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INTERVIEW: Around 500,000 Romanians use the savings-lending system known as Bauspar, which is very popular among Austrians and Germans, says Aurelia Cionga, president of Raiffeisen Banca pentru Locuinte, which provides this product »page 11


JUNE 23 - 29, 2014 / VOLUME 18, NUMBER 23


Changes to the incentives mechanism have dented renewable investors’ confidence in Romania, said experts at the eighth Focus on Energy, held last week. They added that the country could become a net gas exporter by 2020 if new supply routes are opened and domestic production is ramped up » page 6



Mall systems go

Mercure rising

Developer AFI Europe has signed a EUR 220 million refinancing deal for its flagship project in Romania, the AFI Palace Cotroceni mall

French group Accor will add a new hotel brand to its local portfolio, with a Mercure hotel set to open in Bucharest by the end of the year

» page 4

» page 5 Business Review | June 23 - 29, 2014


NEWS in brief

WEEK AHEAD 22-26 June Foren 2014 The 12th WEC Central and Eastern European regional energy forum – Foren 2014, with the main theme Tomorrow’s Energy: From Vision to Reality, will be held at the Palace of Parliament. The event is organized by the WEC Romanian national committee, under the auspices of the government of Romania and the leadership of the World Energy Council (WEC) and with the support of WEC member committees in Central and Eastern Europe.

AIRLINES Emirates to start serving Romania Emirates Airline has spent the last couple of months prospecting the Romanian market and is planning to start operating flights between Bucharest and Dubai by the end of the year, according to Mediafax. Representatives of the Dubai-based airline have met with several tourist agencies and Otopeni airport officials to discuss the details of the route.

25 June Photo: Mihai Constantineanu

BANKING Garanti Bank takes out EUR 35 mln IFC loan to finance SMEs IFC, a member of the World Bank, has granted a EUR 35 million loan to Garanti Bank, owned by Turkiye Garanti Bankasi, which will be used for on-lending to small and medium-sized businesses in Romania, focusing primarily on companies that are owned or managed by women. According to trade registry data, there were close to 415,000 women entrepreneurs in April, accounting for over 36 percent of shareholders and associates in local firms. The bank has said that EUR 20 million of the total lending will target this segment.

HUMAN RESOURCES Amazon recruits for Iasi development center Online retailer Amazon is recruiting staff for its development center in Iasi. Twenty vacancies are being advertised on the center’s website, including for imaging associates, software development interns, managers, catalog associates, imaging support associates and system engineers. According to the Ministry of Finance, Amazon’s Iasi center had 172 employees last year. The center posted a net turnover of nearly RON 25 million (around USD 7.7 million) and a profit of over RON 2.6 million (around USD 811,464) in 2013.

Pitman Training UK launches local center with BPTC Pitman Training UK last week launched its first Eastern European outlet, at the Bucharest Professional Training College (BPTC). Officials from the British Embassy in Romania and British-Romanian Chamber of Commerce joined Pitman representatives at the launch event. Pit-

Paving the way: Street Delivery takes over Bucharest for ninth run Street Delivery, the manifesto-event dedicated to architecture, urban living and culture, unfolded last weekend for the ninth time in Bucharest. The festival, which also took place in Timisoara and Iasi, challenges its audience to imagine a city where pedestrians have priority over cars on the street. Under this year’s theme, “the mobile society”, various events were held in the area of Arthur Verona Street and George Enescu Square.

man-BPTC will offer more than 200 certificate and diploma programs in 20 fields of study, many of which are available through distance learning. Pitman Training, which was established over 175 years ago, delivers training programs and qualifications around the world. Founded in 2009, BPTC is a Britishstyle further education college providing UK-accredited professional and vocational qualifications to “reflect the needs of the ever changing and diverse modern workplace”.

INFRASTRUCTURE EU approves EUR 409 million investment in Bucharest subway system The European Commission last week approved a EUR 409.5 million investment from the Regional Development Fund (FEDR) for the Eroilor-Drumul Taberei subway route currently under development, reports Mediafax. EC officials say that the 335,000 people living in Drumul Taberei will be the main beneficiaries of the investment, which will be made through the POS Transport program. The FEDR will supply EUR 409.5 million out of the total EUR 481 million necessary. The new subway line, which will connect downtown Bucharest with the south-west

of the city, should be completed by the second quarter of 2016, with the whole project due to be finished by 2020. By that year, Metrorex estimates it will have invested EUR 900 million in the subway system serving the Romanian capital, EUR 600 million of which will come from the EU. Some 600,000 passengers ride the subway every day in Bucharest, approximately a third of the city’s population.

LENDING World Bank lends Romania EUR 1 billion for development and health reforms The International Bank for Reconstruction and Development, part of the World Bank, is granting Romania two loans worth EUR 1 billion for development policies (EUR 750 million) and health reform (EUR 250 million). “The loans attest to the new country partnership between Romania and the World Bank, which involves financial assistance of over EUR 1 billion a year over the 20142017 period to support the National Reform and Convergence plans,” said Finance Ministry officials. Both loans were contracted for 18 years. They will be repaid in one tranche: the EUR 250 million in March 2032 and the other EUR 750 million in May 2032.

Electrica IPO The Electrica IPO is scheduled to end on June 25, although the delegate minister for Energy, Razvan Nicolescu, said last week that he believes the offer will be fully subscribed by June 23. Shares will begin trading on the Bucharest Stock Exchange and London Stock Exchange on July 3.

26 – 28 June Tennis for People The third edition of Tennis For People, a special Princess Margareta Foundation project, will take place at Stejarii Country Club in the last weekend of June. This charitable event aims to raise money for 57 disabled children currently living at the Generations community center.

July 3 AmCham Romania invites members, partners and friends to this year’s US Independence Day Celebration on July 4. Access by invitation only. Contact AmCham Romania at or by phone on 021 312 48 34 to buy your invitation.

MOST READ 1 Emirates to start operating flights in Romania

2 EU approves EUR 409 million

investment in Bucharest subway system

3 Romanian Church Patriarch

becomes viral sensation for “paint-roller blessing”. BBC takes notice

4 Romania forces Romgaz, Petrom to trade part of their gas output on bourse

5 Russia cuts off gas supply to

Ukraine. Romania’s Energy Minister: We’re prepared for anything Business Review | June 23 - 29, 2014


CEO CORNER Henk Paardekooper Country Executive of RBS Romania

Can we trust the bank(er)s?

This month I am celebrating exactly 25 years of being in banking. And I still fondly recall the moment I first entered the head office of the bank at the time. It was a landmark historical building which stood for stability, reliability and trust. The building looked and felt very safe. Exactly as a bank should be. Whenever you look at historic bank buildings, many were built in this way. The Federal Reserve Bank in New York, the Bank of England in London, the National Bank of Romania in Bucharest Old Town – all these buildings, everywhere in the world, are located in the heart and center of the communities they serve. Historically, bank buildings have been located in city centers. Everyday people could see with their own eyes that their bank was still there. Rock solid, safe and to be trusted. Twenty-five years ago, not only were banks’ buildings trusted and respected, but so were bankers. They had to live and be active in their own community, in the sense of being members of business boards and associations and local chambers of commerce. Because bankers had to develop relationships in the societies they were working for and living in. The banker

was like the village doctor. He advised people and was highly regarded, respected and trusted. He was a moral compass for his clients. A person of ethics. But at some point, things started to change. Banks started to build modern and ultra-high glass tower buildings, often located outside the city centers in so-called financial districts. It happened everywhere in the world, from London to Paris to New York. The communities that banks were supposed to serve could no longer see them in their city centers. Banks moved away from their core and from their customers. And we know what happened. Eventually it all went wrong. Horribly wrong. The bank buildings did not literally collapse. But the banks did. And the communities had to save them. The very same people who trusted these banks saw the banks collapsing and had no other choice than to save them. Can we trust the banks now? For this we need to go back to the bankers. Bankers should be people of ethics, obsessed with doing the right thing. For their clients, the communities in which they operate and society at large. The burden of proof they are doing so lies heavily now on their shoulders, and rightly so. While they cannot prove that, they should remain located far from communities. Once they have rebuilt trust, the communities will embrace them again.

