Romanians banking on EBRD session

BUCHAREST – Romania is hoping an annual meeting, starting here tomorrow, of the European Bank for Reconstruction and Development (EBRD) will induce foreign businesses to see the country as a profitable investment outlet. «Authorities hope that the meeting of EBRD governors will spark a major inflow of investment, which has been sorely lacking these last few years,» said economist Ionut Balan. Romania has attracted less than $8 billion (8.8 billion euros) in foreign investment since 1990, one of the worst performances of any former Soviet-bloc nation. And despite the optimism displayed by the left-wing government that came to power in 2000, investment levels do not appear to have improved. In the first three months of the year, foreign capital inflows amounted to barely $110 million, jeopardizing chances the government will be able to meet its full-year target of $1.8 billion. The government of Prime Minister Adrian Nastase is therefore banking on convincing the estimated 1,000 foreign business leaders expected to attend two forums held alongside the EBRD meeting that Romania is a good bet. The EBRD has already made clear its interest in the national oil company Petrom and the Romanian Commercial Bank. Romanian ministers this week secured a commitment from the EBRD for a loan of 150 million euros to support the privatization of Petrom, which controls 50 percent of the Romanian gas distribution market. But the EBRD gathering tomorrow and Monday comes at a delicate moment in Romania’s relations with the bank. For several weeks, Bucharest’s municipal leadership has held up the disbursement of a 51.5-million-euro loan to finance infrastructure projects, citing clauses in the contract it describes as «unfavorable.» The council position has exasperated the EBRD representative in Romania, Salvatore Candido, who has threatened to allocate the funds to another city. In addition, the EBRD meeting comes just a week after the World Bank delayed the release of $300 million in credit for Romania, citing the sluggish pace of economic reform in the country. Another obstacle facing authorities is corruption, frequently cited as a major factor discouraging foreign investment.