Business Review Issue 33, October 13 - November 16, 2014

Major foreign investors will gather to debate the challenges facing the local economy, such as the lack of predictability »pages 16-25

ROMANIA’S PREMIER BUSINESS MAGAZINE

OCTOBER 2014 / VOLUME 18, NUMBER 33

LOCAL INVESTMENT TIMIS COUNTY IS ESTABLISHING ITSELF AS A TOP INVESTMENT POLE, BOASTING AN IMPRESSIVELY LOW UNEMPLOYMENT RATE AND AUTHORITIES EAGER TO ATTRACT MORE BUSINESS » INSIDE

onomics of c e e th t a s k BR loo es ECoC, and go becoming an e 2019 choice to Plovdiv, th » page 28

ANALYSIS

CULTURE

Poll position

The key to success

The economy is not likely to be a big issue in November’s presidential election, say pundits, while BR profiles the 14 candidates in the race

As the George Enescu International Music Competition wrapped up, top local performers told BR how aspiring musicians can reach the top

» page 8

» page 27

Courtesy of ArCuB

EUROPEAN CAPITALS OF CULTURE

www.business-review.eu Business Review | October 2014

4 NEWS Contents 7

CEO Corner

8

Economic issues to be overlooked in presidential race

9

Meet the candidates

13

Metropolitan sees room for growth in health insurance

14

Local IT sector rocked by corruption scandals

16

Foreign investors raising key questions about predictability

18 Investors wanted for local infrastructure

NEWS in brief

20 Romania seeks investors to reach energy sufficiency 22 Local infrastructure development in driving seat of carmakers’ future 23 Big IT up: the sky’s the limit for local tech sector 24 Real estate builds upon office growth 25 Agriculture advances despite unresolved issues 26 MEP maps plans for transatlantic trade agreement 27 Musicians in the making 28 How much money does it take to be a European Capital of Culture?

29 Plovdiv embarks on 2019 journey 30 Party of the century 32 Interest in local art confirmed at ViennaFair 33 Witnessing slices of history 34 It takes two to tango 35 Film review: What If

BANKING Visa: local tax payments by card in first eight months climb 27 percent to RON 134 mln The amount of taxes paid by card rose by 27 percent to RON 134 million (EUR 30.2 million) in the first eight months of this year against the same period of last year, according to Visa Europe, the payments technology business. In the same period, card payments of local taxes rose by 22 percent to 374,166 transactions. Last year, 372,000 payments of local taxes amounting to RON 133 million (EUR 30 million) were made by card.

37 Café review 38 November cultural calendar

CONSTRUCTION Ruukki to close its Bolintin Deal factory

ISSN No. 1453 - 729X FOUNDING EDITOR Bill Avery PUBLISHER Anca Ionita EDITOR-IN-CHIEF Simona Fodor JOURNALISTS Otilia Haraga (senior journalist), Simona Bazavan, Ovidiu Posirca, Oana Vasiliu COPY EDITOR Debbie Stowe PHOTO EDITOR Mihai Constantineanu LAYOUT Beatrice Gheorghiu ART DIRECTOR Alexandru Oriean EXECUTIVE DIRECTOR George Moise SALES & EVENTS DIRECTOR Oana Molodoi

SALES & EVENTS Sales managers: Ana-Maria Nedelcu, Oana Albu, Raluca Comanescu MARKETING Ana-Maria Stanca, Ana Maria Andrei, Iulia Mizgan PRODUCTION Dan Mitroi DISTRIBUTION Eugen Musat PUBLISHER Bloc Notes Media ADDRESS No. 10 Italiana St., 2nd floor, ap. 3 Bucharest, Romania LANDLINE Editorial: 031.040.09.32 Office: 031.040.09.31 EMAILS editorial@business-review.ro sales@business-review.ro events@business-review.ro

Ruukki Romania, part of Swedish steel producer SSAB, will close its factory in Giurgiu county, which was the result of a EUR 35 million investment completed in 2008. Rautarukki, former owner of Ruukki Romania, merged this year with SSAB. The departments for civil and industrial construction were regrouped into a new division called Ruukki Construction with headquarters in Finland.

Ruukki Romania will close its paneling, profile and metallic structure production lines at Bolintin Deal, and some of its metallic tile production will be moved to locations in Bacau and Ilfov, owned

by Plannja Romania, another SSAB local branch. The two branches will merge this winter under the Ruukki Construction Romania brand. Some 109 people will be let go, with compensation, while 50 more will be relocated to the Tunari factory.

DELIVERIES Belgium’s bpost is sole bidder in Romanian Post privatization Belgian postal services operator bpost was the sole interested party in submitting a non-binding offer on Tuesday for a 51 percent stake in the Romanian Post, according to Mediafax. bpost’s decision will trigger a conversion process turning the Post’s public debt into stock, a precondition for submitting the non-binding offer. If selected, bpost will be admitted

into the due diligence phase of the process, which grants access to the company’s financial data and management procedures, along with negotiations for the contract. Ultimately, bpost will be able to place a final bid to acquire the majority stake. bpost, also known as the Belgian Post Group, is responsible for the delivery of national and international mail in the Western European country.

ENERGY Enel CEO: Chinese interested in firm’s local assets Chinese companies are interested in buying the Romanian and Slovakian power assets that Enel is looking to sell to cut its debt, the Italian utility’s CEO, Francesco Starace, said, quoted by Reuters. “There are Chinese companies interested in both Romania and Slovakia,” Starace revealed. He added that State Grid Corporation of China had expressed an interest in its Romanian distribution and generation assets. Locally, the Italian company owns three former Electrica distribution and energy supply branches, in Muntenia Sud, Banat and Dobrogea.

Stratum Energy kicks off gas production in Bacau County US-based oil company Stratum Energy has announced the start of oil and gas production in its Moinesti concession in Bacau County, where it is planning to invest USD 150 million next year in fully developing the field. The company currently has two wells that produce 450,000 cbm of gas and 100 cbm of condensate and light crude mixture daily.

Stratum is already drilling a third well and has plans to develop nine more.

The American oil firm has already invested USD 70 million in the country and is in the initial stages of a full field development plant, which has to be approved by the National Agency for Mineral Resources (NARM). It has also constructed a gas export pipeline with a capacity of 4 million cbm that was linked to the Transgaz national gas pipeline system.

INVESTMENT Turkish investors have over USD 600 for Romania

www.business-review.reu Business Review | October 2014 Turkish companies have invested over EUR 5 billion in Romania in the last two decades and are planning to increase their exposure in the years to come.

Turkey is Romania’s main trading partner, after the EU, and bilateral trade between the two countries reaches USD 7 billion annually, according to Prime Minister Victor Ponta, who attended the Romania-Turkey Economic Forum organized this month in Bucharest. “Taking into consideration the constant growth in the number of investments since 2000, the businesspeople present at the forum forecast investments in Romanian companies and projects worth over USD 600 million in the next two years,” said the Association of Turkish Businesspeople (TIAD) in a statement.

NEWS 5 ket, CA Immo owns the Europolis Logistic Park near Bucharest. The assets are held through a joint venture between CA Immo and the European Bank for Reconstruction and Development. Europolis Logistic Park, which offers a leasable surface of 214,000 sqm, counts Carrefour, Altex and eMag among its tenants. CA Immo took ownership of the park after acquiring another Austrian group, Europolis, which had been involved in developing the project since 2004, after it was started by Cefin.

Europolis Logistic Park is located near the Bucharest-Pitesti highway entrance and is valued at EUR 120 million, according to the group’s latest financial reports.

First Home aid scheme to be extended to Romanian diaspora

LEGAL Local insolvencies could exceed 30,000 this year Around 28,000 new insolvency procedures took place in Romania last year, and this year this figure could reach or even exceed 30,000, said Valentina Burdescu, director of the Bulletin of Insolvency Procedures (BPI), during the second National Insolvency Conference.

She commented that companies in the services, commerce, construction, HORECA (hotels, restaurants, cafes) and transport sectors are most prone to enter insolvency, a situation that has changed little in recent years. She added that until one month ago, 47,000 procedures were being carried out under the old insolvency law. In the meantime, Romania has adopted a new law that aims to streamline the procedure and offer creditors greater protection.

PROPERTY Hercesa to invest another EUR 30 mln in Bucharest projects Hercesa is planning to start construction of the third stage of residential compound Vivenda in Bucharest in 2015 and is in talks to start a partnership for the renovation of an old building in the city’s downtown area. The two projects are expected to cost the Spanish company EUR 30 million, officials told Mediafax. The third stage of the Vivenda residential compound in Bucharest will comprise 300 new apartments. Hercesa owns several land plots in Bucharest for residential projects, the Vivenda complex in Titan and Hotel Cismigiu.

Company representative indicated that it will henceforth focus on the residential segment.

CA Immo in negotiations to sell Europolis Logistic Park near Bucharest Austrian group CA Immo announced earlier this month that it was in final negotiations to sell the logistics portfolio it owns in Romania, Poland and Serbia, according to Mediafax. On the local mar-

Romanians living and working abroad will be able to buy homes in Romania through the state-guaranteed mortgage lending First Home (Prima Casa) program, which has a guarantee budget of RON 25 million until the end of the year. “It is a practical proposal, which allows us to help Romanians working abroad to buy or build a home for themselves. At the same time, the measure will contribute to a better administration of the First Home portfolio,” said Ioana Petrescu, finance minister. The new measure is included in a government bill drawn up

by Petrescu’s ministry. The RON 25 million guarantee budget was left over from ANL funds that were not accessed. The First Home aid scheme was launched in 2009. The average sum accessed by Romanians looking to get on the property ladder is around EUR 38,000.

STOCK EXCHANGE Last bell rings for local Rasdaq market The Romanian Parliament has approved a bill dismantling the Rasdaq market.

Issuers listed on this segment will be transferred to the regulated market or an alternative trading system (ATS), or will be delisted. Some 928 companies are currently listed on Rasdaq, the electronic stock exchange, with a share capital of EUR 1.71 million. The regulated market of the Bucharest Stock Exchange (BVB) trades shares from 81 companies, with a total share capital of EUR 29.4 billion. In 2004, stock exchanges in the EU were classified as regulated markets or ATS. Since then, Rasdaq could no longer be considered a regulated market, as was the intention in 1996 when it was founded. However, the National Securities Commission (CNVM) did not classify it as an ATS either. The CNVM did establish that issuers and companies on Rasdaq must follow the same rules as a regulated market, such as launching public offers. Prosecutors and the European Commission have both asked in the past for the status of the electronic stock exchange to be clarified.

DEFENSE

US Navy takes control of Deveselu military base

U

S naval forces assumed control on October 10 of the military base in Deveselu, southern Romania, which hosts the NATO land-ballistic missile defense system.

Marking the event, Rear Adm. John Scorby, Commander, Navy Region Europe, Africa, Southwest Asia, said: “Today’s ceremony is an important milestone as we improve our ballistic missile defense capability in Europe. […] Our continued close work with our Romanian partners exemplifies how crucial our European allies are to building up NATO’s overall ballistic missile defense system.”

Construction of the base started in October 2013, with the support facility set to become fully operational in late 2015. US-based engineering group KBR will build the supporting facilities of the Deveselu air base. Last summer, the company was awarded the USD 134 million contract by the US Army Corps of Engineers, Europe District.

Romania will also spend USD 1.2 million through to 2015 on enhancing the utilities network and revamping barracks for Romanian personnel within the base.

Capt. Bill Garren assumed duties as

the first commanding officer of the Deveselu base. “It’s an honor to be here and have the opportunity to work with this international team of dedicated professional who are building the future of ballistic missile defense in Europe,” said Garren. The ballistic system at the Romanian base will be almost identical to that used on Navy Aegis-capable guided-missile destroyers and cruisers. The system is designed to destroy ballistic missiles in flight.

The base spans about 430 acres and consists of a fire-control radar deckhouse with an associated Aegis command, control and communications suite. It will also house several launch modules for missiles and be staffed by about 200 US military personnel, government civilians and support contractors.

A second missile defense shield is set to become operational in Poland in 2018.

Romania has signed a partnership for the 21st century with the US, designed to enhance political, economical and military relationships between the two countries. ∫ Ovidiu Posirca

www.business-review.eu Business Review | October 2014

6 NEWS ENERGY

3Q Julien Ducarroz CCO, Orange Romania

What services launched by Orange Group will be brought to Romania?

Orange was the first mobile operator bringing wearables to the market, in the last quarter of 2013, as we believed in the potential of this niche. Customers’ appetite increased very fast, generating over 100 percent sales growth in the second quarter of this year versus the previous one, as the portfolio was continuously extended.

What are the company’s plans for TV in Romania?

Most Orange TV customers use our voice and/or internet services as well. Since the launch, we have offered customers over 100 channels, the highest number of HD channels and the highest number of multi-screen channels.The portfolio has been continuously enriched, with new channels such as AXN and stations for Hungarian natives, matches from the First Division of the Romanian Football League and also rich and fresh videoon-demand content for multi-screen. We will soon launch Orange Info Channel, to keep our customers constantly informed about our products and services and updated with the latest general interest news, and we will bring more Orange TV Go benefits to 4G packages otilia.haraga@business-review.ro

Courtesy of CJSC _PMP

What are the plans for modernizing the Orange shops in Romania?

We have recently reshaped our shops based on a friendly and open concept, allowing customers to touch and try real products, a premiere in Romania at that time. To the same end, we opened nine care centers in our stores based on a unique concept in Europe, and we were the first operator to offer a dedicated center for handset related issues in the shop. As the digital landscape evolves fast, a new shop design concept will be implemented from next year across Orange Group’s footprint, and in Romania as well.

Romania and Lukoil lock horns over tax evasion probe

Far from fine: Lukoil, which owns a refinery in Ploiesti, is at the center of a tax evasion and money laundering probe

T

he nationalization of Lukoil’s Petrotel refinery in Ploiesti was tabled earlier in October after officials from Russia’s second largest oil company threatened to close the facility if prosecutors did not lift the seizure on Lukoil’s oil reserves as part of a EUR 230 million tax evasion and money laundering probe.

The authorities raided the Russian firm’s offices in Ploiesti and initiated the prosecution of Andrey Bogdanov, general manager of the refinery.

Vladimir Nekrasov, first vice-president of Lukoil, travelled to Bucharest and met with Liviu Dragnea, the deputy prime minister, Razvan Nicolescu, the delegate minister of energy, and the prosecutor that coordinated the tax evasion probe. Neksarov said that Lukoil Petrotel was set to pay USD 700 million to the state budget in taxes this year.

“We think that this USD 700 million we will pay can be considered guarantee measures (e.n. in the investigation). If the refinery ceases to operate, the state will not get this money, because we will shut the refinery for good,” said the Lukoil official, quoted by Agerpres newswire. He added that 90 percent of the fuel refined in Ploiesti goes to the 300 retail stations operated by the company locally.

President Traian Basescu slammed

“We think that this USD 700 million we will pay can be considered guarantee measures (e.n. in the investigation). If the refinery ceases to operate, the state will not get this money, because we will shut the refinery for good,” Vladimir Nekrasov, first vice-president of Lukoil Nekrasov’s statement, retorting that Romania would not bow to threats or pressure from the Russian company against prosecutors and the government.

“The nerve of those that issued this message, that we are thinking by Friday (e.n. October 10), if you are not done with these matters, with the justice, the prosecutors, we are leaving. Go ahead and leave boys, if you don’t respect the laws of the land, but don’t think for one second that you will take the refinery with you,” said Basescu, quoted by Mediafax newswire. He suggested the government should take over the refinery if Lukoil scraps its local operations.

Prime Minister Victor Ponta commented that “no company would leave Romania because Basescu is upset.”

Lukoil had decided to restart production at the refinery on October 10, after one week of inactivity, according

to Daniela Tudorache, head of the Environmental Guard of Prahova County.

Oleg Malginov, the Russian Ambassador to Bucharest, told Mediafax newswire, that the statements of Romanian officials regarding Lukoil’s situation included “language that is far from what is accepted in international communication”, but said it would not comment on the situation. In a separate case, Romania was grappling with lower gas imports from oil company Gazprom, which reduced its supplies to Romania for two days, without providing any explanation. However, Russian imports have a small share in the total national consumption, which stands at around 9 million cbm daily, while production reaches 31 million cbm. At the same time, Romania has around 2.7 billion cbm in storage for this winter.∫ Ovidiu Posirca

www.business-review.eu Business Review | October 2014

NEWS 7

CEO CORNER Lucian Anghel Managing Partner BSS

Life at the office: now and going forward Life at the office means – besides hard work with meetings, deadlines, targets and memos – personal relations, nice people around you (well, not always!), bits of gossip over a cup of coffee, polite smiles and so many more personal, emotional things. Actually, we spend almost a quarter of our lives AT and IN the office and we often take home much office work and its spirit.