Henk Paardekooper is the Country Executive of RBS Romania and Hub Executive Central and Eastern Europe in RBS. The opinions expressed in this article are the author’s personal views and do not represent the views of the institutions he is associated with.

Public sector workers to receive holiday vouchers if bill approved

Fun-ding: holiday vouchers have been issued in Romania since 2009


bill regulating the granting and issuing of holiday vouchers, which would see the inclusion of public sector workers in the scheme, has been passed by Parliament and is now waiting to be signed into law by President Traian Basescu. If the bill is approved, state employees could start receiving holiday vouchers next year, it is expected. The bill modifies Emergency Ordinance No 8/2009 which up until now provided the legal framework for the granting of holiday vouchers. According to the ordinance, only private companies that posted profit in the previous fiscal year could grant their employees holiday vouchers worth up to six months’ gross minimum salary per year. State employees, on the other hand, could only receive holiday bonuses in the form of cash, which the recipients

are not obliged to spend on domestic travel. The law has been widely welcomed: employment specialists say that holiday vouchers help motivate employees and are profit tax-deductible (up to six months’ gross minimum salary). It should also provide some much needed support to the local tourism industry, as the vouchers can only be used in Romania. Moreover, the use of holiday vouchers should also help stamp out tax evasion in the tourism industry, which commentators say reaches staggering levels. It is estimated that the Romanian state loses some EUR 2 billion each year through unpaid taxes by hotel and guesthouse owners alone. However, some commentators doubt that the law will reach its full potential in its current form. The state wants the holiday vouchers for public sector workers to be issued by the Romanian National Tourist Office, bypassing private prepaid voucher providers which have been issuing such vouchers since 2009. Secondly, the vouchers will be issued online, thereby limiting beneficiaries’ access. It also remains to be seen if the bill will be approved by Basescu in its current form or if, in view of the November presidential elections, it will become a pawn in the in-fighting between the government and the president. ∫ Simona Bazavan


AFI Europe signs record EUR 220 mln refinancing loan for Cotroceni mall


eal estate developer AFI Europe has signed a EUR 220 million refinancing loan agreement with Deutsche Pfanbriefbank, Erste Group Bank and Raiffeisen Bank for the AFI Palace Cotroceni shopping mall in Bucharest, its flagship project in Romania, the company announced last week. The mall was valued at EUR 375 million in September last year, according to AFI Europe data. The EUR 220 million financing agreement is a record for the local real estate market in recent years. “The process was a real challenge considering the financing value, and the facts that three major banks are involved and the money is destined for a project in Romania,” said David Hay, CEO of AFI Europe Romania. The deal proves that it is possible to secure large financing for good projects by experienced developers, he added. AFI Palace Cotroceni, which has a leasable area of 81,000 sqm, was opened in 2009. Today it is still the biggest and most important asset in the developer’s local portfolio. Financing for the project

was secured a year before, with the developer signing a EUR 234 million eightyear loan with Hypo Real Estate Bank. The mall posted a net revenue increase of 6.7 percent in Q1 2014, to EUR 7.3 million. The owners estimate that revenues will stand at EUR 29 million at the end of the year, similar to the result last year. In 2013, AFI Europe reported a EUR 28.7 million net income, up 6.5 percent y-o-y. The company also developed the AFI Palace Ploiesti shopping mall (valued at EUR 64.2 million in September 2013) and is currently building the 63,000 sqm AFI Park office project next to the Cotroceni mall. It also plans to start work on two more retail schemes – AFI Palace B. Noi in Bucharest and the AFI Palace Arad retail park. Expanding into residential is also on the developer’s radar, Hay told BR in an interview earlier this year. AFI Europe has been active in Romania since 2005. The company is part of AFI Properties, which is present on eight CEE markets. ∫ Simona Bazavan Business Review | June 23 - 29, 2014




Ramada Hotels launches EUR 4 mln wellness club

Recovering real estate market entering mature phase by Nicoleta Radu, MRICS

Courtesy of Ramada

Making a splash: the pool is cleaned with organic chlorine, made from salt


itality Wellness Club is the latest gym to open up in the north of Bucharest from Trend Hospitality, the company that owns Ramada Plaza and Ramada Parc in Romania. The facility, which required an investment of EUR 4 million, covers over 3,000 sqm. The first phase of the project was completed in May 2014, including an indoor semiOlympic pool, a fitness room, dry sauna and wet sauna. The second phase will comprise an outdoor pool, children’s playground, all-seasons Jacuzzi, relaxation zone with 80 sun-beds and a terrace, which will be available to users from July 15. The club also offers aquagym, spin, zumba, yogalates, total body workout, step&butts and Thai Chi classes, super-

vised by recognized international trainers and athletes. The fitness zone is equipped with 15 cardio exercise machines and 30 others for exercising with free weights, while spin lovers will have the use of 18 special bikes. In the club, customers can benefit from massage sessions such as Swedish, sports, reflexology, hot stone and special sessions for pregnant women, called the “mother-to-be treatment”, which cost EUR 19. Membership packages run from EUR 110/daytime/month to EUR 1,090/full-time/year. Extra services include massage from EUR 30, personal training for EUR 20/hour and swimming lessons, from EUR 15 for a group session to EUR 20 for an individual. ∫ Oana Vasiliu


Accor to open Mercure hotel in Bucharest


rench hotel group Accor will open its first local Mercure hotel in Bucharest by the end of this year, according to Zoltan Kiraly, director of brand operations, communications & PR at Accor for Eastern Europe. The company is already present locally with the Ibis, Novotel and Pullman brands. “The Mercure hotel in Bucharest, located in the city center close to the Romanian Athenaeum, is being developed with a local partner and investor, and will be managed by Accor,” he said. The company already runs a Novotel hotel in the same area. Mercure is positioned as a non-standardized midscale hotel targeting both business and leisure travelers. Accor currently manages a network of nearly 750 hotels under this brand in 50 countries. The French operator is present in Romania with six properties. It operates four three-star Ibis hotels, which have a combined 760 rooms and 24 conference halls. Two of the four units are located

Room on the market: Mercure has nearly 750 hotels in 50 countries

in Bucharest, Ibis Gara de Nord (opened in 2001) and Ibis Parliament (2005), and the other two are in Constanta (2005) and Sibiu (2009). The hotels are run in partnership under a form of management contract with Continental Hotels which owns the properties. The group also manages a Novotel and Pullman hotel in the capital. ∫ Simona Bazavan

