Fwd: Romania - Communist Comeback

Chris Doss itschris13 at SPAMhotmail.com
Mon Jun 5 22:50:33 MDT 2000



God, I don't blame theme.  Isn't the country projected to use 35% of its
population in the next 20 years?

>Romania's Communists Poised for a Comeback
>
>Summary
>
>Propelled by a banking scandal, the Romanian government may be on
>its way out of power. The current administration, which has led the
>country in its bid for membership in both NATO and the European
>Union, suffered unprecedented losses at municipal elections May 4 -
>partly as a result of the scandal. After four years of pro-Western
>rule in Romania, the country seems prepared to consider a return to
>leaders who are leftovers of the communist era.
>
>Analysis
>
>A banking scandal threw Romanian investors into panic last week,
>resulting in the collapse of a national investment fund. An
>anonymous source leaked information to the public that led to a run
>on the bank. The information leak - apparently politically
>motivated - was the first in what will likely be a string of events
>aimed at weakening the current government.
>
>The banking scandal - combined with success at the polls in recent
>elections - will strengthen the hand of the Social Democrats,
>composed of former communist-era officials, led by former president
>Ion Iliescu. Supporters of the ruling Christian Democratic Party
>largely boycotted local elections on May 4 and, along with low
>voter turnout, helped throw the elections to the Social Democrats.
>In November, the country will hold parliamentary and presidential
>elections.
>
>By themselves the local elections cannot indicate who will win in
>the fall. But the public's awareness of the corruption surrounding
>the banking sector, however, does suggest an imminent collapse of
>the Romanian administration. If the Social Democrats can continue
>to expose government corruption, while influencing voters at the
>municipal level, they may be able to manipulate mass sentiment
>enough to position themselves for a win in November.
>________________________________________________________________
>Would you like to see full text?
>http://www.stratfor.com/SERVICES/giu2000/060600.ASP
>___________________________________________________________________
>
>In mid-May several anonymous phone calls to investors in the
>Romanian Commercial Bank (BCR) began a run on the bank that led to
>the collapse of its partner, the state-run National Investment Fund
>(FNI), according to Bucharest press reports. A total of 10,000
>small investors - out of 300,000 with investments with the fund -
>reportedly attempted to withdraw their cash from the BCR. With only
>4 percent of its $164 million worth of assets liquid, the fund
>collapsed.
>
>Romania's ruling Christian Democrats say the crisis was an attempt
>by the political opposition to sway the elections. They are
>probably right, in that the crisis would not have happened without
>the anonymous phone calls.
>
>A problem had already been brewing; but it was sparked into a
>crisis by a timely leak of information to the public. Initially
>Stefan Boboc, president of the National Securities Commission
>(CNVM) denied any knowledge of FNI's precarious and illegal
>financial position. Two days later he was charged with directly
>managing the fund's questionable operations, reported the Romanian
>daily Economy Today.
>
>_______________________________________________________________
>For more on Romania, see:
>http://www.stratfor.com/cis/countries/Romania/default.htm
>__________________________________________________________________
>
>Boboc, arrested on June 2, is charged with abuse of power for
>allowing FNI to submit false accounting statements to hide its
>dangerous financial status. In addition to holding only 4 percent
>liquid assets, instead of the required 30 percent, FNI also failed
>to report approximately 86 percent of its shares. By law, only 10
>percent can be unaccounted for. Romanian authorities want four
>other FNI officials for their involvement in the scandal. One of
>them, the fund's chief administrator, fled the country.
>
>The banking scandal cost the state an estimated $49 million, and
>possibly November's elections. Timed for just a few days before
>local elections, the banking crisis left the Christian Democrats
>looking corrupt and untrustworthy - with a potent real life
>reminder to voters with empty bank accounts. While voters abandoned
>the Christian Democrats, the Social Democrats gained control of
>Romania's local governments, including the mayorship of Bucharest.
>
>In addition to being the second most popular party in the country,
>the former communists now have the ability to install local
>officials, who can affect the ability of the ruling party to
>campaign. With six months before both parliamentary and
>presidential elections, the successor to the Romanian Communist
>Party may have just enough time to convince voters on a local level
>to vote for them nationally while restricting ruling party access
>to the political apparatus at the municipal level.
>
>The pro-Western ruling party is decidedly vulnerable. The Christian
>Democrats are members of the majority coalition in parliament, with
>30 percent of the seats, but the Social Democrats are not far
>behind, with 23 percent. And, in the 1996 presidential election,
>Iliescu came in a close second to current President Emil
>Constantinescu. Economic scandal and political infighting will
>likely surge as Romania edges closer to its elections.
>
>The next four years - coincidentally the term length of the next
>president - will be telling in Romania's bid for membership in NATO
>and the EU. Western leaders, although diplomatically friendly, do
>not smile on former communist leaders such as Iliescu, who led the
>country from 1989 until 1996.
>
>Iliescu says that he supports Romania's accession to the EU, but
>has so far been so demanding that his participation - not to
>mention his leadership - threatens to stall the process. For
>instance, he asserts that EU expansion is for the good of the EU,
>not Romania, and therefore Romania should be treated the same as
>all full-fledged member states. But, Romania is geographically
>pivotal to the expansion of NATO and the EU. Already, despite the
>country's economic and defense deficiencies, the Western alliances
>are eyeing Romania.
>
>By winning in November's elections, Romania's Social Democrats
>could stall NATO and EU plans for expansion.
>
>
>
>(c) 2000 WNI, Inc.
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