Euro adoption, EU expansion excite British broadsheets on Basescu visit

Romania’s intention to stick to its 2015 target date for adopting the Euro, and the potential expansion of the EU to 35 countries by 2018, were the major themes seized upon by the British media during President Traian Basescu’s visit to the UK last week. Upcoming privatizations and Romania’s Schengen prospects also came under the spotlight in coverage of the two-day trip.

Following an interview with the president, the Financial Times led on Basescu’s statement that Romania was not planning to delay its Euro target dates like other countries in the region, which had seen the value of being able to devalue their national currency in times of crisis to maintain competitiveness. The president told the paper he had discussed with his government and the central bank (BNR) whether to postpone the target date. He was quoted as saying, “2012 is an election year, when politicians can get extremely generous [with public funds] but the people will have to pay for that generosity after the election… Maintaining the objective of 2015 for the euro generates the necessary discipline.”

The FT added that Basescu “said he was hopeful that Romania and Bulgaria would win approval to join the Schengen border-free zone by the end of this year, in spite of objections from France and Germany that more preparation work is needed.”

The paper’s emerging markets blog focused on the imminent round of privatizations, including minority stakes in Petrom, Transelectrica, Romgaz, Nuclearelectrica and Nuclearelectrica. “We will sell important percentages on the market in the largest state-owned companies, before the end of the year” it quoted Basescu as saying. “The money obtained through these tenders will go into a development fund; it is not destined for consumption.”

The FT was candid in its assessment of Romania’s current economic situation and “brutal” attempts to stem the tide. It reported that Romania had “imposed some of the toughest austerity measures in the 27-nation bloc, after letting public spending mushroom before the global financial crisis”. The paper also mentioned Romania’s previously “chronically slow” absorption of EU funds and “backward transport network”. However, it noted, “The [austerity] measures have hit hard the popularity of the president and government – which has survived five no-confidence votes – but markets have praised Romania’s determination to rein in its finances.

Meanwhile, the right-leaning Telegraph led its coverage on Basescu’s suggestion that the EU could expand from the current 27 to 36 countries by 2018. “We are looking at the extension. Maybe it is not the right moment in this crisis to discuss but it is clear that both countries are supportive for Western Balkans integration, for Moldovan integration, for Turkey integration,” the president told the paper. He added: “These are common points of view between Bucharest and London. For the time being we can imagine an EU extended in Western Balkans, with Moldova and with Turkey. We cannot now imagine a larger European Union. That will be 35, maybe by 2018 or 2020 when this process will be finalised.”

President Basescu added that expansion was contingent on EU countries hit by economic crisis. He said: “It will depend very much on how Europe left the crisis period. Because in order to look at the extension we will have to settle the EU’s internal problems, with Greece, Ireland, Portugal and who knows.”

Basescu also met the British prime minister, David Cameron, at his official residence, 10 Downing Street. After the meeting, described by Cameron as “important and productive”, the PM called the two countries “natural partners” and said they had agreed on: boosting their countries’ economies, by “freeing businesses to create jobs – less regulation, more innovation”, extending EU membership to the countries of the Western Balkans, Turkey and Moldova and military efforts in Afghanistan and Libya.

In turn, Basescu called for the EU to be “stronger and united, more competitive and [to] consider research and development as a priority”. He pledged that Romania would meet its military commitments, and its obligations as regards the Europe 2020 strategy. The president added that the two leaders had discussed the two frigates that Romania had bought from Britain.

During his two-day trip, Basescu also delivered a lecture at the prestigious London School of Economics. The hour-long address, given in Romanian, touched on the economic crisis, the dangers of state over-intervention in the market, the need for democracy to be sustainable, the bribery of the electorate with benefits and the dangers of populism. A podcast of Basescu’s speech, in both English and Romanian versions, is available at www.lse.ac.uk. ∫

Debbie Stowe

Tags: basescu visit uk