While most of the opinions of the real estate market professionals conclude into the idea that a new real estate cycle is underway, the market itself proves this started in the autumn of 2013. It is not only the mortgage request rate growing month by month, but the intention of developing new projects in Bucharest and the country side, mostly in the western part, like Cluj, Timisoara, Arad, announced by various developers and consultancy agencies. The beginning of a new Romanian real estate sequence is more a need to step into a mature phase rather than an involuntary process of an industry who can blindly move on. We all, players and beneficiaries of this market, are aware of the fact that what it was, it was enough to determine an entire economical segment to regroup and provide a chance for investors and urban communities to grow. According to The World Bank, Romania had in the 1st Q of 2014 an increase of the economy of 3,8% comparing to the same period of 2013 proving the most rapid rhythm in EU, while referring to the 4th Q of last year, the growth is showing only a 0,1%, according to The main suggestion of such growth is that the consumption power is increasing in a natural way. Is that happening in reality? It seems that residential segment has the most natural evolution in the curve of new state, not only in Bucharest, a sign that residents are still looking to improve their habitats, while the price per sqm reached a minimum yet last October. Prices for residential units are slightly increasing and it is my hope that the reasonableness required for such trend is mainly based on quality and not unrealistic expectations. This opinion is still not shared by The Professional Association of Real Estate Agents in Romania APAIR or by credit broker KIWI Finance, who both compile into a similar conclusion: the past lessons were not strong enough as buyers or private seller are damned to repeat the same mistake of the boom experienced in 2007/2008. There is good news as well, which I personally enjoy to share. If in 2008, the crisis red year, the price per sqm was valued at 1.835 euro, in 2014 the correct price is around 920 euro for the same surface of the residential

unit, while the mortgage age decreased from 24 to 11 years. Another good sign is that, currently for the same total price of approx. 70,000 euro and same mortgage period of 30 years, the type of the unit in size increased from 37 sqm in 2008 (merely the size of a studio) to 80 sqm in 2014 (with the luck of a gifted architect and a bright developer, the size of a 4 room apartment/ house). Imagine your family has an average of 660 euro monthly income and your intention is to buy a new flat depositing 50% of the price, how long your mortgage exposure do you think shall be? Some say 9 years for the same value, comparing to the 35 years credited in 2008, according to a Kiwi Finance analysis on households prices. Isn’t that a change to the better? On the office segment, other areas of Bucharest proved for the last 2 years that location is not defined merely downtown or north. Office segment was the only moving segment between 2008 and 2012, even if shorten by size or survival transactions. Yet, it is the segment now participating to the natural urban development in west part of Bucharest. Reaching 2 mil. sq m of new development (while the total stock strengthen by old industrial platform is not yet considered into the urban development reshape), it is supposed that during the next 3 to 5 years to grow with at least 100,000 sq m new supply. The consumer power is impacting the retail and logistic development. 4 new projects totalling over 150,000 sq m of shopping centers announced only this year. Spread out in the city of Bucharest. The existing schemes struggled to secure their market position in the last couple of years, though the consumer behavior is not yet maturely by what might be we expect to experience while in a shopping centre. Like any other market progress, this segment has its own dynamic yet to be discovered. A final question arises, does Romania need more real estate developments, measured in quantity or better, measuring quality of urban facilities for its inhabitants? Time is always giving the answer.

Nicoleta Radu, MRICS 15 years experienced real estate professional, lately dedicated to optimization product & management Business Review | June 23 - 29, 2014


Unstable rules impair renewable investment outlook

Romania risks losing operational renewable energy capacities if the government does not reassure players that their investments, worth around EUR 6 billion, will be recovered. The deferment of green certificates has hit producers hard, with some running the risk of entering insolvency, said energy experts during the eighth Focus on Energy, organized last week by Business Review. ∫ OVIDIU POSIRCA


Romania meets renewable target six years early The burgeoning renewable sector has helped Romania fulfill this year the 24 percent target of gross consumption of primary energy covered from renewable sources. “It is the moment for a message from the Romanian government to renewable energy investors, who have made investments and bought equipment in good faith, installed and started operations at very high standards, and now they are wondering what to do as they are losing money,” said Valeriu Binig director, financial advisory services/energy & resources/corporate finance at professional services firm Deloitte Romania.

Selling fewer certificates 2






Photos: Mihai Constantineanu

The pressure on renewable producers’ revenues will intensify later this year if the European Commission, the executive arm of the EU, approves the government’s move to partially exempt big industry from paying for the green certificates. The government already deferred, last year, the issuance of some green certificates for wind, solar and small-hydro projects. These tradable certificates, which generate the bulk of a project’s revenues, should be recovered from 2017. Projects coming online this year will also receive fewer certificates after the energy regulator ANRE said that investors were recovering their investments too fast.This spring, the authorities also limited the amount of renewable energy that will be incentivized, with Prime Minister Victor Ponta claiming the move would prevent a 50 percent spike in the cost of green certificate on the electricity bills of households and big industry. This year, the proportion of green certificates that have to be paid by suppliers has been cut from 15 to 11 percent, meaning that more certificates will remain unsold. Ciprian Glodeanu, partner at law firm Wolf Theiss, said that ANRE should come up with a proposal regarding next year’s quota by the end of June, which should be vetted by the department of energy by the end of September. “What we know is that we have around 16-17 percent of renewable en-

1. Panelists gauge the future of renewable energy 2. Valeriu Binig, director, Deloitte Romania 3. Otilia Nutu, energy and infrastructure analyst, Expert Forum 4. Ciprian Glodeanu, partner, Wolf Theiss 5. Ioana Gheorghiade, executive director for infrastructure financing, BCR 6. Radu Dudau, director, Energy Policy Group 7. Silvia Vlasceanu, general manager, ACUE ergy potentially supported by green certificates (e.n. in 2015), and if the quota remains somewhere around 11 percent, we will have a problem with 57 million green certificates remaining unsold,” said Glodeanu.

Going into a buyer’s market This could have a ripple effect in the renewable sector and exert additional pressure on projects’ cash flows, which has the potential to send them into insolvency. “A wind generator needs EUR 115 per MWh to recover its investment and the current income from one green certificate and the sale of electricity amounts to EUR 60. If the project was financed with a bank loan, repayment issues could appear,” said Binig of Deloitte. He added that it is very hard to attract investors willing to take over projects. “Strategic investors would

have been a good fit because they are used to recovering their money on the long term, at lower rates of return. Financial investors usually enter in more favorable conditions with higher returns than strategic investors. If they are leaving, I do not know who will take over. I think that a clear signal is needed (e.n. from the government), telling them to stay here because it will get better for them from now on,” said Binig.He added that investors could seek to refinance bank loans and wait a little longer to recover their investments. In addition, the maintenance costs for some renewable producers are likely to rise. Sabin Posea, smart grid business unit manager at Eximprod Grup, a producer of electrical equipment, said that the private dispatching of renewable projects is set to grow in the coming years. Now smaller projects of up to 10

MW have to buy dispatching and monitoring services, which will create additional costs at a time when revenues are shrinking. At present Eximprod Grup is dispatching 400MW and another 50100MW is under negotiation for projects of below 10MW, according to Posea.

Financing tap switched off Glodeanu of Wolf Theiss pointed out that ANRE expects another 1.5GW worth of renewable capacities to be rolled out. However, this is unlikely to happen, he believes, because it is very hard to get financing. BCR, the biggest lender in Romania by assets, has already restructured some of the loans granted to renewable investors and is discussing the move with others, according to Ioana Gheorghiade, the bank’s executive director for infrastructure financing. “From our perspective this is not an Business Review | June 23 - 29, 2014





1. Viorel Beltechi, general manager, intermediary energy body, Ministry of Economy 2. Alin Mitrica, state secretary, Ministry of EU Funds 3. Costin Ionescu, regional sales manager, AB Energy Romania 4. Sabin Posea, smart grid business unit manager, Eximprod Grup area we would like to (e.n. further) develop, through new renewable energy projects. I think the interest (e.n. of the overall banking market) is limited,” said Gheorghiade. The bank has financed 26 projects, mainly in wind and small hydro, and has an exposure of EUR 250 million in the renewable sector.

Seeking redress Some big companies have asked law firms to gauge their chances of success if they decide to sue the Romanian government following the deferment of some green certificates, said Glodeanu of Wolf Theiss. He did not mention specific companies, but said these cases would be handled by the Washingtonbased International Centre for Settlement of Investment Disputes (ICSID). He described the government’s move as a “textbook example of breaching international treaties.” Czech utility firm CEZ, which owns the biggest wind farm in Romania at 600MW, complained last August to the European Commission, the executive arm of the EU, following the deferment. It claimed this decision could cost the company up to EUR 66 million annually, according to Reuters newswire.