From the dull, grey-ish rooms in the old days, office space has now become a place for work, fun, challenges and relaxation as well. Office building owners, together with designers and facility managers, compete hard to make these working areas more attractive, even exciting, for increasingly demanding tenants, especially as most employees are now part of the end-X and Y generations. Everything is important: space flexibility, indoor microclimate, color patterns, ergonomic

furniture, noise protection etc., which are now the basics. Plus the amenities: conversation lounges, calibrated natural lighting, personalized scents or chill-out sounds set synergies up for enhancing creativity and increasing productivity. Friendly working conditions, intense online media usage and instant connectivity are musts in the new office areas. Micro-communities

pop up in organizations all the time, craving flexibility, so relaxing, socialization areas and social media integration in office tend to become the norm.

Earning dozens of hours of spare time a month, while being at the office, may sound somewhat offbeat. But recently launched concierge services in a capital’s business district come with a clear goal to increase the quality of life at work, by relieving busy employees of boring housework and tiring shopping and offering them a comfortable lifestyle at the office. Other services are available as well, such as car or laundry cleaning, personal care, short-notice event planning, car shuttle or secretarial support.

Another trend is the “vegetal architecture”, so “green building” is not just a metaphor when speaking about modern office buildings, but also a re-

ality, literally. As we, corporate people, find less opportunity to spend valuable time with and in nature, nature comes into our offices. Inspired vegetal arrangements may form eye-catching green cascades or small vertical glades, creating a stress-free, yet work-propitious environment.

There’s much more to be said on this ample topic, but most professionals involved in designing and fitting out modern workplaces stress that musthaves for new offices are communal multipurpose spaces designed to stimulate communication, cooperation and inspiration.

MONTH AHEAD October 20-21 EU-Southeast Europe Summit

The Economist has selected Romania as host country for the EU-Southeast Europe Summit - On the Road to Stability and Growth. Major names from Europe will come together to brainstorm, openly debate and put forward proposals on relevant issues.

PM Victor Ponta and his cabinet ministers will take part in the EU-Southeast Europe Summit Gala Dinner to share leadership strategy with decision-makers from politics, business, finance and academia from Europe on Romania’s potential, to help the country find its position on the global agenda. Other PMs and cabinet ministers from the region are invited.

JW Marriott Bucharest Grand Hotel.

Standard conference rate: EUR 800.

October 31 – November 2 DreamHack Masters Bucharest 2014 The biggest eSports event in Romania includes the Dota 2 Champions League LAN Finals; NESCAFÉ 3in1 Hearthstone®: Heroes of Warcraft ™ tournament; Romanian eSport Championship; Cosplay Contest;

League of Legends High School Tournament; Bring Your Own Computer area; Secret Shop; Arcade Area and more. Additional details available at www.dreamhack.ro.

Sala Polivalenta. Tickets can be purchased online at shop.computergames.ro.

November 1 EU-Ukraine agreement The association agreement between Ukraine and the European Union will fully enter into force. The political provisions of the agreement were signed in March, after Viktor Yanukovych, Ukraine's president at that time, was ousted and an interim government came to power. Current president Petro Poroshenko signed the economic part of the agreement in June.

November 2014 ∫EVENT Focus on Telecom Telecom and IT are two key industries shaping the future of both consumers and businesses. What will the future bring? How will technology impact the business environment, and what developments are taking place in the IT and telecom market? Discussions will center

on challenges facing players, strategic approaches and trends in the industry, government position and strategy.

More details about the fifth Focus on Telecom at www.business-review.eu.

November 2 – 16

Race for Cotroceni Romanians will head to the polls in November to choose their next president.

Over 18.3 million citizens in Romania and 530,000 living abroad are eligible to vote. The PSD’s Victor Ponta and liberal Klaus Iohannis are the main contenders, according to opinion polls. Monica Macovei and Calin Popescu Tariceanu are in the running as independents, while Kelemen Hunor represents the Hungarian party and Elena Udrea the Christian Democratic National Peasants’ Party.

November 18 Wolf of Wall Street in Romania Jordan Belfort, the American former stock broker whose story was portrayed in the Martin Scorsese movie The Wolf of Wall Street, will come to Romania for the first time to showcase his sales system Straight Line Persuasion in a conference organized by Extreme Training. Belfort says his program allows him to train any company or individual, regardless of age, education, field of activity, social status or experience, to achieve immediate results, wealth and success without compromising their integrity or ethics.

More details on the event at www.traininguri.ro.

www.business-review.eu Business Review | October 2014

8 ELECTIONS

Economic issues to be overlooked in presidential race Although the Romanian economy is in technical recession and foreign direct investments (FDI) are losing steam, the upcoming presidential elections will not focus on economic topics, predict political consultants. Foreign investors, meanwhile, have suggested that their investment plans are not linked to the presidential race. ∫ OVIDIU POSIRCA Fourteen candidates are vying for the top job, and their policies in the economic field vary from tax reductions to the development of key infrastructure projects. Others have made more ambitious promises such as the confiscation of the ill-gotten gains of wealthy miscreants and a law targeting debt collectors.

Nationalistic messages “I don’t think we will see an ‘it's the economy, stupid!’ kind of campaign.

Why? Because, compared with the times of austerity, a few years ago, we are better off now; salaries and pensions (and a lot of the people who vote care about that) have been restored.

Of course, some people are unhappy with measures like gas tax hikes or the pillar tax, but I do not see the economy as being key in this presidential election,” Radu Magdin, CEO of Smartlink Communications, a communication consultancy, told BR. “I see issues like rule of law, corruption, as well as candidate likability as key factors in November, particularly for the second round.”

Polls are showing that a large share of Romanians think the country is going in the wrong direction, with more than half saying they are worse off than last year from an economic perspective, says Radu Delicote, an image consultant at VIP Imagine, a communication consultancy.

Polls further indicate that less than 15 percent of respondents trust political officials and their decisions.

“We are observing a highly contradictory social context: on one hand, macroeconomically, Romania is functioning well (at least in statistics) but on the other hand the public perceives declining living standards,” Delicote told BR. On top of this, some Romanians remain nostalgic for the former communist regime, headed by Romanian dictator Nicolae Ceausescu. Polls say that over 60 percent of citizens believe that they lived better before 1989 (the year Ceausescu’s regime was toppled) or that things “were going in the right direction,” commented Delicote.

He added that the current presidential race is witnessing a surge in nationalistic messages.

Elephant in the room: although the economy shrank by a total of 1 percent in the first two quarters, candidates are not campaigning on the economy

Delicote suggested that the use of nationalistic topics is a double-edged sword, because it could convince more people to go out and vote, but at the same time could further widen the gap between undecided voters (the majority of the electorate) and the political class.

The second round of the presidential election in 2009, which was won

by President Traian Basescu, had a 57 percent turnout.

What will win it?

Magdin of Smartlink Communications suggested these elections will be won on the credibility of the presidential messaging, because the campaign themes and slogans are not that impressive.

He said that Prime Minister Victor Ponta, the candidate of the center-left PSD-UNPR-PC coalition, will try to position himself in total opposition to President Traian Basescu, hoping this election will not become a test of his government.

Klaus Iohannis, the candidate backed by the right-wing ACL coalition, will try to define himself in opposition to Ponta and the PSD, hoping to reach the psychological 30 percent milestone in the first round.

“The rest of the candidates will need a miracle to get to the second round,” said Magdin.

Delicote of VIP Imagine described

the November elections as atypical, first of all because there is a lot of fragmentation in the right-wing parties, with four candidates having thrown their hats into the ring.

Secondly, for the first time in Romania, there are two female candidates – Elena Udrea of the right wing PMP party and Monica Macovei, an independent.

He suggested victory will rest on either the formation of a strong coalition backing a candidate in the second round, the mobilization of an electorate that has been inactive since the 2004 presidential elections, or a surprise event that could dramatically change the face of the elections.

“I do not believe that the televised debates just before the elections will play a decisive role in the final vote, because this year’s campaign is being carried out on more media channels than in the past, from social media to mobile apps and guerilla marketing,” said Delicote.

Investment projects linked to elections

not

Mihai Bogza, president of the Foreign Investors’ Council (FIC), said members of the organization expect the presidential elections to be a fair and democratic process that signals the continuation of Romania’s road towards building a strong democracy.

“And I don’t think investment proj-

ects will be conditional on the elections, even less on their outcome,” Bogza told BR. The FIC has 117 member companies, whose investment stock in Romania amounts to EUR 35 billion.

“Since investors’ commitment to Romania is long term, and since elections are a normal part of democratic life, such cycles should not affect the economic environment, as they have already been factored in,” said Bogza.

He added, “That said, we are aware that in Romania, as in other countries, the authorities tend to postpone some difficult decisions until after elections, and sometimes make decisions based on the votes they expect such decisions will bring, rather than on mere economic rationale. As long as these decisions don’t have a major negative impact on the business environment, we can live with them.”

Representatives of the RomanianGerman Chamber of Commerce and Industry (AHK Romania) said they had no information on German companies that have put investment plans on hold until after the November elections.

Lack of a clear action plan in Brussels The management of foreign policy is one of the key responsibilities of the president in Romania, but candidates seem to have ignored this as regards the European Union and its impact on the country, say pundits.

Magdin of Smartlink Communications said this has good and bad parts.

“Good, because everyone accepts that our future is in the EU; we do not have mainstream eurosceptics. Bad because there are no substantial provisions detailing a vision as regards action in Brussels. In the end, it‘s the president who represents us in Brussels, even though he has to work closely with the government in defining EU policies and positioning,” said Magdin.

Delicote of VIP Imagine commented that subjects related to foreign policy, the EU or accession to the Schengen space are hard for regular Romanians to get their heads around, although these matters will impact their daily lives on the long run. otilia.haraga@business-review.ro

www.business-review.eu Business Review | October 2014

ELECTIONS 9

Meet the candidates BR presents the 14 candidates vying for the presidential seat. The list includes a breakdown of the main policy objectives and the political track record of each runner in the November elections. ∫ OVIDIU POSIRCA Victor Ponta

gional economy. He said the country needs a growth model for the economy that excludes austerity. According to his political manifesto, Ponta would back a national pact signed by all politicians after the elections.

Klaus Iohannis

teacher by profession, he has been mayor of Sibiu city since 2000. Iohannis is president of the liberal party (PNL) and became presidential candidate after Crin Antonescu resigned.

He has said he will guarantee individuals’ pension rights.

Dan Diaconescu

mogul, the 47-year-old started out as a newspaper journalist. His career took off after he founded his own TV station OTV, which was closed down in 2012. At the same time he set up his own extreme left-wing party, the PPDD, which has seats in Parliament.

He has been sentenced to three years in jail in a blackmail case, although the decision has not yet been made final. His political manifesto has 69 points, including the nationalization of Romania’s oil reserves and the reopening of his OTV channel.

Hunor Kelemen

PM since 2012, this is the 42-year-old’s first run for president. He became head of the left-wing Social Democratic Party (PSD) in 2010. Ponta would seek to turn Romania into a strong NATO member with a top re-

Iohannis, 55, is backed by the LiberalChristian Alliance (ACL). A physics

A businessman and former media

The 47-year-old is president of the Democratic Union of Hungarians in Romania (UDMR). He also ran in the 2009 presidential race when he got less than 4 percent of the votes. He was deputy PM and minister of culture in the Ponta government. He is seeking to increase the rights of minorities and has proposed the writing

www.business-review.eu Business Review | October 2014

10 ELECTIONS technics Faculty within the Construction Institute in Bucharest.

built his political campaign on nationalistic messages. Funar is calling for an increase in wages and pensions to levels similar to the EU.

Monica Macovei

Szilagyi Zsolt

of a new constitutional law.

Kelemen is a graduate of the Faculty of Veterinary Medicine and has also taken courses in philosophy at the Babes-Bolyay University.

Elena Udrea

Udrea, 41, is backed by the right-wing Popular Movement Party (PMP). She was minister of regional development and tourism in the cabinet of ex-PM Emil Boc. Udrea is seeking to reduce political influence and red tape in state institutions and to continue reforms in the education and health sectors. She is also proposing the start of the country’s reindustrialization process.

Macovei, 55, is running as independent after resigning from the PDL. She is an MEP and a former minister of justice. Her political manifesto contains “10 commandments”, and key measures she is proposing include higher public spending on health and education. She will be a president with the attitude of a referee, not a player, and will fight to protect the independence of the judiciary, according to her manifesto. Macovei holds a BA in Law from the Faculty of Law at the University of Bucharest and an MA in Comparative Constitutional Law from New York University and the Central European University.

Teodor Melescanu

Calin Popescu Tariceanu

Tariceanu, 62, is running for president as an independent. He is currently president of the Romanian Senate and was PM from 2004-2008.

Tariceanu said he wants Romania to become the seventh biggest economic power in the EU, pointing out that at present the country is trailing the EU in all fields, ranging from health and education to the overall wealth of the public. He is a graduate of the Hydro-

Another independent, Melescanu, 73, is a career diplomat and resigned as head of the Foreign Intelligence Service (SIE) a day before announcing he was running for president. He holds a PhD in law from Geneva University.

Melescanu said he would support a national unity government, adding that the country was grappling with a weak economy and security threats generated by the conflict in Ukraine and the advance of the Islamic State group in the Middle East.

mania and to nationalize assets and banks, while cancelling the privatization contracts of large companies. If elected president, he says he would lower VAT and the flat corporate tax to 10 percent.

William Branza

Constantin Rotaru

Branza, 42, was put forward by the Romanian Ecological Party (PER). He was previously a member of the populist extremist PRM, later moving to the right-wing PDL. He is a lawyer with a PhD in the subject. Branza was accused of being a covert intelligence officer, but rejected this allegation, saying he is a retired army lieutenant colonel. He has said that women should have a reasonable retirement age. His political manifesto also contains a strategy for promoting the usage of ecological light bulbs in Romania, and the construction of plants for these products.

Gheorghe Funar

The Socialist Alternative Party (PAS) candidate, 59, is a former member of the Romanian Communist Party (PCR) and also ran in the 2009 elections. Although he has not yet published his political manifesto, he said that he would do everything to prevent any change to the constitution.

Rotaru has a PhD in Economics.

Mircea Amaritei

Corneliu Vadim Tudor Head of the nationalist PRM, Tudor, 65, is running for president for the fifth time. He has been a controversial figure in Romanian politics, aggressively attacking his political opponents. Nonetheless, he was elected MEP in 2009. Tudor has pledged to wipe out the “55 mafia clans” in Ro-

Zsolt, 46, is backed by the Hungarian Popular Party in Transylvania (PPMT).

He has been head of cabinet of MEP Tokes Laszlo since 2007. His political manifesto focuses on the federalization of Romania, with the country becoming a bigger Transylvania.

Szolt is a graduate of the Polytechnics University at Timisoara’s Faculty of Construction.

Independent candidate Funar, 65, was mayor of Cluj-Napoca and general secretary of the Big Romania Party (PRM). This is the second time he has run for the presidential seat.

An economist by profession, he has

A lawyer and president of the left wing Prodemo Party, Amaritei is being prosecuted in relation to the insolvency of TV station Realitatea Media. Prosecutors said that alongside Maricel Pacuraru and Sorin Ionut Barbu, he backdated assignment contracts to generate losses for the company. He is president of the Prodemo Association and the Institute of Research of Behavioral Studies and Biometrics. Amaritei has called for a more serious campaign, adding that the elections in the past 25 years were a “circus”. ovidiu.posirca@business-review.ro

www.business-review.eu Business Review | October 2014

12 HR/WHO’S

WHO’S NEWS BR welcomes information for Who’s News. Submissions may be edited for length and clarity. Get in touch at simona.bazavan@business-review.ro

Razvan Butucaru

has been appointed financial advisory services director at professional services firm Mazars Romania. He will be in charge of developing the financial advisory services offered by the firm’s Bucharest office. With over ten years of professional, he previously worked as internal audit director of Garanti Group Romania and manager at PwC Audit Romania. He holds a bachelor’s degree in Finance with a major in Banks and the Stock Exchange and a master’s degree with a major in Internal Audit in the Financial Services from the Academy of Economic Studies in Bucharest.

Butucaru is a member of the Association of Chartered Certified Accountants (ACCA) and of the Chamber of Financial Auditors in Romania (CAFR).

