Hopes rise for swift reforms in Romania

Date: 06/01/2000

By Simon Taylor

THE European Commission has cautiously welcomed the appointment of former central bank head Mugur Isarescu as Romania's new prime minister, expressing hope that the new government will press ahead with vital reforms.

"We are not saying that we prefer the new government to the previous one, but what we are interested in are stable institutions which can get on with the work that needs to be done," said one official dealing with enlargement.

Isarescu, who is not linked to any political party, was sworn in as prime minister on 22 December, replacing Radu Vasile, who was sacked by President Emil Constantinescu last month after he lost the support of his own Christian Democratic party. Constantinescu said afterwards that Romania now had a government "able to cope with major economic and social problems, and tackle complex negotiations with the EU".

Isarescu's administration

has pledged to continue with reforms designed to stabilise Romania's economy, which has been shrinking for the last three years and has kept the country one of the poorest nations to emerge from the Soviet bloc.

One of the new prime minister's priorities will be to bring Romania's rampant inflation down from the current rate of more than 50% to 25-30%. Another will be to press ahead with stalled reform plans necessary to prepare the country for Union membership.

Analysts point to Romania's slow progress in privatising loss-making state-owned industries as a major obstacle to an improved economic performance. The EU recently allocated Bucharest €100 million in aid to help with restructuring projects.

Romania's hopes of joining the Union were given a boost at December's Helsinki summit, when it was invited to start formal negotiations on EU membership next year despite the poor state of the country's economy and concern that the country was failing to improve its orphan problem.

The European Commission has cautiously welcomed the appointment of former central bank head Mugur Isarescu as Romania's new prime minister, expressing hope that the new government will press ahead with vital reforms.