Bio projects remain a challenge The backbone of the renewable sector seems to be wind, where the incentivized capacities reached close to 2,900MW in April, while solar has

climbed to a little over 1,100MW. Meanwhile, biomass and biogas projects have trailed behind at just over 100MW, with specialists pointing out this technology is harder to implement because investors need to position their plants near areas rich in raw materials such as agricultural or wood waste. Costin Ionescu, regional sales manger at AB Energy Romania, a company providing co-generation solutions, said that in the field of biomass and biogas there is a single project of 1MW running at full capacity. He commented that a lot of bio energy projects backed by EU money are currently blocked because investors have failed to come up with the co-financing, which stands at 30 percent of the project’s value.

Europe seeks to diversify gas supplies In the wake of the ongoing conflict between Russia and Ukraine, which culminated last week with the former cutting off natural gas supplies to the latter, EU member states have been trying to answer some hard questions about their energy future. Radu Dudau, director of the Energy Policy Group (EPG), a local think tank, said that the European Commission and some of the larger member states active in the hydrocarbon sector, mainly gas, seem to be coming around to the idea of a European Energy Union. The idea was first proposed in May by Polish Prime Minister Donald Tusk,

and copies the structure of the European Atomic Energy Community (EURATOM). This agency is the sole purchaser of uranium for all member states that have civil nuclear programs. The EU is currently pinning its hopes on the Southern Corridor pipeline project designed to bring gas via Azerbaijan, which should become operational by 2019. This will allow Romania to import gas from a source other than Russia for the first time, according to Dudau. However, the country will need interconnection with neighboring Bulgaria. Once the two states are linked, Romania could also get access to NLG from the Levant Basin in the Eastern Mediterranean through Greece. Dudau said that Romania would also have the option to tap into US gas after 2020, which would reach Poland and then cross Slovakia and Hungary through the North-South gas corridor. “We are not dependent on large imports from Russia, unlike our neighbors, but the marginal gas price is based on very expensive Russian gas,” said Dudau. The EPG director suggested that the shale gas and Black Sea gas along the Romanian shoreline, combined with the opening of new import routes, would help the country become a net exporter of gas around 2019 or 2020. However, massive investments into transport infrastructure will be required and the EU has allotted funding to this sector in the new financial framework 2014-2020.

and energy efficiency projects. Close to EUR 40 million would go into smart grids and metering systems and EUR 150 million would be put into the development of urban energy infrastructure in the Bucharest-Ilfov area. According to Alin Mitrica, state secretary at the Ministry of EU funds, Romania submitted to the EC the Partnership Agreement for the next EU fund allocation on March 31, and the government is currently waiting for the final feedback. The partnership outlines the government’s design of the EU funding mechanism through operational programs that run until 2020.

Gas market needs reforms

Romania has completed the liberalization of the gas market, meaning that consumers now have the option to choose their suppliers, said Silvia Vlasceanu, general manager of the association of energy utility firms, ACUE. Meanwhile, the deregulation of gas prices for industrial consumers was completed last month, according to Razvan Nicolescu, delegate minister of energy. The government pointed out that the prices of domestic gas are on par with imports. “Romania has to scrap regulated tariffs, and from this moment there is a perception of risk for suppliers that make wholesale acquisition and sell to retail,” said Binig of Deloitte. He adds that the government faces a conundrum as it can either subsidize the industry by maintaining lower prices, or cash in on the higher prices of EUR 400 mln for local energy domestic gas to the detriment of the industry, and redirect this income toinvestments pensions, unemployment Viorel Beltechi, general director of the wards intermediate body for energy at the benefits or other state aid. The Deloitte representative said that Ministry of Economy, said that the EC has approved a new instrument called investors in new gas sources are spendthe Connecting Europe Facility, which ing up to EUR 2 million daily and trying has a budget of EUR 5.85 billion. He ac- to project the price of gas when they knowledged the allocation is small con- move to extract it. “Romania is in the sidering that the 250 investment pre-infringement stage for opening the projects in Europe require EUR 150 bil- domestic gas market. The gas transport lion. “In the financial framework 2007- circuit system works at 40bars, while in 2013, Romania has not been able to Central Europe it works at 50 bars, and prove – and not only Romania but all Romania has to allow double flow, not member states – that they are capable only to import gas but also to export it,” of doing interconnection projects very said Binig. Romania has delayed the deregulaefficiently. We have a single interconnection project from Transelectrica tion of the gas market because the auwhich we aim to finance as soon as pos- thorities failed to overhaul the market sible. There are many legal hindrances,” and bring in new trading instruments, according to Otilia Nutu, energy and incommented Beltechi. Binig of Deloitte added that the local frastructure analyst at Expert Forum, a infrastructure investment require- think tank. “Liberalization does not ments are significant, as Transelectrica, mean we will instantly get a very liquid the grid operator, alone would need spot market, but I think we should EUR 700 million to keep the system sta- learn a little from what has happened ble in the face of soaring renewable ca- on the electricity market because we had similar issues there,” said Nutu. pacities. According to Dudau of the EPG, in In the new financial framework, local energy investments are backed by Romania there are companies that have EU money through the New Opera- built their business plans based on regtional Program of Big Infrastructure, ulated prices. Nutu suggested the govwhich covers transport, the environ- ernment make a cost-benefit analysis for the big industrial consumers that ment and energy. According to the proposed financial have benefited from cheap electricity allocation for energy, which has to be and gas. approved by the EC, Romania would get EUR 230 million to fund renewable Business Review | June 23 - 29, 2014


The right goal: reducing emissions, not increasing green energy In his paper Net Benefits of Low and No-Carbon Electricity Technologies published recently by the Brookings Institution in New York, Charles Frank Jr., a nonresident senior fellow of the famous US think tank and a former EBRD president, argues that efficiency and net benefits should be the only criteria to employ when choosing between wind, solar, hydroelectric, nuclear and gas combined cycle plant technologies. ∫ ANCA IONITA

CV Charles R. Frank, Jr.

What are you arguing for in this paper? Gas-combined cycle, nuclear and hydro plants are more efficient in reducing emissions than either wind or solar. I am arguing that wind is the fourth and solar the fifth of those five in terms of benefits – meaning avoided emissions. Another benefit is avoided capacity costs – in other words, if you build a new gas combined cycle plant you avoid the cost of building a new coal plant or a new wind plant, and that is a very positive thing because a gas-combined cycle plant has very low capital costs compared to any other low-carbon type of technology. How much higher are the capital costs for wind and solar than for a gas combined cycle plant? In the case of wind, the capital cost is roughly double, and in the case of solar, almost quadruple. So you are paying two to four times more for the same capacity. Furthermore, the average time when these plants operate is very low. They only operate when the wind is blowing and the sun is shining. In the case of solar, for example, in the middle of Europe, 10 percent is a good capacity factor (the sun never shines at night, and it doesn’t often shine during the day). If you combine that with capital costs, the numbers look very bad. If you compare it with a gas combined cycle plant, which has a 90 percent capacity factor, this means you produce nine times the amount of energy at one quarter of the capital cost. To put it another way, you need USD 36 million to produce the same amount of electricity at a solar plant compared to USD 1 million for a gas-combined cycle plant. That’s a huge gap in capital costs! But one has to take into consideration the price of natural gas. Even if you value gas at 50 percent more than what are you currently paying, we’ve calculated that it is much more economical to build a gas-combined cycle plant, if your goal is to reduce emissions. What should a government take into consideration when drafting its energy policy? First of all they should take account of