Carmencita Constantin

is the new director of Alstom Thermal Services’ local service center in Bucharest. In her new job, she will be coordinating Romania, Bulgaria and Moldova.

Constantin holds a PhD in Energetic Engineering and has amassed 30 years of experience in the energy industry in Romania.

She joined Alstom after serving as director of the Strategic Energy and Environment Department within the Institute for Studies and Power Engineering. She has extensive experience in the local electricity industry, having worked as project director, consultant and partner on national and international projects.

Andreia Cucu

currently PR & communication manager at GSK Romania, will this month take over the position of GMS (global manufacturing systems) communications manager for two strategic programs at the company: global remediation and LOC quality programs. Cucu started her career in communication 11 years ago, for GSK, and for the last eight years has held various positions in internal and external communication. Since July 2013, she has been part of the Pharma Romania management team and previously spent two years as Central Europe communication lead.

Laura Alexandra Dinescu

has been appointed sales manager in the Romanian commercial team of Officerentinfo.com, the European office and industrial search network.

Dinescu has a degree in Business Administration from the RomanianBritish University in Bucharest and a master’s degree in Management and Business Communication from the SNSPA. With more than eight years of experience in the sales field, she has also worked as a sales and marketing director at Construction Machinery Magazine. She is fluent in English, Romanian, Italian and French.

Dragos Dinu

has been appointed CEO of Tiriac Holdings.

Dinu has over ten years of experience in fields such as FMCG, pharma, electronics and IT&C. Between 2002 and 2008, he served as CEO of A&D Pharma, a pharmaceutical distributor with over 3,000 employees.

Afterwards, he joined the Link Resource consultancy firm as partner and senior consultant.

In 2012, he was appointed CEO and member of the directors’ board at Domo.

Mirela Ivanov

is now director, advisory, corporate finance, energy and utilities, with KPMG in Romania. In her ten year professional career with the firm, Ivanov has managed high-profile projects and transactions on the Romanian and regional markets and led complex specialized teams of cross-discipline professionals. She began by delivering audit services and, over the past five years, has taken on new challenges, extending her skills and expertise to a wide range of disciplines within advisory services, with a particular focus on M&A, valuation, as well as strategy and competition in the energy sector.

Lucian Marin

has decided to leave his role at Gothaer Asigurari Reasigurari, part of the German insurance group Gothaer, one after year his appointment as deputy general manager of the insurer, in charge of the corpo-

rate business lines. Marin has concluded his mandate due to “differences of opinion” regarding the future of the company, according to a statement from Gothaer.

Anca Babaneata, CEO of the insurer, will also take over Marin’s duties until the appointment of a new manager.

Alin Negrescu

is now director, indirect taxation, with KPMG in Romania. Negrescu has ten years’ experience in tax advisory services, specializing in indirect taxation, and has managed and coordinated various projects including tax reviews, business restructuring, assistance provided during tax audits performed by the authorities, as well as specialized training courses provided to companies from various business sectors. Negrescu has ten years’ experience in tax advisory services, specializing in indirect taxation, and has managed and coordinated various projects including tax reviews, business restructuring, assistance provided during tax audits performed by the authorities, as well as specialized training courses provided to companies from various business sectors.

Ovidiu Popescu

is now director, advisory, corporate finance, energy and utilities, with KPMG in Romania. Popescu has ten years’ experience with KPMG and has built up expertise in the energy sector. He started his career as an auditor and over the past few years has provided a wide range of advisory services for the electricity sector in Romania and the CEE region. He has been involved in major transactions, forensic projects and competition advisory services.

Mircea Spinei

has been appointed coordinator of the cash management department of Banca Comerciala Romana (BCR).

He is a graduate of the Polytechnic Faculty in Bucharest, specializing in IT, and has recently graduated from the ASEBUSS Executive MBA program. Spinei has previously worked in the department of operations,

client service, implementation, product management and cash management sales at ABN AMRO Bank (Romania) and RBS Bank (Romania). He has also worked as director of banking transactions division at RBS.

Gabriel Tanase

is now director, IT & security services, with KPMG in Romania. Gabriel has been with KPMG in Romania for 12 years. He is a specialist in IT and IT security services. He gained experience as part of KPMG's IT audit and IT advisory department and specializes in IT and security testing services.

In the last seven years Tanase has also acted as the national IT security officer for Romania and Moldova and since this summer he has also coordinated the internal IT department.

Andreea Vasilescu

is now director, audit, energy and utilities, with KPMG in Romania.

Vasilescu has been with KPMG in Romania for 12 years and has wide experience in managing audits of large Romanian companies, as well as international groups operating in Romania. She has coordinated audit engagements mainly for the energy and utilities sector, as well as in other sectors such as retail, transportation and telecommunications. Vasilescu also has experience in capital markets transactions, having participated as an auditor in listing a large Romanian group on the Bucharest and London stock exchanges.

Avi Victorz

is now director, department of professional practice, with KPMG in Romania. Victor joined KPMG in mid2008. He has gained extensive experience in IFRS over his 14 year career with Big Four firms. During this time, he has covered a wide range of issues related to financial reporting and has provided consulting and training on IFRS issues.

www.business-review.eu Business Review | October 2014

INTERVIEW 13

Metropolitan sees room for growth in health insurance Emilia Bunea, CEO of the Romanian operations of US life insurer MetLife Group, says the company may look to expand in the health insurance business, if the authorities allow full tax deductibility on these products. She added that the insurer, which reported RON 262 million in written premiums last year, is also interested in covering services that are not part of the basic healthcare package. ∫ OVIDIU POSIRCA

CV Emilia Bunea

What is Metropolitan Life’s strategy for the pensions, health and life insurance business lines this year?

Romania is a strategic country for MetLife Group; we are investing in developing our operations on all business lines. In 2014, Metropolitan Life’s health and life insurance business lines are focusing on maintaining a high share for protection products, representing 40 percent of the current portfolio, and on developing customized insurance propositions for specific categories of consumers, starting with children and our complete Dr. KID value proposition. The portfolio of traditional products will be more balanced with unit-linked insurance.

The pension business was recently aligned to the Metropolitan Life brand identity; we will continue to provide professional services and will focus on obtaining top investment yields in the pension market, to our policyholders’ benefit.

How does the roll out of a basic health package influence your business?

The introduction of the basic package represents a very important step in the progress of healthcare reform.

When the basic package becomes more limited, to include only strictly necessary medical services, procedures and interventions, we will develop a complementary health insurance package that will cover those medical services not covered by

2007-2014 CFO of ING for life insurance private pensions operations and CEO of ING Pensii From 2000-2007 she worked in various positions such as deputy general manager and CFO of Interamerican Group (currently Eureko Romania) as well as executive roles within Capital Securities and Comtel Rom.

Courtesy of Metropolitan Life Romania

How many premiums does Metropolitan Life aim to write this year?

At the end of 2013, written premiums amounted to RON 262 million, putting us in second position on the life insurance market with a market share of 16 percent. For 2014 and the medium term, the directions for business development are to maintain a high portfolio share of life insurance with protection benefits and to continue developing packages dedicated to each market segment.

Our overarching objective is to bring at least one life insurance package into each Romanian home.

July 2014-present CEO of Metropolitan Life Romania

the basic package. Health insurance will eliminate the risk of not having the necessary money to pay for costly procedures and surgeries once an unfortunate event requiring them has occurred. By paying a regular amount of money each month, patients will be protected from these risks. We have an important role in making this transition by communicating the benefits of private health insurance to all consumers.

Does the company aim to expand insurance services in the health sector?

Our product portfolio already includes individual and corporate health insurance. The present packages are more focused on providing medical services related to hospitalization and surgeries, as well as bene-

fits for the recovery period.

An important factor in assessing our focus on the private health insurance market will be the introduction of full tax deductibility for health insurance products, both at the level of the employer and of the employee, as provided in the current draft of the Tax Code for next year.

What value of assets does Metropolitan Life have under management in the pensions segment?

Metropolitan Life Pensii holds a leading market position with RON 2.45 billion of assets under management (14.14 percent market share; number three in the market) as of end-August.

Metropolitan Life Pensii has been number one in terms of investment performance among pension funds

She holds a BA in software engineering from the Faculty of Automatic Controls and Computers. She has an executive MBA from Washington University in Seattle and a CFA certification.

with medium risk for the past two years, according to data from the end of September.

How do you think the recent issues in the insurance market related to faulty business practices are going to impact people’s confidence in this kind of service?

In my opinion, a consumer’s final choice is based on the image the insurance company has built in front of its customers. The closest and the most tangible connection of the consumer with the company is built by the life insurance consultant. The messages she or he sends out as well as the perception of a company’s brand are the main factors that can influence the customer’s decision.

I agree it’s better for consumer confidence if negative issues do not taint the financial market. Nevertheless, this is not the main factor in the decision-making process once the customer is aware of the need to insure her or his life or health. ovidiu.posirca@business-review.ro

14 LINKS

www.business-review.eu Business Review | October 2014

Local IT sector rocked by corruption scandals The recent Microsoft and Siveco corruption cases reveal a Lernean Hydra, each of its heads being a high-profile official. The scandal risks besmirching the image of the local IT industry, one the most prolific sectors in Romania. The question is: will it put investors off or, on the contrary, will this purging of the sinners prove beneficial for the industry? ∫ OTILIA HARAGA OVIDIU POSIRCA In an official statement sent to Business Review, the Employers’ Association of Software and IT Services (ANIS), said these investigations “prove that Romania is a country where justice is working and this is an encouraging sign both for investors as well as for those who wish to start and grow healthy businesses locally.”

ANIS went on, “In recent years, Romanian IT has been proven to be one of the factors supporting the growth in national competitiveness at global level. This year, Romania has climbed from 79th to 59th position in the Global Competitiveness Index as well as improving its position in the Global Innovation Index. Moreover, until now, Romanian IT has proven that there are numerous talents and people with vision who can develop successful companies regionally and globally. This is the field that has contributed a great deal in recent years to the growth of Romania’s global exports. According to the Romanian National Bank, the software and IT services industry has managed to bring over EUR 1.4 billion into the Digital scandal: corruption in the Romanian IT sector involves officials at the top of the political and business chains country, making it the sector with the second most exports in 2013.”

ANIS, as an association that repre- leaders in the region who seem to the tough words of the American offi- the public. Mrs. Nuland’s remark also sents the software and IT services in- have forgotten the values on which cial were directed at neighbor Hun- includes Romania. Corruption is a dustry, says it encourages the these institutions are based,” she said gary. “I believe both President Barack threat to national security. I should development of all companies in this in a speech.

Obama and Assistant Secretary Nu- remind those who do not recognize sector in a clean environment in The American official starkly land have an extremely critical public themselves in the statement that Mrs. which innovation and competition asked leaders in these countries: opinion regarding what is happening Nuland is speaking about parliaments come first.

“How can you sleep under your NATO in our neighboring country, Hungary, that are setting obstacles in the way of But the scandal that is staining Ro- Article 5 blanket at night while push- and I believe that since Mr Orban is justice,” said Basescu.

Nine local ex-ministers – Ecaterina manian IT is hard to sweep under the ing ‘illiberal democracy’ by day, whip- today in Romania, and in Bucharest rug. ping up nationalism, restricting free even, you have the opportunity to ask Andronescu, Valerian Vreme, Serban Recently, corruption in Central Euro- press or demonizing civil society! I him. As prime minister of Romania, I Mihailescu, Dan Nica, Adriana Ticau, pean states has drawn reprimands ask the same of those who shield do not wish to and cannot comment Gabriel Sandu, Daniel Funeriu, from American officials such as Victo- crooked officials from prosecution, in public when looking across the bor- Alexandru Athanasiu and Mihai Tanasescu – face prosecution followria Nuland, assistant secretary of state bypass Parliament when convenient der at others,” said Ponta. for European and Eurasian affairs.

On the other hand, President Tra- ing a Microsoft investigation into the or cut dirty deals that increase their “Across the region, the twin cancers of countries’ dependence on one source ian Basescu said Nuland’s statements lease of its licenses to schools. The democratic backsliding and corrup- of energy despite their stated policy should be taken seriously, because former government officials are charged with a series of offences, intion are threatening the dream so of diversification?” they also targeted Romania. many have worked for since 1989.

“I can see an extremely dishonest cluding abuse of office and money Romanian officials were split in And even as they reap the benefits of their reactions to Nuland’s statements. approach that harms politicians, from laundering. The contract under invesNATO and EU membership, we find Prime Minister Victor Ponta said Ponta to regular parliamentarians and tigation ran between 2004 and 2009.

www.business-review.eu Business Review | October 2014

LINKS 15

“In recent years, Romanian IT has been proven to be one of the factors supporting the growth in national competitiveness at global level. This year, Romania has climbed from 79th to 59th position in the Global Competitiveness Index as well as improving its position in the Global Innovation Index.”ANIS Anti-corruption prosecutors started to investigate following a request by the Control Body of Prime Minister Victor Ponta, which claimed that educational licenses had been used without any legal or contractual base since December 2009, during the mandate of Daniel Funeriu, former minister of education, and Valerian Vreme, former minister of communication.

In July, the DNA started an investigation in rem into influence peddling related to corrupt practices, bribery and abuse of office regarding the licenses investigation. At that time, Sorin Eftene, former interim general manager of Microsoft Romania, was called to testify in the case.

Prosecutors said that some of the former ministers had helped facilitate the signing of a licensing contract in

2004, which allowed a 47 percent discount granted by Microsoft to the government to be embezzled, and distributed in bungs to the individuals involved, according to news portal hotnews.ro The DNA added that it had evidence that the ministers had asked for money to favor Fujitsu Siemens Computers in operating the contract, at a price that was inflated by 40 percent.

At the end of last week, Claudiu Florica, the former head of Fujitsu Siemens, was questioned by prosecutors.

The investigation found that out of the USD 54 million paid by the government under the licensing contract and its extension, bungs paid to public officials amounted to USD 20 million.

In addition, the signing and

operation of leasing contracts for Microsoft Enterprise Agreement Subscription licenses with the D-CON.NET consortium was carried out in violation of the public acquisitions law by Funeriu and Vreme.

Prosecutors said this was done to favor certain companies.

In addition, prosecutors are claiming that a USD 200 million government program (SEI) to develop IT labs in public schools was also tainted by corruption. Both the software and equipment for the labs were overpriced and the public acquisition procedure favored Romanian IT firm Siveco, which is also implicated in the other high corruption scandal shaking the sector.

In that case, Siveco is suspected of creating a criminal network that robbed the state of an estimated EUR 10 million by acquiring fictitious IT services, from various companies created especially for the purpose.

Currently, Irina Socol, former president of the scandal-mired firm, remains in detention.

The two companies said they will fully cooperate with the investigation.

In the Microsoft case, the latest developments are that the plenum of the Chamber of Deputies will meet on October 13 to decide whether to allow the prosecution of deputy Valerian Vreme, announced the president of the chamber, Valeriu Zgonea.

He said the short ten-day term in which the deputies will pronounce a decision shows they are not shielding any deputy from justice, in response to recent criticism.

The DNA has asked the Chamber of Deputies and the Senate to start prosecution procedures against former ministers Ecaterina Andronescu, Serban Mihailescu and Valerian Vreme.

The Permanent Bureau ordered the Juridical Commission to present a report on the DNA solicitation within 15 days in the case of senators Ecaterina Andronescu and Serban Mihailescu and 10 days in the case of deputy and former IT&C minister Valerian Vreme.

The terms were slammed by opponents, who urged the process to be expedited. One of the most vocal opponents was former minister of justice Catalin Predoiu. “I condemn all of Parliament’s ways to slow down the investigation. The fact that the Senate president has granted a 15-day term for approving the prosecution of two senators under the pretext that the Juridical Commission of the Senate must study the 13 volumes of the file shows a hostile approach to the justice system,” said the former minister. otilia.haraga@business-review.ro ovidiu.posirca@business-review.ro

www.business-review.eu Business Review | October 2014

16 INVESTMENT

Foreign investors raising key questions about predictability Investors are still grappling with a lack of predictability in Romania’s fiscal and legal framework, while foreign direct investments (FDI) have continued their decline, falling by 13.8 percent to EUR 1.3 billion in the first seven months compared to the same period of last year. ∫ OVIDIU POSIRCA For years, foreign investors have decried the lack of proper consultation on the adoption of key bills that impact businesses. They are saying that any major changes to legislation need to be backed by impact studies.

Seeking a predictable path for business

Positive projections: foreign investors say Romania needs a more predictable rule-making process and a long-term plan for the development of the economy

companies whose cumulated investments in Romania exceed EUR 35 billion, accounting for two thirds of the total national investment stock. The member companies have created close to 200,000 direct and indirect jobs.

