On the Eve of Romania Elections, EU-Romania Business Society Calls on New Government to Improve Conditions for Foreign Investors - Seite 2

There have been many high-profile public conflicts, where Romania has ended up on the losing side. We have seen the government in dispute with Raiffeisen over property rights. Romanian authorities lost their case against Enel in a 900 million Euro arbitration. The Government also lost their 33 million Euro case against Germany's E.ON at the International Court of Arbitration in Paris, and were ordered to pay E.ON's two million Euros legal expenses. Romanian state companies lost their case against CEZ in an 81 million Euro arbitration regarding privatisations from 2005.

Still looming is a dispute with Rompetrol, owned by KazMunayGas International (KMGI). We would like to see the new Romanian Government taking a constructive path to resolve this and other conflicts in an amicable manner. Romania, in contrast to her neighbours, benefits from KMGI accounting for 22mt per year of production, and the energy security that the Kazakh partners and investors have brought to the country.

We call on the new Government and business leaders to negotiate investor claims, and to avoid lengthy litigation and arbitration wherever possible. There is not just the cost to the country of losing the arbitration, but also the reputational damage that undermines our efforts to promote Romania as a safe and hospitable environment for foreign investment. Indeed, foreign direct investment into Romania is on a five year downward trend. Economic growth for the third quarter of this year has also been lowered, with ING Bank stating this week that it has decelerated to 4.4%

Spending by the private sector is the bedrock for development and expansion, not just in Romania but across the Black Sea region. We want to see more of this, private sector funds that leverage greater public investment.

Since our inception we have called for open markets, fair competition on a level playing field and protection of public and private assets.

What we care about most is working with the Government, and the member states of the EU, to make Romania a stronger and safer destination for business and investment. Romania has in the past encouraged and engaged in public private partnerships to boost job creation and growth. We believe that in the interests of good governance and economic security these kinds of alliances are vital.

We conclude this interim report with a determined commitment to continue to examine and report on the national issues we feel urgently require Government action for Romania's greater stability and progress.