2013 – present non-resident senior fellow of Brookings Institution 2001 – present director at Central European Media Enterprises 2001- present advisory committee member of Sigma Bleyzer Growth Fund IV, Ukraine 2009-2010 CFO Central European Media Enterprises 1997-2001 first vice-president and acting president of EBRD 1978 – 1987 vice-president of Salomon Brothers avoided emissions (the reduction of emissions that you get from a low or a new carbon plant, emissions avoided from pumping into the air). That has a value. There is a lot of argument about what that value is and in my paper I have put it at USD50 per ton (which is in my opinion a reasonable estimate of what it’s worth). As long as you put a reasonable price, the conclusions of the paper are that it is better to build a gas combined cycle plant, or a nuclear or hydro plant, than a wind or solar plant. In Romania you have a green certificate program. In the original program (which has subsequently been modified), a solar plant got six green certificates for each megawatt-hour (MWH) power produced, and a wind plant got two certificates. However, they were given it for a megawatthour, not for the reduction in emissions. Why would you give solar three times more than wind, when they probably reduce emissions by the same amount? Green certificates should be technology neutral, for one thing. Secondly, the amount of certificates should focus on reduced emissions, not on MWH. For example, solar power does better, because it produces during the day, when reduced emissions are greater, than wind, which produces during the night, when the reduced emissions are less. Therefore solar should get

more, but not three times more. It should be the ratio of emissions avoided by solar versus those avoided by wind. And you should extend it to other forms of green energy. Why not largescale hydro? It is very efficient, not only because it emits no CO2, but if you have water storage, you are able to produce a lot of electricity during peak hours, when the emissions are the greatest. So hydro has a very high level of avoided emissions, and should therefore be rewarded for that. But there are no green certificates even to hydro projects of over 10 megawatts/hour, only to small run-of-the-river hydroelectric projects. Then, one should be giving certificates to gas-combined cycle plants, to the extent that they replace coal power, and coal power is important in Romania. What I understand is that your paper addresses the issue of green certificates from a different perspective. The problem with the green certificates program is that it’s designed to reach a certain percentage of renewable energy in terms of total electrical engine energy, not in terms of trying to reduce CO2 emissions by a certain percentage. Maximizing the percentage of renewable types of energy doesn’t maximize the reduction in CO2 emissions. They are correlated, but there is a significant difference. The real goal is this reduction, not

an increase in green energy. It’s directed at the wrong goal, which doesn’t come from Romania, but from the 2008 EU directive that says 20 percent of energy output has to be from renewables. Hydro and solar are better than wind in terms of reducing emissions because they operate more efficiently during peak hours, when the emissions are the highest. Gas combined cycle plants can operate at peak hours as well, because you take the plant down for maintenance during offpeak periods, so that it has a higher capacity factor during peak hours. Hydro, nuclear and gas combined cycle plants should also get green certificates, since they reduce CO2 emissions, as well. That is the only way to design an efficient policy.

GLOSSARY OF TERMS Availability factor The percentage of time in a year during which a power plant is producing, or able to produce, at full capacity. Avoided capacity cost The capacity cost of a fossil fuel plant that would have been incurred had a new plant using low or no-carbon technology not been built. Avoided emissions The reduction in total emissions of an electricity system caused by the introduction of a new plant. Avoided energy cost The reduction in total energy cost of an electricity system caused by the introduction of a new plant. Combined cycle gas plant A power plant that utilizes both a gas turbine and a steam turbine to produce electricity. The waste heat from the gas turbine burning natural gas to produce electricity is utilized to heat water and produce steam for the steam turbine to produce additional electricity.

Source: Net Benefits of Low and NoCarbon Electricity Technologies paper published in the Global Economy & Development at Brookings, Working Paper 73 / May 2014 Business Review | June 23 - 29, 2014


Local doctors’ e-hospital spearheads online medical shift, the first platform for live doctor-patient chat in Europe, has been launched in Romania by a group of local doctors, with support from UK specialists. This type of doctor-patient interaction could particularly benefit citizens in remote areas who are cut off from medical services, and patients who suffer from anxiety issues when consulting a doctor, the founder tells BR. ∫ OTILIA HARAGA

Courtesy of

“Digital is the solution of the future, and this trend can be felt in nearly all fields of activity. Medicine must keep pace with these changes and be available to patients in real time, 24/7,” Mihai Rascu, MD in orthopedicstrauma and founder of, tells BR. “Like any doctor, I want medical services to be available to as many patients as possible, even more so in rural areas where there is greater need for access to a doctor. I hope in time we will get there, especially since the internet penetration rate and mobile penetration rate are getting higher.” He says that the number of internet users is higher in Central and Eastern Europe than in Western Europe. “Data from February 2014 show that the internet penetration rate in Romania is 50 percent, with approximately 11 million Romanians being active online,” says the doctor. Apart from citizens who have logistical difficulties in accessing medical services, there is another category of patient that could benefit from online interaction with a physician: those who put off going to the doctor until the last minute due to anxiety issues. “Throughout my career, I have noticed patients suffering from ‘the white gown phobia’. This is a significant patient category who will no longer have to face this fear thanks to the online platform,” Dr. Rascu tells BR., launched with an investment of EUR 30,000, is an alternative to traditional consultations, allowing patients to access medical services anytime across a range of 30 specialties: allergology, infectious diseases, cardiology, dermato-venereology, diabetes and nutrition, endocrinology, gastroenterology, gynecology, family medicine, general medicine, internal medicine, sports medicine, nephrology, neurology, ophthalmology, oncology, otorhinolaryngology, orthopedics, pediatrics, pulmonology, psychiatry, psychology, rheumatology, dental medicine and urology. The standard cost of a consultation is RON 85, though subscribers pay a reduced fee of 50 RON, with a year’s subscription costing RON 190. If a particular physician is not online at that moment, the patient can make an ap-

Clinical approach: the founding team of (from left to right): Svetlana Popescu, MD, Rheumatology, Ionut Cristea, specialist MD, Mihai Rascu, MD, and Gabriel Stefanescu, specialist MD, all Orthopedics-Trauma

pointment or consult one of the doctors online at the time. The fee is payable before the consultation. “Taking into account the price of consultations at private clinics, as well as the informal payments in the state medical system, I believe the fees charged by are reasonable, allowing many patients to access the platform. Moreover, there are no price differences between the consultations given by an MD and a specialist MD, which is new on the Romanian medical market,” Dr. Rascu tells BR. Using the online platform, patients will be able to send the doctor copies of medical tests and other documents in electronic format. Only the patient in question and the doctor will have access to the patient’s medical files. According to Dr. Rascu, surveys show that approximately 70 percent of visits to a hospital or bricks-and-mortar clinic for diagnosis could be avoided through the use of technology. “I believe that telemedicine and online medicine have a good future and significant potential growth both in Romania and the rest of Europe,” says Dr. Rascu. Often, Romanians prefer to search for a diagnosis online and self-medicate, rather than seek the opinion of a specialist. “We want to avoid the situation where people, often without support from trained medical staff, treat them-

selves by ear. In, they can get the necessary information from real doctors based on their needs and a presumptive diagnosis,” adds the doctor. The founders estimate they will reach EUR 180,000 in revenue in the first year. Initially, 150 doctors will be involved in the project. The founders predict that one year from launch, they will be collaborating with 400 doctors every month – both Romanian medics who work in the country and abroad, as well as foreign specialists. The founders of aim to build over time a national network of collaborating doctors and expand the international partnerships to other countries in Europe, as well as Central and South America. “In other countries, there are greater openings for this type of medical services, maybe partly because people have been exposed to similar projects. One of our future plans is to launch an English version of the platform. But this is a medium- to long-term objective. At the moment, it is important that the Romanian patient is first convinced by the upsides of this platform,” adds the service founder. The Romanian initiative is new even for other countries where medical services are otherwise much more advanced. “Great Britain has seen several similar attempts, but these are not in-

dependent platforms but online clinics that represent extensions of offline clinics and which do not have such a large number of doctors. (…) We are in discussions with colleagues from Great Britain who wish to provide online consultations,” said Dr. Umer Butt, senior knee and arthroscopic shoulder surgeon at CircleBath London. To get in touch with a doctor, patients need to create an account, select the specialty required and look at the list of doctors to see who is online. Doctors provide support and advice for minor emergencies, interpreting test results and presumptive diagnosis. They can also issue prescriptions and medical certificates valid in any EU country. “More and more Romanians are going abroad. Romanians who leave to work abroad do not always have access to medical services, and most wait until they come back to Romania to go to a doctor here. At the same time, there are also Romanian doctors who choose to work abroad, and is a platform that seeks to bring the two sides together. Romanian patients abroad can receive medical advice wherever they are, while local doctors working in other countries can provide consultations and a second opinion online,” says Dr. Rascu. Business Review | June 23 - 29, 2014