Investors welcome cut in labor tax The five percentage point reduction in social insurance contributions (CAS) paid by employers from October has been welcomed by foreign investors, although some commentators pointed out that the reduction could bring tax hikes next year.

“We were very grateful that the last major fiscal measure in 2014 was a tax reduction, namely the CAS. Its full positive effect on businesses will be felt in 2015. The government said that based on their own calculation no additional tax increase will be needed next year in order to offset the loss of revenues coming from the CAS reduction,” said the FIC president.

He added, “We believe this can be

achieved by a combination of improving tax collection and better allocating budget expenditures, and the FIC has proposed concrete solutions in this regard. Should the authorities live up to their promises, than we investors should not fear an increase in the tax burden, which would otherwise be very detrimental to the whole economy.”

Representatives of AHK Romania added that the cut in CAS could boost Romania’s attractiveness to investors on the short term. They noted that many foreign investors come to Romania due to the advantageous labor costs.

“German investors, mainly those active in cost-sensitive sectors, such as automotive, have certain advantages from the reduction in CAS,” said AHK Romania officials. “On the other hand, the effects of the reduction of this tax on the state budget have to be discussed, because any tax cut, if not compensated in a sustainable manner, loses its objective.

There is no point in cutting one tax to increase another. This will only increase transaction costs.”

FDI to Romania 2000-2014 (EUR bln) 2000

1.1

2001

1.3

2002

1.2

2003

1.9

2004

5.1

2005

5.2

2006

9.0

2007

7.2

2008

9.5

2009

3.5

2010

2.2

2011

1.8

2012

2.1

2013

2.7

2014*

1.3

*first seven months

Source: National Bank of Romania

“Predictability is one of the most important topics addressed by investors. Usually measures are undertaken to improve a law, but at the same time the legal framework is going backwards,” representatives of the Romanian-German Chamber of Commerce and Industry (AHK Romania), told BR. “We reckon that these improvements should not be introduced if they are not sustainable and designed for the long term, to avoid creating difficulties later.

We would like to see a long-term strategy and well thought out actions in the field of fiscal policies that are then transposed into legislation,” they added.

AHK Romania is the biggest chamber of commerce in the country, with around 530 members currently. Germany is the third largest FDI generator in Romania, with overall investments reaching EUR 6.5 billion at the end of 2012, according to data from the National Bank of Romania.

Meanwhile, Mihai Bogza, president of the Foreign Investors’ Council (FIC), told BR that some legal initiatives are “worrisome” because of their potentially negative impact on investors, citing several measures impacting the banking sector.

“I think until we see such initiatives stopped for good, most banks will think twice before undertaking new investment projects. I am referring mainly to the draft law on the conversion of foreign-exchange loans to individuals using the historical exchange rates, but unfortunately this is not the only one,” said Bogza.

The FIC currently has 117 member

www.business-review.eu Business Review | October 2014

INVESTMENT 17

Courtesy of AmCham Romania

Courtesy of FIC

Mihai Bogza FIC President

Valeriu Nistor AmCham Romania President

A business sentiment index by the FIC published in October has revealed that close to 45 percent of respondents (its member companies) felt in June that the overall legislative, fiscal and administrative environment had slightly

worsened since the end of last year.

The respondents added that burdensome and costly red tape, as well as the lack of planning capabilities of the authorities and administrative bodies were making them cautious in their in-

vestment decisions.

Close to half of the respondents said they were planning to keep investments broadly at last year’s level, while 24.14 percent would be likely to invest more and 6.9 to cut investments significantly.

The respondents said they saw little reason for optimism and that investment in Romania would probably be postponed until things pick up.

Only 24 percent of the surveyed companies were planning a small increase in staff, while most said they would keep their current headcount steady.

Mapping Romania’s priorities AmCham Romania, the business advocacy group, launched in October this year’s Priorities for Romania document, which includes recommendations in a wide array of sectors, from the reform of the public administration to action points in key sectors of the economy such as energy and agriculture.

Valeriu Nistor, president of AmCham Romania, said, “The main conclusion of this analysis, which AmCham Romania proposes as the strategic priority of the

next presidential mandate, is the need to define a multigenerational economic development model to guide Romania’s socioeconomic progress.”

The document was released just before the start of the presidential race, which will culminate in two rounds of voting on November 2 and 16.

From a macroeconomic perspective, AmCham has called for the authorities to stick to the Medium Term Budgetary Objective (MTO) of lowering the deficit to 1.4 percent of GDP, from this year’s target of 2 percent.

In the document, AmCham called for “the accommodation of new budgetary expenses through the restructuring of inefficient expenses, the implementation of structural reforms through a taxation system closer to the European one, aimed at increasing budget revenues, and not expanding the budget deficit.”

AmCham has over 370 members who are US, international and local companies, with an investment stock of USD 20 billion. They have generated around 200,000 jobs in Romania. otilia.haraga@business-review.ro

www.business-review.eu Business Review | October 2014

18 INFRASTRUCTURE

Investors wanted for local infrastructure Romania needs to invest around EUR 50 billion through to 2030 to modernize and expand its transport infrastructure, according to the Master Plan published this month by the Ministry of Transport. Experts say that European financiers have an appetite for infrastructure and that Public Private Partnerships (PPP) could help Romania meet its infrastructure goals. ∫ OVIDIU POSIRCA

Stefan Roseanu, market research analyst, Club Feroviar

Nicolae Ursu, senior coordinating lawyer, bpv Grigorescu Stefanica

According to Ruxandra Chirita, director of advisory services at PwC Romania, the professional services firm, the Transport Master Plan “justifies the prioritizations of projects given the limited financial resources available to the country, irrespective of the source of funds.”

Chirita told BR, “Transport infrastructure projects are capital intensive, need a long time to reach completion, have to be operational for a long time (25 plus years, thereby being a constant source of expenditure) and involve a significant number of risks (not all of them easily identifiable and quantifiable in the feasibility/design stage), hence a thorough planning of resources is the only way to get such projects completed.”

working as a communication platform in the transport field, points out that Romania has “huge potential” in freight transport, but it all depends on how the country is able to manage its resources.

Romania is sixth in the EU by the share of freight transported by rail, according to 2011 data from Eurostat, the EU statistics office.

“Constanta Port could become one of the most important freight access gates to Central Europe if we learn how to develop rail transport infrastructure. Let’s not forget that we have landlocked neighbors (Hungary, Serbia, Slovakia, Czech Republic and Austria) that are complementary markets to Romania for

Growth potential down the line for rail freight Discussions regarding the development of transport infrastructure have in recent years focused primarily on the development of motorways, while investments in rail have been overlooked, according to commentators.

Stefan Roseanu, market research analyst at Club Feroviar, a consultancy

Road infrastructure at end 2013 Motorways

644 km

Express roads

0 km

National roads

16,466 km

County roads

35,587 km

Communal roads

32,190 km

Total

84,887 km

Road builders hit by insolvencies

Source: National Statistics Institute (INS)

The Master Plan maps investments in all segments of infrastructure (road, naval, rail, air), including key strategic projects such as the Trans-European Transport Networks (TEN-T).

“But the Master Plan could (and definitely could) be changed, because the actions it includes are not mandatory. It would, however, be recommendable for the Master Plan to become a draft bill, so as to offer more credibility to potential financiers and constructors, although it is not the law itself that can provide credibility (Romania being known for its legal instability), but, actually, the axis of the future POIM – as once this program were approved it would be impossible to change it without the approval of the EU,” said Ursu.

The lawyer commented that the plan seems to play more of a procedural role because it mentions that the projects ready to be financed and the public authorities that will manage them will be included in a separate strategy report containing the implementation plan. This will include the cost-benefit assessment of the investments, the feasibility studies, the results of the environmental assessment and a more realistic implementation calendar.

Courtesy of bpv Grigorescu Stefanica

More plans before building sites opens

Courtesy of Club Feroviar

The plan was drawn up by US engineering firm AECOM at a cost of EUR 2 million, fully financed from EU money.

“The Master Plan is a mandatory instrument for obtaining EU financing in the transport sector – given the repeated requests of the European Commission (EC), but also because this is an ex-ante condition for accessing structural and European investments,” Nicolae Ursu, senior coordinating lawyer at law firm bpv Grigorescu Stefanica, told BR. He added that the Master Plan is a preliminary step for the approval of the Large Infrastructure Operational Program (POIM) by the EC, the executive arm of the EU. Romania’s Ministry of EU Funds has proposed funding of EUR 9.4 billion for the program in the current seven-year EU budget that runs through to 2020.

the demand for transport,” Roseanu told BR. He added that transit routes from the Balkans that provide links to Asia, through Turkey and Greek ports, are also important.

“None of these routes will be able to develop properly in the absence of quality rail infrastructure, given the limitations of truck transport from the perspective of transport capacity and commercial speed of freight from producers to shop shelves,” argued Roseanu.

He pointed out that Romania needs to invest over EUR 20 billion to finish the railway linking Constanta to the western border with Ukraine, which is half done, and to overhaul other key domestic routes.

Roseanu said that at present national and European financing in the rail sector is limited to a maximum of EUR 400 million annually.

The laborious construction of roads has also been exacerbated by the insolvency of some construction firms, which has led to the enforcement of amendments to the founding law of the national road administration agency, the CNADNR. “According to the new provisions, the sub-contractors of the general contractor within the framework of a public acquisitions contract for road works will benefit from the security mortgage right over the sums owed by the CNADNR to the general contractor. This security mortgage was enforced to guarantee the fulfillment of payment obligations assumed by the general contractor as opposed to sub-contractors based on the respective public acquisitions contract,” said Ursu.

He added that other provisions in the amended law offer greater guarantees to sub-contractors so that they will not seek the insolvency of the general contractor, but if this happens they will have privileged receivables over other creditors.

“The important thing for the CNADNR seems to have been the need to offer subcontractors certain protection so that they do not abandon the building works as soon as the general entrepreneur has difficulties in pay-

www.business-review.eu Business Review | October 2014

ment, a situation that is sometimes caused by the public authorities,” said Ursu.

Romanian construction group Romstrade and Austrian firm Alpine have been the biggest road builders to have filed for insolvency, while the owner of Tehnologica Radion, another company that lays roads, is being prosecuted in a tax evasion case.

“It is unfortunate that it has come to this, especially because insolvency may cause significant execution delays.

However, the market regulates itself and there are new firms filling in,” said Chirita of PwC Romania.

How to finance and build infrastructure The pipeline of local infrastructure projects can be financed either by institutional lenders or by the EC, according to experts.

“The financing methods for public investments that involve large capital expenditure have become more sophisticated in recent years, as new categories of investors have emerged,

INFRASTRUCTURE 19

Cost of prospective road projects in Transport Master Plan Motorways Express roads

479 km 2,403km

such as pension funds and insurance companies, looking for long-term investments at a reasonable profit rate and which could counterbalance their short-term investment portfolio and the placements in state treasury bonds,” said Chirita of PwC Romania.

“Also, specialized investment funds have become more active, seeking to become shareholders in project companies, assuming the construction risk along with strategic investors and thereby increasing the confidence level of commercial lenders,” she added.

Some of the motorway projects included in the Master Plan seem quite attractive judging by their Economic Internal Rate of Return (EIRR). For instance, the Sibiu-Brasov motorway,

EUR 5 billion (VAT excluded) EUR 18.7 billion (VAT excluded) which requires an investment of EUR 690 million (VAT excluded), has an EIRR of 17.3 percent, while the Comarnic-Brasov motorway, which has a cost of EUR 1.1 billion (VAT excluded) has an EIRR of 8.8 percent.

Specialists suggested that an efficient Public Private Partnerships (PPP) law could accelerate the construction of new motorways.

“Following the financial and debt crisis that began in 2008, in Europe at least, it has become clear that large infrastructure projects can no longer be financed purely publicly or privately but rather through a well-balanced combination of the two sources, as the public sector is under increased pressure to monitor its spending while the private sector is less

inclined to fully assume the construction risk in its entirety,” explained the PwC Romania manager.

She added that Europe still relies to a large extent on banking finance for its infrastructure projects as opposed to other financing mechanisms such as project bonds, with a few exceptions (the UK, Germany, France and Benelux).

Romania has a new PPP draft bill, which is currently awaiting final approval in Parliament after the Constitutional Court rejected it. The bill has been amended and should replace the current law, which specialists say is defective.

Roseanu of Club Feroviar pointed out that the identification of projects eligible for PPP could tempt private investors to the rail sector.

“Lines that provide connections with airports and the reconstruction of neighborhoods around stations are examples of projects that can bring profit both for the state and the private investor,” stated Roseanu. ovidiu.posirca@business-review.ro

www.business-review.eu Business Review | October 2014

20 ENERGY

Romania seeks investors to reach energy sufficiency While Razvan Nicolescu, delegate minister of energy, has stated that Romania needs EUR 50 billion of fresh energy investments to strike sufficiency around 2020, experts say European financiers’ appetite to back major projects has been curbed. ∫ OVIDIU POSIRCA

Experts commented that some renewable projects, interconnections and offshore oil and gas developments have strong potential to attract investments.

Robert Ghelasi, managing partner of Energie Finanzierung und Kapital (EFK), which specializes in investment banking services for the energy sector, stated that projects in the field of energy efficiency, micro generation, waste to energy, micro hydro and biogas and biomass have growth potential for the

56.65 TWh Romania’s electricity consumption in 2013

12.4 mln cbm Romania’s gas consumption in 2013

Source: ANRE

Photo: Laurentiu Obae

Investment opportunities

gov.ro

Nicolescu commented recently that the country will need to attract around EUR 4-5 billion in the next decade to become the second country in the EU that is energy independent, joining Denmark.

The minister added that these investments could be backed either by the state or domestic capital, which would be difficult, or by foreign capital.

“There is the possibility that this EUR 4-5 billion could take the form of financing from state-owned companies. Here we have huge potential. I am glad that the listings of Nuclearelectrica, Romgaz and Electrica have made it possible, for the first time this year, for the total investment budget of state-owned companies to exceed EUR 1 billion.

State-owned energy companies’ budget for 2014 is EUR 1.3 billion,” said Nicolescu, quoted by business magazine Capital.

Razvan Nicolescu, delegate minister of energy

Robert Ghelasi, managing partner, EFK

years to come.

“In addition, investments in interconnection lines with neighboring countries could increase the export capacity for energy, which at the moment is extremely limited,” Ghelasi told BR. Romania’s renewable boom has generated over EUR 6 billion of investments over the past five years, with most projects being developed in the wind and solar sectors.

Cristian Colteanu, regional executive for Romania, Bulgaria and the Republic of Moldova at General Electric, said last month during an event organized by AmCham Romania, the business advocacy group, that the windows of opportunity for wind and solar projects have closed. He mentioned, however, that biogas and biomass could be new growth avenues.

The installed capacities in biomass and biogas had reached 91MW and 9.6MW, respectively, by the end of August. Experts say investors have held back from developing such projects due to additional requirements in securing the right raw materials to power them.

Most of them have flocked to the wind and solar sectors, where the installed capacities have reached 2.8GWh and 1.2GWh, respectively.

The government’s intervention to cut the incentives for the renewable sector has dramatically reduced the

pipeline of new projects.

Falling consumption One of the key features taken into consideration by potential investors is the forecast of energy consumption in the coming years. Domestic consumption fell by 5 percent last year against the previous year to 56.65 TWh, according to a report by the energy regulator ANRE. Gas consumption also fell by 8.1 percent to around 12.4 million cbm yearon-year in 2013, according to the energy watchdog.

“The reduction of consumption is for a short period; on the long term it will grow in line with GDP. At present, investors are waiting. Most of those that have invested in the renewable capacities are disappointed,” said Ghelasi.

He added that European financiers do not have any appetite for backing energy projects due to the unpredictable legal framework.

“They have the appetite only for corporate finance where the appeal is based on the creditworthiness of the parent company and not the merits of the project itself,” added the managing partner.

Colteanu of GE said the new gas discovery off the Romanian coast is an opportunity because it is a resource on EU territory and will be a new gas pipeline crossing European soil.

According to energy experts, gas in the Black Sea and shale gas could help Romania become energy sufficient by the end of this decade. US oil major ExxonMobil and Austrian energy company OMV Petrom are currently seeking gas in the Black Sea, while US Chevron is looking for shale gas in eastern Romania.

In the meantime, the government is working to redesign the royalties mechanism for the oil and gas sector, which, according to media reports, will have lower rates for offshore developments, because the investments are bigger.

