German firms want long-term links

How important are German investments in Romania and what position does Germany occupy in the ranking of foreign investors in Romania?
Germany is Romania's most important trading partner and ranks third for foreign direct investments (FDI). This proves that Romania is of key importance to German business and vice versa. Romania's strategic position, the size of its market and its comparative advantages as a location for production – such as its comparatively low labor costs – attract a large amount of German companies.

What are the most attractive sectors and regions of the country for the German companies that are expected to enter the local market this year?
Romania offers interesting business opportunities in all fields related to infrastructure and the environment, such as water and waste management and components for green energy. In these fields, a significant demand meets a specific German expertise. We also continue to see a strong interest in some sectors of retailing, where some German companies are expanding.

Is the volume of German investment in Romania still expected to increase now that there are not many large companies to come?
That is difficult to foresee. Many companies made their investment decisions before the onset of the economic crisis and we are glad to see that they are sticking to them. This shows that German companies are interested in sustainable economic relations rather than in continual coming and going.

How would you characterize the local economic environment? What incentives do German companies want in order to invest more in Romania?
I believe that the specific advantages that Romania offers are still there. Business profits still result from relatively low wages and an attractive domestic market within the European Union. However, it is also clear that Romania will have to do its homework to maintain these advantages: it needs to make serious efforts at improving and expanding its infrastructure and at reducing bureaucracy and improving transparency. Investors also need to be able to rely on the fact that their contract partners meet their obligations. These are points that German investors raise over and over again. We also hope that the EU funds that are available for these purposes will be put to use.

After a relatively short time as the Ambassador of Germany in Romania, how do you find the country and the business scene?
Did you choose Romania or did Romania choose you?I deplore the fact that I did not come to know Romania much earlier in my career. I try to learn and listen. So far, I think I chose Romania. I hope the moment is not too far off when Romania chooses me.

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What was the value of German direct investment in Romania in 2008, and what is the forecast for 2009? How many German companies have been registered to invest in Romania in 2008 and how many are expected to do the same in 2009?
German direct investment in Romania in 2008 amounted to EUR 2.33 billion. This represents more than 10 percent of overall FDI. Since some German firms invest in Romania through their non-German subsidiaries, the de facto significance of Germany as a source of FDI is even greater. In 2008, Romania had over 16,000 firms with German financial participation, the majority of which were small- and medium-sized enterprises. You may label this as of strategic importance.As for the outlook for 2009, we all know that, in the first half of 2009, there has been a significant drop in overall FDI to Romania and worldwide. However, interestingly, the numbers available to us so far for the period show us that there has been a steady increase in both the number of registered German investors and the volume of listed capital, which is an encouraging signal. It might be too early to draw general conclusions, but I think it is safe to say that Romania remains an interesting market for German investors.

Which was the value of the commercial exchanges between Romania and Germany in 2008 and what is your estimate for the current year?
In 2008, German imports to Romania reached EUR 8.7 billion, while exports of Romanian goods and services to Germany accounted for EUR 4.8 billion, thus resulting in a trade volume of EUR 13.5 billion. In the first five months of 2009, bilateral trade between Romania and Germany totaled EUR 4.5 million, whilst Romania's current account deficit in the trade between our two countries has gone down significantly.

In which field do you think German investments will be more active this year and in the years to come?
We're currently seeing a strong interest in sectors such as renewable energy components, building materials and IT.
anda.dragan@business-review.ro