Microsoft consolidates developer community Microsoft is taking steps to consolidate the application developer community in order to boost the number of applications available in the Windows Store. Romanian-born Nancy Nemes, director of category management for Windows Phone platforms in Western Europe, who attended this year’s edition of ICEEfest, tells BR what the company is doing to make that happen and how her personal journey led her to the software giant. nent family, which included doctor Dumitru Bagdasar, philosopher Nicolae Bagdasar, writer Radu Bagdasar and Microsoft is currently working with de- mathematician Alexandra Bellow, velopers to expand the range of appli- Nemes chose to leave the country in cations that are available in the 1990 at the age of 21, and went to study Windows Store, across three strategic in Germany and France. She started her directions: providing a differentiated professional IT career in Germany, at a platform, making it easy to build for the SAP partner, after which she moved to Microsoft platform and creating oppor- Avnet, a global hardware distributor tunities for monetization, says director where she was in charge of selling Microsoft Operating Systems in the emNancy Nemes. According to Microsoft internal data, bedded space across Germany, Austria there are 560,000 registered Windows and Switzerland. “I then moved to Miand Windows Phone developers, with crosoft and had a number of incredibly 94 percent Windows app growth y-o-y. interesting jobs across marketing, busi“Developers are earning three times ness development and sales. I spent six more revenue per active user in mar- years in the USA working on key projkets where carrier billing is offered. ects such as the launch of Office This increases to at least eight times 2007/Vista/Exchange, driving channel more revenue in emerging markets development for Microsoft hardware, where credit card usage is more limited,” and working on sales enablement for says Nemes, quoting Microsoft internal the global sales force,” Nemes tells BR. In 2010, she moved back to Munich, data. Nancy Nemes’s career with Mi- Germany, and was put in charge of crecrosoft started in 2001. Though she was ating the consumer marketing disciborn and raised in Romania in a promi- pline at the CEE HQ. “As of 2014, I cover


App-titude: The Windows Phone ecosystem will soon see more apps

Western Europe in the operator channel, driving adoption of the fast growing Windows Phone,” she tells BR. Nemes says Microsoft has made great progress with customers and partners over the last year. “In 2013, Windows Phone was the number three smartphone operating system and the fastest-growing platform among the leading operating systems with 90 percent year-on-year gain, and in the first

quarter of 2014, Windows Phone was the fastest growing OS in the United States with a 59 percent year-on-year gain, according to Canalys estimates from May,” says Nemes. The Windows Phone Store currently has more than 270,000 apps and continues to grow with 500 new ones added daily, according to Microsoft internal data. “There has been 98 percent quarter-on-quarter (2014 Q3 to Q4) growth in in-app purchase revenue for developers,” adds the director. “We’ve passed critical mass in the Windows Store and the virtuous cycle has begun, with the majority of top apps, such as Flipboard, Instagram, Vine, Mint and Facebook Messenger, joining our platforms. The Windows app ecosystem has experienced 108 percent y-o-y growth, and in the last half of 2013 alone, Windows Store downloads grew by 72 percent and Windows Phone Store downloads by 62 percent,” says Nemes. Business Review | June 23 - 29, 2014


Bauspar gains ground in Romania Aurelia Cionga, president of Raiffeisen Banca pentru Locuinte, says the bank’s potential financing level in Romania has reached close to RON 3 billion (EUR 682 million) under the Bauspar saving-lending system. She adds that 500,000 individuals are currently using Bauspar to improve their homes or buy real estate, as it provides better terms both in loan costs and deposit yields than regular banks. ∫ OVIDIU POSIRCA

What does the Bauspar system entail? The product has saving and lending stages. Currently, during the saving period, we have a good yield: over a period of three to five years the average yield can be 8-10 percent anually. The yield for the saving-lending product, during the saving period, is composed of the bank interest rate and the state premium offered for annual savings (25 percent of the annual savings, but not more than the equivalent in RON of EUR 250 per year). For lending, the interest rate is 4.5 to 6 percent in RON (fixed interest rates, guaranteed for the whole lending period), depending on the chosen version of the product. In recent years, people have been tempted to believe that interest rates would continue to fall, the same way they believed six or seven years ago that wages would continue to climb. In the economic cycle, both move up and down. The efficiency of the Bauspar product is related to the good yield in the savings stage and fixed cost of borrowing. Has the bank’s strategy changed in the last decade, since it started operations in Romania? What has probably significantly characterized these ten years is the need to position the product in the collective mind of Romanian consumers. When we are talking about a country such as

CV Aurelia Cionga

Photo: Mihai Constantineanu

How does the saving-lending market look at the moment and what are your expectations for the second half of the year? I am one of the people who believe that any crisis can be an opportunity provided one understands what has generated the change and what the right reaction to change is. From this perspective we might say that the events in the last four-five years have represented an opportunity for the saving-lending Bauspar system because they allowed it to prove one of its main features, its sustainability.

Austria, which has a penetration rate (for this product) of over 60 percent, it actually means that there is one Bauspar contract for each household. An Austrian has an average of six savinglending contracts during his or her lifetime. In recent years we have put a lot of effort into getting the product out of the bank branches and taking it closer to the people. In fact we have adopted two action lines. One focuses on providing information about the system in partnership with city halls; in two years we have established partnerships with over 100 city halls and over 15,000 people have signed contracts as a result of this collaboration. The second direction is the partnership we have with other stakeholders, developing financial education programs in schools, encouraging people to embrace financial products, including Bauspar products. This product is highly regulated and bears a low risk for clients and has been adapted in time to market changes. We have tried to be among the first players to react to the interest rates decline in recent years. Addition-

September 2012 - present president, Raiffeisen Banca pentru Locuinte December 2009 – September 2012 vice-president, Raiffeisen Banca pentru Locuinte 2001 – 2009 director of the general secretary division at Raiffeisen Bank Romania 1988 – 2011 scientific researcher, first grade, Spatial Science Institute