Looking east for financing For the past two years, the government has been trying to woo Chinese companies with enough financial clout and know-how to build large-scale generation projects in the electricity sector.

State-owned nuclear producer Nuclearelectrica is among the key energy companies looking to attract Chinese capital.

The producer has organized a tender to take place later this year for the construction of two nuclear reactors at Cernavoda, which require an investment of around EUR 6.5 billion. China General Nuclear Power Corporation (CGN) has qualified for the first stage of the selection process for the investor. The Chinese company was the only one interested in the project. According to Nuclearelectrica, the start of negotiations regarding the setting up of the project company should take place at the end of November.

A consortium comprising Europebased utilities that was supposed to build the two reactors disintegrated at the end of 2013. Executives said the deal collapsed because nothing was happening on the part of the state, which was also involved in the project company.

Authorities are looking to the Chinese to modernize some electricity generation capacities and to build the pumped-storage electricity plant at Tarnita, which requires an investment of around EUR 1.3 billion. ovidiu.posirca@business-review.ro

www.business-review.eu Business Review | October 2014

22 AUTO

Local infrastructure development in driving seat of carmakers’ future With new car registrations up by more than 25 percent to just over 36,000 units in the first eight months of this year against the same period of 2013, the government’s plans to replace the construction of motorways with much cheaper express roads could negatively impact the strategies of carmakers Dacia and Ford, according to analysts. importers – obviously we cannot discriminate at all – but I would not like to hide my preference for national producers,” said the PM earlier this month.

∫ OVIDIU POSIRCA

Romania’s car production chalked up a fresh record last year, growing by 22 percent to 410,000 units. The output of Dacia, controlled by French carmaker Renault, rose by 12 percent to 342,000 units.

Nicolas Maure, president and general manager of Dacia and general manager of Renault Romania, said earlier

Courtesy of Ford Romania

Destination: exports

Lack of infrastructure sees operations stall

Courtesy of Dacia

The local car market is set to grow by 10 percent against last year, but this will involve a small gain in volume, according to Constantin Stroe, president of the Association of Automotive Manufacturers in Romania (ACAROM) and vice-president of the administration board at Automobile Dacia.

Data from the department of driving licenses and car registrations (DRPCIV) show that 57,710 new cars were registered in Romania in 2013, down 13.1 percent compared to the previous year. In the same period, registrations of imported used cards soared by 26.8 percent to 205,553 units.

Sebastian Ilinca, senior consultant at Ensight Management Consulting, said that the car market has to deal with several variables, such as buyer caution and the evolution of the economy, which will “suffer following the electoral year.”

“The evolution will therefore not be that promising regarding value. The volumes could be relatively good, reflecting the drop in value per purchased vehicle,” Ilinca told BR. The two carmakers have also attracted a plethora of parts makers that supply anything from cables to batteries and speed sensors.

Nicolas Maure, president and GM of Dacia and GM of Renault Romania

Zoltan Brassai, general manager, Ford Romania

this month that Dacia has to remain competitive in the entry range in comparison to its competitors, while the industrial platform in Mioveni must stay competitive compared to other plants in the Dacia-Renault alliance.

Dacia’s sales rose by 30.2 percent in the EU including Romania in the first eight months, during which time the company sold 17,000 cars, giving it a market share of 33.1 percent.

In the last four years, Dacia has exported 90 percent of its production to more than 42 countries.

US carmaker Ford, meanwhile, more than doubled its production of the BMax to 68,339 units last year compared to 2012. The company had aimed to sell over 100,000 cars, but in the last three months of 2013 it had to grapple with lower demand on European markets, which forced it to suspend production several times at its Craiova plant.

In the first eight months of this year,

Ford’s car registrations in Romania rose by 51 percent to just over 4,600 units.

Zoltan Brassai, general manager of Ford Romania, said in a statement he hoped the growth trend would be maintained to year end, so that Ford could reach a market share of 8 percent.

New car registrations in Romania 2010

2011

2012

2013

116,012

94,541

81,709

66,436

57,710

Source: DRPCIV

2009

First car buyers get foot on the pedal The government is also trying to lend a hand to the auto industry by helping young drivers buy cars. The program, known as First Car, will target 18- to 35year-olds.

The state will guarantee 50 percent of loans up to RON 50,000 (EUR 11,350) taken out by individuals to buy new cars. The government estimates the program will generate annual sales of 20,000 units.

Constantin Nita, minister of economy, said that one of the program’s main goals was to sustain the local production of cars, which would have “multiple effects on the horizontal industry.”

Prime Minister Victor Ponta said the program eases young people’s access to bank loans and targets those on a low income. “I do not want any conflict to emerge between local producers and

The lack of proper road infrastructure is also denting carmakers’ export capabilities, according to commentators. For years, both Ford and Dacia have been calling for the construction of new roads, which would help them streamline the delivery of cars abroad.

The key road infrastructure projects sought by the carmakers are included in the Transport Master Plan. The plan, released this month, maps the country’s priorities in developing road, air and maritime infrastructure. The Master Plan has also been requested by the European Commission, the executive arm of the EU, and is an instrument for tapping EU funds through to 2020.

In the Master Plan, the prospective motorway linking Sibiu and Pitesti has been transformed into an express road.

Dacia has long been calling for the development of this project, which would allow its plant in Mioveni to remain competitive.

Stroe of Dacia told BR that if the road is not built, “there will be some dramatic consequences, at least for the automotive industry.”

Ilinca of Ensight Management Consulting commented, “The infrastructure issues that are expected to continue after Romania officially gives up the construction of motorways will badly hit the medium- and long-term strategies of companies already present here.”

He added, “Even on the short term, deterioration is expected, taking into account the falling competitiveness of the local labor market (in terms of price and lack of specialists, which will worsen due to demographics and the lack of clear future opportunities), along with the poor evolution of the local economy and infrastructure issues.” ovidiu.posirca@business-review.ro

www.business-review.eu Business Review | October 2014

IT&C 23

Big IT up: the sky’s the limit for local tech sector The local IT industry is one of the shining stars of the Romanian economy. The country is famed for its well trained IT labor pool and also grants state aid and tax exemptions to foreign investors interested in opening up such businesses here. With programmed investment as part of the Digital Agenda for Romania, pundits say the only way is up for local IT. ∫ OTILIA HARAGA According to data sent by the National Institute of Statistics (NIS) to Business Review, revenues from IT services represented 2.4 percent of GDP. Last year, IT companies in Romania exported EUR 1.4 billion of services, surpassing even the tourism sector. IT exports posted 30 percent growth on the previous year, which put IT second in a ranking of services exported by Romania.

Data from the NIS put the number of employees in the information technology and related IT services sector in July 2014 at 45,500, up from the start of the year, when it amounted to 41,500.

Average net salaries in IT grew steadily in the last half year, from RON 3,739 at the end of January to RON 3,953 at the end of August.

Further figures from American research company Gartner show that there are approximately 64,000 experts working in IT in Romania, which makes the country a leader in the European Union for the number of employees in this field compared to the population as a whole.

Not only that, but Romania comes sixth in the international ranking. Gartner says Romania offers a well trained

Number of employees in the IT sector January- July, 2014 January 2014

41,500

February 2014

42,100

March 2014

42,300

April 2014

43,000

May 2014

43,600

June 2014

44,400

July 2014

45,500

*Source: National Institute of Statistics

Towards a more digital society: IT will gain even more importance in the future

labor force and a low cost of IT services.

Over the past 10 years, over 50 technology giants have opened offices in Romania.

Of the biggest employers in the Romanian IT software and services sector, HP Geboc comes first, with 2,869 employees, followed by Oracle Romania (2,275), IBM Romania (1,519), Ubisoft (1,086) and Gameloft (981), according to data from the Ministry of Public Finance, quoted by Ziarul Financiar.

The growth of the industry has been encouraged by the government over the past few years, as it granted financing to large job creators and tax exemptions for IT employees.

This year, the Romanian government has approved EUR 67.27 million in state aid for 11 technology companies, which have committed to create nearly 3,000 jobs over the next three years.

These firms expect to incur wage bills of nearly EUR 150 million by implementing these projects. The 11 are Luxoft, Pentalog, Siemens, Ness Romania, Atos IT Solutions, Accesa IT Systems, Vodafone Technologies, eMag IT Research, Computer Generated Solutions, Teamnet Business Services and SAP Romania.

Last year, another 11 companies received state aid: Endava Romania, IBM Romania, Telecom Global Services Center (Orange), SCC Services Romania, Dell International Services, Microsoft Romania and DB Global Technology, ac-

Average net salaries in IT January 2014

RON 3,739

February 2014

RON 3,950

March 2014

RON 3,890

April 2014

RON 3,872

May 2014

RON 3,815

June 2014

RON 3,922

July 2014

RON 3,880

August 2014

RON 3,953

*Source: National Institute of Statistics

cording to Hotnews.ro The sector was encouraged with substantial tax exemptions. Under fiscal legislation, the 16 percent revenue tax is not applicable to salaries for software development activities.

Romania is the only country in the region that does not tax IT employees’ salaries. This means that locally, for an employee who negotiated take home pay of EUR 1,000, the income tax due is EUR 198 (compared to EUR 426 ordinarily) and the taxes that the company must pay are EUR 332 (compared to EUR 396), according to Accace.

The facilities granted by the state to IT employees, the exemption from income tax, reduces the salary taxes that the company owes the state, which leads to a reduction in the value of social contribution, according to Accace experts.

The sector will also get an investment boost: Romania should invest EUR 3.9 billion to attain its IT&C targets by 2020, which include growing its broadband coverage, the use of e-government services, online sales and the number of IT&C employees, as part of the National Strategy Digital Agenda for Romania, published by the Ministry for Information Society.

“A correct implementation of the strategic vision for IT&C in Romania, which should fulfill the country’s specified targets, will require a total investment of more than EUR 3.9 billion. The direct and indirect impact on the economy, calculated in conformity with good practices in other European countries that have made similar investments, can be translated into a GDP growth of 13 percent, an 11 percent increase in the number of jobs and a 12 percent decline in management costs over 2014-2020,” states the document.

The development of the broadband network will attract EUR 3.1 billion, which is the bulk of the investments.

The National Strategy Digital Agenda for Romania directly targets the IT&C sector and will directly and indirectly contribute to the development of the economy, making Romania more competitive.

The strategy aims to attain full broadband coverage in 2020, as well as achieve a fourfold growth in the number of SMEs who sell online to 20 percent in 2020. Also, the proportion of the population who have never used the internet should shrink from 48 percent in 2012 to 30 percent in 2020, while the percentage of citizens who are using egovernment services should grow from 5 percent in 2012 to 30 percent in six years’ time. otilia.haraga@business-review.ro

www.business-review.eu Business Review | October 2014

24 REAL ESTATE

Real estate builds upon office growth Office has been by far the best performing real estate sector this year, with net take-up increasing by about 40 percent in the first semester y-o-y and approximately 95,000 sqm of new office space delivered in Bucharest alone. There is good news from the retail and residential sides as well, with several major projects in the pipeline. ators who are expanding their surfaces as a result of increased business, including from growing online sales, as well as through the expansion of retailers, hypermarkets especially, thinks Dana Bordei, head of the industrial business development at CBRE. In the industrial sector, the automotive industry is the main growth engine, she went on.

The fact that the market is growing more dynamic also means that there are signs that developers are returning to the idea of speculative developments, both in Bucharest and in the main cities, Timisoara in particular, added Bordei.

∫ SIMONA BAZAVAN Office leads the way The first half of the year was marked by the “revival of tenants’ interest in new office space” which in turn generated total take-up of 128,500 sqm, out of which net take-up represented approximately 55,000 sqm, according to a Colliers International Romania report.

This was up by 40 percent against the same period of 2013 and even surpassed the peaks reported in the corresponding periods of 2007 (115,000 sqm) and 2008 (125,000 sqm) for the first time, according to the same source.

“After five years of precaution, the market is showing obvious signs of confidence and growth, with new developments on the horizon, spurred by increased demand for new entries, expansions and consolidations,” commented Georgiana Andrei, director of Colliers International Romania’s office agency team.

Where is this growth coming from?

Companies active in IT, outsourcing and telecom remain the main players driving up the local office market, according to both developers and real estate firms. Over one third of last year’s office transactions involved IT firms, as did about half of those sealed in the first semester of this year, according to CBRE data. Lower costs than Western and Central Europe, a versatile labor force and overall improving economic performances are expected to continue fueling this trend.

Residential lags behind

Towering above: office is proving to be the most dynamic real estate sector

Only one shopping center delivered in first semester In early September, real estate investment fund New Europe Property Investments (NEPI) opened the EUR 47 million Vulcan Value Centre retail park in southwest Bucharest. On October 16, the fund was due to open a second shopping center, Shopping City Targu Jiu. These two projects are the only modern shopping centers to be opened this year in Romania. According to a previous JLL report, their combined surface, 62,000 sqm, marks the lowest annual level reported since 2005.

However, several major projects, the largest of which are ParkLake and Mega Mall in Bucharest, are currently

Real estate market overview (H1) l Total take-up – 128,500 sqm, up by 40 percent against H1 2013 and above

the levels reported in H1 2007 and H1 2008

l Net office take-up – 55,000 sqm l New retail supply (GLA) – 0 sqm l Total leasing activity involving industrial and logistics space – 89,000 sqm l House prices – down by 3.8 pct in Q2 y-o-y and by 1.3 pct q-o-q

Source: Colliers International Romania, DTZ Echinox, Eurostat

under construction and CBRE estimates that the total new modern retail supply to be delivered between 2014 and 2016 will surpass 350,000 sqm.

Demand for logistics and industrial space picks up The manufacturing industry and retailers are driving up demand for logistics and industrial space both in Bucharest and outside, data from the first semester show.

Total leasing activity involving modern industrial and logistics space reached 89,000 sqm in the first six months of 2014, while take-up amounted to 61,000 sqm, according to a DTZ Echinox report. Outside Bucharest take-up was similar to a year ago, but in the capital it increased to 34,000 sqm, up from 20,000 sqm in 2013, according to Rodica Tarcavu, head of the industrial department at DTZ Echinox.

Through to the end of the year the sector is expected to perform well and there are the premises for leasing activity to top last year’s level, pundits agree.

This should also lower the overall vacancy rate of 8 percent reported in the first semester, but even so rents are expected to continue to stagnate.

Demand is driven by logistics oper-

Developers have been talking about the residential market picking up since the beginning of the year, but actual green shoots have yet to sprout. Moreover, house prices have continued to drop, the most recent data from Eurostat indicate. In the second quarter of this year, property prices were down by 3.8 percent versus the same quarter last year and by 1.3 percent against the previous quarter.

The overall evolution of the economy and purchasing power, and banks’ reluctance to finance residential developers are the main factors stalling the start of new housing projects. However, even in these conditions several local developers and international players have made public their plans to start works. Most recently, Romanian real estate developer Impact announced that it would begin a residential project on a 26,000 sqm plot of land close to the Barbu Vacarescu area in Bucharest which it bought for EUR 9 million.

One of the largest residential investments currently under construction belongs to Hanner Group. The Lithuanian real estate developer is putting EUR 37 million into a three-block residential project near Tineretului Park in Bucharest. Construction of the first block, which consists of 69 apartments, began last year and was completed in the first semester of this year. Another three blocks will be built as part of the same project by 2017. simona.bazavan@business-review.ro

www.business-review.eu Business Review | October 2014

AGRICULTURE 25

Agriculture advances despite unresolved issues Early forecasts point to a good agricultural year in 2014 with most crops reaching higher production levels than last year. Moreover, this year will see the coming into force of the first measures of the National Program for Rural Development (NPRD) for the period 2014-2020, which promises better targeted investment projects and simplified application procedures. ∫ SIMONA BAZAVAN Seven years after Romania joined the European Union (EU) and local farmers cashed in over EUR 10 billion in EU funds, the country’s agriculture sector has managed to register progress in areas such as cultivated surfaces and overall vegetal production.

This year Romania is expected to report a wheat production of some 7.37 million tonnes, below the initial estimation of 8 million tonnes, but still slightly above last year’s level, according to data from the Ministry of Agriculture and Rural Development (MADR). Corn production is projected to surpass 11 million tonnes, which would make Romania the second biggest producer in Europe behind France. After Romania reported a positive trade balance for food products in 2013, for the first time in 20 years, albeit with the bulk of exports raw materials and not processed goods, a similar result could be achieved this year as well, hopes Daniel Constantin, Romania’s agriculture minister.

