROMANIAN LIBERAL PARTY DISPLAYS UNITY, AS DEMOCRATIC PARTY ALLY ENTERS PERIOD OF DISCORD Classified By: POLITICAL SECTION CHIEF ROBERT GILCHRIST FOR REASONS 1.4 B AND D 1. (C) Summary. Delegates to the congress of Romania's center-right National Liberal Party (PNL), the largest party in the governing alliance, strongly endorsed Prime Minister Tariceanu's bid for PNL President. Delegates also turned down for the time being a proposed merger with the Democratic Party (PD). Contrasting sharply with