Graduated from the Physics Faculty and holds an MBA from the Romanian-Canadian program at ASE Bucharest, Ottawa University and the Montreal Trade School ally, we want to respond to customer needs and therefore also grant immediate financing, so clients can access a loan during/without the prior saving period. More and more clients are learning the benefits of the Bauspar system and deciding to obtain financing through this system instead of other banking products. What is the penetration rate in Romania? The short answer is 2.5 percent. In Austria we are talking about a product that has 50 years of history and this rate exceeds 50 percent. In Germany, where the penetration rate was at the same level after the unification of the country, including in the former East Germany, today it stands at around 30 percent. The official figure used by the Romanian Bauspar Association is 2.5 percent, computed as the number of contracts (500,000) in reference to a population of 20 million. The problem is to what extent this is the real comparison we should make, because in Romania only half of the population uses banking services. Even if we reach 4-5 percent there is still room for growth – this is the good

side of the story along with the fact that in Romania the system became operational only ten years ago. The first five years of the system, till 2009, was a period in which we had a lending boom and an overheated economy, difficult for a product that preaches sustainability. On the medium term, the objective of the Romanian Bauspar Association is to reach 10 percent (e.n. penetration rate) in three to five years. Currently 500,000 Romanians are enrolled in the system and Raiffeisen Banca pentru Locuinte has around 200,000 clients. Contracts often impact the whole family, namely around 1.5 million people in Romania (based on three family members per household). The growth level in recent years shows us that the role of the Bauspar system will be further enhanced as we have all learned how important sustainability is. What are the main uses of the loans granted by RBL? Our field of activity covers everything related to home acquisition and improvements. We have loans that range from RON 5,000 to RON 500,000 with a variety of purposes, for example from replacing windows and roofs to construction and property acquisition. From a technical point of view, two out of ten loans are for acquisitions, one is for construction and seven are for renovations. Lately, the lending activity has increased on the back of higher demand for home improvements from eligible customers. This is a positive change, after several years of efforts to increase consumption. What was the total contracted amount at the end of 2013? We are looking at existing customers because clients enter and exit the system. The sum is getting closer to RON 3 billion – which is the financing potential on the medium term. Business Review | June 23 - 29, 2014


Power to the people? Bucharest street protests come under gaze of documentary-maker Over 23 years since the Romanian Revolution, in January 2012, the people were back on the streets of Bucharest, reclaiming the public space and fighting to change the political system. Director Vlad Petri followed their stories for a year, from the first days of the protests to the referendum to remove the president, crafting them into a documentary about the people transforming a revolution into a travesty. OANA VASILIU

CV Vlad Petri

Bucharest, where are you? has been called a revolutionary movie. Is it? It is a movie about the people who protested in those days, an X-ray of Romanian society. Initially, I considered my documentary a revolutionary one because I was part of that movement that believed we could change the system, the government, even the president. But after working on putting the material together, I found that the attempt at revolution was shrinking daily, transforming the cause into a live performance. After your first day at the protest, you posted a movie on YouTube that got tens of thousands of viewers in just one day. Was this the trigger for the documentary? The desire to make a documentary movie came later, but the online environment helped me realize that I was doing a good job, that people were supporting me and my work. The feedback was very important in encouraging me to continue to film what was happening on the street. Did you ever feel fearful while shooting the protests? Probably on January 15, 2012, when I was filming behind the line that the gendarmerie had formed and people were throwing stones, recycling bins, bottles and many other hard objects. That was a point when I couldn’t control what I was filming anymore as I had to look up to check if something was about to hit me. The special forces then used teargas and I remembered waking up that night coughing really badly. The first protests started because of the removal of Raed Arafat as state secretary of Health Ministry. Did those people know who Raed Arafat was? Apparently, the protesters remembered the cause of the demonstration only for two-three days, and then everything degenerated into a protest against the whole Romanian system, especially against the president. But to answer the question, I am pretty sure that most of them didn’t know what Arafat was doing, but they associated him with the medical system and his attempts to improve it. You said that people switched from Arafat’s cause to chanting slogans

2014 – Bucharest, where are you? 2012-2014 – filmed Bucharest’s social movements and street events and published them online 2009 – New Year’s Eve

against the president. During the three months of the daily protests, was there a common voice of the street? Very soon a divide appeared between the people positioned near the fountain in University Square and those who were in front of the National Theater, who were much more vociferous and mass-media “friendly”. As a director and protestor in the street movement, what did you feel when you learned the results of the referendum to impeach the President? It was a strange combination between my solidarity with those people who were in the street for so many months and who truly hoped to change the political system and the showing-off that happened there. I filmed scenes that are not in the movie when the protesters from the National Theater moved a fence to occupy the boulevard, and at the end of the day, they put the fence back, blocking themselves back in the pen that the gendarmerie had made for them. Why is the movie entitled Bucharest, where are you? The key of the title can be found while watching the movie, and viewers answer this question themselves. At the beginning, we proposed Again in the street, which would have linked the events from 1989 with the present moment, and Bucharest 78 decibels, after the level of noise in University Square, but we finally alighted on this general title, both asking where the people are when you need them, and presenting

everything as a barometer of Bucharest. In your opinion, what does a protest mean to Romanians? This is a question I haven’t found an answer to yet, but I’m still looking for it back on the streets and through my research. Over 23 years on from the Romanian Revolution, I believe that Romania had no “culture” or experience of protests, which is why the street demonstrations which started in January 2012 took everyone by surprise, from mass media representatives to members of the public. Moreover, the protest spirit had slowly declined since the 90s, especially as regards unions and student associations. How do you compare the protests in 2012 with those that began in the autumn of 2013, against the Rosia Montana project? First, the common ground of the two protests was the space, University Square. Then, I believe that 2012 was the bedrock of the future protests, as some citizens, both activists and leaders, who protested in 2012 came back to support the Rosia Montana cause in 2013. Moreover, those people already had the street experience of confronting the gendarmerie and the police, which both switched tactics because they knew that using violence again would only lead to more media attention. Besides that, in 2012 all sections of society were represented in University Square during the protests, whereas in 2013 the people in University Square were highly educated,

mostly young adults, who were there for one concrete cause: to stop the mining project in Rosia Montana. Are street movements forming a new wave in documentary movies? Clearly, it already exists and probably soon it will have reached saturation. For example, next month I’m presenting the film at the Odessa International Film Festival in a special section with Maidan, a movie that was presented at Cannes, and The Square, a film about Egypt that was at the Oscar’s, among many others. If this type of movie has reached the biggest film festivals worldwide, it is of obvious interest to them. But I still believe that my movie is about the people that made it a movie, not about the social cause. You have already presented the film to foreign audiences at Rotterdam Film Festival and recently at the Transilvania Film Festival. What were their reactions? At Rotterdam International Film Festival, Bucharest, where are you? was included in a category named The State of Europe, among other films that reflect the street movements happening all over Europe. This timid Romanian street democracy was received calmly by the foreigners, whereas the Romanians were very emotional after seeing my movie. This is probably the reason I am more attached to the Romanian public. Business Review | June 23 - 29, 2014


Demystifying depression The Romanian translation of Andrew Solomon’s 2001 book The Noonday Demon: An Atlas of Depression was officially launched last week in the presence of the author. The title is already on its second local print run. SIMONA FODOR Speaking about what motivated him to write the book, Solomon says he wanted firstly to demystify the experience of depression. “Is it biological or psychological; is it a problem of character or a problem of neurochemistry? It seemed to me that those give different vocabulary for the simple fact of the ‘on and on’ that you have with the experience of depression, that there is something chemical going on in your.” Before writing the book – which describes the author’s own struggles with the condition, in addition to featuring interviews with other sufferers, doctors, scientists and policymakers – Solomon authored an article for the New Yorker on the topic in 1998. He says he was overwhelmed with the response he had to it, which gave him an insight into the need to discuss the topic and approaches to it. “In my experience people think they need to suppress it. Depression is a difficult, overwhelming, exhausting experience. Seeking help is a difficult, overwhelming, exhausting experience. Forcing yourself, when you have depression, to keep the secret in addition to dealing with the things you have to deal with only makes it worse and harder for everyone. So it became a mission for me to broaden the conversation,” explains the writer. Another purpose behind Solomon’s endeavor was to demystify the idea of depression as a modern, Western, middle-class illness. “Hippocrates described depression in almost the same way as we would now 2,500 years ago, and there is a long history of people experiencing and writing about it,” argues Solomon, adding that it is not cultural either, as can be seen from the investigation, presented in sections of the book, into depression among the survivors of Cambodia’s Khmer Rouge atrocities. A dedicated segment is on depression among the very poor, who he says “are less likely to self-identify as depressed but are not less likely to be depressed. Depression comes at the intersection of a biological vulnerability and stressors. And the stressors are more frequent for people who are poor.” Another major theme in the book is resilience to the disease. Solomon contrasts depression not with happiness but with vitality, and draws on his own experience of detachment