A good sign that the local agriculture sector has been posting positive results overall in recent years and that it has even further potential for growth is grain traders investing in increasing their local footprint. The most recent of such investments came from the Romanian subsidiary of agribusiness giant Cargill. This August, the trader completed a EUR 15 million investment in partnership with local logistics operator Transport Trade Services (TTS) in increasing the capacity of its Canopus Star JV grain terminal in the Black Sea port of Constanta.

The terminal now has a storage capacity of 110,000 tonnes, up from 50,000 tonnes previously. Cargill’s target is for the terminal to reach traffic of 1.5 million tonnes next year, said company representatives, while its capacity stands at 2 million tonnes/year.

Cargill first decided to invest in the Constanta port in 2008 because of its location and the strategic access it offers

In bloom: the agriculture sector looks set to flourish this year

the region, said Martin Schuldt, product line leader for grains and oilseeds origination in Central & Eastern Europe at Cargill, during the opening event. The decision to increase the terminal’s capacity was based on the growing demand and subsequent increase of local operations, said company representatives. Romania’s grain production has been going up in recent years and a new record level is expected to be reached in 2014 as well, added Schuldt.

The increasing production has also boosted Romania’s grain exports, according to data from the MADR. While, back in 2009, Romania exported 4.2 million tonnes of grain, the figure has now increased to more than 9 million tonnes, said Peter Nagy, state secretary at the MADR. Some 90 percent of this is exported via the Constanta port, he added.

New NPRD comes into force This May the MADR launched the first call for projects under the new National Program for Rural Development (NPRD) for the period 2014-2020. The program regulates how local farmers can gain access to the EUR 9.85 billion available for

investment projects for the period 20142020.

Under the first call for projects, farmers could apply through Measure 121 – the modernization of farms, for which EUR 150 million is available. Out of this, EUR 35 million has been allocated to family farms, and another EUR 15 million is being provided for the meeting of quality standards in the zootechnical sector. The remaining EUR 100 million is divided equally between vegetal and animal farms with separate allocations for equipment acquisition and the construction or modernizations of facilities.

Overall, Romania’s NPRD for 20142020 will include 15 measures, down from the 24 in the NPRD for 2007-2013, which should allow a better focus on the needs of local farmers, say the authorities. Special focus will be given to investments in production for both small and large farms, with a dedicated program for investments in orchards, the integration of production chains and incentives for young Romanians looking to set up a farming business in rural areas, according to previous statements by Constantin.

The new NPRD also comes with the promise of simplified and more flexible application procedures and less bureaucracy. As part of this attempt, an online application tool was made available this May along with a price reference list for equipment acquisition. The ministry has also committed to scaling back the control of beneficiaries to a minimum.

Starting this year, Romanian farmers will also receive higher subsidies in the form of the single area payment scheme.

Over 2014-2020, Romania will have access to some EUR 10.6 billion in direct payments, up by 47.5 percent compared to the 2007-2013 period.

Despite the progress reported in recent years – which many argue was well below potential – there remain several deep-rooted issues in need of a solution.

Romania may rank top in the EU for its overall crop production, but this is almost entirely dependent on weather conditions, and yields per hectare are some of the lowest in the region. The main factor behind the latter is the high fragmentation of land. There were some 3.86 million farms in Romania at the end of 2010, the highest figure in the EU, according to Eurostat. A staggering 97.7 percent were farms that cultivated less than 10 hectares or about 38.7 percent of the country’s total agricultural land, according to the 2010 farming census. At the other end of the spectrum, large commercial farms cultivating areas of over 100 hectares represented only 0.3 percent of the total number of farms but 48.8 percent of the country’s agricultural land.

However, despite such setbacks, Romania’s agriculture has been for several years now, and continues to be, cited among the sectors that provide the most attractive investment opportunities. Cheap farmland and the available EU funding have caught the eye of both local and international investors to the point that it is estimated that more than 7 percent of the country’s farmland is now owned by foreigners. simona.bazavan@business-review.ro

www.business-review.eu Business Review | October 2014

26 INTERVIEW

MEP maps plans for transatlantic trade agreement Laurentiu Rebega, one of Romania’s four members on the European Parliament’s Committee on Agriculture and Rural Development (ComAgri), talks to BR about the committee’s agenda, the future of the Transatlantic Trade and Investment Partnership and what the future agriculture and rural development commissioner’s priorities should be. ∫ SIMONA BAZAVAN What are the main topics currently on the ComAgri agenda and what are the implications for Romania?

The themes currently on the agenda are organic farming, the legislation concerning new foods, restarting the discussions on forestry strategies and the unfair practices in the agro-alimentary sector. All of these issues are important for Romania because organic farming is generally undertaken by young farmers and this sector has been growing over the past few years.

As far as new foods are concerned, this topic is controversial because the local market can see the emergence of foods coming from non-EU countries, which are not controlled. Great attention needs to be paid to this sector. The authorization and use of new foods and ingredients has been harmonized in the EU since 1997, according to REG. 258/97.

But for a food to be introduced on the market, a preliminary request needs to be approved by a food products evaluation body of a member state. A new food is additionally evaluated by the European Food Safety Authority (ESFA).

The forestry sector is important for Romania and the presence of Romanian MEPs is welcome at the discussions on strategy in this area. And, last but not least, it is important to know the European legislation on unfair practices along the food chain, considering that farmers’ interest are the priority.

At what stage are the negotiations for the Transatlantic Trade and Investment Partnership (TTIP) and what will this agreement entail for the agriculture sector in the EU? The bilateral relations between the European Union and the United States are the object of long negotiations. And both political actors in the committees and the European Parliament are trying to reach an agreement to improve commercial trade. Controversial opinions keep on emerging as that agriculture is a key sector but also because legislation on product quality differs. From an economic point of view, this agreement opens the door to a huge horizon, especially in the current context, when some markets are shutting us out, and I’m referring here to the embargo imposed by the Russian Federation.

CV Laurentiu Rebega June 2014 – present MP in the European Parliament. He is a member of the Group of the Progressive Alliance of the Socialists and Democrats and of the Conservative Party. Rebega is a member of the Committee for Agriculture and Rural Development (AGRI), the Commission for Petitions (PETI) and the Delegation to the EU-Turkey Joint Parliamentary Committee (D-TR).

July 2012 – June 2014* VP, Prahova County Council September 2011 – June 2012 director of the agriculture department at Agro Seed September 2009 – September 2011 general manager of Semina SA September 2007 – September 2009 field manager at JD Agro Cocora Rebega is a graduate of the University of Agronomic Sciences and Veterinary Medicine in Bucharest and of the Grindsted Royal Academy in Denmark What are the main benefits that the TTIP will bring to EU farmers and producers and how do you respond to fears that it will lead to a relaxation of EU standards in agriculture and the food industry?

As I was saying, legislation differs and both parties are looking for a balance. It isn’t and it will not be easy. Expert groups are always meeting so it is not impossible that we will reach an agreement. Obviously, the European Union will not give up years of work of trying to fine-tune a so-strong legislation on consumer protection just to facilitate commercial trade. It is unacceptable that it should give in, but it is impossible not to on certain aspects, while looking to find other ways to save the world-level position it holds at this point. Genetically modified organisms are a subject that raises indignation.

Opinions both for and against are justified. I think that the effects can be foreseen through research and, in this way, the European community will maintain a strong position on supporting current legislation.

What are the TTIP’s implications for local agriculture and which local agriculture sectors can most benefit from this

agreement?

The advantages for Romania’s exports and competitiveness in agriculture are self-evident. What sectors will most benefit from this will depend on the quality of the products.

What measures are currently being negotiated or could be taken to help European farmers and producers affected by the Russia-imposed embargo?

This theme was tackled on the very first day of the plenary session in Strasbourg.

At this point, fruit and vegetable producers, who are no longer supported with EU funds, are the most affected.

Together with other members of the committee we have expressly requested that these funds be reinstated and even that the crisis fund be authorized. The current situation has diminished exports by a third and the funds proved insufficient. What we’ve requested is that a political crisis does not have consequences on farmers like the current one does. The European Commission (EC) responded to our request with the promise of a new plan to support farmers. The new rules will probably resemble the previous ones as far as the aid level is concerned, but they will

* According to his public LinkedIn Profile be drafted in such a way as to prevent false claims. And it will include a detailed analysis for every member state on every group of products (apples, pears, citrus fruits etc), taking into account the exports to Russia in the same period of last year (September to December).

What do you think should be the priorities of the new European commissioner for agriculture and rural development?

I think these priorities should include eliminating the differences in subsidy levels, given that the cost differences between founding and new EU member states are not that big. Also, European administrative streamlining needs to come to the forefront and regardless of the conclusions coming out of the TTIP negotiations and the effects of the Russian embargo, support for farmers needs to adapt to challenges on the internal and world markets. simona.bazavan@business-review.ro

www.business-review.eu Business Review | October 2014

MUSIC 27

Musicians in the making In September, Romania was again in the classical spotlight with the George Enescu International Music Competition. After watching around 230 young artists from 36 countries take to the stage, BR asked some of the most famous Romanian musicians how difficult it is to learn the techniques to play a musical instrument well enough to win such a competition. started. But, said Mihaela Anica, places ∫ OANA VASILIU The 14th George Enescu International Music Competition once again offered a great chance for teenagers and young people interested in classical music to be heard, discovered and acclaimed by some of the biggest names from the classical music industry worldwide.

After years of rehearsals and numerous competitions, Romanian-born German violinist Stefan Tarara (28 years old), South Korean cellist Hong Eun Sun (25) and Spanish pianist Josu de Solaun (33) were the three big winners of this year’s event. But how does a performer reach these great heights? The answers come from five top local musicians, flutist Mihaela Anica, pianist Horia Maxim, conductor Tiberiu Soare, cellist Razvan Suma and violinist Alexandru Tomescu.

Among the local teenage stars with great potential, Soare mentions three names: violinists Alexandra Bobeico (17) and Mircea Dumitrescu (16) and pianist Cadmiel Botac (16). “Unfortunately, there is no standardized system of selection in Romania. Some musicians get the chance to be heard by someone with the power of decision, others deliver outstanding performances at national or international competitions, and others have relationships in the music world through parents, teachers or other people,” said Soare.

Asked by BR which instrument is the easiest to learn, the conductor replied, “I think percussion instruments are very suitable for young children, because they can develop a sense of rhythm and are more accessible in terms of the immediate sounds resulting.”

Cello, flute, piano and violin – the first steps The first question that every musician should ask is, according to Tomescu: who wants to learn the instrument, the parent or the child? After answering this question, this is how – and when – to get started. Five seems to be the optimum age at which to begin learning most musical instruments. Suma said that in China, children typically take up his instrument, the cello, at four or five years old, while in Romania, study officially starts at 10. Thanks to the latest developments in flute construction, now children as young as five can start learning the instrument. The revolutionary idea to change the dimensions of the flute came from Professor Barbara Gisler-Haase of the University of Music and Performing Arts, Vienna, who made a model that was slightly curved in an

Alexandru Tomescu: “My mother teaches the violin, so I was certainly familiar with its sound even before I was born! At the beginning, my parents weren’t excited about my choice because of the difficult Communist period, but they eventually gave me a violin for my sixth birthday.”

Razvan Suma: “I was privileged to be part of a family of musicians so I began to the cello at six years old. This made me the first Romanian to study this instrument at such an early age, as in Romania the usual age to begin learning the cello is ten.”

Mihaela Anica: “I was nine years old when I said I wanted to play an instrument. I was too old to start learning the violin or the piano, but still too young to start playing a wind instrument. I waited two years until choosing my favorite instrument – the flute.”

Horia Maxim: “My contact with the piano was facilitated by the lessons that my elder sister was taking with my father, a former opera singer, at home. The study and the theoretical concepts started immediately after my sixth birthday.”

omega shape so that the player’s spine is not affected and the required air volume to generate sound does not affect the player’s respiratory system.

“The education system in Romania has approved a national curriculum for studying the flute from nine years old, which is definitely progress,” commented Anica. Maxim says that six is the best age to start starting the piano, but a musically talented child could begin as young as three or four.

Tomescu told BR that for this instrument there are two extremes: the Suzuki school, a Japanese method of learning to play the

violin for children aged two to three, or taking it up in adulthood.

The violinist says that in Romania, study begins at six or seven, although there are notable exceptions, such as Sandu Albu, who discovered his passion for the violin at 18 and managed to catch up on his missed years of childhood study and go on to enjoy an outstanding musical career.

The money behind the music Every musical instrument comes with maintenance costs to extend its lifespan.

Flute beginners are advised to invest from EUR 400 to EUR 1,200 to get

such as Tomasi Workshop can loan players an instrument for up to 10 months with the option to buy it later.

Kit for a child violinist (aged around six) consists of a quarter size violin, a quarter bow, metallic strings, rosin, the box, stand, metronome and a visit to the luthier, along with lessons. “The price of a small violin, such as those used by children, is reasonably cheap, from several hundred to several thousand RON. But the violin must be changed as soon as the child grows. The child moves from a quarter size violin, to a half size violin for several years, then a three-quarter violin and a full instrument when the violinist’s arms have reached their final length,” said Tomescu. In Romania, he added, instrument upkeep costs half or even a third as much as it does in Europe, with total costs of about RON 200 per year, if proper care is taken.

Piano students have two main options, according to Maxim: an acoustic piano (or upright), meaning an instrument with mechanics and a sounding board, or the more convenient alternative of an electronic/digital instrument.

The latter costs from EUR 400-8,000, while an acoustic piano will set the buyer back by anywhere from EUR 200 (for a second hand model, probably not in great condition) to EUR 10,000. Add to that upkeep costs of almost EUR 75 per year for mechanical adjustments or changing broken strings.

The cello offers a cheaper option for a beginner. “Quarter size cellos can be rented or bought and subsequently resold very cheaply. Then, it is much like in tennis: it depends on what tournaments you want to go to,” said Suma.

A good cello starts from EUR 4,000, but smaller ones cost from EUR 500 upwards, with the kit to support learning approximately EUR 150.

The journey to the stage “The experience of taking part in a competition is a hard school, but extremely useful for anyone who wants to live on stage,” summed up Tomescu. “It is important to know how to choose the right moment to participate, the repertoire and the contest. It is very important for every musician to have his/her own path. I don’t believe there is one most important contest or concert. For us, every gig is a step climbed. On stage, the battle is with ourselves. It’s a battle with your emotions, the preparation, the audience or the jury that evaluates your performance,” concluded Suma. oana.vasiliu@business-review.ro

www.business-review.eu Business Review | October 2014

28 EUROPEAN CAPITAL OF CULTURE

How much money does it take to be a European Capital of Culture?

Several Romanian cities, amongst them Cluj, Timisoara, Arad, Craiova and Iasi, have officially announced their intention to compete with each other for the 2021 European Capital of Culture (ECoC) title. How much are they ready to spend on this race, due to start at the end of the year, and how much in EU structural funds are the cities able to attract to build and upgrade their infrastructure? ∫ ANCA IONITA The start of the competition will be announced by the end of this year in the Official Journal of the European Union, with the bids to be submitted for evaluation by a panel of international experts, in approximately nine months from the launch of the call. Another three or four cities are expected to join the race, including Bucharest.

According to the EU calendar, two member states, Romania and Greece, are to provide, each, a European Capital of Culture for 2021. For the competing cities this translates into the intention to sustain, if elected, an immense organizational and financial effort over the sixyear period prior to the actual event.

Although it’s not the main criteria for selection, the capacity of the city (actually of the independent association set up for the purpose) to raise the funds in the current economic situation is carefully analyzed by the panel during the six-year monitored phase between the selection announcement and the beginning of the event.

Experts agree that the EUR 1.126 billion spent by Liverpool, which was designated an ECoC in 2008, the highest expenditure in the history of the title, is a benchmark that will never be reached again. In 2007, Sibiu’s overall funding was EUR 56 million, out of which EUR 40 million was infrastructure spending.

The overall budget of an ECoC is split into two categories: operating expenses, which include the cost of the actual program, the salaries and the promotion and marketing, and capital expenditure, divided into three categories: new provision and upgrading of cultural capital – museums, galleries, theatres, concert halls, arts centers etc.; urban revitalization – renovation of squares, gardens, streets, tree planting, public place development, lighting etc.; and infrastructure – investment in the underground, rail stations, dockyards, roads and so on.

Are towns like Cluj, Timisoara, Arad, Craiova and Iasi capable of attracting a similar budget as Sibiu raised seven years ago, before the global economic crisis? Plovdiv, which was last month designated European Capital of Culture in 2019, proposed an operational budget of EUR 22.3 million, of which EUR 14.7 million is for program activities. (See the next page for more on Plovdiv.)

Creating culture: annual street theater international festival B-FIT, organized

by ArCuB, entertains Bucharest citizens for one week

ECoC budget trends Since its beginning, in 1985, at the initiative of Melina Mercouri, then Greek minister of culture, the European City of Culture project has seen changes in the way the town is chosen. In their book Eventful Cities (ButterworthHeinemann, 2010), authors Robert Palmer and Greg Richards say these changes mark three periods of ECoC budgetary development: l 1985-1989: Expensive Festival – the majority of the host cities were capitals that already had considerable cultural infrastructure l 1990-2004: Investment in Cultural Regeneration – the majority of the cities were ‘second cities’ that saw the event as an opportunity to develop their cultural facilities and their international profile l 2005 onwards: Investment in Infrastructure – the trend towards greater infrastructure spending seems to be strengthening (…) the cities from the new EU member states have been able to call on newly available structural funds from the EU to boost the capital budget.

According to the Ex-Post Evaluation Report of 2012 European Capitals of Culture by Ecorys, the Portuguese city of Guimares envisaged, at the time of the application, an “overall budget of EUR 111 million, including EUR 41 million for developing, managing and implementing the cultural program and EUR 70 million for infrastructure projects”.

Maribor, the second largest Slovenian

city that was also designated a Capital of Culture in 2012, foresaw in its original application a budget of “around EUR 200 million, of which EUR 57 million was allocated to the development and implementation of the cultural program and EUR 143 million to infrastructure investments”.

Sweden’s Umea, designated European Cultural Capital for 2014, has a proposed overall budget of EUR 730 million, a EUR 40.5 million operational budget and a EUR 690 million capital budget.

In a study titled Culture and/or development? Managing of Urban and Regional Infrastructure Projects in the European Capital of Culture Program published recently, several Croatian researchers from the Faculty of Economic in Osijek looked into this trend, as part of the preparatory work for Croatian cities’ bids for ECoC in 2020. The study highlights the Hungarian city of Pecs, European Capital of Culture in 2010 (with Ruhr and Istanbul) “as the first big ECoC infrastructural development project in a new European Union member”, with key projects such as a conference and concert center, the reconstruction of Museum Street and the revival of public areas and parks. With an overall budget of EUR 201 million, out of which EUR 138.4 million was spent on the previously mentioned projects, Pecs is recommended as a model for the Croatian hopefuls.

However, looking forward to the end of the 2014-2019 investment cycle, the

study warns that infrastructure consumption in ECoC cities will decrease for to a combination of reasons, such as lower investment in the cultural sector from state budgets, the lack of sustainability of big infrastructural investments (at the end of a project, some facilities have neither economic, cultural nor social legitimacy in the city) and the latest trend of focusing on cultural programs and the involvement of community, to the detriment of capital investment.

Plovdiv’s income sources for European Capital of Culture in 2019 are the city (EUR 7.3 million), national government (EUR 10 million) and sponsors (EUR 3.5 million). The capital Sofia, which lost the competition to smaller Plovdiv, had different sources of income, as following: the city (EUR 27 million), the region (EUR 3.7 million), the national government (EUR 26 million), EU structural funds (EUR 17 million) and EUR 14 million from the private sector.

But how do the towns manage to persuade the private sector to fund a cultural enterprise such as a 365-day event that also involves, besides the creative industries, all the other economic sectors, from tourism to transportation?

An interesting example comes from the Slovakian city of Košice, which was ECoC last year, along with the French region Marseille-Provence. A monitoring report for Košice 2013 cites “the good relations and cooperation with the steel company U.S. Steel Košice which will invest EUR 500,000 in supporting a Creative Factory that will be located in the Kasarne/Kulturpark premises. It is a non-commercial project aimed at attracting and inspiring children and young people to deepen their knowledge of science and technology. Exhibits will be produced and the installation coordinated by U.S. Steel Košice.”

The potential of such an investment to generate more business for the city is extremely high. In an interview granted to euroactive.com, Commissioner Maros Šefčovič recalled “the case of the French city of Lille, European Capital of Culture for 2004, which managed to obtain an EUR 8 return for every euro invested, in terms of increased revenues from tourism or new business opportunities”. anca.ionita@business-review.ro

www.business-review.eu Business Review | October 2014

EUROPEAN CAPITAL OF CULTURE 29

Plovdiv embarks on 2019 journey Last month, the Bulgarian city of Plovdiv was named 2019 European Capital of Culture, beating off competition from local rivals Varna and Veliko Turnovo as well the capital Sofia. It will share the title with an Italian town that has yet to be decided. BR traveled to Plovdiv to see what attractions won it the coveted title. ∫ DEBBIE STOWE Sights Bulgaria’s second city is one of the world’s oldest, dating back 6,000 years. The sense of history dominates its atmosphere and cultural life – which many argue outshine the capital Sofia. This is encapsulated in the old town, a network of cobbled streets and colorful 19th-century buildings remarkable for their overhanging second stories. It’s a lovely area for strolling, more sedate than the Bucharest equivalent of Lipscani, as you’re more likely to stop for a drink in a quiet café than a thumping bar.

Plovdiv’s history is shown off impressively at the Roman Theater, built in the second century, which would have initially accommodated 7,000 spectators baying for the blood of the hapless gladiators sent out to meet a grisly end for the amusement of the mob. The theater has undergone a meticulous restoration process, and today hosts concerts and plays, where the deaths are purely fictional. When no events are scheduled visitors can wander round the site, and it’s possible to go on the stage and release your inner Russell Crowe by bellowing to your companions, “Are you not entertained?” and other classic lines from the movie. If ancient arenas are your thing, the town center also hosts a Roman Stadium, about 240 meters long and 50 meters wide, which would have hosted up to 30,000 spectators back in the day.

In poor weather the museums are good options – like almost every town in Bulgaria, Plovdiv has the obligatory archeological (www.archaeologicalmuseumplovdiv.org) and ethnographic (www.ethnograph.info) museums. These can get repetitive if you are a frequent visitor to the country, but if it’s your first trip south of the border they afford an easy entry point into the national folk culture, and there are often interesting stories behind the exhibits if you have a knowledgeable tour guide. Natural science (www.rnhm.org) and aviation (www.aviationmuseum.eu) also get their own museums, the former with its own aquarium.

Bulgaria’s checkered religious history has also left a mark on the town’s

Div-ine right: the Bulgarian city of Plovdiv has recently been selected as European Capital of Culture for 2019

architecture. There are several pretty churches, and Plovdiv has the Zion synagogue which is not open to the public as a rule but can occasionally be seen by appointment (032 632 622, services take place on Friday from 17.00 to 19.00), and Dzhumaya mosque (032 629 097, open 06.0023.00), a 15th-century construction that has outlived many of its contemporaries.

Entertainment and dining out A hugely popular spot on the tourist circuit is Megdana (megdanabg.com), which describes itself – with some justification – as “the most Bulgarian restaurant”. The wooden and stone décor, stripy red table cloths and rustic feel will be familiar to anyone who’s travelled in the country, and the cuisine is quintessentially Bulgarian. What draws the crowds, though, is the “ethno” program, a lively and joyous celebration of local music and dancing. Various performers take to the stage, picking on the odd diner to

get up and join them, before embarking on group “horo” dances that get everyone up and involved. Residents of Romania will know the equivalent, but this communal Balkan experience is a jolly way to round off a Plovdiv trip. The horo, the horo…

Information Find out more about the individual attractions mentioned here and the city more generally at www.visitplovdiv.com. The well put together tourist portal includes things to see and do, as well as restaurant and hotel recommendations and a schedule of cultural events.

Getting there Qatar Airways and Tarom both run direct flights between Bucharest and Sofia, five or six days a week.

Spring fares start at around EUR 170 for a return flight. Driving from Bucharest to Sofia takes about five and a half hours, from where it’s less than two hours from Sofia to Plovdiv,

or you could take an alternative route via Veliko Turnovo. Regular trains go between the capital and Plovdiv, taking between two and two and a half hours.

Moving on Plovdiv is also the gateway city to Bulgaria’s Rhodope Mountains, which straddle the border with Greece, home to such sights as the spectacular Chudnite mostove (Wonder Bridges), the lofty Asen’s Fortress, Dyavolsko Garlo (Devil’s Throat Cave) – where Orpheus is said to have emerged from the underworld – and the exciting Yagodina Cave. You could also continue your journey into Greece itself, or head south-east into Turkey.

Debbie Stowe and Vasile Szakacs travelled to Bulgaria courtesy of the country’s Ministry of Economy and Energy and Bulgarian Publishing Company. debbie.stowe@business-review.ro

www.business-review.eu Business Review | October 2014

30 EVENTS

The party of the century As I was leaving the Athenee Palace Hilton Hotel’s 100 year anniversary party, I realized how true the words in the opening speeches were. Everything was the result of a fantastic team that worked together to provide Bucharest with the finest, top quality entertainment that has been, for a century, the mark of one Europe’s oldest hotels, next to Hotel Plaza Athenee in Paris or The Savoy in London.

Fireworks of passion: Athenee Palace Hilton celebrates its 100 years anniversary

∫ ANCA IONITA Otherwise how could I explain the fantastic display of creativity that transformed every public space of the hotel into a different sensorial world, a specific taste-sound-light texture that immediately engulfed you once you stepped in? The Regina Maria Ballroom was, not only in my view, I think, the most fantastic display of creativity and attention to detail, when transformed into an “Alice in Wonderland of Sweets” space.

One could never imagine the extraordinary diversity of personalized ice cream, vivid celebratory cakes, heavenly tiramisu and rivers of decadent chocolate embracing the sweetness of the grapes and melon, as well as the ice-bar that invited guests to taste several frozen cocktails, each and every one with a touch of sugar.

Jazz music invited guests into Roberto's restaurant, where Chef Lam proudly paraded both Italian and French cuisine menu highlights, whereas the English Bar “kept it simple but posh”, with 1980s disco sounds and a selection of mini-burgers, fish & chips and shepherd's pie.

The Haydn Deane Orchestra, performing Frank Sinatra’s hits, transformed Le Diplomate Ballroom into the perfect dance hall, where the 600 guests that attended the party danced and sang along with the charismatic Irish band leader who entertained guests until midnight.

A live DJ and sax performance gave Café Athénée’s an intimate clubbing atmosphere, where several other dishes from the hotel’s pura cucina italiana could be tasted.

It was the company’s 200 employees that Alexandra Copos de Prada, the CEO of Ana Hotels, thanked in her

Alexandra Copos de Prada and Jan Thomsen

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EVENTS 31

Regina Maria Ballroom was transformed into the Alice Wonderland of Sweets

Princess Marina Sturdza

opening speech for restoring the hotel’s past glory, adding that she was “aware of the great deal of responsibility of owning such a property – since we bought the company in 2005 we have invested heavily in renovating the public areas where you are standing now, and plan to invest over EUR 8 million in a full room refurbishment”.

Princess Marina Sturdza remembered the re-opening of the hotel in 1997, “together with an exceptional

More than 600 guests attended the event

staff, many of whom are still here. We were organizing and hosting the IHT Romanian Investment Summit, to accelerate investment in this newly democratic country, and we were determined to hold it in this particular iconic hotel, to mark this country’s fresh start. It literally ushered in a new era in a free and democratic country, one in which we enjoy all the intellectual freedoms, talent and initiative are recompensed and business begins to boom.”

Jan Thompsen, the hotel’s general manager, said the hotel’s success today “is built on a full century of experience in hospitality. Not everyone has the pleasure of running a hotel in a property turning 100 years,” adding that “it’s not just the design, it’s about the people.”

All the opening speeches mentioned the extraordinary team at the hotel, and they were right in doing so.

Their heart-warming smiles and constant show of good disposition sur-

rounded the entire place with positive energy, the “fireworks of passion”, as Chef Lam called it. “The evening ingredients were more than 600 people, nine months of planning, an open venue and five distinct restaurant concepts fighting to flash and shimmer, but in the end nothing would have been possible without the right mindset and people by your side,” he said. anca.ionita@business-review.ro

www.business-review.eu Business Review | October 2014

32 EXHIBITIONS

Interest in local art confirmed at ViennaFair

Courtesy KUNSTPRESSE.ATt

Zoltán Belá Tolstoi's Ghost Playing, 2014. Oil on canvas 200 x 160 cm.

Alongside their counterparts in Eastern and South-Eastern Europe, Romanian galleries participated in the between East and West works at this year’s edition of the ViennaFair The New Contemporary, the contemporary art fair that took place in the Austrian capital.

The Baril gallery in Cluj passed on two works by Maxim Liulca to US collections. On its second visit to the fair, the Anca Poterasu Gallery from Bucharest sold works by Zoltan Bela (EUR 8,000), Daniel Djamo (EUR 4,000), and Nicu Ilfoveanu (EUR 1,000) to private collectors, as did the Jezca Gallery from Timisoara with works by Genti Korini and Liviu Stoicoviciu (from EUR 2,000 to 5,000).

The Dialog: New Energies section of the ViennaFair.The New Contemporary put the focus this year on 30 local artists in a presentation curated by Romanian art expert Andreiana Mihail. Works by Romanian artists were presented by five galleries: the Anaid Art Gallery, Anca Poterasu Gallery, Jecza Gallery, Galeria Plan B, and Zorzini Gallery, and two non-profit spaces: ATELIER 030202 and ALERT studio.

The dedicated focus on contemporary Romanian art comes as the scene has been receiving increasing international attention in recent years, both from highly reputed exhibition spaces and from collectors. According to the organizers of the fair, the curatorial concept ran “from classical contemporary

artists, frequently considered as emerging due to their lack of exposure during communism, to young and inquisitive artists who tell their own personal story independently of any socio-political perspective.”

Over the course of the past ten years ViennaFair The New Contemporary has become a springboard for galleries and artists from countries in the Central, Eastern, and South-Eastern European region. Many galleries made their first presentation to an international audience here.

“Dialog: New Energies aims at finding the delicate balance between the expected commercial purpose of a fair and the clarity and coherence of a theoretical outline which reflects on adapting and assuming as the two most significant existential attitudes in recent Romanian history,” the organizers said.

The tenth edition of ViennaFair The New Contemporary once again broke its record with 25,274 visitors. “More visitors, more international art collectors and satisfied galleries – this is more than we could have expected,” said Christina Steinbrecher-Pfandt, artistic director of ViennaFair The New Contemporary, on the completion of the tenth edition of Austria’s biggest international art fair.

The Dialog: New Energies section was co-initiated and supported by OMV. editorial@business-review.ro

www.business-review.eu Business Review | October 2014

EXHIBITIONS 33

EXHIBITION REVIEW

Witnessing slices of history Besides the historical interpretation of what the Holocaust means, I believe that every human being associates the word with genocide, pain and suffering. Survivors of the tragedy are now advanced in years, but many take the opportunity to tell the story of their lives to whomever is interested. ∫ OANA VASILIU To commemorate the local victims of the Holocaust, several students from the National University of Arts in Bucharest met some survivors and heard more about our recent national history. “We, the artists, respect diversity and beauty and promote peace by all our means. We promote love for others,” said artist Andra Marisoiu, summing up the aim of the exhibition Witness and Testimonials.

Under this banner, 35 young artists decided to present their visions of this historical chapter. The most impressive works of art of the exhibition are charcoal portraits, most of them 70x70 cm, of characters actually looking at you, so somehow you can hear their story merely by looking at the painting.

“I wanted to illustrate the suffering and humiliation that women who

Pictures of the past: local artists sought to present their visions of history

boarding the frightening death trains endured, of whom few survived to tell their story. My character, drawn in charcoal, is a naked woman, symboliz-

ing lack of dignity and full exposure without the possibility of salvation, which countless women suffered during the Holocaust,” said artist

Alexandra Chirita.

Other works show glimpses of a human face, but contours and shapes merge with the background, almost disappearing. This tells the viewer that individual drama will be ignored, covered by the almost white canvas, in the same way the horror of the Holocaust was covered up.

“One does not need to be a Jew to suffer discrimination; this can happen to anyone, anywhere. If you accept discrimination in your society and you think that it will not affect you, you can wake up one day and find yourself the discriminated party,” commented Maria Oancea, another young artist, illustrating her vision with a photomontage.