Andrew Solomon helped launch the local translation of his 2001 book and continuous anxiety to ask the question of what makes some people more resilient than others. “I had only thought of myself as quite a tough and resilient person. In 1994 I published my first novel and found myself feeling strangely detached from the experience. As I went on I found many ordinary things in my life started to get more and more difficult. I thought there were all these things I should be accomplishing and achieving and I lacked energy for it. […] And then I got to the point at which I thought ‘I should have lunch’ but in order to do it I would have to get the food out, I would have to put it on a plate, I would have to cut it, and I would have to chew it, and I would have to swallow it, and it felt to me like stations of the cross. And one of the things that often get lost in discussions about depression is that you know it’s ridiculous while you’re experiencing it. You know most people manage to listen to their messages, and eat lunch and organize themselves to take a shower and get out the front door. You are nonetheless in its grip and you are unable to figure any way around it,” Solomon writes. It is the starting point of an investigation into why some people who had what was termed mild depression were nonetheless disabled by it while other people who had much more acute depression had rich and meaningful lives.“ I wanted to understand the mechanisms that allowed some people to be much more resilient than others,” Solomon says. Business Review | June 23 - 29, 2014


WHO’S NEWS BR welcomes information for Who’s News. Submissions may be edited for length and clarity. Get in touch at

Stephane Batoux

is the new general manager of Romanian dairy producer Albalact. He is the former head of Coca-Cola Romania and dairy competitor Danone, positions he held for two and three years, respectively. The newly appointed general manager is replacing Raul Ciurtin, president of Albalact’s administration board, who served as GM for the past four years and will continue as president. Batoux, 49, holds an MBA from Ecole Superieure de Commerce in France.

Mugur Isarescu

last week received Parliament’s stamp of approval for his fifth term in charge of Romania’s central bank (BNR). He will lead the institution for another five years, after having served as governor for the last 24. Parliament also approved Liviu Voinea (PSDUNPR-PC), Bogdan Olteanu (PNL) and Florin Georgescu (PSD-UNPRPC) for the positions of deputy governors on BNR’s board of directors. Georgescu will serve as first deputy governor.

Olga Melihov

is the new business development manager of BNP Paribas Real Estate in Romania. She has over ten years of professional experience in real estate. Melihov previously worked for Mayland Real Estate in Poland and Romania where she was responsible for development, marketing and communication activities. She has also

worked for Seracom International Group where she coordinated the setting up of the company’s Russian branch. Melihov graduated from the University of Bucharest and the executive post-graduate program in Professional Real Estate from the Solvay Brussels School of Economics and Management and the Polish Council of Shopping Centers.

Alexandru Popescu

is the new GM of Philips Healthcare for SouthEast Europe. He will develop and implement the firm’s strategy in Romania and in the regional countries where it operates. Popescu has a professional background of over 15 years in health industries and commerce, specializing in mergers and acquisition, branding and identity, plus product and business development. His previous position was executive director of Amethyst Radiotherapy, where he oversaw operations for Romania, Bulgaria and the Republic of Moldova. Previously, he held senior management positions at medical companies, such as ISIDA, Regina Maria, Euromedic and Medicover, having both operational and strategic responsibilities. Popescu graduated from the Law Faculty of the University of Bucharest, and has an MBA from the University of Ottawa.

Marian Sarbu

is the new first vice-president of the Financial Supervisory Authority (ASF) following Parliament’s vote of approval last week. He is taking over from Daniel Daianu, who stepped down in order to run for a position on the central bank’s board. Sarbu is a former PSD minister of labor and former president of the UNPR political party.

FOUNDING EDITOR Bill Avery PUBLISHER Anca Ionita EDITOR-IN-CHIEF Simona Fodor JOURNALISTS Otilia Haraga - senior journalist, Simona Bazavan, Ovidiu Posirca, Oana Vasiliu COPY EDITOR Debbie Stowe PHOTO EDITOR: Mihai Constantineanu

ISSN No. 1453 - 729X

LAYOUT Beatrice Gheorghiu ART DIRECTOR Alexandru Oriean

Once Upon a Forest (Il etait une foret) DEBBIE STOWE Director: Luc Jacquet Starring: Francis Hallé, Michel Papineschi (voice) On at: Cinemateca Union, Elvira Popescu, NCRR Sitting in the cinema watching Once Upon a Forest, a 78-minute documentary by French director Luc Jacquet, the air suddenly feels cleaner and fresher. Such is the impact of the mise-en-scène of this visual love letter to the sylvan world, that even a committed urbanite will be seduced by the rustling leaves, thundering waterfalls, delicate dewdrops and brisling bark. Jacquet is best known for March of the Penguins, the 2005 movie sensation that charmed the world and netted the director an Oscar. That documentary could not go far wrong, both because of the epic and emotional journey everyone’s favorite flightless bird embarks upon every year, and, well, because penguins are so cute. Despite providing us with our oxygen, trees are not quite as cute as penguins. Nor do they really do much (or so you might think). Once Upon a Forest, then, doesn’t tug on the heartstrings in the same way as March of the Penguins; nor does it have much of a narrative arc. But that doesn’t stop it being beautiful and remarkable. The majority might not find forests as watchable as penguins, but one person does: French botanist Francis Hallé, who stars in the film (though he would probably argue that the real stars are the trees). Morgan Freeman did the voiceover for March of the Penguins and Jacquet could have had a big name or Hollywood hottie tramp around the rainforest in Peru and Gabon to ramp up the box office. Happily he didn’t. Hallé is the understated, serious presence that speaks of a lifetime’s quiet devotion to his field, and he traverses his domain respectfully, creeping amid boughs and sketching from branches.

EXECUTIVE DIRECTOR George Moise SALES & EVENTS DIRECTOR Oana Molodoi SALES & EVENTS Sales managers: Ana-Maria Nedelcu, Oana Albu, Raluca Comanescu MARKETING Ana-Maria Stanca, Ana Maria Andrei, Iulia Mizgan PRODUCTION Dan Mitroi DISTRIBUTION Eugen Musat

PUBLISHER Bloc Notes Media ADDRESS No. 10 Italiana St., 2nd floor, ap. 3 Bucharest, Romania LANDLINE Editorial: Office: EMAILS

A river runs through it: the forest

Meanwhile, Michel Papineschi’s voiceover describes phenomena that, while not approaching the drama of a lovelorn bird waddling miles to reach its mate, are very impressive. For example: the tree that, when a predator approaches (in this case a lumbering elephant), is able to emit a toxic smell, repel the unwanted advance and warn other trees. Something to think on when you’re wandering the linden-permeated streets of Bucharest at this time of year. Nature’s complex symbiosis is another source of fascination: some trees harbor ant colonies which they deploy to see off other insects intent on feeding on their foliage. As with this expansive type of documentary that takes on vast realms like the sea or the sky (David Attenborough’s output springs to mind), the infinitesimal actions and interactions reveal a whole other world. The movie is not without its message. Despite their life-facilitating properties, serenity and prettiness, humans are as horrid to trees as they are to the rest of the flora and fauna that share the planet. There are sobering scenes of piles of trunks felled by loggers, and ominous warnings about deforestation. But the moralizing doesn’t mar the movie, and with the power and beauty of the forest set out so convincingly, the argument for conserving it is compelling and justified.

Business Review Issue 22/2014 June 23 - 29  

Changes to the incentives mechanism have dented renewable investors’ confidence in Romania, said experts at the eighth Focus on Energy, held...

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