The exhibition Witness and Testimonials can be seen until October 17 at The National Library of Romania. oana.vasiliu@business-review.ro

www.business-review.eu Business Review | October 2014

34 HALLOWEEN BALL

OPINION Leslie Hawke Eight Reasons You Should Come to the “Halloween Charity Ball at Palatul Parlamentului” on 25 October

It takes two to tango: cellist Razvan Suma to tour with singer-wife Analia Selis Cellist Razvan Suma continues his series of “Do you like … ?” tours, this time with singer Analia Selis, who is also his wife, and guitarist Julio Santillan. The trio will embark on a nationwide 12-city tour dedicated to tango music. ∫ OANA VASILIU Why did you choose the tango this year?

RS: Tango has been part of my life since I fell in love with Analia. Among the first gifts she gave me were some CDs of tango recordings from the 60s and 70s.

I first thought of a repertoire of modern tango such as Piazzolla, which I know and have played in many concerts. It was only when I put everything on paper that I realized that I needed more, because it seemed limited and could not reach the essential roots of the tango genre. So I asked myself: “Who can better lead me in this direction?”

The answer was very clear: Argentines.

“Where can I find good Argentine musicians in Romania?” The answer was: “at home.” This is how the story of this tour began. Analia hesitated at first but eventually she agreed.

OvidiuRo co-founder Leslie Hawke

OvidiuRo’s Halloween Charity Ball is, arguably, Bucharest’s best party – and I have even heard people say it is the best Halloween Party they’ve ever attended – anywhere.

Why is that, you might well ask.

First of all, a costume party for grown ups, where over half of the 600 guests actually “dress up” in costumes is just good fun. And it makes everyone there an integral part of the entertainment.

Where else are you likely to run into Bonnie and Clyde, dance with Fred Astaire, or eat dinner with James Bond?

Secondly, Palatul Parlamentalui, which was known as “The People’s Palace” when OvidiuRo held its first Halloween Charity Ball back in 2005, is the perfect venue for such a huge, elaborate and colorful event. A public tour of the palace just doesn’t do it justice – when that whole gigantic front wing is empty, it seems bizarrely overdone and hollow. But when you decorate it creatively and fill it with 650 people dressed up as glamorous film stars and weird movie characters and there is danceable music filling the ballroom, the atmosphere is magic!

But if you’re still not convinced, here are some even better reasons: l To

support a severely disadvantaged child in gradinita for a whole year (only 10 percent of the entrance fee goes to the event costs);

l To

help a poor child get prepared for success in school (gradinita is especially important for disadvantaged children who have fewer learning experiences at home than other kids);

l To

improve the future of Romania (preschool is positively correlated to higher graduation and employment rates and lower crime rates);

l To

get a better ROI (investing in early education has been shown to have a higher ‘Return on Investment’ than any other poverty intervention);

How did you persuade Julio Santillan to be part of this national tour?

RS: This is not Julio’s first time in Romania. We have collaborated with him on at least eight concerts nationwide, I also worked with him on Analia’s concert with the Big Band Radio in November 2013, and when I completed the “Do you like Brahms?” tour, I suggested to both of them that we work together. I really believe in Julio as an artist, an arranger and a composer, and because of that I entrusted him with all arrangements for our trio.

How would you characterize the national tour, now on its fourth run?

RS: It is a more beautiful dream than I ever imagined. It is not necessarily the fact that we’re reached four editions l To talk to your clients in a relaxed, that makes me happy, but more the aufestive atmosphere; diences numbers, which remain impressively high. This gives me strength l To say you have danced in the secfor the future, but also the responsibility ond largest building in the world. to come up with new ideas to attract and surprise music lovers. This associaThe 2014 Ball, celebrating Ovidi- tion with musicians from outside the uRo’s 10th anniversary, will take place classical circle greatly enriches my spiron the 25th of October in the Unirii itual journey, and cultures such as the Ballroom of Palatul Parlamentului. Argentinean one, which I have experiThe theme is “The Magic of the Movies.” enced intensely, take me beyond the exSponsorship packages are based on pressive and emotional limits of the cost of supporting a disadvantaged classical music.

child in gradinita (preschool and kindergarten) for a year.

For more details, see www.ovid.ro or call Simona Ilas on 021 315 8806 or 0728 778 821.

It is difficult to work with your spouse?

RS: Doing business with friends is the perfect recipe for losing them. This has happened to me too. Regarding Analia, I think it is the perfect time for a collab-

Spousal support: Razvan Suma and Analia Selis will take the tango on tour

oration. I have taken part in dozens, maybe hundreds of tours. Each time, in extreme conditions, fatigue, stress and external factors can weigh heavily. I think our experience can solve any problem that affects us, because we are a team both at home and on stage.

Analia, what does tango mean to you?

AS: The streets of Buenos Aires, the familiar air, our way of living… I'm from the north of the country where the most important thing is folklore, even more important than tango – but pure Argentina means tango. When I listen to a tango I can see my country in front of my eyes, and playing tango I realize that it is in my blood and in my soul.

How did you structure the concert?

AS: It will be a concert of tango played in the most traditional way possible, but unusual for a tango music arrangement: cello, guitar and vocals. We have been preparing this show since last year when I found out that we would do the tour, and I started listening to the oldest versions of tango. I made a long selection of 40 tangos out of which 15 will be heard in the tour. The most famous tango composers whose works will feature are Gardel, Villoldo, Dames, Piana, Discepolo and Piazzolla, as along with compositions by Julio Santillan.

It is difficult to work with your partner?

AS: It is common knowledge that it’s not easy to collaborate with friends and family and, indeed, it isn’t. But we had the objectivity and the intelligence to collaborate in order to build. I think we built this relationship nicely and now we are ready to hit the road. oana.vasiliu@business-review.ro

www.business-review.eu Business Review | October 2014

FILM REVIEW 35

What If

It’s a kind of magic: Harry Potter actor Daniel Radcliffe appears opposite Zoe Kazan in his first romcom

∫ DEBBIE STOWE Director: Michael Dowse Starring: Daniel Radcliffe, Zoe Kazan, Megan Park, Adam Driver, Mackenzie Davis, Rafe Spall In cinemas from 10 October. Initially showing at: Grand Cinema & More, Hollywood Multiplex, Movieplex Cinema Plaza, Cinema City Cotroceni, Elvira Popescu, NCRR Poor old Harry Potter has been “friend zoned”. Well, not Harry Potter himself, but Daniel Radcliffe, who played him.

Or, more accurately, medical school dropout Wallace, Radcliffe’s debut romcom role. Living in his sister’s basement, he passes his days in a dead-end job and his nights sitting on the roof, gazing gloomily out at the Toronto skyline and pining over his ex.

That’s until one night at a party he meets Chantry (Zoe Kazan, who seems to be taking over the mantle of go-to Manic Pixie Dream Girl – the stock film character of a kooky love interest who serves as the troubled main character’s defibrillator – from Zooey Deschanel). They bond over fridge magnet poetry and exchange quirky banter, and Wallace offers to walk her home. But just as they appear to be approaching the awkward goodnight kiss juncture, Chantry drops the B bomb – she’s got a boyfriend waiting for her! Into the friend zone, Potter!

Wallace is advised by Allan, the standard movie over-sexualized twenty-something male best friend (Adam Driver) that his options are to make a move on Chantry, constantly badmouth her boyfriend Ben (Rafe

Spall) to her so she eventually chucks him, or just hang back and wait out the relationship. “So your advice is to be sleazy, conniving or pathetic?” replies Wallace, in one of the movie’s standout lines.

Much of the story is given over to the back-and-forth patter between the lead characters – which runs from Elvis’s bowel movements to the sex habits of the elderly – giving it a Before Sunrise talkiness. The problem is that while long, whimsical conversations between two people with sexual chemistry are a lot of fun to take part in, they are not much fun to observe, and some of the dialogue feels overwritten and grating.

Another difficulty the film faces is the familiarity of its material. There are many romcoms it could be compared with, but its similarities to 1998’s The Wedding Singer are particularly striking, even down to the jerk boyfriend standing in the way of the main couple, the male lead’s pervybut-in-a-nice-way best friend and the female lead’s slutty sister (or cousin in the earlier film) who hits on the main character only to realize he’s in love with her relative.

From the opening scene, it’s smack-you-in-the-face obvious that the jerk boyfriend will somehow be jettisoned (deservedly, of course) and our couple will come together just when all hope looked lost.

What If could have sunk without trace into a graveyard of derivative romcoms, but the movie is elevated by its stars. Both Radcliffe and Kazan bring enough vulnerability and likeability to their roles to keep you with them, and the sub 100-minute run

time doesn’t push it. Plus, halfway through comes a hilarious line, delivered by an entirely peripheral character, that will have local audiences

rolling in the aisles. Even the most romcom-phobic viewer will enjoy it. debbie.stowe@business-review.ro

www.business-review.eu Business Review | October 2014

CAFE REVIEW 37

Black Eye Coffee

Back to Black: a rare non-smoking venue for the coffee cognoscenti

∫ DEBBIE STOWE As the opportunities for an al fresco tea or coffee fade, with the colder weather driving us back indoors, Bucharest’s non-smokers are faced with the annual conundrum: where to get our caffeine without a large side order of obligatory nicotine?

One recent addition to the small but growing niche of non-smoking cafes in the capital is Black Eye Coffee, which opened last December opposite Gheorghe Lazar National College, near Cismigiu Gardens. Happily for the rest of us, though, it’s not teeming with high school students making us feel old. No, this is a place for people who want a civilized hot drink in calm surroundings – but especially for anyone who values “proper coffee”.

The Black Eye Coffee crew really know their onions – better said, their beans – when it comes to the black stuff. As always with the most professional establishments, the menu is short. Customers choose between five types of bean – from Indonesia, Ethiopia, Guatemala, Jamaica and Colombia (the latter is decaf) – and four brewing methods – industry espresso machine, the V60 Dripper, the Aeropress and the big one, the Cona Coffee Maker, which uses a glass siphon for greater purity.

Pricing reflects the hierarchy of the blends and the processes, so espressos start from a reasonable RON 6, and cappuccinos from RON 10.

However, the coffee connoisseur can enjoy a cappuccino made from the highly sought after Jamaica Blue Mountain (so desirable that over 80 percent of it is exported to Japan) for RON 22. This type combined

with the Cona method costs a cool RON 37.

But the Black Eye Coffee team is pushing the education side as much as the taste. As one of just a few local cafes offering a range of brewing methods, they know that an EUR 8 coffee is not for everyone.

The menu outlines the whole chain – from the coffee belt to the consumer. And the staff have detailed product and process knowledge, and are great at remembering what drink you had last time and making recommendations based on your preferences. They’ll also throw in some latte art.

Tea drinkers are catered for with a handful of organic brews (RON 10), and if you want something harder there’s whiskey (RON 12), cognac (RON 20), long drinks and cocktails (RON 14), wine (RON 12) and beer (RON 8-9). Cakes sit temptingly in a display case and if you go before 3pm there’s a coffee and croissant deal (RON 15). The décor is upmarket yet pleasantly understated, with comfortable seating and offset with a ceiling dome.

Black Eye Coffee is the latest entrant to a mini café belt developing at the south-east corner of Cismigiu Gardens, joining Dolce Bacio (a slightly cheaper option popular with the high school crowd) over the road and Kafeterya (Turkish owned, serving meals, with a long drinks menu and regular live music) around the corner.

With Black Eye the choice of the coffee aficionado.

59 Regina Elisabeta. 0768 936 640. www.blackeyecoffee.ro.

Mon-Fri 08.00-22.00 Sat & Sun 10.00-22.00 debbie.stowe@business-review.ro

www.business-review.eu Business Review | October 2014

38 NOVEMBER CALENDAR

DON’T MISS: A SELECTION OF CULTURAL EVENTS THIS MONTH British Documentaries National Peasant Museum Every Monday until December 15

Eleven UK productions will be showcased at Studio Horia Bernea, as part of the British Council’s program, which aims to give more visibility to British cultural events. The films included in the series have been nominated or awarded at international festivals, including Sundance, the Karlovy Vary International Film Festival, BAFTA and the Nuremberg International Human Rights Festival.

The season includes Imagine: The Fatwa – Salman’s Story (Oct. 6), Syria: Across the Lines (Oct. 13), Salma (Oct. 20), Order and Disorder: The Story of Energy (Oct. 27), No fire zone: The Killing of Sri Lanka (Nov. 3), Rich Hall's Continental Drifters (Nov. 17), The Trouble with Aid (Nov. 24), Beach Boy (Dec. 2), Transsexual Teenage Beauty Queen (Dec. 2), The 2000 Years Old Computer (Dec.10) and Arena: Aka Norman Parkinson (Dec. 15).

Les Films de Cannes a Bucarest Cinema Patria, Cinema Studio, Cinema Elvira Popescu, October 24-30 Now on its fifth run, the festival gives Romanian audiences a chance to see some of the movies screened in Cannes this year, both in and out of competition. It will open with Leviathan, which won the Best Screenplay Award, directed by Andrey Zvyagintsev and starring Aleksei Serebryakov, Elena Lyadova and Vladimir Vdovichenkov. The 2014 Russian drama, set on a peninsula by the Barents Sea, tells the story of a man who struggles against a corrupt mayor who wants his piece of land.

The National Theater Festival October 24 – November 2 Several locations Over 40 performances will take place during the National Theater Festival in the Bucharest National, Odeon, Bulandra, Nottara, Metropolis, Jewish, Excelsior, Tandarica, Masca, ACT, Lipscani, Elisabeta, Art, Godot Café, UNTEATRU Bucharest and Craiova National theaters, along with Grand Cinema & More Baneasa Shopping City and Ion Manu Cultural Center Otopeni.

The festival will also have an international production, Donka: A Letter to Chekhov, written and directed by Daniele Finzi Pasca. A melding of acrobatics, juggling, clowning, and music, internationally renowned circus artist Pasca delivers an imagistic love letter to the Russian writer.

Tickets can be bought online from www.eventim.ro at prices ranging from RON 22 to RON 110.

La Traviata Premiere Bucharest National Opera, October 30

SoNoRo October 31 – November 17 Bucharest, Iasi and Cluj Napoca

Jack White November 9, Romexpo

Bucharest, Cluj and Iasi will host the ninth SoNoRo chamber music festival.

Pianists Diana Ketler and Henri Sigfridsson, violinists Alina Pogostkina, Daniel Rowland, Hugo Ticciati, viola players Vladimir Mendelssohn and Răzvan Popovici, cellists Julian Arp and Anja Lechner will perform on the opening night, at Cotroceni Palace.

A further 11 Bucharest concerts will be held in Bragadiru Palace, the Palace of the National Military Circle, the Romanian Athenaeum, ArCuB, the National Museum of Art, St. Iosif’s Cathedral, the National Bank, The Ark and the George Enescu National College. Subscriptions cost RON 370 for nine concerts and RON 250 for five concerts, while tickets for individual concerts are RON 50.

Tarja Turunen November 4, Sala Palatului

Lara Fabian Sala Palatului, October 20

With hits including Tu t’en vas, Si tu m’aime and Deux ils, deux elles, Lara Fabian has sold over 20 million records, making her the best-selling Belgian-born female artist of all time.

This will be her second time on a Bucharest stage.

soprano with a three-octave vocal range, was previously lead vocalist of the Finnish symphonic metal band Nightwish, which she co-founded in 1996 and helped pioneer so-called “opera metal”. Since 2006 she has performed solo. Tickets are priced between RON 90 and RON 245.

Jack White, winner of eight Grammys, will hold his first concert on Romanian soil, organized by Phoenix Entertainment. Known primarily for his work as lead vocalist of bands such as the White Stripes and the Raconteurs, White is currently enjoying a successful solo career.

His first solo album, Blunderbuss, was released in 2012. In April, the American announced his second solo album, Lazaretto; which was released in June along with the first single from the album, High Ball Stepper.

Tickets are on sale for RON 130 (normal circle) and RON 215 (golden circle) or RON 360 for VIP tickets, from the Eventim network.

Sarah Brightman November 13, Sala Palatului

Director Paul Curran will stage the premiere of Verdi’s La Traviata at the Bucharest National Opera, with the help of designer Gary McCann. “A combination of old and new, classic and modern,” is the institution’s promise.

The queen of heavy rock is coming to Bucharest. Tarja Turunen’s tour was initially to promote her 2013 studio album, Colours in the Dark. A second version, called Left in the Dark, has subsequently been released. The Finnish singer-songwriter, a light lyric

Sarah Brightman, the best-selling soprano of all time and a pioneer of the classical crossover genre, will stage a grand production with the help of a 30 musician-strong orchestra. The soprano will treat fans to a combination of older hits and songs from her latest album, Dreamchaser. Brightman intends to become the first artist to record a song in space, and is undertaking intensive training for the project in 2015.

Ticket prices for the concert range from RON 200 to RON 700.